samchain/econo-pairs-v1 huggingface dataset:
One point worth noting to begin with, is that the Swedish nation as a whole has not increased its indebtedness in recent years. On the contrary, the large surplus on the current account indicates that external debt has declined. This should have contributed to making the economy as a whole less vulnerable to a rise in interest rates. In this respect we differ from a number of other countries, where household indebtedness has increased rapidly, while they have had a deficit in their current accounts for several years. This applies, for instance, in the United States, the United Kingdom and Australia. Developments in household indebtedness in Sweden are not remarkable when seen in relation to other OECD countries. It is clearly difficult to compare the level of debt ratios between different countries. Differences in taxation systems, credit terms and the percentage of the population that are home-owners are just some of the factors that complicate this analysis. On the other hand, a comparison of how much the debt ratio has increased in different countries in recent years can provide some perspective for developments in Sweden. It appears that developments in, for instance, the United Kingdom and Australia have been much more dramatic than in Sweden. Property prices have also risen more rapidly in these countries. However, in the United States, which deregulated its credit market at an earlier stage than the other countries, indebtedness has increased at a slightly slower rate, although it did not show any decline in the mid-1990s, as there was in Sweden.

The number of kinds of risk has grown, and the varieties of non-financial institutions have multiplied. All these changes together call for a sounder banking system. They remind us of the fact that sound banking is a continuous process. The importance of risk management in various kinds of situations is well understood. In today’s environment, our understanding that a sound and efficiently functioning banking system is a fundamental necessity is once again reinforced. So what have we in Turkey done to meet these exigencies? The Turkish banking system is not a recently established one. Turkey has a deep-rooted banking tradition that goes back to the 19th century. During the last two or three decades, the banking sector has played a prominent role in the Turkish financial system, and has made considerable progress, aided to some extent by structural changes, towards making the Turkish economy more financially liberalized. In response to the restructuring of the Turkish economy and to the need to integrate Turkey into the modern world of finance, Turkish banks have made major changes both in their institutional structures and in the quality of services and products they offer. As a result of the greater freedom that comes with market-oriented policies and a liberalized financial environment, many entrepreneurs, foreign as well as domestic, have been attracted by the potentially profitable Turkish banking system. 1  BIS Review 31/1999  During the last two decades, the number of banks active in the banking sector has grown from 43 to 74.
As regards complex structured products, we insist on imposing certain prohibitions, and both Anatoly Aksakov and Nikolay Zhuravlev have already said this. We have been discussing at the Federation Council that we need adequate laws in this area. The second problem is high hidden fees in consumer lending. In the conditions of low interest rates, banks, regrettably, also get involved in dubious practices striving to increase their interest income. Some banks ‘conceal’ the actual cost of a loan in insurance premiums and fees, while their amount may reach up to 50% of the loan cost. Often, people are unable to understand how much they would have to actually pay for a loan. Therefore, we are proposing a new approach to calculating the effective interest rate and hoping to be supported by legislative authorities on this issue as well. The new approach implies that the calculation will cover all additional services and insurance options approved by a borrower. As a result, a client will receive exhaustive information. Furthermore, as loans with a high effective interest rate involve higher capital requirements, banks will be less interested in granting so expensive loans. 5/7  BIS central bankers' speeches  The third topic is floating interest rates on retail loans. Banks want to be capable to efficiently manage their interest rate risk. Indeed, we appreciate that banks are careful in controlling their interest rate risk. This risk should never be underestimated. Nevertheless, we believe it inappropriate to fully transfer these risks to retail borrowers, especially on long-term loans.

If housing prices were to fall, for instance, housing declines in value while mortgages remain constant. Consequently, the loan-to-value ratio of the mortgage increases. As mortgages with an excessive loan-to-value ratio cannot be used as collateral, falling housing prices can thus mean that some of the collateral must be removed or replaced. As the banks have often allocated an extra buffer of collateral, there is scope to remove mortgages that no longer meet the requirements, without having to replace them with other collateral. However, if the banks do not replace the collateral that has been removed, it may limit their possibilities to issue further bonds based on this collateral. The reason for this is that both investors and credit rating agencies often require a buffer of additional collateral. The banks can top up the collateral by earmarking other types of collateral, such as government bonds, by selling parts of their liquidity buffers or by issuing short-term securities and then earmarking the liquid funds they receive. However, the opportunity to top up the collateral in this way presupposes that the financial markets are functioning normally and that investors have confidence in the Swedish banks. Heavily falling housing prices can disrupt market functioning Covered bonds are subject to special legislation that ensures that these securities are very safe. Although this regulation has worked well so far, one cannot rule out the possibility that heavily falling housing prices could disrupt the functioning of the market and thus affect the banks.
The latter in particular is defined as “being a reliable institution because of its technical nature and excellence in achieving the mandated objectives.” This expresses the need for the CBC to be prepared to respond to the opportunities and challenges that are presented to it at the macroeconomic and institutional level, in the understanding that in today’s world and society the citizens’ and markets’ confidence have to be earned day by day, beyond our past achievements. Based on these definitions, the plan identifies five areas of priority:  Maintain intellectual leadership in the areas related to the institutional mandates of the CBC;  Strengthen the understanding and dialogue of the organization with its environment;  Strengthen its corporate governance to balance out risk tolerance and the efficiency of its business processes;  Improve ability to understand and incorporate technological changes into its tasks; and  Consolidate the CBC as an employer of excellence, capable of attracting and engaging the best talent. Accordingly, twenty-one lines of action were defined that will be developed over this fiveyear period, all of them described in the document in your hands. Below I summarize those that may be of greatest interest for you honorable senators, with their corresponding progress status. Intellectual leadership. Since last January, we apply a new monetary policy communication scheme. To date, we have held six monetary policy meeting under this scheme, three of them accompanied by the respective publications of the Monetary Policy Report and subsequent presentation to the Senate.

This adjustment also involved the creation of the strategic- and technological-risk Department. Technology. A technological observatory was created intended to act as catalyst for enhancing knowledge and adopting important innovations for the CBC’s fulfillment of its functions. The main objectives of the observatory are: (i) to agree on common principles and contribute, inside the CBC, to the coordination of the treatment of disruptive technologies, (ii) create networks with the external community to enhance know-how and identify opportunities and threats, and (iii) agree on the pillars of innovation to promote and contribute to knowledge in those areas. The pillars of interest that have been defined include: digital currencies of central banks, cryptoassets and financial stability, development of digital payments and technology of distributed records and their applications, technology and data management, cybersecurity and risks for the financial system, among other issues. Employer of excellence. We have been working on strengthening the organizational culture and improving the value proposition for our staff in order to achieve effectiveness in attracting and retaining employees and developing their careers. To strengthen the internal career, we are developing an exercise to improve job description and assessment. Hand in hand with the strategic initiatives just defined, the CBC has continued with its projects linked to the fulfillment of its permanent functions.
Take the naval reference and the gender bias out, and you have the ultimate guide for all of you who depart Bryant today aspiring to lead: You must be more than smart and have more than a mighty intellect; you must develop the whole woman, the whole man to be a leader in whatever field you chose. A smattering of Latin Which brings me to the last requirement for most all commencement orations – a smattering of Latin. Commencement speakers at great schools seem to delight in showing off their command of an ancient tongue. Many a commencement speaker might have concluded this afternoon’s remarks with labor omnia vincit – a stern reminder that labor conquers all things. It is true, indeed, that you can’t rest on your laurels or your good family name or a Bryant education or just plain good luck. You have to work hard and sweat to succeed. And in doing so, you have to remember mens sana in corpore sano – a sound mind resides best in a sound body. But that is way too ponderous. This is, after all, a festive day!

One example where the banks did not co-operate in the payment market is the service of digital invoicing systems. Up to spring 2002 the banks were offering two different, non-compatible systems, “e-giro” and “e-faktura”. The existence of two digital invoicing systems was an obstacle with regard to getting both companies and households to utilise the new technology. Today the banks are investing in making the systems compatible with one another and the goal is that invoicers and invoicees will be able to reach one another regardless of which bank they use. If this succeeds, it should lead to increased acceptance from customers and enable critical mass to be achieved more easily. Will cash disappear? The use of cash in Sweden has halved since the mid-1950s, which is of course a result of the technological developments with card payments and later Internet payments offering good substitutes for payment with banknotes. However, the decline in the use of cash has slowed down in recent years and the M0 money supply is currently around SEK 90 billion, or 4 per cent of GDP. Cash is suitable for certain types of transaction, including, unfortunately, those that people don’t want registered, and there is perhaps a lower limit for the demand for banknotes. In addition, the alternative cost for cash has been low in recent years, as a result of low inflation and low interest rates. However, the use of cash in Sweden is higher than in other Nordic countries.
This is so that risks from potential concentration of market power and financial instability are minimised. The final pillar aims to fill the gaps in institutional, including legal and information, infrastructure that are necessary for an efficient and modern financial system. We will be looking at the legal framework and other measures that would support a more effective functioning and supervision of financial institutions. These include sound credit culture (e.g., bankruptcy and foreclosure laws) and implementation of international best practices, such as new international accounting standards. On the information side, efforts will focus on the information infrastructure that would assist financial institutions in pricing and managing risks better. Areas for improvements are, for example, the operation of the Credit Bureau, rating agency, and more complete data on key economic sectors such as the real estate and housing market, etc. BIS Review 54/2008  5  On the whole, while the policy recommendations will largely cover BOT-supervised financial institutions, those related to other types of financial institutions and broader financial markets can also be addressed if they are deemed to be systemically important. Ladies and Gentlemen, In closing, allow me to emphasize once again that Thailand’s record of economic resiliency to adverse shocks and uncertainties in the past should clearly attest to the strength of our underlying fundamentals. The US and Thailand are long-time partners, and I need not mention how crucial it is to both our economies that we strengthen our trade and investment partnership in the years ahead.

BIS Review 124/2007  1
As a result, economies which are very open to international trade and business like the UK are likely to have to live with more economic volatility than we would ideally like.6 Implications for monetary policy So, let me sum up my analysis so far. I have identified three potential challenges arising from the “New Global Economy” which is shaping the world of modern business and having such a powerful influence on open international economies like the UK and Jersey. The first is a shift in the centre of economic gravity in the world economy towards Asia – which is likely to become the dominant region in the world economy in the first half of this century. That creates market opportunities for other economies as well as competitive threats, and is likely to result in further structural change as businesses adjust to changing patterns of demand and supply. Supply-side policies – focussing on skills, enterprise and innovation – are the key to maintaining growth and employment in the face of these structural adjustments. The two other challenges I have identified – a prolonged period of upward pressure on energy and commodity prices climate and an increase in global economic volatility more generally – have more significant implications for monetary policy in an open internationally focussed economy like the UK. So how should monetary policy respond? 6  See Sentance (2009a) and Sentance (2009b) for a more detailed discussion.

21  There are currently three countries that use, or plan to use, a leverage ratio, namely the United States, Canada and Switzerland. Switzerland has introduced a leverage ratio for its two large, internationally active banks, which will take effect in 2013. 22  Pressure on banks to reduce leverage has been apparent from discussions in various international fora, such as the G20, which has called for the introduction of leverage ratios, in addition to risk-based capital ratios, in order to prevent banks from arbitraging capital requirements. 36  BIS Review 10/2010  With improving conditions in the economy and financial markets, supportive measures by governments and central banks have progressively less “raison d’être”. The withdrawal of these measures must occur in a timely fashion; being too early or too late could have unwanted implications for the speed at which the new steady state can be reached. In particular, too brisk a phasing-out could lead to a dramatic process of de-leveraging, jeopardising the economic recovery. On the other hand, it is essential to prevent the banking system from relying on support measures for too long, i.e. becoming “addicted” to them. The intermediation role of the central banks during the crisis, if drawn out for too long, may reduce incentives for banks to return to actively operating in the money market. Such a scenario may also weaken incentives to restructure banks’ balance sheets. Credit flows to households and firms represent an indicator of financing conditions and of the prospects of a recovery in economic activity.
Think of the chain of events for me to get my “dream job” – head of the Federal Reserve Bank of New York. I had to decide to leave Goldman Sachs at the end of 2005; be asked by Timothy Geithner to be head of the Markets Group in 2006 and be smart enough to take him up on his offer; Barack Obama had to win the presidential election; Tim had to be selected to be Treasury Secretary; and the Board of Directors of the Bank in collaboration with the Board of Governors in Washington, D.C., had to agree on me as Tim’s successor. If you ever thought that train of events was even remotely likely, I think you would have been considered delusional! My final piece of advice is the most important one: Don’t forget all that they have taught you here about thinking critically and speaking up. So, let me sum up. Go into the job market with enthusiasm and don’t be daunted by the inevitable rejections. That’s part of the process of getting started. Don’t feel in a rush to figure out all the details of your career. If you are true to yourself, continue to build your human capital and don’t forget everything that they have taught you here, I know that you will meet with every success. Thank you and, most importantly, good luck! 4  BIS Review 71/2010

The first criterion states that the interest rate should be set with a view to stabilising inflation at target or bringing it back to target after a deviation has occurred. The specific time horizon for stabilising inflation at target will depend on the disturbances to which the economy is exposed and their duration. The second criterion states that the interest rate path should provide a reasonable balance between the path for inflation and the path for overall capacity utilisation in the economy, i.e. that the inflation targeting regime is flexible. Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to provide an anchor for expectations of low and stable inflation, and the objective of stability in the economy. The third criterion states that monetary policy should be robust and should seek to mitigate the risk of a build-up of financial imbalances. The criterion is an expression of the lack of a complete understanding of how the economy functions or the shocks to which the economy may be exposed. The consideration of robustness can therefore be interpreted as a form of insurance against adverse outcomes. Norges Bank does not have independent objectives for asset price inflation or debt growth. However, by mitigating the risk of financial imbalances, we may also achieve more stable developments in inflation, output and employment over time. In the case of conflicting objectives, the choice of interest rate path will involve a trade-off between different considerations.
In this respect, indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. Risks to the outlook for inflation are broadly balanced. On the downside they relate, in particular, to the outlook for economic activity, while on the upside they relate to higher than expected commodity prices. Furthermore, increases in indirect taxation and administered prices may be stronger than currently expected owing to the need for fiscal consolidation in the coming years. Turning to the monetary analysis, the latest data confirm a continued deceleration in monetary dynamics. In May, the annual growth rate of M3 declined further to 3.7%, with that of loans to the private sector falling further to 1.8% – the lowest rates since the start of Stage Three of Economic and Monetary Union. This concurrent deceleration supports the assessment of a slower underlying pace of monetary expansion and low inflationary pressures over the medium term. In May, the outstanding amounts of most components of M3 showed a contraction, reflecting, to a large extent, the recent declines in interest rates paid on short-term deposits and marketable instruments and the increased allocation of funds to instruments outside M3 that these may have fostered. Following a substantial strengthening in April, the growth of M1, while having remained strong, also moderated in May. The short-term developments in M3 have been volatile over the past few months.

This is particularly relevant in the current setting of low demand for financing in Spain, in which this trend could contribute to further eroding the net interest margins in some market segments. To conclude, let me sum up the key messages I would like to convey. In recent years, Spanish credit institutions have made sterling efforts to overcome the problems stemming from the crisis and to adapt to the new and stricter regulatory requirements. This has been reflected in the significant improvements in their solvency, profitability and asset quality. However, despite these improvements, Spanish banks continue to face major challenges, largely shared with other euro area banking systems. These include, most notably: (i) stepping up sales of non-productive assets (ii) the need to strengthen capital, (iii) addressing profitability challenges without unduly easing credit standards and, lastly (iv) harnessing new technologies in a competitive environment of potential new competitors. In an economy as highly banked as Spain’s, overcoming these challenges is key to the banking industry gaining a sufficient position of strength from which to contribute to economic growth and job creation. Thank you for your attention. 8/8