samchain/econo-pairs-v1 huggingface dataset:
20  These percentages should be considered as the lower bound of the total impact of the interest rate rise, as this would also reduce agents’ income, through its negative impact on economic activity, and would curb the accumulation of wealth on account of the higher net interest burden. 13  As far as general government is concerned, the steep rise in the public debt-to-GDP ratio seen since 2007 also means that public finances are more sensitive to interest rate movements. However, the fall in interest rates of recent years has led to a continuous decline in the interest burden as a percentage of GDP, while at the same time, longer average debt maturities (currently standing at more than eight years) limit the short-term impact of higher issuance costs. Specifically, incorporating the current market expectations for rising interest rates into the Banco de España’s latest macroeconomic projections, the public debt burden would increase from 2.2% of GDP at end-2021 to 2.5% in 2024. Under this updated scenario, an additional 100 bp increase in short and long-term interest rates, with all other variables remaining constant, will further drive up interest payments by around 0.4 pp of GDP by 2024. 14  As regards the impact of rising energy prices, variations similar to those observed between the Banco de España’s December 2021 and March 2022 projections21 would have moderate average effects on the degree of financial vulnerability of firms, albeit with notable crosssector heterogeneity.

The growing interest for attending the Conference confirms once again the significant contribution of the Conference to the enrichment of the knowledge and exchange of experience of the representatives of the central banks in regional and international frames. Nevertheless, the Conference would not be a unique treasure of knowledge and experience, if it did not include the representatives of the domestic financial system and the payment service providers, which by their continuous active participation and involvement in the panel discussion, contribute to the thematic comprehensiveness of the Conference. The Conference will cover the latest developments in payment and securities settlement systems, as well as payment services on global, European and national level. In the global context, Mr Klaus Löber, the esteemed expert from the European Central Bank, will elaborate on the new developments in the area of implementation of the PFMIs, work on retail payments, cyber security, digital innovations and correspondent banking. These are very important issues for central banks given that we also promote the safety and efficiency of payment, clearing and settlement, thereby supporting financial stability and the wider economy. In addition, the developments in the compliance area regarding the prevention of money laundering, financing of terrorism, insider dealing, fraud, corruption and other criminal offences are in the focus of the Conference, as well. In this context, we appreciate the contribution of Mr Oliver Schufmann, the representative of Commerzbank, who will present their experience regarding the compliance activities.
I should like to highlight this latter aspect of price-setting policy at the level of products or services since, traditionally, services that are not explicitly charged and whose cost has been covered by the net interest margin have been provided to customers. I believe it is important to introduce transparency and rigour into price-setting. Without it, the reality of the business is distorted as is, consequently, the attendant analysis, and informed decision-  1  “SSM thematic review on profitability and business models. Report on the outcome of the assessment.”, September 2018. 3/8  making is hampered. Not in vain, in the aforementioned thematic review price-setting is included among the areas where the SSM recommends making improvements. I would further stress that, in this comprehensive analysis of the bank’s accounts, there should be some thought on the weight of operating expenses. Unquestionably, Spanish banks have made a great effort in terms of capacity adjustment in recent years. Numbers of staff and offices have fallen approximately by 32% and 40%, respectively, from their 2008 peaks. It is necessary to continue paying attention to these expenses, so as to ensure they are in step with developments in lending activity and in revenue. Against this background, progress in new technologies, and the alternatives these offer to the traditional means of providing bank services, may prove an opportunity to cut costs and come into line with the change under way in the customer-bank relationship.

Such investment will also afford banks a greater guarantee of success when addressing the growing competition from technology firms. Likewise, these investments are needed to mitigate the impact and probability of cyber risks, which we have identified as a growing threat. Fourth, let us not forget that there are also various challenges in the regulatory and institutional arenas, both globally and at the European level. The coming months will be key to ensuring the full adoption of the Basel III accord in Europe. This will enable us to remain at the forefront of the multilateral response to this crisis and to establish, within Europe, the benefits that proper banking regulation has for economies’ capacity to absorb shocks and foster the public’s well-being. Moreover, the COVID-19 crisis has once again reminded us of the pressing need to complete the Banking Union and strengthen the Capital Markets Union. The creation of a common European Deposit Insurance Scheme and the adoption of appropriate panEuropean resolution legislation for large institutions are key steps in this process, paving the way for cross-border mergers and acquisitions and the associated potential efficiency gains, for instance. Thus, further integration of the European financial system would open up greater risk diversification possibilities and facilitate financing for productive activities at a lower cost. Lastly, in the longer term, it will also be important that the banking sector provides an appropriate response to the risks posed by climate change.
Not just the euro, but the Swiss franc, too, had been losing ground against the US dollar. In contrast to summer 2011, when the Swiss franc had been significantly overvalued against all other currencies, by the time of the discontinuation, Swiss franc strength had given way to euro weakness. The increasingly divergent monetary policy stances of the Federal Reserve and ECB were also putting pressure on the minimum exchange rate against the euro. The SNB was forced to intervene in the foreign exchange market on an ever larger scale. This was reflected in the monetary base (the volume of liquidity created by the SNB), which had expanded in several surges since 2009 and was now rising sharply again (cf. chart 4). Given the changed international environment, the minimum exchange rate of CHF 1.20 per euro was no longer sustainable. The SNB could only have enforced it through ongoing foreign currency purchases of rapidly increasing magnitude – in an environment where there was no prospect of a long-term stabilisation on the exchange rate front. Delaying the decision to discontinue would not have mitigated the economic consequences, but the losses for the SNB would have been far greater. This would have compromised the SNB’s ability to fulfil its mandate in the long term and would have undermined its independence in matters of monetary policy. Monetary policy since the discontinuation of the minimum exchange rate Developments since the minimum exchange rate was discontinued have confirmed our assessment at the time. The euro continued to weaken against the US dollar.

Floating exchange rates allow a country to pursue its own, independent monetary policy; however, the disadvantage of such an approach is that it can result in major (nominal and  2  BIS central bankers’ speeches  real) exchange rate fluctuations. A country’s currency may thus be substantially under or overvalued – sometimes for considerable periods of time. The problems associated with both fixed and floating exchange rates mean that, time and again, central banks have been on the lookout for compromises. Since the end of the Bretton Woods system, the SNB has twice introduced a temporary exchange rate floor in order to cap Swiss franc appreciation: first in October 1978 against the German mark, and latterly in September 2011 as a minimum exchange rate against the euro. The minimum exchange rate as a monetary policy instrument When a central bank announces a minimum exchange rate, it commits to enforcing a floor, if necessary by means of foreign currency purchases. Such a policy is designed to cap a currency’s appreciation. The minimum exchange rate is not conceived as an instrument for fine-tuning the exchange rate. Rather, it is intended to give guidance to the markets in a period of extreme uncertainty and to reduce excessive appreciation. However, a minimum exchange rate is not a long-term instrument. This is especially true in a country like Switzerland which has lower long-term average inflation rates than most countries and a currency that has appreciated consistently over the decades – both in real and nominal terms.
It requires clear objectives, extensive decision-making delegation, strong control systems, open and transparent reporting and a realistic appreciation of the constraints faced. If conducted properly, openly and successfully it will greatly strengthen the public’s respect for and confidence in official policy, and make a material contribution to successful macroeconomic management. When we speak about reserve management strategy, we face the challenges of the new low yield environment, but at the same time, one should have in mind the constrains set by the country-specific factors like the foreign exchange regime, the domestic capital markets size and depth, the reserve volume and the currency of the country's liabilities. In that regard, main building block in the reserve management process is naturally the strategic asset allocation, set in a manner that ensures achievment of the key goals of the reserves management, that is: capital preservation, liquidity and at the end - return. In respect to the last goal of the reserve management process, as we are in the middle of the second decade of 21st century, competition for return has intensified, reaching new levels, as the global economy enters increasingly challenging times. In that regard, operational functions of the reserve management can contribute as well, having in mind that like never before the most important goal of operational conduct of the transaction is to deliver the most value at the lowest cost in the least amount of time.

This part of the city survived the 1963 earthquake, when nearly all the city's beautiful neoclassical 18th and 19th century buildings were destroyed. After the earthquake, international financial aid poured into Skopje in order to rebuild the city. Today, Skopje is seeing a makeover in buildings, streets and shops, and many projects (Macedonian Struggle Museum, the Archeological Museum of Macedonia, National Archive, Constitutional Court, New Philharmonic Theatre) were finished in order to return some of the looks and spirit of the city. In economic aspect, being many times since 2006 on the list of 10 best reformers by the Doing Business rank of the World Bank, proves that Macedonia has undergone considerable economic reforms. It has developed as an open economy with the trade accounting more  BIS central bankers’ speeches  1  than country's GDP in recent years. Although the environment was highly difficult, first with the global financial crisis, afterward with euro area crisis and more recently, with Greece crisis, our GDP growth was on average above 3% for whole this period, which is one of the highest in Europe, and for 2015 it is expected to be around 3.5%. The unemployment from a very high level, throughout this period is on declining path, by implementing many structural reforms and ALMP. The government strategy to attract foreign investments and establishment of a good business environment for the development of small and mediumsized enterprises (SMEs) was paid off.
6  the tensions in commodity markets during 2022 were caused by the Russian invasion of Ukraine and, therefore, a prolongation of the war is still a major source of uncertainty for Europe. Moreover, although the breakdown of euro area GDP growth in the last quarter of 2022 is not yet available, growth looks to have been sustained by stockbuilding and a positive contribution from net trade, which mainly reflects a drop in imports. In addition, domestic demand fell in some of the countries for which fourth quarter data is available – in particular France and Spain –, a pattern that was also evident in the latest retail sales data for December, with sharper declines in Germany and the Netherlands. Conversely, the qualitative data available for the first quarter of 2023 point to an improvement in consumer and business confidence. Therefore, we need to continue to monitor domestic demand patterns, which will be key to modulating the convergence of inflation towards our target. The transmission of our monetary policy The current ECB hiking cycle is unprecedented in terms of its speed. Policy rates have increased by 300 bp in about half a year. The question is whether such aggressive tightening is enough to ensure a timely return of euro area inflation to 2%. We assess the impact of our measures based on the historical evidence of previous rate-hiking cycles.

However, China’s reopening may temper inflation through its impact on supply bottlenecks. Indeed, the end of the zero-COVID policy will avert production distortions caused by restrictions. In the recent past, the COVID-induced production stoppages in China were key factors behind the bottlenecks and inflationary pressures and, therefore, the reopening could be seen as net deflationary. All in all, it is difficult to disentangle the net effects of all these factors on inflation and close monitoring will be needed. The resilience of euro area growth and its composition In the second half of 2022 the euro area economy proved more resilient than expected and the slowdown in the fourth quarter of last year was less severe than anticipated . This has occurred in a context on which a significant reversal of previous supply shocks (bottlenecks and energy prices) was observed, households and firms had plenty of buffers (in particular the household savings built up during the pandemic), the post-COVID rebound in demand continued to generate positive effects and monetary policy had not yet been fully transmitted. However, there is much uncertainty about the continuity of these factors. In particular, the sharp decline in European gas prices reflects unusually mild weather, energy-saving measures and strong inventory levels, which mitigate supply risks for next winter. However, 12  Ko lerus, Diaye and Sabo ro wski (2016) “China’s Footprint in Global Co mmodity Markets”. International Mo netary Fund.
This illustrates the first question, which is how to solve time inconsistency in fiscal policy. It is easier to follow the prescriptions of Keynes in bad times than in good times. This asymmetry may lead to an increase in budget deficits and sovereign debt over time, also referred to as the fiscal bias. As a result, many countries (PIIGS, UK,) have to tighten policy in a period when the real economy would certainly benefit from further stimulus. The crisis caused fiscal balances to deteriorate by 8–10 percentage points. There is an immense difference between encountering a shock of this magnitude from a positive fiscal balance of 4 per cent and encountering it from a negative fiscal balance of 4 per cent. From a negative balance of 4 per cent, fiscal balances end up at a 12 per cent deficit! Then it is imperative to tighten policy. A similar time inconsistency problem, the inflation bias, has been a much debated issue in monetary policy. The solution has been central bank independence. So the question is, is there something to be learnt from monetary policy? Ragnar Frisch  The fiscal bias is not a new phenomenon. And a number of possible solutions have been tried. As far back as in the early 1930s, the Norwegian economist and Nobel Prize winner Ragnar Frisch had the following suggestion: “It might be an idea to establish a cyclical council to make such decisions, a council that could operate with an independent status similar to that of the Supreme Court.

In Norway, as in most other countries, this was particularly distinct for credit to enterprises. Both higher spreads and tighter credit standards can have potentially strong contractionary effects on the economy and needed to be counteracted. BIS Review 113/2010  1  Liquidity and capital support was necessary to restore credit flows  The contractionary forces from the financial sector were addressed by providing liquidity and capital to banks, through both regular and unconventional instruments in many countries. Government actions enabled banks to continue to provide credit to households and enterprises. The crisis demonstrated that the transmission mechanism is important for the effectiveness of monetary policy. It also demonstrated that the relationship between price stability and financial stability must be given due attention. In Norges Bank there is close integration between the two areas Norges Bank Monetary Policy and Norges Bank Financial Stability. Norges Bank Financial Stability participates at all meetings in the monetary policy process. This ensures that sufficient attention is given to developments in the financial system. It also provided the necessary insight to make wellinformed assessments of the transmission mechanism during the crisis. Considerable revision of the interest rate forecast during the crisis  The second lesson is that inflation targeting seems to have survived the test. In my view, increased transparency and the efforts made to improve the communication of monetary policy to the general public have been very valuable.
BIS central bankers’ speeches  underpinned by a clear separation between board oversight and management. While this may appear to be a rudimentary feature of any governance arrangement, it may be challenging in organisations that are large and have complex or opaque reporting lines, resulting in boards and senior management that are too far removed from the issues on the ground. “Too big to manage” is a real concern. In their reflection of banking practices leading up to the crisis, the United Kingdom’s Parliamentary Commission on Banking Standards found that an “unclear, complex and confusing allocation of responsibilities” among senior management had posed challenges in identifying individuals who were responsible for poor decisions and more importantly, in holding them to account 7. This is an important lesson to keep in mind for Asia, as our financial institutions continue to significantly expand their operations across sectors and geographical boundaries. In ensuring the effectiveness of governance structures, none is more important than having competent and committed individuals at the helm of financial institutions. The members of the board of directors must have a sound understanding of the business, the risk profile of the financial institution, and the operating environment. The board must also be ready to challenge executive management and hold it to account. This demands a combination of experience, confidence and character – elements which were found lacking among financial institutions in the recent crisis.

Thomas Jordan: Structures of a new financial system Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Volkshochschule Zürich, University of Zurich, Zurich, 15 April 2010. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Well-functioning financial systems are fundamental for long-term economic growth. They enable capital to be allocated efficiently and facilitate trade in goods and services. However, financial systems also harbour major risks. The recent financial market crisis clearly revealed the vulnerability of our globally integrated financial system. Wrong turns taken in the past few years together with government rescue measures have led to a situation that is, from a liberal perspective, untenable. All this underscores the urgent need to make financial systems more robust and to minimise the risks faced by governments and by national economies as a whole. It will not be possible to banish crises forever, since we cannot be sure what the origins of the next crisis might be or when exactly it will occur. Building a more robust financial system therefore represents a major challenge. The key role that banks play in the economy combined with their high level of vulnerability clearly underline the necessity of effective bank regulation. Greater stability and security, however, do not automatically mean less efficiency or growth. On the contrary, the creation of an intelligent and stabilising framework is a basic prerequisite for the efficient functioning of the financial system.
So it is unsurprising that Statistics Iceland's standard of living study revealed that households with onerous housing costs have declined substantially in number. About 10% of homeowners and 14% of renters consider their housing costs burdensome. This shows that debt service has risen less than could be inferred from public discourse. Just over half of households who have taken loans in the past three years have seen their debt service rise by less than 30,000 kr. per month. After adjusting for wage growth, the ratio of debt service to disposable income is broadly unchanged. As of this past January, the share of households whose debt service exceeds 35% of disposable income had risen by only 2 percentage points, from 7% to 9%. The winds are now changing in the real estate market, and the Central Bank is determined to push real rates upwards, whether through policy rate hikes or by lowering inflation and inflation expectations. This is why, in its most recent statement, the Financial Stability Committee encouraged mortgage lenders to "work with borrowers, as they have in the past, to prevent financial distress insofar as is possible." I expect that we will be taken seriously and that the banks will be prepared to respond when fixedrate clauses expire this coming winter. On the other hand, there is no reason for taxpayers to subsidise borrowers' mortgage interest expense - not at this point in time, at least.

Large fluctuations of the exchange rate of the leu that are decoupled from domestic economic fundamentals, as well as from the monetary policy pursued by the National Bank of Romania  4. Major deviations from the administered price adjustment programme announced by the Government, in terms of both magnitude and proposed calendar  5. Divergence of the fiscal and income policies, in terms of implementation and outcomes, from the programmed coordinates  Case in point: monetary policy under a string of VAT changes  To give you a flavour of the environment the monetary policy has had to operate in lately, we had three VAT rate cuts from 2013 to 2016, after a hike in 2010, and another cut is scheduled for 2017. Currently, the annual inflation rate stands at –3.25 percent, the most negative value in the EU. Excluding the first-round effects of the VAT cuts in mid-2015 and early 2016, headline inflation would have hovered around +1 percent. Consequently, the negative inflation we are dealing with now is not at all a condition brought about by a persistent lack of demand, as economic activity, employment and wages are actually buoyant. This is just a transitory development, induced by the aforementioned indirect tax cuts. The textbook policy choice would be to accommodate the temporary deviation from the inflation target and focus on the VAT-adjusted inflation developments – especially since the latter paint a quite different picture.