samchain/econo-pairs-v1 huggingface dataset:
We should of course think about how to create a liquid market for bank certificates in kronor. One problem is that the benefits of such a market fall to the banks collectively while the costs in the form of higher borrowing costs fall to each bank individually. In this perspective it may be necessary to investigate whether the costs that each individual bank pays for its shortterm funding in foreign currencies reflects the true costs to the Swedish financial system and Swedish society. BIS central bankers’ speeches  7  Figure 3 Outstanding certificates issued by banks in Swedish kronor SEK billion  Note. Refers to certificates issued by banks, mortgage institutions and other credit institutions. Source: Statistics Sweden  Swedish conditions require a complement to the reform agenda The Swedish banking system is thus marked by a number of characteristics that make it somewhat special in an international perspective – characteristics that either increase the risk of problems or the economic costs to society if problems arise in the banking sector. There are therefore good reasons for establishing a safe margin – a respectable distance – to the minimum regulations in the Basel III Accord. As you know, we have already taken several steps to strengthen the Swedish banking system, over and above the commitments that Basel III entails.

Can you explain the ECB’s assessment of how inflation is developing? Looking at incoming data, I would say that data are more or less in line with our expectations. But this has to be seen in a context where we had repeatedly overestimated future inflation rates. In the last years, we have repeatedly lengthened the horizon over which we would get back close to 2 percent. Mechanically updated projections suggest that the risk is present that we may again have to extend this horizon. And even if it’s slightly, it’s a repetition of a past pattern. And then you go into the question of credibility of monetary policy. BIS central bankers’ speeches  1  If you observe for example, that the price people are ready to pay for protection against inflation is zero, or very low, that’s not necessarily a good signal, as it suggests that they are not convinced there’ll be inflation. And that could be related to scepticism about the ability of the central bank to influence inflation even five years ahead – which would be quite serious. You cannot just reject that. Markets might be signalling that there could be some second round effects related to the fall in oil prices. Inflation expectations would then be hit at some point. Finally they could also reflect a very pessimistic view on the future, and that’s the more secular stagnation scenario where the falls of oil prices would be more the reflection of deep structural problems in the global economy.
But the longer it persists, the more likely it is that sterling prices will adjust to euro prices, creating the potential for quite long term impacts on UK inflation relative to the euro area. That is what we appear to be seeing at the moment, with the historic relationship shown in Chart 6 suggesting that UK inflation could run 1 to 2 percentage points above euro area inflation for a considerable while unless there is some noticeable appreciation in the value of the pound. The counterargument to this view is that the recent substantial depreciation of the pound against the euro and other currencies is needed to support a rebalancing of the UK economy and sustain the growth of UK manufacturing and other internationally competitive sectors of the economy. But the extent of the depreciation of sterling since 2007 has been much greater than we have seen in previous rebalancing episodes, such as the mid-1990s – which raises the question whether sterling has fallen much further than needed.5 And it is not clear  5  8  See Sentance (2011) for a comparison of the recent fall in sterling with previous episodes. BIS central bankers’ speeches  that the export-based manufacturing activities which could benefit from a large depreciation have the capability to respond quickly by scaling up output – particularly when their demand is already being boosted by a recovery in global demand.

One Norwegian krone was worth 0.40323 grams of fine gold. In the latter part of the 1800s, Norway benefited from free trade and free capital movements and became a relatively prosperous country. The standard of living in Norway did not lag behind that of Sweden. The currency union was maintained after the political union with Sweden was dissolved. The agreement lost its practical significance after the gold standard was suspended in 1914. The agreement was not formally terminated until 1972. From an economic viewpoint, the dissolution of the union in 1905 was a painless process. Economic developments were favourable up to World War I. International real interest rates have fallen The interest rate level is lower today than in 1905. In fact, Norges Bank has not allowed the key rate to be this low since the Bank was established in 1816. This partly reflects international conditions. In many countries interest rates were reduced considerably when the economic situation took a turn for the worse early in 2000. Interest rates adjusted for inflation, i.e. real interest rates, are now also low. Low real interest rates may be ascribed to several factors: Inflation has been low for such a long period that savers require a low premium as a hedge against unexpected inflation in the future. In order to prevent an appreciation against the dollar, many Asian central banks have been buying US government bonds, thereby pushing down yields.
François Villeroy de Galhau: Beyond Brexit, our common challenges and our common answers Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the City Week 2018, London, 24 April 2018. * * * Ladies and Gentlemen, It is a pleasure to be in London again and allow me to thank you for inviting me to speak at City Week 2018. As is to be expected, Brexit is omnipresent on the agenda. But, as the Belgian friar Dominique Pire said when he received the Nobel Peace Prize in 1958, “men build too many walls and not enough bridges”. That is why I am not going to speak about what divides us, but rather about what unites us. We are and will always remain close friends and partners, even if we will no longer be in the same European club. Today I will elaborate on two challenges that should unite us in the near future: the utmost need for active multilateralism and the finance of tomorrow in an interconnected world. 1. The need for active multilateralism International cooperation between countries is more important than ever to preserve the current improvement in the global economic environment: according to the latest IMF forecast, global growth should stand at 3.9% in 2018, after 3.8% in 2017. And we should together resist two temptations: financial complacency, and protectionist escalation.

Indeed, apart from assuring the rule of law, Smith saw two other functions for government: “the duty of protecting the society from the violence and invasion of other independent societies” and the “the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain”. Against the backdrop of these brief reflections on the great Adam Smith, let me turn back to the specific question put to us. I have no doubt that together with a functioning rule of law and limited government intervention, free markets in general and financial markets in particular are the optimal path to the promotion of wealth. I am equally convinced that responsible behaviour has the best chances of flourishing in an environment of economic opportunities and rising standards of living. Trust clearly enhances the rule of law as there will never be enough courts to permanently monitor all market transactions. Modern means of communication and transparency, in turn, are trust-enhancing. Think of seller and purchaser ratings on many internet auction sites. Now, let me conclude my remarks with a final and in my view crucial note of caution. As Charles Kindleberger demonstrated convincingly in his 1978 book Manias, Panics and Crashes, financial markets are prone to phases of irrationality and exaggeration. Such market disequilibria lend support to the need for the rule of law and the utility of limited government intervention in a number of areas.
Another way to consider the graveyard question is to look at the returns of the insurance firms that we oversee and ask whether or not they resemble tombstones. Empirically, returns on equity can be volatile thanks to things like competitive pricing pressures, catastrophe risk losses and asset market volatility, but they have remained healthy in recent years. Since the introduction of Solvency II, returns have been in ranges of about 8 to 10% in general insurance, and 10% to 15% in the life sector. Our insurance sector is clearly alive and kicking. Moreover, the PRA does not aspire to a zero failure regime – more than fifty insurers regulated by the PRA are currently in some form of run off, for example – and even our primary objective of safety and soundness is in some ways just a means to end. Policyholders are not well served by firms that are so safe and cautious that they might apparently be able to live forever, but never grow or change. Such firms are more likely to be broken by a storm than to bend with it. On the contrary, policyholders are better protected by firms that: first, are sufficiently profitable and attractive to external capital to be able to change and grow in response to the changing external environment; and second, are able, if their business models do fail, to exit the market in an orderly fashion, paying their remaining liabilities as they fall due. What we do have a very low appetite for is disorderly failure.

But to acknowledge these complexities does not weaken the case for the importance of trying to make sensible judgments about how monetary policy should respond to asset price developments. Here are some considerations for how central banks should navigate through these challenges. 2  BIS Review 2/2006  First, in circumstances where the central bank observes a large realized movement in asset prices and is confident in its knowledge of the impact of those moves on the path of aggregate demand, monetary policy may need to follow a different path than might have seemed appropriate in the absence of those developments. In other words, when policymakers have already witnessed a significant move in asset values, and are confident in what that move means for the outlook, it should be prepared to adjust policy accordingly. Note that in order for this seemingly straightforward proposition to apply the central bank must be responding to its assessment of what an already observed movement in asset prices will mean for output and inflation. Of course central banks must always be prepared to respond when factors threaten to push aggregate demand away from aggregate supply and impact the inflation outlook. Movements in asset prices certainly have the potential to be one of those factors, and the implications of this approach apply in both directions.
Ardian Fullani: Albania’s 2013 economic and financial developments and future objectives Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Parliamentary Committee on Economy and Finance, presenting Bank of Albania’s Annual Report 2013, Tirana, 23 April 2014. *  *  *  Honourable Chairman, Honourable Committee members, I avail myself of the moment to thank you, on behalf of the Bank of Albania, for this annual opportunity to present the economic and financial developments over the past year, as well as to report on central bank’s progress and results conform to its mission and objectives. As se have mentioned on several occasions, 2013 was a very difficult year for the Albanian economy. It posed serious challenges to both economic agents and policy makers. As one of the key institutions that design macroeconomic policies, as well as the supervisor and regulator of the banking system, the Bank of Albania has been fully committed to addressing these challenges. Overall, I am confident we have been successful in fulfilling our objectives, although the problems facing us may not be considered as overcome, and require even greater attention in the future. First, I will briefly present the main developments during 2013. Then, I will make a summary of the work of the Bank of Albania. Lastly, I will share some issues I believe should be addressed with priority in the future. *** 1. Albanian economy during 2013  Economic activity in Albania slowed down significantly in 2013.

In parallel, it amended the regulatory and supervisory framework to adapt it to the new financial conditions and approximate it with the new international standards. With regard to the latter, we have worked to gradually transfer the supervisory practices from Basel I to Basel II system. 4  BIS central bankers’ speeches  In view of integrating the Albanian banking system with the European one, we have intensified the cooperation with counterparts in other countries. Bank of Albania’s membership into Vienna Initiative 2.0 Steering Committee was particularly important in this regard. This initiative is a platform of cooperation, which brings together the European Commission and other institutions of the European Union, international banking groups that operate in Central, Eastern and South-eastern Europe, as well as authorities from home and host countries. Its main objective is to promote coordination between home and host country authorities, to avoid disorderly deleveraging. Given that the Albanian banking system is dominated by cross-border banking groups, decisions from the Vienna Initiative 2.0 have considerable effects on it. Therefore, our participation in the decision-making process is very significant. Albania is the only non-EU member country participating in Vienna 2.0. As such, it also represents the interests of other non-EU countries that are not represented in the Steering Committee. For all these reasons, I believe the involvement of the Bank of Albania in Vienna Initiative 2.0 is an important institutional achievement.
Second, there are significant challenges associated with the construction of the data in the index, especially related to the measure they call “jumbo deposits.”27 Virtually the entire rise in their measure of dispersion in late 2015 comes from this one series, but this rise is largely eliminated if the series is instead constructed as done in the Organization for Economic Co-operation and Development (OECD)’s Main Economic Indicators for the United States. Third, it isn’t obvious to me that higher or lower levels of this index correspond to “better” or “worse” monetary transmission. Absent frictions and risk premia, dispersion would be zero. In practice, there is quite a bit of dispersion. These spreads are driven by liquidity, credit, term and other fundamental risk premia that vary over time. Effective monetary transmission does not require zero dispersion—instead, it requires that market rates respond appropriately to changes in the federal funds rate, and that the relationships among market rates be reasonably predictable. Put another way: if some change in market structure causes rates across markets 6 / 13  BIS central bankers' speeches  to be more dispersed, but every traded rate within each money market moves up by exactly 25 basis points following a 25 basis point increase in the federal funds rate, is transmission really worse than it was before the structural change?

Among others, the finance industry is one with many untapped opportunities. Currently, a wide group of people in our countries still needs a better access to finance and there are still lots of demand for financial services to be met – be they savings, loans, insurance products, or payment services for both domestic and crossborder transactions. By applying the airline industry’ experiences for policymakers, let me lay out five key conditions necessary to developing domestic financial systems and nurturing financial connectivity in the CLMVT in the periods ahead. Analogous to the “Open Sky Policy”, the first factor is to promote domestic financial liberalization policy and a well-integrated regional financial system. The financial liberalization policy should aim to lessen the degree of domestic financial repression, thereby strengthening financial institutions’ performance, and broadening their offer of financial  2  BIS central bankers’ speeches  products and services. This can be done along with the policy to enhance financial connectivity by promoting the presence of capable players with regional focus. Under our mandate, the Bank of Thailand aims to promote financial connectivity through more connected banking networks and more integrated payment systems. Under the ASEAN Banking Integration Framework, countries in the CLMVT should gear up efforts to strengthen regional banking networks, which will serve a diverse range of businesses and local people to gain more access to high quality banking services at fair prices.
A high level of indebtedness can cause what one might call debt dominance in the economy, which put constraints on economic policy and leads to general unease over how debt will be reduced – whether this can be achieved in an orderly manner or whether it will be a rapid, abrupt process with substantial negative effects on the economy. Riksbank quick to point out the risks with a credit boom I mentioned earlier that prior to the crisis there was a discussion on whether central banks should try “leaning against the wind” to dampen the credit boom and the upturn in housing prices that could be observed in a number of countries. One could actually claim that the Riksbank was one of the first central banks to clearly highlight the risks linked to household indebtedness and housing prices in its monetary policy agenda, and it was also one of the few central banks that in practice conducted a policy prior to the crisis that to some extent entailed “leaning against the wind”. 6 I myself discussed the Riksbank’s policy at the annual conference in Jackson Hole in 2007. 7 This was before the crisis had really made itself felt and there was considerable scepticism of a “leaning against the wind” policy. When the crisis came, opinion changed and as I see it, there is today considerably more understanding and acceptance for the policy we conducted.

Something one should always bear in mind, but which I do not intend to discuss further here, is that decisions we make regarding conditions in Sweden must also be incorporated into a broader, European context. There are also a number of questions, particularly with regard to the interplay between macroprudential policy and monetary policy, that sooner or later may need to be dealt with in practice and it would be wise to have thought them through. Coordination... Some of the research into macroprudential policy – which is in general still in its infancy – tries to analyse the importance of coordinating macroprudential policy and monetary policy. The idea is roughly as follows: Monetary policy and macroprudential policy act through largely the same channels. Both the policy rate and most macroprudential tools affect, for instance, credit growth in the economy and developments in various asset prices. This also means that the two policy areas affect one another’s objectives. Monetary policy affects the credit cycle – which was the whole point of “leaning against the wind”, and macroprudential policy has effects on the business cycle. It is therefore desirable to find the right policy mix – the combination of policy rate and macroprudential tools that give the best overall outcome for the economy. The conditions for finding the right mix are normally improved if the two types of policy are coordinated, rather than determined separately. 14 The importance of coordination is also pointed out in more practical economic policy contexts.
However, experience has shown that when a country requests such assistance, the national authorities tend to blame European institutions, including the ECB, for having pushed them to do so. “Europe” thus becomes a scapegoat and this may fuel strong – although unjustified – anti-European sentiment in the countries concerned. So governments have a natural inclination not to request financial assistance at an early stage. The second thing that has gone wrong has been the implementation of the Greek programme of reforms. Reform fatigue set in at an early stage and it probably went unnoticed for a while. Member States adopting IMF/EU programmes have to remain firmly committed to very specific measures, which need to be acted upon from the outset. Monitoring has to be strengthened. I will not elaborate on these two first issues but – being here in Berlin today – I would like to focus on the third issue which has not gone well, in my opinion, namely the whole discussion about private sector involvement. The point I would like to make is that having the private sector actively involved in preventing and resolving sovereign crises is a good idea. However, the practical implementation of this idea is fraught with complications and, if done unwisely, may actually be very damaging, and turn out to be more costly for taxpayers. The events of recent months seem to confirm my views.

As Bank of Zambia, we believe that the recent economic developments, such as, the attainment of single digit inflation for the first time in three decades in April 2006 and sustaining low-level inflation for nearly three consecutive quarters so far to November 2006 are supportive of this initiative. These developments also indicate that Zambia is able to rally foreign private capital to improve the domestic financing limitations and support efforts of encouraging faster economic growth, private sector investment and exploitation of the country’s huge potential in various sectors. Ladies and gentlemen, we also believe that events such as this complement the outcomes of Government’s economic reform agenda which in part is aimed at strengthening our country’s creditworthiness as demonstrated by the attainment of the enhanced Highly Indebted Poor Countries Initiative (HIPC) completion point in April 2005. Ladies and gentlemen, please allow me to elaborate. In order to strengthen and sustain our new status as a creditworthy economy following the attainment of the HIPC completion point, the Bank of Zambia, together with Government, is working on ensuring that our institutional arrangements are supportive of keeping the global investor audience, amongst others, informed about domestic economic developments transparently and on an ongoing basis. For instance, we believe that obtaining a formal sovereign credit rating would help us build part of the necessary institutional arrangements of keeping all stakeholders informed.