samchain/econo-pairs-v1 huggingface dataset:
This is reflected in the fact that the Danish Central Bank invariably alters its interest rates in the wake of announcements of changes in the European Central Bank (ECB) policy rate. Sweden and the UK have opted for inflation targeting as their monetary policy framework, which therefore does not have the objective of keeping these countries’ currencies stable against the Euro. European Central Bank The Maastricht Treaty stipulates monetary arrangements in the EMU. The EU countries created a framework for the ECB’s activities which was to some extent modelled on the Central Bank of Germany but differed in many ways from the arrangements in others. Various conditions were set which EU members had to fulfil in order to be granted EMU membership. On the one hand these related to major components of economic developments, such as inflation, fiscal deficit, government debt and interest rates. On the other hand they addressed the framework that the Maastricht Treaty lays down for monetary policy implementation in the EMU. This policy was consistent with growing support for the view that it was natural to set a simple target for central banks – i.e. promoting price stability – and to increase their independence from the political leadership in pursuing their main objectives, and to strengthen their financial independence. Another emphasis was that, at the same time as the central banks’ independence was strengthened, stricter demands would need to be made of them regarding transparency in their activities and actions, and regarding accountability towards the government and general public.

BIS Review 95/2001  1  All this was reflected in the Maastricht Treaty. The European Central Bank, which formally began operation in the middle of 1998, enjoys extensive independence and is subject to requirements for transparency and accountability. Even though Sweden is not yet a member of the EMU, it amended legislation on its own Central Bank which now largely fulfils the Maastricht terms. The Bank of England’s legislation does not entirely fulfil the terms of the treaty, but it was granted greatly increased independence a few years ago. Denmark has still not amended its central bank legislation, although this will need to be done in the event of Denmark joining the EMU, not least to give legal sanction to its independence. Price stability is the main objective The Maastricht Treaty set a single objective for the European Central Bank, namely ensuring price stability. Price stability was not defined in the treaty, however; this was done by the ECB itself, which specified it as an annual rise of under 2% in the Harmonised Consumer Price Index. A separate treaty on stability and economic growth stipulates that EMU members should aim for long-term fiscal balance or a surplus, and a public sector deficit of less than 3% of GDP. The decisive viewpoints behind the formulation of the European monetary framework were also dominant in many other parts of the world.
Mark Carney: The spirit of the season Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, to the Economic Club of New York, New York City, 9 December 2013. *  *  *  Accompanying charts can be found at the end of the speech. It is always a pleasure to be in New York during the festive season. At this time of year in this city everything seems possible. However for some time now, appearances have deceived. The hopes and dreams of the holiday season have gone unfulfilled as the bright lights of December have given way to the grim realities of January. Around this time every year policymakers, investors and economists take stock. For four of the past five years, perhaps caught up in the seasonal spirit of goodwill, they have rendered the same verdict: the outgoing year was disappointing but the incoming one will be better (Chart 1). This year is no different. The IMF, the Bank of England and private forecasters all predict faster growth in the advanced and global economies in 2014. Will such hopes again be dashed once the New Year dawns? More profoundly, as the string of disappointments lengthens, some are raising deeper questions. It is being suggested that a malign spirit, a spectre of Christmases past, haunts our future. In particular, no less an authority than Larry Summers has raised the prospect that “secular stagnation” could be the root cause of past excess and current weakness.

Typically in a liquidity trap, the equilibrium real interest rate is negative, creating a persistent inability to match aggregate demand and supply. Before proceeding, I should make clear what I mean by the equilibrium (or natural) real interest rate. Let me use Roger Ferguson’s definition: it is the level of the real policy rate that, if allowed to prevail for several years, would place economic activity at its potential and keep inflation low and stable. For small open economies, like the UK, that equilibrium real rate is determined at the global level by the balance of the supply of savings and demand for investment. In the run-up to the crisis, that balance had shifted decisively as what Chairman Bernanke christened a “savings glut” from emerging economies developed. The flipside of that was low demand for advanced economy exports and low domestic demand in emerging economies. Only very low global real interest rates could spur sufficient domestic demand in advanced economies to maintain activity at its potential level. The problem of course was that the expansion of demand in advanced economies largely took the form of unsustainable consumption rather than business investment. The ensuing financial crisis pushed the equilibrium real interest rate down further and, with nominal interest rates stuck at zero and inflation low, monetary policy was unable to push actual real rates to a level low enough to maintain full employment.
3  Ibid. BIS central bankers’ speeches  1  As income increases and wealth accumulates, the demand for modern services is likely to grow faster, as they have higher income elasticities. Thus, we expect that demand for financial services in Asia – such as wealth management – will rise more than proportionately to the increase in household income. For instance, assets under management attributed to mass affluent and high net worth investors in Asia is expected to expand by 60% to reach USD 176 trillion by 2020. 4 7. These positive economic factors will continue to drive the growth of Asian financial institutions and Asian capital markets. Today, five of the top ten largest banks in the world by market capitalisation are Asian banks. 5 Primary market capital-raising in Asia via IPOs is the highest in the world. In the debt market, capital raised via Asian bond issuances have also doubled since 2009 after having achieved record sales in each of the past three years. II. Asia’s capital markets are ripe for closer integration  8. The strong growth of Asian economies and financial markets has created the conditions that are driving greater financial integration in the region. In China, home to the largest bank in the world by assets, banks and asset managers have acquired sufficient scale domestically to expand and look abroad to grow their businesses. Since 2012, the total amount of RQFII quota awarded by China has more than doubled for qualified foreign institutional investors to purchase mainland RMB-denominated securities.

It is steadily making progress in individual asset classes, among small groups of countries, sometimes bilaterally, where there is common interest and where markets and institutions are at similar stages of development. 12. We can see evidence of market integration among jurisdictions in several areas:  a. Banking. ASEAN is in discussions to complete a banking integration framework that will allow qualified ASEAN banks to progressively expand in each other’s’ jurisdictions. This initiative aims to create opportunities to strengthen regional banks in ASEAN and improve banking services offered to local markets. Even in other Asian countries where cross-border bank financing is restricted, we are seeing pockets opening up. For example, since China issued cross-border RMB rules for Suzhou Industrial Park (SIP) and Tianjin Eco City (TEC) in the middle of the year, about RMB 2 billion of loans have been approved from Singapore-based banks to companies in the two industrial parks. b. Equity Markets. In 2012, stock exchanges and regulators in Malaysia, Thailand and Singapore launched the ASEAN trading link to offer easy access to each other’s stock markets. Singapore and China have also established a Direct Listing Framework for Chinese companies last year. The framework will facilitate interested Chinese companies seeking direct listing opportunities in Singapore. c.  Debt Markets. ASEAN securities regulators have since April last year implemented common disclosure standards, which would allow issuers to issue debt securities across various ASEAN markets with a single prospectus.
Durmuş Yilmaz: Financial security and stability Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the forum “Measuring and Fostering the Progress of Societies: The OECD World Forum on Statistics, Knowledge and Policy”, Istanbul, 28 June 2007. *  *  *  Dear guests, I would first like to welcome you all to Istanbul, the city where the two continents meet. And today it is so delightful to see that it is a meeting point for high level delegates from all the continents. In that regard, it is a great pleasure for me to be given the opportunity to share my views on financial stability and security with such a distinguished audience. Today, I would like to begin my speech by underlining the importance of financial stability, why and how we should keep an eye on the stability of the financial system, including the Turkish perspective. Finally, I will try to emphasize the interrelatedness between financial security and stability. Importance of financial stability… As a result of the liberalization and deregulation processes, financial markets became more integrated and underwent radical transformation, starting, in fact, with developed countries in the late 70’s and spreading to developing countries in the 80’s and 90’s. At the same period, capital movements were seen to have accelerated and reached to high levels. This, in turn, led to financial innovation and heavy use of sophisticated instruments.

In this regard, every central bank all around the world is concentrating on developing new tools and stress tests for assessing financial stability. They are reorganizing themselves in order to directly and effectively monitor financial stability and to develop new analysis techniques regardless of whether a central bank is also the supervisory authority or not. Financial stability from the Turkish perspective… If we consider the last two decades of the Turkish economy, we can say that Turkey learned its lesson very well by actually going through several crises and economic downturns. Thus, we now are aware of how important it is to have a sound financial system, which is resilient to potential shocks. The distortions in the banking sector and weak institutional structure of the financial system led to important systemic risks in the Turkish economy making it impossible for the economy to survive without financial sector reforms taking place. Therefore, the restructuring program for the financial sector was launched with the goal of eliminating the distortions in the financial sector, improving its intermediary function and thus enhancing its competitiveness by international standards. Banking Regulation and Supervision Agency has become operational as a separate body to improve the banking supervision. The Banks Act was amended to bring the supervision standards in line with the EU directives and international best practices. Moreover, the Central Bank Law has been amended and instrumental independence of the Central Bank was provided and the primary goal of the Bank was determined to be maintaining the price stability.
Establishing closer contacts with private creditors, particularly at an early stage of a crisis, raises difficult issues; thus, it is not surprising that the Interim Committee has not pronounced on this point. Among the various options, I would suggest that consideration be given to asking the appropriate authorities in each creditor country to arrange for the selection of a representative of its financial community, who could be contacted in a crisis and who could provide a channel for communicating with a wide spectrum of financial institutions. BIS Review 43/1998  -6-  • • •  the integration of the poorest countries in the globalized economy. Asia should not distract us from the pressing problems of the poorest economies; the stabilization of the international monetary system; or the issue of the democratic accountability of international financial institutions, as far as the IMF is concerned. The issue of the integration of the poorest countries is, of course, already on our agenda. But, true, the attention of the world has been so focused on the Asian crisis and the need to avoid its recurrence that the immense problem of development and alleviation of poverty, particularly in Africa, seems to have been put temporarily on a back burner. This is no longer acceptable. In this context, I was particularly happy that, in drawing the lessons of an external evaluation of ESAF, the Interim Committee encouraged us to “strengthen the ability of the Fund to foster sustained growth and external viability in poor countries”.

In addition, the authorities should look into the possibility of supplementing the complex regulations with simpler and more robust indicators such as, for instance, more effective concentration limits and an upper limit for the indebtedness ratio. BIS Review 30/2008  1
It is effects of this type that are referred to in the international debate when arguing that the policy rate is far too blunt an instrument to counter financial imbalances. Sweden's experiences also suggest that the policy rate cannot always be expected to be available for this purpose. Even when a central bank is leaning quite moderately against the wind, such a policy could be in conflict with the task of maintaining confidence in the inflation target. Here too, of course, the question arises of whether it is really so important to maintain confidence in the inflation target. Would it not be possible for monetary 7 [20]  policy instead to just lean against the wind and let inflation develop as it will? Once again, I will return to this shortly. Before continuing, I would like to add that there is a growing amount of research that explicitly attempts to calculate the costs and benefits of using the policy rate to attempt to counteract financial imbalances. The debate is ongoing and the jury is still out. 13 Of course, in this context, the view I present here should only be seen as a country-specific case study. But considering that practical experience of this type of policy is very limited, reflections from someone who has been involved in taking decisions in a country that is ‘ahead in the cycle’ may perhaps be of some value.

For example, my staff produces monthly indexes of economic activity – essentially local measures of output – for the city, New Jersey and New York. We have also started a consumer panel to track local household credit conditions. In addition, we have a new survey about credit and financing for small businesses. Almost 900 regional businesses responded to our May 2011 poll – nearly 10 percent from the Bronx. If you, as part of a small business, would like to participate in our January poll, please pass your card to my colleagues in the audience. This December we will host a workshop for the New York City metro area’s small businesses – to provide information about credit enhancements and loans from the Small Business  BIS central bankers’ speeches  1  Administration. I will send your president, Mr. Caro, details about how to register. I hope to see you in at the New York Fed in lower Manhattan in December. As you know, even states as wealthy as New York have large pockets of poverty. So, we target some key initiatives specifically to low- and moderate-income groups. We have worked hard to help neighborhoods, including some in the Bronx, that face high foreclosure rates. Later today, I’ll tour some hard-hit areas with the city’s commissioner of Housing Preservation and Development. To share what we learn about our diverse District, we have a rich website. I invite you to visit newyorkfed.org to explore our detailed maps and information on small business, credit and housing conditions.
It is a pity that government accounts, which affect everyone in a society in a compulsory way, are less transparent, less well audited and less understood than the accounts of companies listed on the stock exchange, which only affect few people. Sweden has pre-decided ceilings on government expenditure three years ahead and a target of a 2 per cent surplus for the public sector over the business cycle, a figure that includes pension savings and that, given an ageing population, is in fact akin to targeting a balanced budget over the cycle. This target is present in the debate of every budget. The National Institute of Economic Research comments on the target and helps the public to understand it. This keeps the government accountable not only in the normal political sense but also in relation to the targets agreed upon. The political debate is in a sense being taught to keep the long term in view. The public then knows from the national debate that fiscal discipline is good for the country and, if “accountants” in Brussels or other nations criticise your budget policies, there is a greater chance of the criticism being interpreted as a help towards fiscal soundness. The Swedish trade unions, for example, are among the most vocal defenders of our budget target. The expenditure ceilings have been respected but to some extent with the help of creative accounting. In addition, the last couple of years no decisions have been taken on the ceilings for all three years, as was intended.

Eva Srejber: Greater budgetary discipline in the EU through transparency and national ownership Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at a breakfast seminar organised by Ernst & Young, Stockholm, 26 September 2006. *  *  *  Fiscal and monetary policy are interdependent. A government needs transparent and consistent monetary policy to know how to conduct fiscal policy. Similarly, no monetary policy will be sustainable if there is a rapid accumulation of debt. This is what Sweden witnessed in the 1980s and the early 1990s. An unsustainable mix of fixed exchange rates and lax fiscal policy, which led to high inflation and eventually to a crisis that landed us with an even higher mountain of debt. When the regime collapsed, General Council decided that the Riksbank should work towards a direct inflation target. The Riksbank determined that the target would be two per cent. Today this policy is hailed as a success. However, the real breakthrough for the new regime was in the mid-1990s when a forceful implementation of fiscal consolidation, supported by a broad political majority in parliament, made the macroeconomic set-up as a whole credible. It was only then that inflation expectations among the public finally fell to the target of 2 per cent, and interest rate spreads against Germany were reduced substantially. This fiscal tightening could in turn be based on the predictability of the new monetary regime with a clear inflation target. And the tighter fiscal policy would eventually allow less restrictive monetary policy.
What applies to single financial institutions obviously also applies to institutions of financial market infrastructure, to central banks and to institutions of supervision and oversight in general. The same insights apply to everyone: Be aware of the new dimensions of systemic risk within globalized financial markets and refrain from early satisfaction with what you appear to have achieved. At this point, I would like to stress that the overall resilience of the financial sector also depends on the financial strength of each institution. In retrospect it might be said it was a benign coincidence that the September 11, 2001 attacks happened in a period of comparatively favorable economic conditions in the financial industry. Under less favorable circumstances the capacity to absorb shocks could have been considerably smaller. This is another reason why the rapid implementation of the new Basel Accord on capital adequacy is so very important for the financial system as a whole. In addition to this it is obvious that further and new tasks arise for regulatory agencies and central banks at the national as well as the international level. Addressing the issue of disaster recovery has to become part of the routine supervisory process. Supervisory guidelines and examination procedures are being adjusted in this light and they are helpful tools in increasing resilience. Also, when overseeing payment systems resilience and business continuity will have to be scrutinized anew.

This has permitted the creation of today’s globalized financial industry and has made possible an impressive growth in value. The role of central bank oversight Now, let me turn to the role of central bank oversight: Every transaction - be it a commodity or a service - eventually leads to a transfer of money. From trade to settlement at least one system of the financial market infrastructure is usually involved. Given this, it is not surprising that the regulators are keeping a keen eye on market developments. Central banks, with their core mandate of monetary policy, have an especially close relationship with the payment systems. To the overseers of payment systems the main objective is safety. The definition and standards of safety have evolved with the years. For a long time the main interest of central banks in payment systems came from computer experts. Payment systems used to be viewed merely as ‘computers’ that cleared and settled payment obligations. In the late 1980s the focus started to shift towards the financial risks, i.e. credit and liquidity risk inherent in payment systems. Slowly it became common knowledge that payment systems could be a source of systemic risk by providing a channel through which the failure of one participant to meet its payment obligations could be passed on to other participants. In their own best interest and under the influence of the overseers operators started to protect their systems against financial risks - in most cases by building Real-Time Gross Settlement systems (RTGS).