samchain/econo-pairs-v1 huggingface dataset:
The situation would be even more critical if the bank was at the same time a relatively small actor in its own country. In this type of situation the supervisory authority in the home country – which in this case is the one that decides – would probably consider that the need for supervision was not as great as the other countries might consider it to be. There is an evident risk of a conflict of interests between the countries. 2  BIS Review 38/2007  There are elements of similar problems in the Nordea case, too. However, here the problem is rather the opposite – namely that the bank group’s different companies (parent and subsidiaries) would be covered by supervision in several countries. The fact that each cross-border bank group has to obey and report to several supervisory authorities leads to additional costs and administrative duties for the bank. This is an obstacle to continued integration and to the competitiveness of the European bank market. Another problem is that there are no common arrangements for crisis management within the EU. Basically the only EC regulations defining how responsibility should be divided between the countries in the event of a cross-border crisis are regulations for compensating depositors in the case of bank failures. However, these regulations are not primarily intended to ensure efficient crisis management. They should rather be seen as protection for consumers.

The Government has also provided increased loans and guarantees to Norwegian export industries, and has raised lending limits for state banks. In addition, Folketrygdfondet (the Government Pension Fund – Norway) has been permitted to increase its purchases of bonds. 6  BIS Review 139/2009  The extraordinary monetary and liquidity measures implemented were tailored to a situation in which financial markets no longer functioned. In Norway, it has been appropriate to start winding down the unconventional measures earlier than in other countries: In recent months, Norges Bank has not supplied liquidity through the currency swap lines or liquidity in foreign currency. Loans in NOK at long maturities have not been provided since February. Surplus liquidity in the banking system was increased to more than NOK 100 billion, but is now close to a more normal level. This motivates banks to revert to money market funding. The swap arrangement involving covered bonds (OMF) in exchange for government securities has made an essential contribution to securing banks’ long-term funding. The first signs that the covered bond market was beginning to function appeared in spring. The minimum price in the swap arrangement has been raised by 0.9 percentage point, from NIBOR-0.2 percentage point to NIBOR+0.7 percentage point. Use of the arrangement is currently being phased out. Norges Bank eased its collateral requirements to enable banks to increase their borrowing in the central bank. This measure is now being reversed.
The result of this was that the credit rating agency Moody’s lowered the credit ratings of several Danish banks  BIS central bankers’ speeches  3  and loan loss insurance became more expensive. Moody’s justified this change by claiming that the implicit state guarantee had decreased. Major Swedish banks have a large share of market funding in foreign currency In addition, the major Swedish banks receive a large share of their funding – about half – from the financial markets. In addition, almost half of this market funding is in foreign currency. The integration of financial markets is basically a good thing. Much of foreign currency borrowing is necessary to meet lending needs. And market funding can be good for spreading financing risks. But at the same time, the risk of imported shocks increases. Borrowing in foreign currency for lending in Swedish kronor also increases dependence on the efficiency of the swap market. The liquidity risks taken by the major Swedish banks are also still larger than the European average. Unexpected negative events or disruptions on the international financial markets can thus cause considerable problems for the major banks and ultimately for the Swedish economy. Swedish banks have low risk weightings The low risk weightings in Sweden are particularly important for the Basel regulations on capital adequacy. At present, of course, the banks can calculate risk weights using internal risk-classification models based on historical data on loan losses. From an international perspective, these internal models generate very low risk weights for Swedish mortgages.

Stefan Ingves: Financial crises in an international perspective Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Danish Financial Supervisory Authority, Copenhagen, 12 September 2006. *  *  *  Thank you for inviting me here today. It is easy to forget what a financial crisis entails, now that a number of years have passed since we last experienced one and it is therefore important that we remind ourselves. Although we cannot yet see any immediate threats, we must look ahead to prevent potential crises. During my twenty minutes or so today I intend to talk about the following: •  the fact that most of the various crises in different countries during the 1980s and 1990s have had a number of common causes,  •  the fact that it is important to invest in preventing and managing crises,  •  the fact that risks and potential vulnerabilities in the financial system are now changing rapidly as the differences between banks and other financial institutions decline and crossborder integration intensifies,  •  the fact that the cooperation between authorities within and between countries must be developed further, both with regard to regular monitoring and crisis management. In particular, it is necessary to discuss how the responsibilities and costs should be divided up in the event of a crisis. Many of the experiences I describe refer to crises and countries outside of Scandinavia, even outside of Europe, which does not prevent them from being relevant to our discussion.
Thirdly, somewhat tighter monetary policy than otherwise would be able to counter an over-optimistic pricing of financial assets and properties. The second argument is therefore based on the idea that the central banks’ normal forecast horizon of two years is too short, while the third argument is based on the assumption of irrational expectations. Lengthening the forecast horizon is relatively simple in principle, but in practice it is more difficult of course. Especially if the models used have some of the shortcomings I mentioned earlier. The third argument regarding irrational expectations is more difficult to adopt a position on. If we seriously believe that it is relevant, a large part of the foundation for the analysis and recommendations on which central banks today base their policy collapses at the same time. However, “Irrational expectations” could be a result of insufficient availability of information. Therefore, it cannot be ruled out that central banks, by pointing out potential problems associated with high debt levels, can contribute to reflection among those agents that otherwise would undertake commitments that they would not be able to meet when conditions change or in banks that otherwise would take on excessive credit risks. Influencing behaviour in this way by spreading information is an important idea behind the Riksbank’s Financial Stability Reports. Those that maintain that there is too much uncertainty to dampen a price rise via interest rate adjustments are thus of the opinion that it is better to wait until asset prices start to decline.

According to these theories there is some scope for monetary policy to take account of the output gap without necessarily threatening price stability in the slightly longer term. An important condition for this, however, is that there is considerable confidence in the central bank’s aim to focus on long-term price stability. In the long run, monetary policy cannot determine the real interest rate but in the short term the real interest rate can be influenced and deviate from its long-term equilibrium position. An increasing number of central banks have adopted inflation targets during the 1990s. The introduction of statutory price-stability objectives, independent central banks, transparency and - not least - regulations that give long-term sustainability in the public finances have also been important means for increasing credibility for the ability of economic policy to maintain price stability. 1  2  E.g. Woodford, Claridas  BIS Review 40/2004  In Sweden, the Riksbank adopted an inflation target as early as 1993. According to this target, inflation measured in terms of the change in consumer prices should be 2 per cent per year, with a tolerance for deviations of +/- 1 percentage point. As monetary policy does not have an immediate impact, interest rate decisions are normally governed by forecasts of inflation one to two years ahead. To avoid the economic costs of excessively sharp fluctuations in economic activity, the Riksbank many decide not to take account of price effects that are judged to be temporary.
After all, China is one of the world’s largest economies that in spite of its increasing openness follows a course of its own. Critics of the dollar peg believe that if the renminbi were allowed to float, it would appreciate, thus reducing China’s current account surplus and shrinking the US deficit. In the long term, I believe that it is right to allow the renminbi to float. In the short term, however, it is difficult to see this as the appropriate solution. The main reason for not floating the renminbi yet is the Chinese financial system. The Chinese banking system is still a long way from being adapted to market conditions, and a large proportion of its lending is still made to state-owned companies that are often unable to honour their payment obligations. If we take into account all the hidden and disclosed nonperforming loans in the banking system, these are estimated to be equal to as much as half of China’s GDP, and they are continuing to grow. Were the currency allowed to float before addressing these problems, it is just as likely to depreciate as appreciate since the Chinese public could take advantage of the opportunity to transfer its assets abroad instead of saving at low interest rates in the weak  4  BIS Review 47/2003  domestic banking system, a system that would then be rocked to its foundations.

As the representative of a central bank, I must add that it is interesting to at least toy with the idea of how a global currency and global monetary policy would look. But for the time being this will probably remain no more than an intellectually stimulating vision. At global level, integration needs to go much further, and the economies become more synchronised, if the long-term gains of fixed exchange-rate cooperation are to outweigh the risks. In the long term, it is not inconceivable that a trend will arise towards large regional currency blocs with single currencies, but with flexibility between them. Within these blocs, it will be possible to reap the advantages of integration fully, while the risks will be limited by increasingly similar conditions in the countries taking part in the common currency. Competition between these areas regarding which has the dominant reserve currency may increase gradually. The dollar’s unique position will weaken, just as we are seeing today with a number of Asian central banks planning to increase their assets in euro and reduce those in dollars. Let us hope that there will also be cooperation between the regions, so as to give the world greater stability, development and continued integration. BIS Review 47/2003  5
Chart 9 OECD measure of UK output gap Output gap as percentage of potential output 4 Real-time estimate  3  Latest estimate  2 1 0 -1 -2 -3 -4 -5  1991  1993  1995  1997  1999  2001  2003  2005  2007  *: Positive numbers indicate above-potential levels of GDP. Source: OECD  BIS central bankers’ speeches  11  The combined impact of data revisions and reassessments of the trend in underlying capacity can be seen in the way estimates of the “output gap” change over time. Chart 9 shows how the OECD’s estimate of the UK output gap has changed over the 1990s and in the 2000s prior to the recession. In general, the revisions have indicated that there was much less spare capacity in the economy than originally thought. The persistent “output gap” of spare capacity which was believed to exist in the mid-1990s has been revised away. And the OECD’s current estimate is that the UK economy was operating much further above capacity before the recession than thought at the time. These difficulties in measuring or estimating the margin of spare capacity can be remedied to some extent by looking at direct measures of spare capacity in firms from business surveys and indicators of labour market slack from employment data.

Michael Gondwe: Enhancing access to financial services in Zambia Speech by Dr Michael Gondwe, Governor of the Bank of Zambia, at the launch of the Mpongwe branch of the National Savings and Credit Bank Zambia Limited (NATSAVE), Mpongwe, 28 June 2013. *  *  *  The Copperbelt Province Minister, Hon Mwenya Musenge, MP The Mpongwe Area Member of Parliament and Deputy Minister of Foreign Affairs, Hon Gabriel Namulambe, MP; The Copperbelt Province Permanent Secretary, Mr Stanford Msichili; The Permanent Secretary, Ministry of Agriculture, Dr Shamulenge; The Permanent Secretary Ministry of Agriculture, Mr Siazongo Siakalenge; Your Royal Highnesses the Chiefs Present; The Mpongwe District Commissioner; The NATSAVE Chairman of the Board, Dr Chiselebwe Ngandwe; The NATSAVE Managing Director, Mr Cephas Chabu; Distinguished NATSAVE Customers; Management and Staff of NATSAVE; Colleagues from Bank of Zambia; Members of the Press; Distinguished Guests; Ladies and Gentlemen. It is my honour and privilege to officiate at this very important launch of the National Savings and Credit Bank (NATSAVE), Mpongwe Branch. Let me begin by thanking the Board of Directors and Management of NATSAVE for inviting me to this momentous occasion, which marks the official opening of the Mpongwe Branch which is the first ever bank branch in this economically vibrant district. I commend the Board and Management of NATSAVE for the effort in opening this branch which will go a long way in supporting the Bank of Zambia’s strategic objective of increasing financial inclusion.
Thank you for your attention. 6  BIS central bankers’ speeches

Thomas Jordan: Repercussions of the financial markets crisis in Switzerland Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the Zuger Wirtschaftskammer, Zug, 28 April 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The turbulence in the financial markets that began in August 2007 is having a generally negative impact on the Swiss economy and is spreading through different transmission channels. The downgraded growth prospects for the US economy are resulting in fewer imports from the rest of the world. Since net exports and the global economic developments are of particular importance for Switzerland, they are having a negative effect, which may be reinforced by the appreciation of the Swiss franc. Because of the major importance of banking in the industrial structure of the Swiss economy, falling turnover on the financial markets can also affect Switzerland more severely than other countries. Moreover, rising credit risk premiums result in higher financing costs for companies, and the deterioration in bank balance sheets could be an additional factor in compromising the availability of credit in Switzerland. Finally, the increase in commodity prices has had a significant impact on the inflation rate in Switzerland. Despite the fallout from the financial crisis, the outlook for Switzerland‘s economy remains good. In Europe – which is crucial for Switzerland – the economy will probably weaken only gradually.
Durmuş Yilmaz: Turkey’s monetary and exchange rate policy for 2007 Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Central Bank of the Republic of Turkey, Istanbul, 13 December 2006. *  *  *  General framework of the monetary policy A brief evaluation of the first year of the inflation targeting regime The Central Bank of the Republic of Turkey (Central Bank) adopted the formal inflation-targeting regime at the turn of 2006, and since that time has implemented a policy consistent with the principles laid out in the policy statement entitled “General Framework of Inflation Targeting Regime And Monetary And Exchange Rate Policy for 2006” and released on 5th of December, 2006. Four Inflation Reports have been published in 2006, in January, April, July and October. These reports have explicated the Central Bank’s inflation forecasts and policy perspectives. The main messages of the reports have been shared with the public each time in by means of press conferences. The Monetary Policy Committee (Committee) held regular meetings throughout 2006, in addition to the interim meetings held in June, in line with the pre-announced annual timetable to determine policy rates. Press releases explaining the rationale of decisions and the Committee’s policy stance have been published along with interest rate decisions. Moreover, the summary reports of the Committee’s discussions have been released within five working days following the meetings.

Since the end of 2005, the Central Bank has repeatedly drawn attention to this matter via the Inflation Report and other policy documents. Special CPI aggregates and core inflation Instead of considering a single so-called core indicator, the Central Bank uses more than one indicator in the differentiation of various exogenous shocks. Thus, depending on the source of shocks, different indicators may stand out from time to time. For instance, the index that excludes the energy item in a period where oil prices display high increases or the index that excludes the unprocessed food group in a period where agricultural prices fluctuate excessively may contain more comprehensive information in order to achieve a better understanding of the main inflation trend. Special CPI aggregates produced will continue to be a part of the forward-looking inflation analysis and the communication policy of the Central Bank. As of 2005, TURKSTAT started to publish 7 special CPI aggregates and beginning from September 2006 the H index composed by excluding energy, alcoholic beverages-tobacco, unprocessed food, and gold has started to be published. Currently, even though the H index seems to be relatively in the forefront, it should be kept in mind that this index is sensitive to developments in FX rates and it could provide incomplete information in periods when FX rates are highly volatile. In such periods it would be appropriate to support the data from the H index with other indexes that have low FX rate pass-through (for example; evaluating them with service prices inflation).
Confidence in the Norwegian krone had to be restored in order to avoid persistently high inflation. This required very high interest rates. The fixed exchange rate regime resulted in a gradual reduction in inflation and succeeded in providing the economy with a nominal anchor. However, fine-tuning the exchange rate proved to be an extremely demanding task. We had to abandon the fixed exchange rate regime in December 1992. Important reasons were freer capital flows, deeper financial markets and hence a surge in cross-border capital movements. Initially, however, the krone exchange rate showed little change and quickly found a new range. The exchange rate remained stable until autumn 1996, but gradually began to show wider fluctuations. Developments in international financial markets led to more pronounced fluctuations. And more fundamentally, exchange rate developments no longer provided signals to wage formation and fiscal policy when labour market pressures mounted and incomes policy failed. High petroleum revenues, fiscal slippage and expectations of increased use of petroleum revenues contributed to this. The exchange rate was no longer appropriate as a nominal anchor. Norges Bank therefore placed increasing emphasis on low and stable inflation in its conduct of monetary policy. Petroleum revenues posed particular challenges to stabilisation policy. It became increasingly challenging to smooth cyclical fluctuations by means of fiscal policy. The pressure on fiscal policy made it appropriate to tie oneself to the mast to a further extent to protect petroleum revenues from special interest groups.

Thank you for your kind attention. 2015 U.S. Monetary Policy Forum The Equilibrium Real Funds Rate: Past, Present and Future  4  BIS central bankers’ speeches
Their purpose is not to pledge some particular path of policy, independently of what happens to the economy. It’s to help people understand the dependence of policy on the economic outlook. The other form of guidance – sometimes called “Odyssean” – is quite different in this respect. It actively promises a certain path – in particular to keep interest rates very low – almost regardless of how things turn out. It’s a means of easing monetary conditions, and specifically  of lowering longer-term real interest rates, when the outlook for inflation is weak but the immediate policy rate is constrained by the lower bound (and if other alternatives like QE are for some reason unavailable or ineffective). If you’re able to convince people that, even in the event of a positive shock to inflation in the future, you won’t raise interest rates, this can push up expected inflation, thereby reducing the real forward rate of interest and encouraging more demand today. This “promise to be irresponsible”[4] won’t necessarily be believed because, when the time comes, and if there were subsequently some significant rise in inflationary pressure, the policymaker will be tempted to go back on the earlier promise and respond by raising interest rates. The optimal policy is intrinsically “time inconsistent”.

At last week’s 4th ASEAN Informal Summit in Singapore, ASEAN leaders launched an Initiative for ASEAN Integration or “IAI”. It is intended to narrow the divide between the older and newer members of ASEAN and enhance ASEAN’s competitiveness as a region. It is a framework for the more developed ASEAN members to help those members that most need help, and in so doing make ASEAN prosper. To kick it off, Singapore is offering a package of IT training and assistance in human resource development to Myanmar, Laos, Cambodia and Vietnam, while China, Japan and South Korea have also offered assistance that falls within IAI’s broad framework. Of course, ASEAN’s future depends as much on external factors as it does on these direct initiatives to promote intra-ASEAN trade and investment, and build up the economic strength of individual members. Our economies are highly dependent on international trade, and it is in our interest to work together actively for a freer, more stable and secure global trading environment. ASEAN therefore needs to support an open, stable multilateral trading system under the WTO, and the early launch of a new round of trade negotiations. Strong multilateral rules are the foundation for world trade, and protection against anarchic bilateral and unilateral trade policies. Small countries could not survive without them; even large economies would be much poorer off in a tit-for-tat environment. Hence ASEAN strongly supported the candidacy of Dr Supachai Panitchpakdi for the Director Generalship of the WTO.