samchain/econo-pairs-v1 huggingface dataset:
Profit before loan losses and net loan losses in the major banks (Four-quarter figures, SEK billion, 2006 prices) 100  80  60  40  20  jun-06  dec-06  jun-05  dec-05  jun-04  dec-04  jun-03  dec-03  jun-02  dec-02  jun-01  dec-01  jun-00  dec-00  jun-99  dec-99  jun-98  dec-98  jun-97  dec-97  jun-96  dec-96  jun-95  dec-95  jun-94  dec-94  jun-93  dec-93  jun-92  dec-92  jun-91  dec-91  dec-90  0  -20 Profit before loan losses  Profit before loan losses using IFRS  Loan losses  Sources: Bank reports and the Riksbank  2.

The hope is that monetary policy and the Riksbank’s arguments may contribute to reducing the risk of an overly rapid and far-reaching build-up of debt, and thereby also reduce the risk of a more abrupt adjustment of household indebtedness further ahead. It has sometimes been claimed that these considerations have meant that the Riksbank has given less priority to the inflation target and begun to regard house prices and household borrowing as target variables. This is not the case. The purpose of taking into account household indebtedness and house prices is to safeguard the inflation target and a stable development in the real economy, also in the longer term. These considerations could and should, in my opinion, be accommodated within the scope of the flexible inflation-targeting policy the Riksbank conducts, like many other central banks. The Riksbank is far from the only central bank to make this type of consideration. Household indebtedness and house prices have increased at an even faster rate in other countries, as I mentioned earlier. However, I consider that the question of house prices and household indebtedness has been given much more attention in the monetary policy debate than it actually deserves, considering the significance this question has for monetary policy decisions. In the media the interest rate increases have sometimes been linked directly to developments in the housing market. This is an incorrect picture.
Future challenges for wage formation The Municipal Workers' Union's termination of its collective wage agreement for 450 000 members before the third year and the demand for relative wage changes entail touchstone for wage formation. The union has for a long period watched its wages situation deteriorate in relation to industrial workers and other groups in the public sector. During the previous bargaining rounds, however, the LO unions were agreed that the Municipal Workers' Union should receive higher wage increases than the other member unions in order to improve its relative wages. However, the union is dissatisfied with the outcome so far, which it claims has given only 0.4 percentage points above the wage increases achieved through collective bargaining. This union's members are currently among those with the lowest wages in the labour market, with an average wage of approximately SEK 16 000. The Municipal Workers' Union's wage demands are not in themselves a threat to the inflation target, as long as other groups in the labour market are prepared to stand back in favour of this union's members. However, there is a risk that other trade unions will follow their example and also demand higher wages. Approximately 70 per cent of the employees in trade and industry have the possibility of renegotiating their agreements during the final year of the agreement. Already, there have been demands for compensation if the Municipal Workers' Union members should be given higher wages.

2  For the banks to manage the stress test their Tier 1 capital ratio, that is, their Tier 1 capital in relation to their risk-weighted liabilities, must not fall below 6 per cent. In the stress test the major Swedish banks were calculated to have Tier 1 capital ratios of 8.9–10.3 at the end of the test period. 4  BIS Review 109/2010  Strong GDP growth The Riksbank’s Monetary Policy Report from July forecasts relatively high GDP growth in the coming years: that Swedish GDP will grow by 3.8 per cent this year, and then by on average just over 3 per cent a year in 2011 and 2012. (Figure: GDP growth). We could also note that the first quarter of the year had been better than expected. It is particularly pleasing that the upturn was on a broad front – all of the components of GDP contributed to the upturn. Moreover, the Riksbank also saw good opportunities for a continuing recovery. Domestic demand is being maintained by a continued expansionary economic policy, combined with an optimistic view of the future in both the household and corporate sectors. In addition, growth abroad is expected to rise during the forecast period. This will contribute to an increased demand for Swedish export products, which in turn will benefit business sector investment as resource utilisation rises. Our picture of a recovery in the Swedish economy is also supported by new statistics published after the Monetary Policy Report.
An inflation target of 2½ per cent and trend productivity growth of around 2 per cent, according to updated national accounts figures, imply annual nominal wage growth of about 4½ per cent. These figures are consistent with developments in the 1990s, when wage growth averaged 4½ per cent. This resulted in inflation of 2½ per cent. The krone exchange rate was stable. In general, an unexpected upward shift in labour costs will prompt an increase in interest rates in order to avoid higher inflation. With a floating exchange rate and unchanged interest rates, an increase in wage growth of one percentage point will eventually translate into a comparable increase in price inflation, unless this increase is based on higher productivity. The magnitude of the interest rate increase must be adapted to this. First, the nominal interest rate must be increased to maintain the real interest rate. Second, the real interest rate must also be increased in order to prevent inflation from accelerating.

Financial stability does not mean that bank insolvencies should be excluded or that stock markets should develop smoothly. We are concerned about financial stability because of the macroeconomic implications of financial turmoil. First, financial stability is a prerequisite for the successful implementation of monetary policy. Second, a stable financial sector is necessary for the smooth functioning of the economy as a whole. Third, central banks have an interest in financial stability because they know that in the event of financial crisis their role as ultimate liquidity provider could interfere severely with their traditional objective of price stability. 1  Greenspan, 1998. BIS Review 74/2007  1  1. The HLI industry  In order to assess whether HLIs constitute a major risk to financial stability, it may be helpful to discuss the exact meaning of the terms “highly leveraged institution” and “hedge fund”. Legal – or any other generally accepted – definitions do not exist yet. However, there are several characteristics that such institutions have in common. They are privately offered investment vehicles that pool the investments of high-net-worth individuals and family businesses, the HLI managers themselves and, increasingly, institutional investors. Often there are minimum investment requirements that restrict access to HLIs. Thus retail investors are mainly indirectly exposed to HLIs: actively through investments in funds of funds or passively through pension funds. HLIs deploy active investment strategies to pursue superior absolute return. Usually HLIs also employ leverage. HLIs are only lightly regulated and are not subject to supervision.
Many countries are now on the right track. Ireland, Spain and Portugal, for example, have implemented a series of reforms; they have become more competitive and their economies are recovering. And yet, in some euro area countries, unemployment remains very high, especially among young people. In addition, many countries still have large public deficits and high levels of debt. So further reforms are necessary here. The same applies to goods markets and the general business environment. In many Member States bureaucratic hurdles have to be overcome in order to start a business, and not only in the crisis countries. Removing such administrative barriers is much  2  BIS central bankers’ speeches  less expensive than national recovery plans, and can contribute significantly to sustained growth and increasing prosperity. 2 It is all the more worrying that the OECD in its recent “Economic Policy Reforms” report notes that particularly in the euro area countries the pace of reform is slowing. It would be disastrous if necessary reforms cannot be implemented or, if implemented, reforms were even to be withdrawn. That would slow down, or even totally impede, the necessary economic upswing. Central banks would then come under pressure to counteract this by pursuing an exceptionally loose monetary policy. A stable monetary union rests on the shoulders of individual Member States. Sound economic and responsible fiscal policies at national level are an essential basis for a stable monetary union.

The constant need to invest in key payment infrastructures in this country is in line with technological advancements and the changing needs of consumers and businesses. In this regard, MyClear should be responsible to facilitate the pooling of resources and adoption of new technology to expand the network reach and resilience of its payment infrastructures. Financial institutions on the other hand, should leverage on the common platform to compete by providing innovative and value-adding products to their customers. Such synergistic collaboration will prevent unnecessary duplication and wastage  BIS central bankers’ speeches  3  of resources in the payment landscape. It shall reduce the cost of transactions over the long run. Modernising payment and settlement infrastructure MyClear is embarking on a multi-year programme to modernise Malaysia’s payment infrastructure. In the area of retail payments, a new real-time Retail Payments Platform will be developed to serve both as a catalyst and enabler for innovative payments in Malaysia. As for large value payments, the Real-Time Gross Settlement System or RENTAS is currently being enhanced to adopt a multi-currency system that leverages on the SWIFT messaging standard. The enhanced RENTAS would cater for multiple messaging formats including the internationally-recognised ISO 20022 which supports the transmission of richer remittance data and facilitates interconnectedness with other economies within the region. Enhancing capital market infrastructures With respect to the capital market, Malaysia’s debt securities market is the largest in Southeast Asia.
Given my assessment of the data as they stand and recognising the substantial policy tightening already implemented, in my view the MPC’s current priority must be to ensure we see the job through, so as to return inflation to target on a sustainable and lasting basis. It remains premature to declare victory over the unacceptably higher rates of inflation we have seen recently. Continuing to raise rates at the pace and magnitude seen over the past year would eventually – and perhaps soon – imply that monetary policy had cumulatively been tightened too much. Nevertheless, given where we stand, I still choose to emphasise the MPC’s need to be watchful for signs of greater-than-expected persistence in inflationary pressure. And I would flag the need for the Committee to maintain a readiness to act to address any such persistence should it emerge. We have long signalled how we assess the potential for inflation persistence: by looking at the strength of corporate pricing power along supply chains, by evaluating the tightness of the labour market, by weighing up wage developments and their implications for services price inflation. The past few days have yielded some new information along these dimensions. Tuesday’s labour market release pointed to signs that the UK labour market loosened a little in the fourth quarter, in line with the narrative underpinning the MPC’s February Monetary Policy Report.

As a result, inflation in Malta was lower than in the euro area for most of the last six months, partly compensating for the higher rates registered previously. In the context of an economic recession, Malta’s public finances performed relatively well in 2009, although the country is still subject to an Excessive Deficit Procedure. The deficit-toGDP ratio declined from 4.5% to 3.8% in spite of an outlay of some 0.7% of GDP by way of  BIS Review 73/2010  1  targeted assistance to manufacturing firms and other stimulus measures. 1 To a large extent, however, the fall in the deficit ratio is explained by the presence of one-off expenditure items in 2008. 2 The general government debt ratio rose by around five percentage points to end the year at 69.1% of GDP, still below the estimated 78.7% euro area average. These developments helped to underpin confidence in Maltese government bonds, which are primarily held by domestic residents. In fact, all the government and corporate bond issues launched in 2009 were oversubscribed, in spite of the fact that the issuance volume doubled compared with 2008. Credit rating agencies have confirmed Malta’s sovereign credit standing, with Moody’s giving an A1 rating with a stable outlook. Spreads over the German benchmark ten-year bond yield have remained stable over the past year at around 123 basis points. Sources of economic resilience The relative resilience of the Maltese economy is mainly attributable to four factors. The first is the adoption of the euro.
It seems reasonable to conclude, however, that an evaluation of the Riksbank’s policy for inflation must recognise that a part of the changes in the rate of inflation stems from transitory effects occasioned by the Riksbank’s own measures. 3. The current assessment The March inflation report I should now like to turn to the outlook for inflation in the coming years. In order to provide as open and clear a picture as possible of how the Riksbank analyses the future prospect for inflation and approaches the construction of monetary policy, we present reports on this four times a year. In the latest report, published this March, it was considered that the GDP growth rates for 1997 and 1978 would be 2 and 3 per cent, respectively. It was also foreseen that no appreciable capacity restrictions should arise in these years. With an unchanged monetary stance and given that households and firms continue to count on inflation remaining low, underlying domestic inflation (the CPI change excluding transitory effects on inflation) one to two years ahead was judged to be between 1.5 and 2 per cent. In that the transitory effects will be dropping out of the 12-month change figures, however, registered inflation will move up by degrees in 1997 and 1998. In March we counted on the annual rate of inflation in 1997 being around 0.5 per cent, which would still be clearly below the inflation target. We also envisaged that in 1998 inflation would be somewhat below 2 per cent.

Since the beginning of the year, domestic inflation has edged down, hovering around 1.3 per cent. Adjusted for the reduction in day-care rates in January this year, the year-on-year  2  BIS Review 80/2006  rise in domestic prices has been 1.6 per cent. The rise in prices has been lower than expected for both goods and services. There may be several factors behind the low inflation rate. Strong competition between various producers within the food industry and construction industry may have had a dampening impact on inflation. In addition, productivity growth in retail trade has been high in the past few years. Intensified competition may also have contributed to curbing the rise in prices for banking and insurance services. Several factors point to higher inflation in the period ahead. Capacity utilisation in the Norwegian economy is rising, which will push up the rise in prices for domestically produced goods and services. A tighter labour market will probably lead to higher wage growth in the coming years. The rise in oil prices is pushing up producer input costs. Increased electricity costs may also translate into higher prices for domestically produced goods and services. Outlook for the years ahead Monetary policy will increasingly have to reflect the constraints facing some Norwegian industries. Oil prices are of importance for the activity level in the Norwegian economy and central government revenues. In recent years, oil prices have risen sharply.
Competition-weighted exchange rate, TCW index Index, 1992-11-18 = 100 150  150  145  145  140  140  135  135  130  130  125  125  120  120 00  01  02  03  04  05  06  07  08  09  10  11  Note: Outcomes are current rates to 081201 and the forecasts are quarterly averages. Broken line is the Riksbank’s forecast. Source: The Riksbank  14  BIS Review 154/2008  Figure 13. Labour costs, labour productivity and CPI in Sweden and the euro area Average of annual percentage change 2000-2008 4,0  4,0  3,5  3,5 Sweden  Euro area  3,0  3,0  2,5  2,5  2,0  2,0  1,5  1,5  1,0  1,0  0,5  0,5 0,0  0,0 Labour cost index  Productivity  CPI  Source: Eurostat  BIS Review 154/2008  15

News conference  22 September 2022, 10.00 am  Introductory remarks by Martin Schlegel Against the backdrop of current interest rate movements, I would like to give you a brief assessment of developments on the mortgage and real estate markets. Alongside other factors such as construction activity, income and demographics, interest rates have an impact on the real estate market and on demand for mortgages. In turn, mortgage and real estate markets play a key role for banks and financial stability. After a long period of extremely low interest rates, interest rate levels on the money and capital markets in Switzerland have risen substantially since the beginning of the year. As a consequence, interest rates for fixed mortgages have also increased, while rates for SARON mortgages have remained low. Until now, these interest rate developments have had little effect on growth in the mortgage and real estate markets. Prices for single-family houses and privately owned apartments have continued to rise and mortgage volume has also grown further. One possible reason is that actual interest costs for real estate purchases have increased only slightly due to the shift from fixed-rate mortgages to SARON mortgages. By contrast, there are signs of a slowdown in the residential investment property segment. Available data for apartment buildings indicate a slight reduction in prices in the second quarter. Looking ahead, the tightening of monetary policy should also help to ease the risk situation on the mortgage and real estate markets.
This is why the Riksbank often allows monetary policy to be guided by the CPIF inflation measure – a measure of underlying inflation that is not directly affected by changes in mortgage rates and therefore is not impacted by this effect (see Figure 4). The fact that the CPI is impacted by changes in the interest rate in this way is of course something the Riksbank was aware of when the inflation target was introduced. The choice was still made to define the target in terms of the CPI, as the CPI is a broad price index that represents normal purchases and is familiar to the general public. But as the Riksbank has pointed out, measures of underlying inflation are also used to obtain indications of the more lasting inflationary pressures. CPI inflation is constantly affected by temporary factors, which there is no reason to counteract with monetary policy – for instance, the direct effect on interest expenditure of the Riksbank's own monetary policy. Underlying measures, such as the CPIF, have thus often been used to guide monetary policy.2 Twenty years is a long time, and one might expect that the effects of fluctuations in interest rates on the interest-expenditure component in the CPI would offset one another. The average inflation rate according to both the CPI and the CPIF would therefore be roughly the same. However, this is not the case. The average rate of inflation measured in terms of the CPIF during the period 1995-2012 is 1.8 per cent.

In practice, the Central Bank has allowed the exchange rate to move within the band to the extent that it deems such movements consistent with its long-term goal of maintaining low inflation. Now the exchange rate is roughly 3.5% above the central rate and has appreciated by 2.7% since the middle of June when the Central Bank raised interest rates for the second time this year. In our present situation, we have sought to increase the transparency of our operations by explaining as thoroughly as we can the targets of monetary policy, our instruments, our methods, the assessments  3  BIS Review 117/1999  that underlie our policy in general and our individual actions in particular. This we do through our regular publications and interviews with the press. This is important in order to broaden the understanding of the main principles which underlie our monetary policy and its implementation. Financial supervision As you may know, until the end of last year, the Central Bank was responsible for the supervision of the operations of all financial institutions in Iceland except insurance companies. At the beginning of 1999, the Bank Inspectorate of the Central Bank and the Insurance Supervision Authority were merged into a new Financial Supervisory Authority which has the responsibility for supervising the operations of all financial institutions in Iceland. The change was in a way modelled on decisions which had been taken in some other countries, such as the United Kingdom.