samchain/econo-pairs-v1 huggingface dataset:
3  The Riksbank’s long-run target fulfilment is discussed by Andersson, Björn, Stefan Palmqvist and Pär Österholm (2012), “The Riksbank’s attainment of its inflation target over a longer period of time”, Economic Commentary no. 4, 2012, Sveriges Riksbank. 4  See, for instance, Heikensten, Lars, (1999), “The Riksbank’s inflation target – clarifications and evaluation”, Sveriges Riksbank Quarterly Review, 1999:1, pp. 5–17. 5  The reason why the inflation target did not begin to apply from January 1993 was that it was realised that the large depreciation in connection with letting the krona float would result in a one-off increase in the price of imported products and thus a relatively large, but temporary, increase in the inflation rate. BIS central bankers’ speeches  3  Favourable developments have held inflation back Of course, it is also important to analyse why inflation has undershot the target, even after these direct effects of interest rate changes have been excluded. My view is that growth in the economy has often been surprisingly high during the periods when inflation has been unexpectedly low. The combination of low inflation and high growth indicates that the economy was affected by positive changes on the supply side. The Riksbank and other forecasters have, for instance, often been surprised by the high productivity growth in the Swedish economy. As I see it, it is thus largely unforeseen, but beneficial developments that have kept inflation down.

Among the currencies (graph 1), the US dollar and the euro predominate with shares of 42% and 46% respectively. The maturities of the investments extend over the entire interest rate curve, with the average maturity being around five years. In the debtor categories, government paper predominates, accounting for a share of more than 50%. The rest comprises claims against international organisations and banks or bank-like borrowers with an above-average rating. Aside from these traditional bonds, US mortgage-backed securities were introduced in 2000, a new investment category which represents an ideal addition to the portfolio. In the context of the primary requirements specific to a central bank – extremely high liquidity, investment focus on the major currencies US dollar and euro, a mainly passive investment style – risk/return considerations are of prime concern. The goal is to achieve the highest possible return by means of all available concepts and techniques of modern asset management with adequate risk control. The investment strategy is developed by inhouse investment specialists. It is mostly implemented internally by a team of eight portfolio managers. We resort to external asset managers for the investment of approximately Sfr 4 billion (global bonds and mortgage-backed securities). Our entire investment activity is systematically monitored by risk specialists. In 2001, a yield of 5.2% was achieved on foreign exchange reserves. The average yield in the past four years was 6.3%.
Join me in wishing Mr Ndhlovu well in his new role and I have every confidence that he will perform to distinction. I wish to take this opportunity to thank Ms Lumpa for her able stewardship of the Association and wish her well in her new appointment. I have every confidence that she will excel. Ladies and gentlemen, the banking industry plays an important role in any economy, particularly the role of intermediating funds between savers and borrowers. It also plays an equally important role in providing payment system platform where economic agents can settle their transactions. You will also note that the performance of these functions also attracts numerous risks which have potential to compromise the stability and the efficient operations of the banking industry. The regulatory environment therefore requires adjusting appropriately in response to developments in the financial system. Chairperson, you will note that the Bank of Zambia has, in the most recent past, introduced a number of measures aimed at enhancing stability of the banking industry in Zambia as well as to enhance the transparency and efficiency in the allocation of resource in the economy. Allow me to briefly highlight some of the key policy initiatives that the Bank of Zambia has recently introduced: 1)  Reduction of statutory reserve ratios: in the fourth quarter of 2011, the Bank of Zambia reduced both the statutory and core liquid asset ratios by 3 percentage points to 5.0% and 6.0% respectively.

The policy measure was intended to loosen liquidity for commercial banks to enable them increase their lending to productive  BIS central bankers’ speeches  1  sectors of the economy. The measure was also aimed at influencing the pricing of the loans especially in light of high lending rates prevailing in the economy; 2)  Increase in capital: a robust banking industry is indispensable for supporting investments in the economy. A lower capital base entails limited participation in the financing of investments in addition to increased vulnerability of the banking industry. From the last quarter of 2011, the banking sector saw significant regulatory reform as the capital thresholds for banks were increased. Local owned banks are now required to have a capital base of K104 billion whilst foreign owned banks are required to have a minimum capital base of K520 billion. The revised thresholds are aimed at ensuring that we have the best possible environment in which banks can carry out these key functions. As I stated earlier, banks are specialised institutions and they are fundamental to the working of the economy and linked to all parts of the financial system. But the consequence is that if banks fail, the external effects can have an adverse impact on the financial system and the economy. That is why banks are required to maintain a certain level of minimum capital. In this regard, the central bank provides oversight through prudential supervision.
These investments were, of course, driven by a series of important changes in law and regulation, but they also reflect a rational response by the institutions themselves to the financial and reputational damage associated with some of the earlier weaknesses. The progress achieved in internal control regimes has of course come with some costs. Many of these costs can be measured in dollars, but others, such as management attention and the uncertainty induced by greater vulnerability to enforcement action and litigation, are more difficult to measure. Despite the difficulty of adding up all these costs, it is hard to challenge the widespread view that they have been quite substantial. But the relevant metric is not merely their magnitude, but how they compare to the magnitude of the resulting gains. There is no straightforward way to make this assessment, but today I want to offer some perspectives on our continued efforts to balance critical financial stability objectives with the need to foster and encourage the innovation and dynamism that is such a central part of the U.S. financial system. I’ll begin with the observation that profitability measures suggest that the business of financial intermediation is reasonably healthy, despite the costs induced by changes in the regulatory environment. Part of this reflects the reduction in credit costs and increased macroeconomic stability of the past several years. The financial performance of the well-run U.S. financial institutions seems to compare favorably to that of their peers in other markets.

Miguel Fernández Ordóñez: The Spanish experience with banking system restructuring – some lessons Opening address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Bank of Spain Seminar – Spanish Day, ADB Annual Meetings, Madrid, 6 May 2008. *  *  *  Good morning ladies and gentlemen, I would like to welcome the participants in the Asian Development Bank Annual Meetings to the Seminar organised by Banco de España on the occasion of the Spanish Day of this year's Meetings, which conclude today. I hope that you are enjoying your stay in Madrid. I also hope that, after so many interesting meetings and discussions we will be able to provide you with new food for thought. The stakes are high, but I think that the topics selected for the two sessions of this Seminar and the distinguished panels of participants will be up to the challenge. Indeed, I am convinced that the discussions this morning will raise a number of interesting reflections. They should help us frame a better understanding of the important economic and financial challenges facing a region like Asia, which has become increasingly relevant for the world economy. Specifically, the aim of the Seminar is to reflect on how the financial system can be an instrument to rebalance and foster growth in the region. In this context, I believe that the Spanish experience on banking system restructuring – which is widely viewed as a success story – can provide some interesting lessons.
Despite the fact that risk attitudes, as such, are positive, demand for safe investments and thus for the Swiss franc has remained particularly strong. Consequently, recent movements in the Swiss franc have been influenced not only by the divergence between the dollar and euro regions, but also by persistent safe haven flows. The discontinuation of the minimum exchange rate led to a very substantial but short-lived appreciation in the Swiss franc. The extent of this appreciation is shown in chart 3. The extreme movements in the exchange rate were accompanied by a sharp increase in volatility on the Swiss franc foreign exchange market. Since then, Swiss franc volatility has declined, although it remains high in a long-term comparison with the period prior to the financial crisis. BIS central bankers’ speeches  1  At the same time, bid-ask spreads, i.e. differences between the best purchasing and selling offers, widened substantially following the end of the minimum exchange rate. These, too, have declined in the past few months, although the bid-ask spreads remain relatively large. In trade-weighted terms, the Swiss franc is no longer at the extreme levels that prevailed immediately after the discontinuation of the minimum exchange rate. However, it is still some 12% above the level at the beginning of the year. Thus, the Swiss franc is still substantially overvalued.

Main risks identified outside the euro area financial system  A main risk to the euro area financial stability is the possibility that concerns about the sustainability of the public finances persist, or even increase, with an associated crowding out of private investment (slide 5). The progressive intensification of market concerns about sovereign credit risks among industrialised economies in the early months of 2010 opened up a number of hazardous contagion channels and adverse feedback loops between financial systems and public finances, in particular in the euro area. The main reason for the severe deterioration of public finances was the activation of automatic stabilisers as a result of the marked contraction of economic activity which followed the collapse of Lehman Brothers. At the same time, because the structural fiscal deficits of a number of euro area countries were sizeable before the financial crisis erupted, fiscal deficits in those countries rose to very high levels. Added to this were the discretionary fiscal measures taken by many countries to stimulate their economies, following the adoption in December 2008 of the European Economic Recovery Plan. By early May this year, adverse market dynamics had taken hold across a range of asset markets in an environment of diminishing market liquidity. Ultimately, the functioning of some markets, such as the government bond markets in countries with a very negative fiscal outlook, became impaired, thereby triggering a significant widening of government bond yield spreads in these countries, as shown on Chart 1 on slide 5.
Sources: the IMF and the Riksbank  Oil price, Brent crude USD per barrel 160  M PR 2008:2  160  140  140  120  120  100  100  80  80  60  60  40  40  20  20 0  0 00  01  02  03  04  05  06  07  08  Sources: Intercontinental Exchange and the Riksbank  10  BIS Review 100/2008  The Economist’s commodity price index for food Index 2000 = 100, USD 300  M PR 2008:2  300  250  250  200  200  150  150  100  100  50  50  0  0 00  01  02  03  04  05  06  07  08  Source: The Economist  Inflation in the USA, the euro area and the world Annual percentage change 6  6  5  5  4  4  3  3  2  2 USA Euro area World  1  1  0  0 00  01  02  03  04  05  06  07  08  Note. Broken lines represent the IM F’s forecast.

We expect to be able to demonstrate encouraging progress in a number of areas (particularly the provision of seed, start-up and early stage new capital). Closing remarks Much of the focus of today’s conference has been on high-growth, entrepreneurial firms - the gazelles. It is important also to remember the great majority of small firms that are not intent on breaking speed limits and are quite content driving in the middle lane, do not have .com in their names, but are steadily contributing to output and employment. These firms are important. Nonetheless, it is the high growth firms that will continue to remain at the leading edge of the creation of an entrepreneurial economy. Continued public and private sector support for these firms is vital. The Bank of England will seek to continue to play its part, both in maintaining macroeconomic stability and in encouraging the better financing of growing businesses. BIS Review 39/2000  4
In this respect, you will have seen in a recently published Opinion of the ECB on, inter alia, amendments to the EU Capital Requirements Regulation (CRR), that the ECB supports the review of the calculation method for the leverage ratio.16 I have also previously voiced support as CPMI Chair for implementing the leverage ratio in a way that does not create disincentives for centrally cleared transactions, namely by offsetting the initial margin in the case of derivative exposures related to client clearing.17 All these exercises, however, should not be mistaken for tolerance of a relaxation of regulation. Post-crisis reforms aim to curb excessive leverage and reliance on short-term wholesale funding, and for good reasons. This is also why the Financial Stability Board (FSB) has published specific recommendations, including a framework for minimum haircuts for securities financing transactions (SFTs).18 The FSB has also assessed the potential financial stability risks related to collateral re-use in SFTs.19 The latter may contribute to a build-up of leverage and increase interconnectedness among market participants. The FSB concluded that regulatory reforms, in particular the leverage ratio and the liquidity requirements, are important to mitigate these risks. 8 / 10  BIS central bankers' speeches  This means that the implementation of the Basel III reforms will have effects on repo markets, as intended. These might look undesirable from an institution-perspective but they will have systemwide benefits. Conclusion Let me conclude. The repo market is undergoing significant change.

Increasing scarcity in that segment of the cash 5 / 10  BIS central bankers' speeches  market then also translated into a persistent rise in the specialness premia of such bonds, even when abstracting from year-end effects. Our decision to accept cash as collateral in securities lending, and to allow purchases below the DFR, contributed to relieving this pressure. Premia across maturity buckets are now broadly similar. The relatively low specialness premia for bonds with shorter maturities, in turn, also suggests that the majority of holders of such bonds – mainly non-euro area investors without access to our deposit facility, as I illustrated in a previous speech – were, and remain, generally willing to provide them in sufficient quantity in the repo market.10 Yet, this chart also reinforces the point I made earlier about the flow and stock effects of our purchases: with the effective supply of bonds gradually shrinking over time as a result of our purchases, specialness premia have been persistently inching upwards.11 While stock effects reinforce one of the key transmission channels of the APP by increasing the “value for money” – the bang for the buck – of new net purchases in terms of their impact on financial conditions, we also need to be mindful that a shortage of government bonds may over time adversely affect the intermediation capacity of repo markets. There are two reasons for this. First, government bonds are the main type of collateral used in repo markets, primarily because of their safety and liquidity.
Page 1  The digital pound − speech by Jon Cunliffe Given at UK Finance  Page 2  Published on 07 February 2023  Jon Cunliffe says it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed by the end of this decade. He discusses why this is the case, what the model could look like and how the digital pound may sit within the digital payments landscape. Speech As some of you may have seen, the Bank of England and the Treasury have today published, as a Consultation Paper, the report of the Bank of England – HM Treasury Taskforce on the introduction in the UK of a central bank digital currency – a ‘digital pound’. So I am grateful for the opportunity today to set out some of the thinking behind the report and the next steps we propose. First, however, I should set out the headline conclusions of the Taskforce. Our assessment is that on current trends it is likely that a retail, general purpose digital central bank currency - a digital pound - will be needed in the UK. This would be a new, digital form of money, issued by the Bank of England for use by households and businesses for everyday payments. A digital pound would be a very substantial financial infrastructure project that would take several years to complete.

As a result, the household sector’s financial condition today is in unusually good shape for this point in the economic cycle. In relative terms, household indebtedness is low, and—thanks in part to low interest rates—debt service burdens relative to household income have fallen to levels not seen since at least the early 1980s. As we will show in today’s presentation, compared to 2008, a greater proportion of overall debt today is now held by older households that have higher and more stable incomes and more experience as borrowers, on average. Consequently, a much larger proportion of debt is currently held by borrowers with higher credit scores. The resulting higher overall debt quality is reflected in historically low overall delinquency rates. Transition rates into new delinquency are below the levels of the early 2000s, and foreclosure and bankruptcy rates in 2016 are the lowest since our data series began in 1999. Notwithstanding this overall rosy picture, the improvement in aggregate debt quality and performance conceals important underlying changes in debt holdings that could be consequential, with implications for the housing market and for consumer spending over the longer term. While older borrowers hold more debt of all types, there has been a significant shift among younger people toward student debt and away from mortgage and other debt. Student debt has increased more than fivefold over the past 14 years, with more young adults taking out loans and borrowing larger average amounts. And, while debt delinquency rates overall have fallen, those for student debt have remained elevated.
As you are aware, in view of the deterioration in the BOP and to support the government’s reform agenda, Sri Lanka obtained a three-year Extended Fund Facility (EFF) from the IMF, in 2015, and we have already received five tranches of this Facility. Although the developments over the past weeks have delayed the progress that Sri Lanka has been making under the IMF Programme, we hope to keep the IMF Programme on track this year. While this will 20  categorically support the country’s external sector, the reforms would also help boost investor confidence and productivity of the economy. These are key drivers in enhancing growth of the economy. As inflation targeting involves managing and anchoring inflation expectations effectively, transparency of monetary policy, particularly in terms of plans, objectives and decisions, is of utmost importance. Hence, as transparency is achieved through effective communication, as a prospective inflation targeter, the Central Bank is very conscious of the need for a well devised communication strategy. Accordingly, a number of initiatives have already been taken by us to enhance the communication strategy. We have enhanced the analytical value of the regular monetary policy press releases with the support of the IMF, while maintaining clarity, simplicity and enhancing the forward looking approach. In addition, we have initiated programmes on educating, particularly journalists and other stakeholders, regarding FIT.

First of all, by creating a direct relationship between our profits and the funding of an important element in our system of social security, the initiative would establish a dangerous link, since it would certainly place the SNB under constant pressure to distribute more profits in the future. Higher profit distribution would only be possible if we took bigger investment risks or if we reduced our monetary reserves. Markets would start to ask themselves whether the SNB's goal was to ensure the monetary stability of the country or to generate profits. As I pointed out before, there is a risk that constant debate on this topic could sap market perception of our independence. This would damage our credibility and hamper our monetary policy. At the end of the day, implementation of this initiative would undermine confidence in the Swiss franc. Second, the initiative assumes that our profit distribution can be held permanently at a level above CHF 1 billion a year. This is an illusion. The only possible outcome is bitter disappointment on the part of our fellow Swiss. All our calculations show that, as confirmed in the remarks made by the President of the Bank Council on the results for 2005, the SNB's medium-term profit distribution potential amounts to only CHF 1 billion a year. If we deduct the gains due to the spectacular increase in the price of gold and to exchange rate gains from the CHF 12 billion profit recorded for 2005, the distributable profit falls to CHF 2 billion.