samchain/econo-pairs-v1 huggingface dataset:
According to an expectations survey, inflation expectations five years ahead among experts in the financial industry, the social partners and academia were virtually unchanged from the fourth quarter of 2008 to the first quarter of 2009. An indicator of inflation expectations in financial markets can be derived from the long-term forward rate differential between Norway and the euro area. Because of a higher inflation target in our country, this differential will normally be around ½-1 percentage point, depending on risk premiums in the bond market. The differential has been in this range in recent years, but has fluctuated somewhat since last autumn. BIS Review 37/2009  7  After a prolonged upturn both output and employment are falling in Norway. The turnaround had already occurred just over a year ago, but in the period to autumn last year, it appeared that capacity utilisation would gradually decrease to a normal level. As the global economic outlook deteriorated, it became clear that the slowdown in our economy would occur more rapidly and be more pronounced than envisaged earlier. In November, regional network contacts reported an abrupt and marked turnaround in activity. They now report that the labour supply is no longer a constraint on production. The enterprises in the network are expecting output and employment to fall further over the next six months. Unemployment has increased since autumn last year, but is still at historical low levels. Unemployment is projected to rise to 4 3/4 per cent at the end of the year.

Banks have become more vulnerable to distortions in the credit markets. Historically, our 4 banks primarily obtained funds through deposits by households and enterprises. In recent  1  Folketrygdfondet will manage the new Government Bond Fund. 2  The Government has increased the capital of Kommunalbanken Norway (the local government funding agency), it has increased the scope of GIEK (the central government export credit agency) and Innovation Norway, and has offered state loans to Eksportfinans Norway (the credit institution for export financing). 3  Figures for banks’ equity capital before 1918 are based on: Jan Tore Klovland (2007): “A reconstruction of the balance sheets of savings banks in Norway 1822-1875” and “A reconstruction of the balance sheets of commercial banks in Norway1848-1900” in Øyvind Eitrheim, Jan Tore Klovland and Jan F. Qvigstad (Ed.) (2007): “Historical Monetary Statistics for Norway – Part II” Norges Bank’s Occasional Papers, No. 38, Oslo. Statistics Norway is the source for figures from 1919 to 1995. Norges Bank is the source for figures from 1996. 4  Figures are taken from the sources in footnote 3 and Hege Imset Matre, H. I. (1992): Norske forretningsbanker 1848-1990: En tilbakeføring av forretningsstatistikken (Norwegian commercial banks 1848-1990). Report No 41 from the research programme Det nye pengesamfunnet. 2  BIS Review 37/2009  years, banks have borrowed in both domestic and foreign markets. When credit markets dried up, this proved to involve high liquidity risk for banks.
10  This monetary policy regime has performed well through several rounds of shocks to the Norwegian economy. Both during the financial crisis in 2008 and after the oil price fall in 2014, monetary policy was able to respond quickly. Moreover, the krone exchange rate has functioned as an important shock absorber. When Norway’s terms of trade weakened owing to the oil price fall, a weaker krone helped to support business sector competitiveness. Chart 9 Historically low policy rate Percent 12  12  10  10  8  8  6  6  4  4  2  2  0  0  1991  1996  2001  2006  2011  2016  NORGES BANK ECONOMIC PERSPECTIVES 18 FEBRUARY 2021  2021  Source: Norges Bank  With a policy rate of 1.5 percent, monetary policy could again make a contribution when Norway and much of the global economy locked down nearly a year ago. In the space of a short time, the policy rate was lowered to zero (Chart 9). The policy rate cuts had a broad impact and freed up funds for indebted businesses and households. As containment measures are scaled back, continued low interest rates will underpin consumption and investment, paving the way for a resumption of business activity. The room for manoeuvre in monetary policy is nearly exhausted. We do not envisage making further policy rate cuts from today’s level.

In order to deal with this problem, it is important that the new exchanges establish clear rules regarding participation and price quotation as soon as possible in the process of starting their operations. Finally, I would like to say a few words about electronic money. E-money is still very much in its infancy but has the potential to develop. In the euro area, various e-money schemes exist. Although the volume of e-money in circulation currently remains very low in the euro area, the number of devices already in circulation suggests that usage could expand rapidly ("Issues arising from the emergence of electronic money", November 2000 edition of the Monthly Bulletin of the ECB, p.49-60.) In this context, it was important that the regulatory framework was clearly set up at an early stage so as to reduce uncertainty. In my view, this will encourage innovation. I am glad to say that the framework adopted in the European Union has the advantage of ensuring a high measure of security for customers, in particular through providing protection against counterfeiting and money laundering. For monetary policy, there are three main issues arising from the emergence of electronic money. First, it is important that electronic money does not jeopardise the unit of account function of money. In other words, electronic euros stored on a payment card must have the same value irrespective of when and by whom the card was issued. This important principle has been safeguarded in European legislation through the imposition of a redeemability requirement for e-money.
Following this process, the Commission bancaire will take a formal decision as to whether or not to authorise the institutions in question to adopt the advanced approaches of Basel II on 1 January 2008. For institutions with foreign entities, this authorisation is granted, where appropriate, following an exchange of information with the host supervisors, i.e. where the institutions’ subsidiaries are established. While many counties, such as France, have entered into the effective implementation phase of Basel II, the recent financial turmoil has once again drawn attention to this framework, leading some observers to call into question its overall rationale. This turmoil has new characteristics as it is a credit crisis in a market environment with particular implications concerning contagion channels. Risk transfer operations, in particular securitisation, and the interaction between funding liquidity and market liquidity risks have played new or at any rate greater roles than before. I am nevertheless convinced that the reform of the capital adequacy ratio rightly remains a crucial element in the regulatory response to the problems facing us today. I would now like to explain why I am convinced of this. 2. The current financial turmoil confirms the need to concretely implement Basel II. This turmoil may very legitimately raise questions about several of the major provisions of Basel II, such as the use of rating agencies or the internal approaches developed by banks to assess credit risk.

6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  The new finance must be inclusive, allowing everyone to be better connected, better informed and more empowered. By adapting our hard and soft infrastructure, the Bank of England will help create the conditions for such innovation to flourish to promote the good of all the people of the United Kingdom. 7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7
Through the years, the phrase has been simplified into “as safe as the bank”. As banks and central banks store gold and money in their vaults, their edifices have always been solid, protected by thick walls. In a figurative sense, it might be said that a safe and credible national monetary value relied for a long time on thick central bank walls insulating its internal workings from the general public. Until our time, central banks have been closed, both physically and figuratively. Central banks were shrouded in an aura of mystique, which they probably had a hand in perpetuating. Central bank governors worldwide refrained from saying too much, and what they did say often sounded cryptic. 1  The duty of confidentiality for Norges Bank employees is laid down in Section 12 of the Norges Bank Act. Violation of the duty of confidentiality is punishable under the General Civil Penal Code: “Any person who wilfully or through gross negligence violates a duty of secrecy which in accordance with any statutory provision or valid directive is a consequence of his service or work for any state or municipal body shall be liable to fines or imprisonment for a term not exceeding six months” (Section 121, first paragraph of the General Civil Penal Code).

The Governing Council supports the actions taken by the European Commission in the context of the Stability and Growth Pact and the subsequent outcome of the ECOFIN Council meeting last month. It is now necessary to remain vigilant in order to ensure strict adherence to the medium-term plans and rigorous implementation of the procedures of the Stability and Growth Pact. In order to further improve the fundamentals of the euro area and to put the expected recovery on a broad and sustainable basis, euro area countries must strengthen their efforts to implement comprehensive structural reforms. Over the past few years progress has been made with regard to enhancing the flexibility of euro area product and capital markets. Euro area countries have also made some headway in terms of improving the way their labour markets operate. These reforms, together with moderate wage developments, have contributed to the strong employment growth and the considerable reduction in unemployment witnessed in many euro area countries in the last cyclical upswing. However, it is worth noting that despite the continued high unemployment in the euro area, firms continue to report difficulties in terms of recruiting suitably qualified workers. This suggests that further improvements in the functioning of euro area labour markets and their ability to match labour supply and demand are needed. Evidence gathered in a recent Eurosystem analysis, which will be published shortly, supports this view. In this context I would also like to stress that structural reforms in different markets should not be seen in isolation.
•  We continue to require that examiners rotate to another institution after three to five years. This tenure allows enough time to gain an understanding of a firm without sacrificing examiner independence. •  We have taken concrete steps to encourage examiners to speak up, which we view as a core competency. For example, we evaluate examiners on their level of engagement with colleagues and their willingness to share insights. •  We created programs to encourage peer recognition of good ideas, including funding for new supervision ideas proposed and voted on by supervisory staff. •  We increased the opportunities for feedback to senior managers, including the head of supervision, in addition to other channels already provided by the New York Fed. Among other improvements, we conduct regular town halls and provide a standing, on-line forum as a device to funnel questions to group leaders. In both settings, questions and answers are offered in an open, transparent manner. •  And we require examination teams to spend more time at New York Fed headquarters and less time “in the field.” Additional time at headquarters promotes cross-firm discussion and direct communication between senior managers and examiners. For example, we offer a seminar series at which group leaders discuss key issues in supervision with our supervision staff. Each and together, these improvements to the substance and process of supervision contribute to financial stability by providing greater insight into bank resiliency and risk. But these enhancements are not self-executing.

William C Dudley: Improving financial institution supervision – examining and addressing regulatory capture Testimony by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, before the Senate Committee on Banking, Housing, and Urban Affairs Financial Institutions and Consumer Protection Subcommittee, Washington DC, 21 November 2014. * I. *  *  Introduction  Chairman Brown, Ranking Member Toomey, and members of the Subcommittee, thank you for this opportunity to testify on the effectiveness of financial institution supervision and the issue of regulatory capture. In 2008 and 2009 our country faced its worst financial crisis since the Great Depression. I mention those years as a touchstone for my remarks today. Despite the passage of time and an economy that is steadily improving, the financial crisis is hardly something that happened in the remote past. For the too many people who are still unemployed or underemployed, or who otherwise continue to struggle financially, it is living history. While the causes of the crisis remain subject to debate, it is undeniable that banking supervisors could have done better in their prudential oversight of the financial system. This conclusion raises two fundamental questions: •  First, how can we improve the stability of the financial system? In other words, how can we make the financial system more resilient and productive? •  Second, how can we improve our supervision of financial institutions? The Federal Reserve is working diligently to improve both stability and supervision. The two concepts are linked.
The problem is that countries and companies alike are pledging to hit targets in almost three decades’ time without committing to action for which they can be held accountable in the short term. To achieve net-zero by 2050, the necessary policies and the associated investments must be made between now and 2030. Singapore is firmly committed to doing its part in the global effort to reduce greenhouse gas emissions. Last year, the government launched the Singapore Green Plan, which sets out a road map towards sustainable development, a green economy, and net zero emissions. Singapore aims to peak carbon emissions around 2030 and to achieve net zero by or around mid-century. If anything, the direction of travel in the coming years can only be towards greater climate ambition, not less. The world should be upfront about the cost of decarbonisation and have concrete plans to support those adversely affected. There will no doubt be opportunities in green technologies and industries, and the long-term cost of doing nothing will be much more than the cost of mitigation measures. But decarbonisation will impose substantial short-term economic costs and have profound distributional implications. Like all economic transformations, the green transition will involve winners and losers, and unless this is recognised and dealt with, the sustainability agenda will lose social legitimacy. If we do not support the losers, there will be a strong backlash against the shift to a greener, cleaner future, much like the backlash we have seen against globalisation by those who were adversely affected by it.

We are exploring geothermal and biomethane technologies as well as small modular reactors using nuclear fission. GREEN ECONOMY The third imperative for the net zero transition is to green the economy. Greening the existing economy is more important than growing new green sectors. Investing in green technologies and renewable energy is important. But such pure green activities are estimated to make up less than 8% of the global economy. Non-green activities – in manufacturing, building and construction, aviation, maritime, agriculture and fisheries - make up the bulk of any economy. To move the needle on emissions reduction, we need transition strategies that progressively reduce the carbon footprint across all sectors. Let me highlight six challenges associated with greening the global economy. First, a green economy will rely much more on electricity. The cheapest and easiest way to decarbonise several sectors of the economy, such as cars that run on petrol or heat generated by burning natural gas, is to electrify them and ensure that the electricity is generated from zero 5/9  BIS central bankers' speeches  or low carbon sources. According to the Princeton researchers, total electricity usage in the United States will likely be two to four times as great in a fully decarbonised economy compared with today. In the IEA’s net zero world, electric vehicle sales would vault from 5% of the car market today to 60% in 2030. This would require building the equivalent of 20 of Tesla’s massive “gigafactories” every year this decade.
This is a very acute topic for businesses, and we have already discussed it many times. The second issue is how the Faster Payments System evolves and what benefits it can provide to SMEs. The third topic I may not ignore and which is currently widely discussed is a digital ruble and what it can give to businesses. As regards AML/CTF problems, we hold, and I hope that you also comprehend it, that these antimoney laundering procedures are absolutely crucial since they protect the banking system and the economy in general against ‘dirty’ business and crime. However, these procedures have their drawbacks. Banks may behave suspiciously even towards lawful companies, and we have observed this. Banks are not ready to investigate the situation when these are small clients that do not bring high profits, such as small and medium-sized enterprises. It is easier for banks just to block transactions than to consider them carefully. As a result, this affects bona fide businesses. We have been employing the mechanism for rehabilitating such affected companies for a while already, but we are aware that the entire system requires redesigning and costs need to be lower. Of course, it is now possible for a firm to be rehabilitated, but it would be better to avoid such a situation where companies have to undergo all these procedures, including an examination by the commission, since this is stressful for any market participants.

A number of banks, for instance in China, have already started testing digital currencies. We may talk of a global technological revolution in central banks which will create a new form of money. What are the differences between a digital ruble and the currently existing cash and non-cash money forms? Firstly, a digital ruble is an obligation of the Central Bank, and not of commercial banks, which makes it similar to cash rubles. For those holding digital rubles, this implies that they will preserve this money, whatever happens to their banks. Secondly, a digital ruble enables faster and more reliable payments and settlements. We are currently exploring several models to design a digital ruble which organise the interaction between customers, the Central Bank and commercial banks differently, but all the models have these advantages. These are faster, reliable and secure payments. To a certain extent, a digital ruble also blurs the distinction between cash and non-cash payments. We are studying the option of launching offline payments with digital rubles via special-purpose wallets, but this is a challenging issue. This will enable people to pay with digital rubles even where there is no internet connection and they do not have cash. For companies operating in such localities, in remote areas, this option will reduce cash turnover costs. Of course, a digital ruble may also create new risks, and we are closely exploring them.
The industry trends underlying the pick-up in trade are encouraging. The global electronics sector is on a strong upswing. Semiconductor exports surged by 20% in 2017. This reflects both a cyclical upturn as well as a structural uptrend, as products ranging from smartphones to automobiles and home electronics become increasingly chip-intensive. The broad-based, geographical spread of the current economic expansion is perhaps the strongest basis for its durability. The rising tide is lifting most boats. The advanced economies are leading the charge. The US economy is expected to grow at or above trend, driven by strength in consumption, a healthy labour market, and better prospects for business fixed investment with the enactment of the tax reform package. 1/7  BIS central bankers' speeches  The Eurozone economy was probably the most pleasant surprise of 2017, with a strong recovery in household spending and private investment. There is still slack in the economy, suggesting that the growth momentum is likely to be sustained. The Japanese economy has recorded the longest growth streak in 16 years, with a resurgence in exports and investment. Emerging market economies – especially in Asia – are benefitting from the positive spill-overs from the advanced economies as well as healthier macro fundamentals. Emerging Asia is benefiting from the pick-up in the global electronics cycle, recovery in commodity prices, steady domestic demand, and benign financial conditions. China is likely to see a moderation in growth this year but not cool off sharply.

The question of when it would have been right to intervene – and how – is extremely difficult to answer, however. No one has perfect foresight. Many lessons will doubtless be learned from the experience of the past few years, including lessons about capital and liquidity requirements, concentration of financial company ownership, financial links between owners and financial companies, and financial companies’ ownership of other businesses, to name a few. But those lessons are outside the scope of my talk today. Conditions in the global financial system are at their worst since the Great Depression, particularly after the collapse of Lehman Brothers. It is virtually an unprecedented crisis. Perhaps it is possible to say after the fact that the fall of Lehman sealed the fate of Iceland’s banks. Once Lehman had failed, nothing could have saved them. Assets had become almost impossible to sell due to the crisis of confidence and the global credit squeeze the Icelandic banks faced a much harsher operating environment and could expect that strict limitations would be placed on their foreign deposit business – if it were not stopped entirely. Government authorities in other countries consulted with one another more and more frequently on these issues. Early in October, the Icelandic Parliament passed emergency legislation authorising the Financial Supervisory Authority to take over the banks’ operations. The authorities had no choice but to act on that authorisation immediately, take over the three large banks, and divide their operations into two parts, the old banks and the new.