samchain/econo-pairs-v1 huggingface dataset:
This is especially important just now as there is very considerable uncertainty about the future and the Riksbank’s toolbox is perceived to be limited or even exhausted. Third, because it is important to analyse and discuss whether and if so what central banks, including the Riksbank, can and should do to combat climate change. I will argue that the Riksbank can act with strength and security in an economic crisis, and I will exemplify this in the form of a financial crisis triggered by climaterelated events. The Riksbank’s toolbox has changed but it is not empty. But in order for our measures to have a profound impact, we need to work together with other authorities. Good cooperation with other authorities and in international networks is also key when it comes to the Riksbank’s scope for contributing to climate adaptation. The Riksbank can contribute to a more sustainable future, but only as a complement to other effective climate policy. The Riksbank and other central banks will not be able to replace the need for an effective climate policy that should be focused on setting a price on carbon emissions. Let me begin by focusing on the issue of how the Swedish economy is affected by climate change. The climate and its effect on the economy and the financial system The climate is a particularly complicated system. This means that the economic consequences of climate change are difficult to predict.

Direct greenhouse gas emissions, excluding uptake and emission of greenhouse gases from land use, GHG (kt CO2e)/GDP (USD million). Sources: UNFCCC, OEDCD and Climate Watch. Chart 4. Greenhouse gas emissions Blue bars show the Riksbank’s bond holdings and red bars show bonds sold in 2019, in Canada and Australia respectively. Emissions as a share of GDP 1,4  1,4  1,4  1,4  1,2  1,2  1,2  1,2  1,0  1  1,0  1  0,8  0,8  0,8  0,8  0,6  0,6  0,6  0,6  0,4  0,4  0,2  0,2  0,0  0  0,4  0,4  0,2  0,2  0,0  0  Note. Direct greenhouse gas emissions, excluding uptake and emission of greenhouse gases from land use, GHG (kt CO2e)/GDP (USD million). Sources: Australian Bureau of Statistics, Bloomberg, Government of Australia, Government of Canada, UNFCCC and Statistics Canada  Bond purchases for monetary policy purposes Like many other central banks, the Riksbank has bought bonds for monetary policy purposes. The Riksbank has limited purchases to nominal and inflation-indexed government bonds. As I have already mentioned, the Riksbank can broaden its purchases to other types of bonds, such as corporate bonds, municipal bonds and housing bonds. There is an international debate33 on to what extent central banks should consider sustainability aspects in these types of bond purchases: should they give extra  33  See, for instance, Cœuré (2018), Honohan (2019) and Mersch (2018).
Headline CPI went from 1.5 percent annually in  BIS central bankers’ speeches  1  October 2013 to 4.7 percent in May 2014 (figure 1). We expected this rise in inflation to some degree, because it came from a low level and the peso depreciation we have been observing since mid-last year also had an impact. A look into inflation rates over the past six months shows that the biggest increase has concentrated in those components of core inflation of goods and services whose prices are connected – directly or indirectly – to the exchange rate (figure 2). We have also seen an acceleration of nominal wages in recent months. Inflation has behaved thus in a context of sharply decelerating output and demand. In the first quarter this year, output grew 2.6 percent annually, confirming the slowdown that began in the third quarter of 2013. Overall, this outcome was in line with forecasts, but composition shifted towards higher growth in those areas more closely linked to the external sector – like some branches of manufacturing and agriculture – and slower growth in those areas tied to domestic demand, especially services. Leaving out inventories, y-o-y growth in domestic demand picked up from end-of 2013, basically due to a milder drop in investment – especially its machinery & equipment component – and increased dynamism of public expenditure. Domestic spending is still weak, however. Investment has posted negative variation rates for three quarters in a row, while private consumption, mainly of durables, is slowing down (figure 3).

Urban Bäckström: Sweden’s economy is slowing down Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Social Democrats, Härnösand, 20 August 2001. *  *  *  Thank you for the invitation to discuss economic developments in Sweden here in Härnösand. First let me say that conducting monetary policy in the past year has not been exactly easy. The repo rate was raised 0.25 percentage points last December, from 3.75 to 4.0 per cent, and this has been followed by an equally large increase to the present rate of 4.25 per cent. In June, moreover, the Riksbank intervened in the currency market in an endeavour to strengthen the Swedish krona and thereby avert a threat to the 2 per cent inflation target. This evening I shall be attempting to present the Riksbank’s actions as I see them in a wider perspective and convey my view of the challenges we will be facing. Before doing so, however, I want to underscore that a decision by the Riksbank to raise or lower the repo rate does not always appear completely self-evident. In order to avoid an unduly erratic monetary stance, these decisions have to be based on assessments of developments in the period one to two years ahead. The current consensus is that this is approximately the time it takes for an interest rate adjustment to exert its full effect and influence the economy in the desired direction.
Moreover, the aim of deposit protection is to protect small retail depositors, i.e. depositors with deposits of less than $ and DTCs and RLB do not have such depositors. However, the issue of whether their exclusion from coverage might adversely affect the business of RLBs and DTCs needs to be considered. Certainly one might argue that as the first $ of deposits of over $ with licensed banks would be covered, the same should apply to deposits with RLBs and DTCs. This is something that we will consider further in the light of the views that have been expressed. 5. Moving on to the issue of deregulation, July, of course, will see the full abolition of controls on interest rates. This is highly significant, as such controls are surely inimical to Hong Kong’s free competition ethos. Certainly this change in the status quo will provide certain challenges for institutions, but in the long run the competition, innovation and efficiency that the removal of such barriers will engender will help to keep Hong Kong’s banking sector competitive and profitable. We also, as you know, hold the view that some greater consolidation among the local banks would be desirable from this point of view, although we have not forced the issue. This is something, however, to which we would urge bank owners to give careful thought. 6. It is clear that as part of the process of deregulation of interest rates banks will be considering revising certain fees and charges. This, of course, is understandable.

Joseph Yam, JP: The Hong Kong Monetary Authority’s main initiatives in the area of banking supervision Speech by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority (HKMA), at a lunch with representatives of the Finance Constituency organised by Dr David Li, held in Hong Kong on 15 January 2001. The speech outlines the latest state of play on the HKMA’s current initiatives in the area of banking supervision, as well as responding to some points raised by Dr Li on behalf of the Finance Constituency. *  *  *  1. I would like to thank David Li for arranging today’s lunch with representatives of the Finance Constituency. The number of live issues in the realm of bank supervision, some of which have been set down in David’s letter in advance of this lunch, is currently quite considerable, so it is useful to have this opportunity to get together to exchange views. As you will know, it is very much our style to work in close collaboration with the banking industry on developing our policies rather than to adopt a confrontational approach, and long may this continue. 2. Let me run through what I see as the HKMA’s main initiatives in the bank supervision area in the next twelve months, in the course of which I will try to pick up some of the points made in David’s letter.
This is why financial stability is about the way in which banks and financial markets function and how safe and efficient various technical payment systems are – on a daily basis, but also in crisis situations. Money is an excellent means of payment – as long as we believe that it has some value. Should we lose that belief then it only remains for us to begin to exchange goods with each other and there are many accounts as to how clumsy and costly this is, even in modern times. This is why the Riksdag has given the Riksbank the task to maintain price stability However, I do not intend to talk about the inflation target and its background today. Today I will talk about cash and other means of making payments. And this is where, just like in so many other areas, technical developments have to a great extent changed reality. Do you remember the pay packet? When holding wage negotiations, there are still discussions about “how much money will there be in the pay packet”. However, the pay packet is now a metaphor. Those of us who have seen them in reality are becoming fewer. I shall never forget when I worked at a sawmill in Ångermanland and “the chief clerk” from the office came down with the pay packets on Fridays. When one received the pay packet in one’s hand it felt as though one had truly accomplished something during the week.

A doubling of the GDP growth rate might not sound particularly exciting, but over time it has very major effects. An increase in the GDP growth rate from one to two per cent entails the standard of living doubling within 35 years instead of 70 years. For Sweden the stronger growth rate during the second half of the 19th century meant that we emerged from the developing country stage. A number of factors contributed to this development. Free trade was an important element. Our exports abroad were central to this process, which was of course facilitated by the development of the railway system. During the first decades after 1850, there were three main export products contributing to a very rapid export upturn; oats, iron and timber. The importance of exports of oats from the southern part of Sweden is something of a curiosity. Oats were the fuel of that time. All of the horses providing transport in industrial cities like London required oats and much of this came from Götaland. The construction of the railway, as well as investment in industry, housing construction and agriculture naturally required capital. This was mainly obtained from abroad. Sweden was a typical example of a country with an expansionary economy making use of saving in other parts of Europe. This borrowing from abroad was on a very large scale and, prior to the outbreak of the First World War, Sweden was probably the most indebted nation of the time.
I’ll highlight two areas where markets have evolved in ways that raise questions about their resilience, even if all the intermediaries are safe. They might mean investors aren’t able to take the liquidity of markets for granted if they adjust. In both cases, there is no proven problem for markets or the economy. Inquiries are, as the police like to say, ongoing. Through our market intelligence gathering, I’m pleased to say that market participants are helping with those inquiries. And I look forward to the contributions of this Centre too. i) (Mis) use of volatility measures  Against a backdrop of relatively stable markets, some investors may have developed an appetite for betting that a range of markets, including bond markets, will remain stable. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  That means selling options – effectively insurance against moves in market prices. A put option, for example, is insurance against falling prices. An investor who buys this insurance is guaranteed a sale price for the asset insured, regardless of what happens to the market. If prices are currently higher but then fall below the guaranteed price, an investor that wants to sell will incur some loss – think of this as the insurance excess – but the insurer will pay for the rest. If markets stay stable, as the insurer is betting they will, no payout is made and the insurance collects a premium. While markets are stable, it’s a nice little earner for the insurer.

Philipp Hildebrand: Key factors for the Swiss economy – financial market regulation in Switzerland Speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, Swiss Economic Forum, Interlaken, 4 June 2010. The complete speech can be found in German on the Swiss National Bank’s website. *  *  *  The financial system is the life blood of our economy. Key measures to increase the resilience of the financial system have already been implemented in Switzerland. However, they have not addressed the fundamental problem, which is that systemically important banks cannot at present be allowed to fail. The commission of experts set up by the government to examine ways of alleviating this problem published its interim report a few weeks ago. The report proposes measures in the areas of capital, liquidity and organisational structure. This approach is in line with the key points on the Financial Stability Board’s agenda. The interim report is an important milestone in the efforts to address the “too big to fail” issue. Naturally, we still face considerable challenges. Moreover, cross-border solutions are required for the “too big to fail” question. The commission’s proposals represent a constructive step towards global cooperation. If the key points on the Financial Stability Board’s agenda are not implemented in the major financial centres, we will ultimately be left empty handed. One of the few positive aspects of the financial crisis has been the unprecedented international collaboration to combat the crisis and the endeavours to cooperate internationally on regulatory reform.
2/8  BIS central bankers' speeches  All the countries that experienced an acute crisis – Greece, Ireland, Portugal and Spain – now have budgets with deficits below 3% of GDP and a positive primary balance in their current account, with the exception of Spain. Last year, Spain still had a primary deficit of 0.5%, but this year it is very likely that they will also make a surplus. In some cases, this adjustment in the primary balance was in the double-digits, which is huge. Our analysis, and the IMF’s, shows that the positive current accounts that all of these peripheral countries have built are the result of a structural adjustment. This is not about lower imports and weaker demand; it is about the improved performance of exports and structural adjustments. And that’s very important. Second, in terms of the banking sector, the capital level of banks everywhere has increased and the average common equity ratio of banks here is 14.3%. There is no bank below 11% in the euro area. That also represents a huge reduction of risk. Then, third, there is the BRRD [Bank Recovery and Resolution Directive], which rules that if there will be any collapse of banks, then no bailouts by the public sector can be engineered – at least before there is a private bail-in of 8% of the total assets of the bank. So that’s a big risk reduction for national government budgets and for taxpayers. Banks are also building up their bail-in-able securities.

The idea is that if the central bank uses an active policy to do so, then it’s to correct distortions that exist in financial markets and ensure that lending rates to businesses and households in the economy as a whole are at the right level to get to the level of activity that would be desirable. If there are rigidities and distortions in the private sector that do not engineer the smooth functioning of the economy, then public intervention is fully justified. It does not add up to manipulation because the reality is not perfect to start with. I’m just now thinking in very abstract terms; this was never discussed at the ECB’s Governing Council. This is my personal take on possibilities; it is not more than that. We didn’t start any discussion about the medium-term future of monetary policy, it’s too soon in Europe to start thinking about that. But I’ll just say it’s a possibility and it can work. We could buy more bonds to enforce it – the 33% 1/8  BIS central bankers' speeches  limit [that the ECB has on buying all of the outstanding stock of a country’s government bonds] is a self-binding decision by the Governing Council. That decision could be slightly changed, theoretically, of course. What about the use of the other non-standard measures? There is a view that some of the tools, such as the Outright Monetary Transactions (OMT) programme, are closely linked with the current ECB leadership and not as much with the ECB itself.
It does not take into account that the evolution of relative exchange rates stems, to a great extent, from a natural compensation for inflation rate differentials. This is particularly relevant to Switzerland, where we have experienced far less inflation than our commercial partners over the last thirty years. If this issue is accounted for, that is, in real terms, the Swiss franc can then be said to have appreciated by around 100% against the US dollar and 70% against the British pound since 1973 and by 14% against the Euro between 1999 and today. We learn more if we take a multilateral viewpoint, based on the real effective exchange rate13. On a statistical basis, it can be argued that the Swiss franc’s effective exchange rate has remained more or less stable, at least from 1990 until recently. This does not mean, however, that it has been constant. On the contrary, it fluctuates constantly around its  12  The Bank of England has reached the same decision regarding the British pound. 13  This rationale and the figures that follow refer to the export-weighted real exchange rate (nominal rates which correct the gaps between price indexes and consumption), as published by the BIS. BIS central bankers’ speeches  5  average.14 You may recall, in particular, that for approximately three years in the mid-1990’s it remained well above its long-term average, then peaking at 12% in 1995. Until now, this was the Swiss franc’s most significant deviation from the long term average observed.

The intervention of the central bank is then viewed as a means of helping market participants to coordinate on valuations which are more in line with the real fundamentals. Today, the Swiss franc remains high and should therefore continue to depreciate in the future. Conclusion As I stated at the outset, we face no shortage of challenges. I have addressed two of them today. The Swiss franc was overvalued to such an extent that the SNB has been forced to take the extraordinary decision of setting a minimum exchange rate. This carefully considered decision reflects the extent to which we live in extraordinary times. Given the prevailing circumstances this summer, to the SNB, this seemed to be the only way in which the central bank could fulfil its mandate to ensure price stability while taking due account of economic developments. Behind the scenes, the rapid and complex evolution of FMIs worldwide is a matter of longterm interest. This infrastructure is central to the functioning of financial markets. It is a challenge of primordial importance to the financial markets. Today, we are the beneficiaries of an effective infrastructure, in part thanks to the adoption of “Gemeinschaftswerk”, a collaborative modus operandi which has permitted a near-perfect alignment of stakeholders’ individual and collective interests. It cannot be taken for granted, however, and it is our collective responsibility to act.
Not only has the WTO proved unsuccessful as a forum for solving these issues, but also progress in responding to the challenges posed by the emergence of new forms of trade, such as e-commerce, has been rather limited. The experience in other relevant areas such as investment, intellectual property protection and public procurement, has been similar. Indeed, the collapse of the Doha round in 2001 had already raised doubts about the WTO governance framework. In particular, the effectiveness of the Dispute Resolution System and the viability of conducting trade discussions and adopting decisions involving over 160 countries, on the basis of general consensus, had been called into question. In fact, given the deadlock in WTO negotiations, countries have chosen to shift their liberalisation efforts towards regional or bilateral agreements. However, it is important to stress that bilateral agreements represent only a second-best solution. They usually entail some form of trade diversion which, from a global perspective, reduces the positive effects stemming from trade creation.4 What is more, bilateral or regional agreements, give rise to situations in which large trading nations or blocks are typically in a stronger negotiating position than other economies, generating an asymmetric system of international relations. And, in this context, a trade war has unfolded, which is already taking a heavy toll as regards its effects on global trade and global uncertainty and is currently one of the greatest threats to the world economy.

The other relates to global imbalances: deficit and surplus countries should both take action in a cooperative manner. Again, a core element of any of these proposals is complementarity between sound domestic policies, international cooperation and a robust global financial safety network that accommodates both regional and multilateral actors. Conclusions In short, the multilateral economic cooperation system, despite its limitations, has allowed significant development in many countries over the last few decades. Today, more than ever, its defining principles of cooperation, rules, universality, formality and sovereign equity need to be preserved to enable the various global challenges ahead to be addressed. Notwithstanding this, the new economic, social and geopolitical realities call for a reform of multilateralism. We must work to adapt multilateral institutions to the new realities, eliminating obstacles that hinder collective action, making them more flexible, efficient, representative, transparent and accountable. They also need to become more cooperative and to better complement regional arrangements and institutions. Thank you. 8/8