samchain/econo-pairs-v1 huggingface dataset:
A summary of the results has for some time now been published in our quarterly Business Cycle Signals report. The enclosed study explains the objectives and the methods underlying these company talks. You will also find the latest issue of the Business Cycle Signals in your press kits. Both of these sources of information are, of course, also available on our website. Page 5/6  Berne, 12 December 2019 Thomas Jordan  News conference  Ladies and gentlemen, thank you for your attention. It is now my pleasure to give the floor to Fritz Zurbrügg. Page 6/6

Conversely, the scope of the European exercise will be much broader, including in its adverse scenario shocks – both at the level of the global economy and at that of each national economy – that affect all types of exposures, including the sovereign debt portfolio. All told, Spanish banks’ starting position ahead of the new exercise can generally be confirmed as relatively favourable, if we consider the disposals of problem assets, especially by the most vulnerable banks, the recognition of impairment of the assets most affected by the crisis and the sizeable increase in all banks’ loss-absorption capacity. 4. Beyond the analysis exercise  In any event, the exercise will, irrespective of its final result, be a good opportunity to reflect on the relative strengths and weaknesses of the Spanish banking sector. And this can provide a platform for banks to take strategic measures enabling them to strengthen their competitive position in the new institutional framework. In this connection, the regional diversification of the major banks – following a model of stand-alone subsidiaries, in terms of both capital and liquidity – has clearly been an advantage that has enabled them to soften the impact on their profits of adverse but not synchronised macroeconomic developments in different economic regions. Also worth highlighting is their proven capacity to obtain high levels of profitability in the retail business and to maintain the value of franchises, despite the shortcomings evidenced in the selling of loan and deposit products.
The third issue is whether the rise in commodity prices will turn out to be persistent and, if so, how this might impact the inflation outlook. Recently, commodity prices have risen sharply. For example, the spot GSCI – a broad measure of commodity prices – has risen more than 35 percent over the past year. This was in train before the upheavals in the Middle East raised market concerns about potential disruption to oil supplies, pushing energy prices – though not other commodity prices – still higher. Commodity price pressures are pushing measures of headline inflation above measures of core inflation, which exclude food and energy prices. How worried should policymakers be about this development? Although there have been commodity price cycles in the past, commodity prices have not consistently increased relative to other prices, and indeed have declined in relative terms over the very long term. Historically, if commodity prices rose sharply in a given year, it has been reasonable to expect that these prices would stabilize or fall within a year or two. This property has been important because it has meant that measures of current “core” inflation, rather than current headline inflation, have been more reliable in predicting future headline inflation rates. In contrast, over the past decade, commodity prices generally have been on an upward trend. For example, as shown in Chart 25, fuel prices have generally been in a rising trend since 1999 and non-fuel prices since 2001 – both trends interrupted temporarily by the financial crisis.

Governor Veerathai’s Statement Your Excellency, Fellow Governors, Ladies and Gentlemen, Members of the press,  A very good afternoon to you all,  It is my great pleasure to welcome our distinguished guests to this special event before the year ends. Let me extend a very warm welcome to Governor Agus and Governor Muhammad Ibrahim who have both travelled to Bangkok specifically for this occasion. The year of 2016, which is coming to the end soon will be remembered by economists and financial professionals as a year of the unexpected, beginning from China's circuit breaker in the very first week of the year, to negative policy rates, to Brexit and the US elections. Greater uncertainties now hang over the global economy. Fortunately, our ASEAN region, with its high potential, is a bright spot in the world. This is therefore 1  time for us to navigate today’s uncertainties through our concerted efforts to bring out the potentials of our ASEAN region. What we are witnessing here today is a renewal of the spirit of regional integration by relying more on collaboration to serve as a key driver for sustainable growth to benefit all of us. The MoUs that we are about to sign will provide flexibilities on foreign exchange regulations for the settlement of trade and investment in local currencies, resulting in greater efficiency and convenience for businesses. Another key merit of this framework is that businesses will be able to better manage exchange rate risks.
First, the government has shown little ability and willingness to impose clear and ambitious return requirements and control the financial risk in companies where it has a dominant stake. In addition, if the companies are underperforming, both jobs and regions will be adversely affected. Second, the government has not developed effective management of equity in the companies. The size of equity and the dividend policy seem to be randomly determined by historical factors. New equity management instruments, such as share buy-backs and extraordinary dividends, are seldom used. On the whole, it seems difficult for a state-owned enterprise and for the state as owner to acknowledge that a growth period may have come to an end and that the owners should invest their capital elsewhere. Third, the state as owner will always have a strong aversion to negative corporate events. On the other hand, the state will provide little extra rewards to a company that has boosted its return on equity by one or two percentage points. The result is an erosion of an important driving force behind growth. BIS Review 14/2001  11  In a state-owned enterprise the board or management of the company and the state as owner may have a common interest in overcapitalising the company because they will then both be on the safe side. Fourth, the state has complex and elaborate procedures for making decisions. Moreover, the procedures are designed to accommodate tasks other than the role of ownership.

Second, real interest rates must also be increased with a view to removing the causes behind the differentials. BIS Review 14/2001  5  Interaction with fiscal policy It is important that the annual budgets are based on a long-term strategy that takes into account possible fluctuations in oil revenues from one year to the next. With large and, to some extent, varying budget revenues, the basis for determining central government expenditure and taxes from one year to the next may easily be impaired. If budget spending is allowed to vary in step with oil prices, the Norwegian economy may experience abrupt shifts and instability. Changes in oil prices may then quickly influence wage and price expectations, the exchange rate and long-term rates. In addition, short-term rates would have to be changed frequently and sharply. Budget tightening and spending growth Percentage change from previous year 3  3  Spending growth  2  2  1  1  0  0  -1  -1  Total effect of the budget  -2 93  94  95  96  97  98  99  00  -2 01  In recent years, central government real underlying spending growth has accelerated somewhat. Both in 2000 and 2001, spending growth has been higher than 2 per cent, which is above potential growth in the mainland economy. At the same time, taxes have increased.
Supervision should be based on a combination of offsite observations, where the supervisor analyses financial and prudential reports and other information; onsite visits where the supervisor verifies the information it has received and focuses on the governance and control processes in the bank; and personal contacts with banks’ auditors, owners, boards, management and staff in order to gain a good understanding of the bank’s business and of the competencies of the leading personalities. Recently, more stress has been given to this latter issue because the increased complexity of banking makes the importance of good corporate governance and efficient control functions even more evident. Supervisors should avoid trying to micro-manage the banks. When supervisors go too much into the details of the running of the bank, they will be seen to assume – in the eyes of the bank and also of the general public – a responsibility for the bank, which they should not have. The operational independence of supervisors has lately become even more important. The higher degree of interdependence between the institutions and markets combined with their increased complexity and thus vulnerability implies that supervisory decisions and measures must be based on purely prudential grounds without listening to non-relevant arguments. Such operational independence is inscribed in the statutes of the Swedish supervisory authority. However, independence must be tempered by accountability so the supervisors will have to explain their decisions publicly in various ways, such as reports to the Parliament, and they must be prepared to take responsibility for them afterwards.

But it’s one that has gained colour from the debate about derivatives. An oddly polarised debate. Overstating it somewhat: in one corner, a group contending that derivatives bring tangible benefits to civilisation. In the other, a group arguing that they have within them the seeds of severe disorder. Unsurprisingly, my take is that the truth lies somewhere in between. It is nicely illustrated by the quite extraordinary development of the credit derivatives market over the past five years or so.2  Dispersion of risk, and the price of risk Credit derivatives plainly have been used as an effective risk management tool by a number of banks and others. Contrary to some suggestions, the acid test is not especially whether banks, individually or in aggregate, have been net sellers of credit risk. Individual banks have been able to reduce concentrated loan exposures to single corporates, industries or countries. As the Telecom episode reminded everyone just a few years ago, that is really important, if elementary. Individual banks have also been able to increase their exposure to borrowers with which they do not have a lending relationship. (Indeed, some commentators suggest that it may sometimes be more effective for second-tier and smaller banks to take corporate credit exposure via the derivatives market than via participation in the lower tiers of loan syndicates.)
I am not in this speech going to summarise all our reform measures, which are due to be implemented over the period to the end of 2001. Instead, I will describe what we have done so far, and the main tasks that remain to be done. The progress on competitive reforms So far we have introduced three main changes that are intended to promote competition: •  In September 1999, the one-building condition that applied to foreign banks licensed after 1978 was relaxed to allow such banks to open branches in a maximum of three separate  BIS Review 69/2000  2  buildings. At the same time we eliminated any restriction on the number of regional and back offices that foreign banks can maintain. •  In December 1999, we announced that agreement had been reached with the various parties involved for restricted licence banks to join the RTGS interbank payment system. The detailed legal arrangements were finalised in May of this year and a formal invitation to join the system was issued to those RLBs with a clear business need to do so. •  Finally, at the beginning of July of this year, we embarked on the first phase of deregulation of the remaining interest rate rules. This involved removal of the interest rate cap on time deposits with a maturity of less than 7 days. Following this, all time deposits are now completely deregulated. What has been the reaction to these changes? The answer is that not much has happened so far.

Profits rose sharply and bad debts were lower. This means that the clouds that have hung over the banking system for the last two years have now lifted. But it would be wrong to conclude that life for the banks will go on much the same way as it did before in the golden years before the crisis. The competitive environment for the banks is becoming increasingly intense. Of course, you can argue that there is nothing new in this. The banking system in Hong Kong has always been competitive, which is one of the reasons it was able to cope with the Asian crisis. But competition in past years was taking place in highly buoyant conditions and within defined limits, reflecting in part the influence of the interest rate rules of the Hong Kong Association of Banks. 1  BIS Review 69/2000  The competitive environment Now things are somewhat different. A number of major players in the market, including some foreign banks, are competing even more intensely than they did before. Some of them have recently increased their presence in Hong Kong or are planning to do so. In some cases, this presence may be in virtual form as banks increasingly offer their services in whole or in part over the internet. This is part of a worldwide trend towards greater competition. But it is happening in Hong Kong at a time when lending growth has still not recovered along with the economy.
A stronger exchange rate will curb the rise in prices for imports, which directly and indirectly account for 40 per cent of goods and services in the consumer price index. A stronger krone weakens earnings and reduces activity in enterprises in the internationally exposed sector. This has an impact on enterprises’ capacity to pay, wage growth and price inflation. We do not expect a change in interest rates to have an immediate effect on inflation. Our analyses indicate that a substantial share of the effects of an interest rate change occurs within two years. Hence, the key rate is set with a view to achieving an inflation rate of 2½ per cent two years ahead. The social partners will take account of the inflation outlook in their wage negotiations. If there are prospects of higher inflation, the nominal wage increases will be higher. At the same time, higher wage growth means higher inflation. Developments in the labour market and wage formation are therefore important for interest rate setting in Norges Bank. It is also important to be aware that developments in labour costs may influence inflation, growth and employment differently in a system with a floating exchange rate that in a system with a fixed exchange rate.

Svein Gjedrem: Monetary policy and the outlook for the Norwegian economy Address by Mr Svein Gjedrem, Governor of the Norges Bank, at the Wage Bargaining Conference of the Electricians and IT Workers' Union in Vestfold and Telemark counties, Drangedal, 24 August 2001. *  *  *  The objective of monetary policy In spring this year, the Norwegian Government and the Storting (Norwegian parliament) laid down new guidelines for economic policy. The Government has announced that it will use the expected real return on petroleum revenues in the Government Petroleum Fund over the central government budget. The Government stresses that it will nevertheless use fiscal policy to smooth fluctuations in employment and activity levels. At the same time, Norges Bank was given a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. The inflation target is set at 2½ per cent. Low and stable inflation is the best contribution monetary policy can make to growth and prosperity. High and varying inflation weakens growth potential. The function of prices as a vehicle for information is impaired. Many choices will be based on a false foundation. Pay increases may be cancelled out by high price inflation. With high and varying inflation, it is difficult to determine whether higher house prices, for example, entail a real increase in the value of property, or whether the rise in prices is mainly due to a decrease in the value of money.
In a context requiring, first, that the funds be used nimbly to shore up the recovery and, second, a lasting impact to encourage the structural transformation, the ongoing assessment of the projects financed using those funds is the most effective answer to squaring these short and long-term objectives and to strengthening the necessary public fund control mechanisms. Ongoing assessment allows for experimentation with new ideas and transformative projects. It also minimises the danger of continuing to channel funds to projects which are attractive a priori, but which do not yield the expected results. Making mistakes can sometimes be a part of long-term success; however, persisting in the error never is. Spain and Europe need Next Generation EU to be a success, on account of it representing a chance to ready ourselves for the future and making the case for further European integration. Indeed, the need for the European funds to help foster our economy’s transformation is also determined by the requirement that the funds be used in conjunction with reforms addressing the structural defects that, according to the evidence, have weighed down growth and hampered our society’s well-being for decades (e.g. those related to low productivity and the poor functioning of our labour market).

Monetary policy and asset bubbles In my opinion, this crisis should lead to a critical reevaluation of the view that central banks cannot identify or prevent asset bubbles, they can only clean up after asset bubbles burst. As I wrote in 2006, this orthodoxy can be summarized by three propositions: 1. Asset bubbles are hard to identify. 2. Monetary policy is not well-suited to respond to bubbles. 3. Thus, the cost/benefit tradeoff of “leaning against the wind” against asset bubbles is unfavorable. From these propositions, the two important policy implications directly follow: 1. The central bank should only take asset bubbles into consideration in the conduct of monetary policy to the extent that these asset bubbles affect the growth/inflation outlook. 2. The monetary authorities should be there to “clean-up” after bubbles burst, both to prevent systemic problems and undesired downward pressure on economic activity and/or inflation. Relative to this, I would argue that:  BIS Review 83/2009  3  1. Asset bubbles may not be that hard to identify – especially large ones. For example, the housing bubble in the United States had been identified by many by 2005, and the compressed nature of risk spreads and the increased leverage in the financial system was very well known going into 2007. 2. If one means by monetary policy the instrument of short-term interest rates, then I agree that monetary policy is not well-suited to deal with asset bubbles.
Ardian Fullani: On building capacities for policy design and implementation Opening remarks by Mr Ardian Fullani, Governor of the Bank of Albania, at the workshop “On building capacities for policy design and implementation", Tirana, 3 December 2009. *  *  *  Dear participants, It is a very great pleasure for me to open the proceedings of this two-day workshop, entitled “Building Capacities for Policy Design and Implementation”, organised for the first time in Albania by the Bank of Albania, in co-operation with the Center of Excellence in Finance (CEF), Ljubljana, with support from the European Commission, European Central Bank, and International Monetary Fund. Welcoming you here in Tirana, allow me to express my gratitude for the excellent work done by the CEF in the course of these years, to the benefit of our region. Since our Washington meeting last April, the effects of the global crisis increased their presence in our region; however, as I have already emphasised even earlier, they did not immediately concert to full blown economic and financial problems. The extension of crisis effects to the real economy, to the budgets of governments and to financial sectors of the region, was mitigated by sound macroeconomic policies pursued in the recent years and by the availability of International Monetary Fund funding on an unprecedented scale, in coordination with support from the European Commission and the EBRD.

Importantly in this connection, the Spanish economy has sufficient depth of stability to enable it to weather the impact on household spending of an appreciable house price correction, in the unlikely event that it should occur. The soundness of Spanish credit institutions, underpinned by high solvency levels and comfortable bad debt coverage ratios (a matter to which I will return later in the more general framework of the situation of the financial system), minimises the possibility that downward adjustments in house prices, should they occur, would significantly impair banks’ ability to continue to efficiently finance the spending decisions of firms and households. Moreover, unlike in other countries, Spanish households have not started significantly to borrow against their increased housing wealth to directly finance current consumption plans. In any event, the losses in competitiveness, household debt levels and house prices evidently entail a risk of the expansion being interrupted. The economic policies under national sovereignty thus have the important mission of preventing these risks from materialising and providing a solid foundation for growth. In particular, since monetary and financial conditions will most likely continue to be relatively generous for the needs of the Spanish economy in the foreseeable future, it will continue to be the responsibility of fiscal policy to help establish an overall macroeconomic stance that will contribute to mitigating spending pressure.