samchain/econo-pairs-v1 huggingface dataset:
Fundamental to the growth of internet banking over the years is the confidence which the public has in its convenience and security. This is something that we cannot take for granted and must be continuously preserved. Advancement in technology and innovation has resulted in greater consumer convenience and enhanced efficiency. However, the same technology and innovation have also created new methods of perpetrating fraud that could be executed faster and with greater reach. Cyber criminals have been active ever since the advent of the internet, and are constantly finding new ways to defraud innocent victims. Safety and security of transactions in the banking system is fundamental in ensuring consumer confidence. Hence, an important function and responsibility of the Central Bank is to ensure online transactions can be made in a safe and efficient manner in the economy, in the pursuit of monetary and financial stability objectives. The need for constant vigilance & cooperation This fight that the banks are launching today is something that requires the support of all parties. We are aware of the creative ways in which criminals have attempted to deceive customers over the years and measures were required to be taken by the banks to protect the customers. While it is good to know that banks have played their roles in investing in robust security systems, they must also ensure that customers play their part in protecting their own assets and savings. The reminder and greater awareness from the Banks through this campaign is timely.

So, to the extent that we become more confident, if we become more confident about the economic outlook, that the recovery will be sustained, then I think that for me – speaking for myself, and only myself – that might make me a little bit more comfortable to proceed with balance sheet normalization a little bit more quickly. I think the important thing here is that when balance sheet normalization occurs and we start to end the reinvestment, don’t think of it as an active tool of policy. Think of it as a passive tool, number one. And number two, to the extent that we then do decide at some point in the future to taper or end the reinvestment, that will also be a way of removing accommodation. And so that would be a bit of a substitute for raising short-term interest rates. So, I would guess, my own personal view, is if we move to balance sheet normalization, that might actually stretch out the process of raising short-term interest rates a little bit because the two are substitutes for one another in terms of removing monetary policy accommodation. The Chair said in her testimony that this is something we’re going to be looking at over the coming meetings.
The interest rate has been reduced by 5 percentage points and is now approximately the same as among our trading partners. The krone has depreciated by about 12 per cent over the past year, and has returned to the level prevailing in the summer of 2001 and is in line with the average for the 1990s. Chart 20. After-tax real interest rates Quarterly figures. Per cent 10  10  8  8  3-month rate  6  6 10-year rate  4  4  2  2  0 1990  0 1992  1994  1996  1998  2000  2002  2004  Sources: Statistics Norway and Norges Bank  Monetary policy is expansionary now. This is reflected in low after-tax real interest rates. A long-term real yield on 10-year bonds can be estimated at about 1 per cent. We have adjusted the nominal interest rate for expected inflation. The short-term real interest rate is estimated at 1½ per cent. We have then adjusted the figure for actual inflation. The fall in nominal interest rates in 2003 has also reduced household net interest expenses. This has increased household purchasing power considerably. Chart 21. Labour costs in Norway compared with trading partners Index.

1990=100  110  110  105  105  100  100  Local currency  95  95 Common currency  90  90 1990 1992 1994 1996 1998 2000 2002 2004  Sources: TRCIS, Ministry of Finance and Norges Bank  14  BIS Review 11/2004  The fall in the value of the krone over the past year has strengthened the Norwegian business sector. The business sector is, however, still feeling the effects of a sharp rise in labour costs over a period of several years. Relative labour costs measured in a common currency are in line with the level prevailing in 1990, but approximately 10 per cent higher than in the mid-1990s. The internationally exposed sector has been scaled back. Those companies that are currently operating may be in a better position to bear the high wage level. Nevertheless, costs may limit activity and employment. Growth in the Norwegian economy picked up again through the summer of 2003. In the period ahead, solid growth in household income, subdued consumer price inflation and low interest rates will provide the conditions for high growth in private consumption. There is optimism in the building and construction sector. High petroleum investment is also supporting activity while mainland business investment has been low for a long period. The number of persons employed began to increase in the summer of 2003 and unemployment stabilised.
Purchases under the public securities purchase programme commenced on 9 March and, to 31 March, had reached over € billion, of which more than € billion related to purchases of Spanish public debt by the Banco de España and the ECB itself. With this expanded asset purchase programme in train, monetary policy may be said to have exhausted its room for manoeuvre. It should be added that the programme is already yielding its first fruit in terms of wholesale funding market prices and, more importantly, signs of easier financing conditions for households and firms. The politics of the Monetary Union I would like to conclude with some thoughts on the political environment in the euro area and its relationship to the economic recovery and the improvement in employment throughout the area. The crisis that commenced in 2007, which is still not completely over, has obviously exacted a high cost in terms of political support for what Monetary Union means. The Monetary Union, whose ultimate justification lies in the advantages it brings for economic growth and welfare, entails a common monetary policy and, as a corollary, relinquishing the possibility of using devaluation of the exchange rate as a national instrument to correct monetary and fiscal imbalances, and also the possibility of central bank financing of budget deficits (known as “monetary financing”). In this situation, there is no way of correcting imbalances other than by means of an “internal devaluation”, i.e.

Inflation is measured as the CPIF and before 1987 as the CPI excluding interest rates. Sources: Statistics Sweden and the Riksbank. 13 [15]  Figure 5. Central banks have reacted relatively quickly and unison Policy rates  Increases so far this year 4  3  2  1  0 BoC  FED  BoE  RB  ECB  NB  Note. Per cent and percentage points. Sources: National central banks. Figure 6. In a good scenario, the Riksbank does not need to make very large interest rate hikes Real policy rate  Nominal policy rate  Note. Per cent. The real policy rate is the Riksbank’s expected real interest rate, calculated as a quarterly mean value of the Riksbank’s policy rate forecast one year ahead minus the inflation forecast (CPIF) for the corresponding period. As the real interest rate is a forward-looking variable, the outcomes are also based on forecasts. The outcomes are calculated on the basis of the most recently published forecasts at that point in time. Source: The Riksbank. 14 [15]  Figure 7. Favourable development during the inflation-targeting period Yield differential against Germany  Real wages  Note. Percentage points and index, 1970 = 100. The interest rate differential against Germany is for 10-year government bonds. Real wages are deflated with CPI and the dot refers to the outcome for Jan-Sep 2022. Sources: Macrobond, the National Mediation Office, the OECD, Statistics Sweden and the Riksbank. 15 [15]
Its location, however, also depends on the spread, S, with the boom phase of the credit cycle leading IS to shift outwards and the bust phase shifting IS inwards. To complete the story, we just need to add a description of monetary policy. Assuming inflation starts off at target, an inflation targeting central bank will seek to hold the level of demand at potential, so monetary policy is described by MP. In the face of a credit boom, the central bank would then raise the interest rate to negate the expansionary effect on demand, and cut it in the face of a credit bust. The corresponding aggregate demand schedule, incorporating the endogenous policy response, is given by AD in the right-hand panel, together with a conventional upward-sloping aggregate supply schedule, AS; for simplicity, I ignore the possible impact on the supply of goods of changes in the price and availability of credit. A central implication of this analysis is that while it suffices to think in terms of a single representative interest rate in normal conditions, in times of stress the whole set of market rates need to be considered. Consequently, movements in the policy rate alone no longer provide an accurate summary measure of monetary conditions. The importance of this is illustrated in Chart 8, which shows the recent paths of the policy rate in the United States and the United Kingdom, together with representative measures of the cost of bank debt and the  BIS central bankers’ speeches  5  corporate loan rate5.

Our understanding of the transmission channels behind this synchronized increase is still limited.5 These recent events have elicited mixed feelings in the international community. On the one hand, there is the view that the longer the global liquidity persists, the more likely that vulnerabilities will build up in capital‐receiving countries. In this view, a gradual normalization of international liquidity conditions would be a welcome event for those countries where fundamentals are still strong. Furthermore, to the extent that the normalization comes with better prospects for advanced economies, the somewhat tighter access to international borrowing would be accompanied by an increase in external demand. On the other hand, there is the view that a fast reversal of expansionary monetary policies in advanced countries would yield a sudden and important tightening of financial conditions and a surge in financial volatility. Recent years have taught us all too well that a situation like this may have unforeseen consequences. All in all, the final impact of the tapering of QE policies on the rest of the world will depend on when it takes place, how it is done, and what countries do in the meantime. Let me first address the issue of when it will take place. After some speculation earlier this year that tapering would start in September, subsequent developments indicated that the recovery of the US labor market had been more sluggish than initially expected.
While unlikely, an extreme scenario would see the entrenchment of disinflationary developments initiate a downward drift in the Phillips curve and unmoor inflation expectations. Empirically disentangling these factors is extremely difficult, so we need to be mindful of such considerations when discussing the relationship between economic slack and inflation developments, especially in an environment of uncertainty over the anchoring of inflation expectations. Our primary task as a central bank is to ensure that the reconnection of the real and the nominal sides of the economy – what I referred to before as the Phillips curve regularity eventually reasserting itself – occurs at a steady state rate of inflation that is consistent with our medium-term aim. We have not yet accomplished our mission, and so we must remain patient and persistent. In 2/3  BIS central bankers' speeches  light of this, the October monetary policy decisions were taken to preserve the favourable financing conditions that are still needed for a sustained return of inflation rates towards levels that are below, but close to, 2%. In particular, the recalibration of our asset purchases reflects growing confidence in the gradual convergence of inflation rates towards our inflation aim. 1 See, for example, the European Commission’s “European Economic Forecast – Autumn 2017”. 2 For more details, see the box entitled “The targeted longer-term refinancing operations: an overview of the take-  up and their impact on bank intermediation”, Economic Bulletin, Issue 3, ECB, 2017.

In sum, we are still far from completing the steps envisaged in the first phase of the Five Presidents’ roadmap. Achieving and maintaining responsible fiscal policies at national and euro area level still  3  seems beyond our grasp and while certain elements of the Banking Union are now in place, more needs to be done. Overall, the timetable is ambitious. We must also be realistic and admit that further integration is running against headwinds of popular discontent with integration and liberalisation. We need, therefore to be more open about what we are doing, to fully engage all our citizens and to build a case for a stronger EMU that can enjoy broad popular consensus rather than being imposed from above. 4
Thus, a central bank providing emergency liquidity assistance must base its decision on the possibility of a loss. Given the uncertainty about the ultimate cost of emergency liquidity assistance and the central banks’ national mandates, conflicts of interest are likely to emerge in a decision to grant emergency liquidity assistance to a bank with major cross-border activities. It is not difficult to see how these conflicts could complicate crisis management, in particular if the bank is systemically important in any of the host countries. In the present situation, the home country’s authorities are likely to have the principal responsibility, at least if it is organised according to a branch structure. If the bank is systemic in the home country, the decision to provide emergency liquidity assistance may not be so difficult; the risk of incurring a loss may be worth it to avoid a systemic crisis in the home country. But if the bank is not systemic in the home country, but systemic in the host country, there may be some hesitation on behalf of the home country’s authorities to provide liquidity assistance. If the bank has a branch structure, the demise of the bank means that the foreign branch goes down with it, and, because it’s systemic in the host country, financial stability may be at risk and greater social costs are incurred at the host than in the home country.

A basic challenge for the authorities dealing with cross-border banks is how to find an acceptable formula for sharing the burden and the costs of a crisis. Goodhart and Schoenmaker have in their paper suggested a number of keys that could be explored to create such a formula, for example the relative size of GDP, the ECB capital ratio, and the relative amount of bank assets in the country. As pointed out by Goodhart and Schoenmaker, the first question to be asked is whether one would want a general solution where all countries contribute according to some fixed key, or more specific burden sharing arrangements, where only the directly involved countries participate according to a more flexible key, presumably taking into account the geographic spread of the bank’s business. To achieve the latter, it would be necessary to find some commonly agreed criteria for assessing a bank’s systemic relevance to the financial system of a country. Merely using market shares as a criterion will probably not be adequate as other aspects, such as the bank’s relevance to the payment system, clearing and settlement, involvement in inter-bank securities markets and so on would also be important in this respect. At the same time, in a constantly changing banking landscape, it would be difficult to find criteria that are so clear-cut that assessments will not be “up for negotiation” in a sharp crisis scenario.
But as we have said time and again in the past, we are not and cannot be immune to what happens outside our borders. We can mitigate its effects, but we cannot avoid them altogether. Therefore, the external situation is likely to have repercussions on our economy and, consequently, on our monetary policy conduct. As I just mentioned, at the August meeting the Board withdrew the tightening bias on the MPR it had communicated in previous minutes, which has reflected in the behavior of market interest rates. The baseline scenario I will be presenting in a moment assumes that the world economy will grow less than we anticipated just three months ago. First-half output figures were pretty  BIS central bankers’ speeches  1  weak in the developed world. Recent financial turmoil could aggravate in the second half of the year. Developed economies’ households continue to tighten their belts in order to reduce their massive debts, but, in turn, this deleveraging process is restraining growth in domestic demand and employment, prolonging balance sheet vulnerability. In addition, the fiscal position of these economies has deteriorated after several years of fiscal deficit. Remedying this situation will call for substantial adjustments in their public finances. Some of them could be done in the medium term, for instance in the United States, while others need immediate action, as is the case in some emerging European economies. In moments of weak private demand, these adjustments could postpone the much expected recovery even further.

Developed countries must make costly, complex, yet unavoidable adjustments. The experience of the developed world confirms the need to safeguard macroeconomic balances, both public and private, as well as a strong, well regulated financial system. The fragility of financial systems and fiscal accounts of some developed economies have caused a recoiling of living standards and could compromise their growth ability for a long while. 6  BIS central bankers’ speeches  Figure 1 Gross domestic product  (index, IV.2007=100, quarterly series) 115  115  110  110  105  105  100  100  95  95  90  90  IV.07  IV.08 Chile  IV.09 U.S.  Eurozone  IV.10 U.K.  Sources: Central Bank of Chile and Bloomberg. Figure 2 Real exchange rates around the world (index, July 1994-July 2011 average = 100)  180  160  160  140  140  120  120  100  100  80  80  60  60 Russia Brazil Czech Rep. Australia Hungary Canada Indonesia Switzerland N. Zealand Poland India Philippines Turkey China Chile Thailand South Africa Israel Norway Mexico Peru Malaysia Eurozone Japan South Korea Sweden U.S. U.K.  180  Range (*)  Spot  Average  (*) The range shows peaks and troughs of the local currency during indicated period. The scale has been adjusted to 180. The peak value for this country was 225. Sources: Central Bank of Chile and Bank for International Settlements (BIS).
from pension funds looking to maturity-match their longterm liabilities). What this means is that it is difficult to separate moves driven by changes in market liquidity, investor mandates or preferred habitat from moves driven by changes in underlying inflation expectations. For me, the inflation swaps market, which has grown and deepened in recent years, gives a more reliable read on underlying market participants’ views of inflation expectations than the gilt market data. Those swaps suggest that there has been little change in medium-term inflation expectations for some time (Chart 11). Chart 11 Medium term inflation expectations derived from inflation swaps(a) Per cent  5  4  3  2  1 2005  2006  2007  2008  2009  2010  2011  Sources: Bloomberg and Bank calculations. (a) Based on the 5-year, 5-year forward. Policy In these remarks, I have tried to explain how I personally read the main forces acting on the outlook for GDP growth and CPI inflation over the next few years. The final step is to explain my policy vote based on those views. At the moment, I see the risks to CPI inflation in the medium term as broadly balanced, around the 2% target. In particular, I expect that the upside risk from any deterioration in the level of potential supply is broadly offset by the downside risks to consumer spending. While there are certainly upside risks to the outlook from higher inflation expectations, those are not of immediate concern.

As always, I stand ready to change my views should the economic outlook change sufficiently to warrant it. BIS central bankers’ speeches  9
Moreover, the progress made in reducing the level of debt has not been uniform. While general government debt is still close to its recent high levels (on which I will have more to say later), private sector deleveraging has been very significant. 4/8  In any event, the net external debt of the economy as a whole remains very high. Reducing this debt will require running persistent external surpluses, which would be difficult in a setting of contracting international trade or rising interest rates. Insofar as maintaining balanced economic growth is concerned, the low profitability of Spanish deposit institutions is certainly a problem. This phenomenon, also observed in other European banking systems, is related to the pressure that the low interest rate environment exerts on the net interest margin, but also to the still-high level of unproductive assets, limited turnover and the competitive environment, in which a growing number of institutions from outside the financial sector are increasingly active in offering services traditionally provided by banks. Challenges for sustained economic growth in Spain in the long term Taking into account these short and medium-term prospects, I will now refer to the challenges facing the Spanish economy in the longer term. Our report refers to four priorities: combating the effects of population ageing, tackling long-term unemployment, increasing productivity growth and reducing public debt. The consequences of population ageing As in other European countries, we are witnessing a process of strong population ageing, a phenomenon with profound implications in various areas.

At the same time, the financing of this process required huge flows of funds which, given the insufficiency of domestic saving, had to be met by turning to foreign saving, channelled to Spanish households and firms by credit institutions. Behind this whole process lay a real estate sector growing at an excessive pace in terms of both houses built and house prices. The excessive surge in construction was unquestionably fuelled by low interest rates and the practically unlimited supply of financing provided by foreign saving. The sound fiscal performance by the Spanish economy before the crisis, between 2005 and 2007, masked the actual situation of public finances which were distorted by extraordinary revenue of a strictly temporary nature, linked to the exuberant real estate sector. These abundant inflows discouraged the adoption of the necessary public expenditure rationalisation and control measures needed in both central and regional government. BIS central bankers’ speeches  3  In short, the path followed by the Spanish economy in those years brought about substantial macroeconomic imbalances which crystallised in, among other things, a large external deficit and a sudden sharp rise in total external debt, both of which reached highs in 2007–2008. Finally and inevitably a far-reaching adjustment took place, unfortunately amid the turmoil of the international financial crisis.