samchain/econo-pairs-v1 huggingface dataset:
To ensure that affected businesses could access COVID-19 loans quickly and at favourable conditions, the federal government, commercial banks, the Swiss Financial Market Supervisory Authority (FINMA) and the SNB engaged in unprecedented collaboration. The government guaranteed the loans; 2 the banks used their existing client relationships to process applications and disburse the funds; and the SNB set up the COVID-19 refinancing facility (CRF) – a new refinancing tool designed to complement the COVID-19 loan programme. This package of measures enabled firms to receive a government-guaranteed bank loan within one business day at the attractive rate of 0% and with a minimum of bureaucracy, and the banks could refinance their loans at the SNB policy rate of –0.75%.3 In addition to the CRF, the SNB took other measures to facilitate lending. At the recommendation of the SNB, the Federal Council deactivated the countercyclical capital buffer. Doing so made it easier for banks to reallocate capital to where it was most needed. The SNB also raised the exemption threshold on the sight deposits that commercial banks hold at the central bank. Since negative interest is charged only on the portion of the sight deposit account balance that exceeds the exemption threshold, this measure helped substantively lower the interest burden for the banking sector as a whole. 4 Overall, the CRF greatly facilitated the disbursement of COVID-19 loans to firms. Participation was sizeable: 20% of all Swiss firms participated in the programme, with total loan volume amounting to 2.4% of GDP.

In some advanced economies, such as Spain (shown in light green in Chart 1) and the United Kingdom (in purple), output plummeted more than 20% within weeks of the first lockdown. The sharp increase in uncertainty caused substantial turmoil in the financial markets. In March last year, major equity markets, such as the S&P 500 (shown in blue in Chart 2) and the Stoxx Europe 600 (in yellow), dropped 30% and more in a matter of weeks. At one point, investors were forced to sell even their safest and most liquid assets, such as government bonds, in order to rebalance portfolios and raise cash. As you can see in Chart 3, due to this ‘dash for cash’, at the height of the panic in March 2020, yields on government bonds, which Page 2/10  typically serve as safe havens, spiked in spite of the very negative risk sentiment. In the foreign exchange markets, however, traditional safe-haven currencies like the US dollar and the Swiss franc appreciated, as expected. In response to these safe-haven flows, the SNB had to step up its efforts to prevent a sudden and detrimental appreciation of the Swiss franc. The red line on Chart 4 shows the nominal trade-weighted index of the franc since the start of 2020. With the outbreak of the global COVID-19 pandemic, the Swiss franc came under increasing pressure. To stem an excessive appreciation of the franc, the SNB bought foreign currency worth 90 billion Swiss francs in the first half of 2020 alone.
But when monetary policy is oriented towards low and stable inflation, this will contribute to a stable krone exchange rate over time. Interest rates influence inflation through their impact on domestic demand and on the market for NOK. When interest rates rise, it is more profitable to save and more costly to borrow. This dampens consumption and investment and hence aggregate demand. Lower demand in turn curbs the rise in prices and wages. Higher interest rates make it more attractive to take krone positions and borrow in foreign currency. As a result, higher interest rates normally lead to an appreciation of the krone. This reduces prices for imported goods. In addition, a strong krone reduces activity and profitability in the internationally exposed sector. It is important to be aware of the relationships between employment, output and inflation. If there is a shortage of labour and other economic resources, a tight monetary policy stance will reduce inflation by affecting aggregate demand. Conversely, when unemployment is high, low interest rates stimulate demand, which will contribute to stable wages and prices. A monetary policy stance that is aimed at stabilising inflation will thus also contribute to stabilising aggregate output and employment. But there is little monetary policy can do to prevent an increase in unemployment that is driven by high cost inflation. The mandate implies that the interest rate must be adapted to the outlook for the Norwegian economy.

To understand the handling of a crisis, it is useful to know which factors generated the problems. Hence, my narrative will include the events that led up to the crisis in Sweden. I will also comment on the developments in Asia, with some emphasis on Korea. Having sketched this background, I will turn to the actual handling of crises, explaining why we found certain types of solutions useful in Sweden - leaving it to you to consider whether the same might apply to some extent to your country. 2. Background The macroeconomy First, let me say a few words about the macroeconomic background to the crisis in Sweden. There are both similarities and differences between Sweden and Asia. In the following I will touch on some of them. It should also be remembered that substantial differences also exist between the Asian countries. One common factor is the fixed exchange rate. In Sweden this led to high levels of foreign borrowing, particularly in the private sector. In addition it made it difficult to counter the gradual overheating of the economy by applying contractive monetary measures - raising interest rates tended to increase capital inflows which, to the extent they were monetised, further contributed to the overheating. Following the deregulation of the domestic financial market, the crisis in Sweden was also preceded by a rapid expansion of credit; in the course of five years, private borrowing grew from 85 to 135 % of GDP.
Role of the authorities Oversight in Sweden is the responsibility of the Riksbank. We are required by law to “promote a safe and efficient payment system”. The payment system is such a large component of the financial system that our role can really be described as being to promote the latter’s general safety and efficiency. Supervision, however, is the function of the Financial Supervisory Authority. What this means is that the Riksbank primarily oversees developments in a system or a market, while the Financial Supervisory Authority, besides monitoring the stability of the entire system, focuses on the situation in each institution. In practice, however, these two roles are difficult to distinguish clearly, so close cooperation between the two authorities is important. It is indeed a hallmark of our relationship, from the executive level down to managers and their personnel. Still, the Riksbank is in a position to detect more direct problems at an early stage, since they are likely to show up in the payment system, for which we are responsible. Our possibilities of affecting the course of events then lie in talking with bank executives and informing the Financial Supervisory Authority. Moreover, our series of Financial Stability Reports can no doubt exert a more continuous  5  BIS Review 127/1999  influence in this respect. In the longer run the Riksbank can also contribute to stability through international cooperation, as well as by participating in Sweden in work on new legislation and the promotion of structural changes in various systems.

In 1999, 54% of Turkish exports - $ billion - and 53% of Turkish imports - $ billion - went to or came from EU countries. •  About 54% of Turkey’s official reserves consists of Euro - 11 currencies and the euro itself. •  The foreign exchange deposits belonging to Turkish workers in other countries and held in the Central Bank of Turkey amount to about 11 billion euros, almost 93% of which is in the form of deutsche marks. •  Our external debt totals about $ billion, 34% of which consists of Euro - 11 currencies and the euro itself. •  Since 1 January 2000 the Turkish Treasury has borrowed via bond issues in the international capital markets a total $ billion, 37% of which is denominated in euros. •  During the last five years, 60% of direct foreign investments in Turkey came from Europe. •  Of the 9.3 million foreign tourists who visited Turkey during the first ten months of this year, 5.1 million came from Europe. Given the breadth and depth of Turkey’s relationship with the European Union, it is no wonder that the euro and the creation of a European currency will powerfully affect the Turkish economy from now on. Assuming that the euro is accepted by the international financial markets as a stable reserve currency, the medium and long term will see the euro’s share in Turkey’s financial accounts continue to increase.
This would contribute to both better understanding and greater legitimacy for the policy conducted by the central bank. It should be added here that the Riksbank’ monetary policy is evaluated every year, that is, how the Riksbank has performed its remit. The Riksdag Committee on Finance performs an annual review based on background material such as the “Account of monetary policy”, a report compiled and published by the Riksbank. 15 In addition, the Committee on Finance occasionally hires external experts to review Swedish monetary policy. So far three such reviews have been conducted: By Francesco Giavazzi and Frederic Mishkin for the period 1995-2005, by Charles  14 Advocates of a higher inflation target include Blanchard et al. (2013), Ball (2014), Krugman (2014), Rosengren (2015) and Yates (2019). 15 See Sveriges Riksdag (2018) and Sveriges Riksbank (2018a) for the latest versions of these publications. 9 [21]  Goodhart and Jean-Charles Rochet for the period 2005-2010 and by Marvin Goodfriend and Mervyn King for the period 2010-2015. 16 Although these external reviews have sometimes touched upon issues related to the policy objective, their main purpose has been to evaluate the monetary policy conducted, based on the existing policy objective. These reviews are undoubtedly valuable and fulfil their purpose effectively, but it is something else I have in mind here. Canada has chosen a system with reviews of the central bank’s remit every fifth year. 17 The latest review from 2016 analysed, among other things, whether the level of the inflation target was the most appropriate.

Responsible investment is an integral part of the investment strategy and includes the exclusion of companies on an ethical basis. In 2016, the Ministry of Finance, at the request of the Storting, introduced two new criteria for ethics-based exclusions: a climate criterion and a coal criterion. Norges Bank has conducted extensive research to collect data and perform analyses to identify the companies that fall under the coal criterion. Based on the results, the Executive Board decided to exclude 69 companies and place 13 companies under observation in 2016. On the advice of the Council on Ethics, the Board also decided to exclude a further eight companies and place one company under observation, while the exclusion of one company was revoked. The exchange of information and division of responsibilities between Norges Bank and the Council on 1/2  BIS central bankers' speeches  Ethics functions smoothly. At the end of 2016, Norges Bank submitted a recommendation to the Ministry of Finance to increase the share of equities in the GPFG. Historically, equities have generated a higher return than bonds, but the return has also been more volatile. A lower return on bonds is the price we pay to dampen fluctuations in the fund’s value. In recent years, bonds have become a more efficient, but also more costly, hedge against security market volatility. Both factors suggest that the bond allocation should be somewhat lower. In addition, Norway’s petroleum wealth as a whole has become more diversified over the past ten years.
Despite this notable progress, there remains opportunities to leverage more on existing platforms to address more recent challenges pertaining to cross border issues such as regulatory arbitrage, facilitating financial integration, and establishing a more robust framework for regional macro surveillance and crisis management. The global crisis experience also offers important insights that could further deepen our understanding and cement cooperation in the area of cross border resolution of problem institutions. The ongoing efforts in Europe to implement "living wills" would be of significant interest to this region, from the perspective of their construction as well as implementation. While these approaches are still untested, this exercise will make an important contribution to deepen our understanding on the relevance of business models and the different regulatory structures and legal systems that have an important bearing on the operations of significant institutions with cross border operations. BIS central bankers’ speeches  3  Moving forward, more experience is still to be gained in regard to effective financial stability communication strategy, an element that has not received much attention until the recent crisis. Credible financial stability communication strategies, particularly during periods of heightened uncertainties will require appropriate timing and delivery as well as effective coordination among relevant agencies. The effective coordination of announcements on the blanket government guarantee and liquidity measures in Malaysia, Singapore and Hong Kong during the recent crisis for instance, had helped sustained the overall confidence in our financial markets.

Similarly, there are also lessons to be learned in regard to the experience in the communication of supervisory stress test results in Europe and the United States. Conclusion Given the dynamics of the financial markets today, more effective engagements between policy makers and the industry, both within and across borders have never been more important so as to bring about a greater awareness of key financial stability issues, to further sharpen supervisory and management judgements and to promote greater collaboration on multiple fronts. Enhanced prospects for greater global financial stability depend on a sustained commitment to these priorities. Ultimately, the goal is to strengthen our collective ability to anticipate and respond effectively to developments that affect financial stability, not just in these present challenging times, but through what will likely be an extended period of global adjustments going forward. 4  BIS central bankers’ speeches
3 Figure 2 shows that the flexprice gap occasionally differs somewhat from the GDP gap. The fluctuations in the flexprice gap have in general been slightly less, which is partly because the flexprice gap only captures the fluctuations in GDP that can be explained by sticky prices and wages. However, the flexprice gap and the GDP gap do provide a uniform picture of the recent development towards an excessively low level of resource utilisation in the economy. The fact that the flexprice gap is now negative is currently interpreted to mean that output is now lower than it would have been if prices and wages had adjusted to the changes that have recently affected the economy. Labour market gaps Another type of measure focuses on utilisation of labour. These are based on Statistics Sweden’s labour force surveys and on the National Accounts. Figure 3 shows two such measures: unemployment and the employment rate, that is, what percentage of the population of working age is employed. The curves provide a consistent picture of changes in resource utilisation over time. At the same time, they show that the crisis of the 1990s permanently raised unemployment and reduced the employment rate. This makes it difficult to determine what is a long-term sustainable level for resource utilisation in the labour market. From the perspective of general politics, it is normally regarded as an advantage if employment is high and unemployment is low.

Resource utilisation is important for monetary policy When we members of the Executive Board make decisions on monetary policy we take into account both inflation and resource utilisation. Our monetary policy is normally aimed at attaining the inflation target of two per cent a couple of years ahead. If we are also able to support economic policy in general without neglecting the inflation target, then we do so. At present this means that we can also use monetary policy to try to mitigate the current economic recession. It is fairly easy to follow inflation. Inflation is measured by means of a well-established and relatively uncontroversial instrument, the annual change in the consumer price index – the CPI. Of course, there are other measures of inflation that we regularly follow, such as the CPI with a fixed interest rate – the CPIF, the CPI with a fixed interest rate excluding energy, the EU-harmonised measure HICP, and a number of measures of what is known as underlying inflation. But we always clearly state that it is the CPI that is our target variable. We only use the other inflation measures to analyse and better understand developments in inflation. However, it is much more difficult to determine the degree of resource utilisation. On a general level, resource utilisation refers to how much of the available labour and capital assets are used. In practice, one tries to measure it in several different ways. For example, GDP in relation to trend GDP, employment ratio, unemployment and capacity utilisation.
Thus, there is a greater need for authorities to monitor development in real estate prices and warn against possible asset bubbles, while the collateral needs to be less homogenous. -  Risks associated with the foreign exchange  As a result of large financial assets euroization in all countries of the region, the foreign exchange rate fluctuations are an important source of vulnerability. Stress tests in almost all countries suggests that there is limited exposure of banks balance sheets to the direct exchange rate risk as banks are able to hedge foreign currency loans wit FC deposits and sources from their parent banks. However, the dominance of loans either denominated in or linked to the euro to borrowers with income in national currency means that sudden exchange rate depreciation could threaten their capacity to repay. -  Vulnerabilities associated with foreign branches entry and domination  Turning to the issue of opening of the banking sector to foreign investors, specific issues need considerable attention by supervising authorities. The recently conducted Financial Sector Assessment Program in Serbia listed several benefits. Attracting funds from households that may be reluctant to deposit with domestic banks, providing new sources of funding for domestic credit, introducing new financial products and credit instruments, reducing the influence of vested interests, and enhancing competition by buying state banks and increasing the number of players.

Ardian Fullani: The convergence of economic systems and institutions of South East Europe towards the EU – a view from Albania Lecture by Mr Ardian Fullani, Governor of the Bank of Albania, at Bocconi University, Milan, 10 October 2007. *  *  *  Good Afternoon Ladies and Gentlemen, Dear Students, I am pleased to appear before you tonight. This is a fantastic occasion and I am delighted to share with you some of my thoughts and findings over my country and the Balkan region. 1. Few words on Albania  I would like to start my presentation by saying few words on my country, on its roots, on its past and its present. Albania is a small country placed in the Southeastern Europe, bordering the Adriatic Sea and Ionian Sea, between Greece, Macedonia, Kosovo and Montenegro. It is generally recognized today that the Albanians are one of the most ancient people in southeastern Europe. All indications point to the fact that they are descendants of the Illyrians. Authors of antiquity relate that the Illyrians were a sociable and hospitable people, renowned for their daring and bravery at war. Illyrian women were fairly equal in status to the men, even to the point of becoming heads of tribal federations. The land of Illyria was rich in minerals – iron, copper, gold, silver – and Illyrians became skillful in the mining and processing of metals.
The underlying picture now appears to be one of gently rising household spending. This is being supported by highly accommodative credit conditions and now-positive growth in inflation-adjusted wages. And then, of course, there is the World Cup. Without wishing to tempt fate, England’s recent sporting success on the football field (and cricket pitch) has probably added to that feel-good factor among Englandsupporting consumers. The “smile count” on my recent visits to Wales and Scotland was also as high as I can remember, although I suspect that may have been the weather rather than the football. Of course, there are always some data – and, indeed, some football teams – which disappoint to the downside. That is what data does. But waiting for something to turn up is not a prudent strategy in life. And 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  waiting for everything to turn up is certainly not a prudent strategy for monetary policy. That is why the MPC has signalled, and I have voted for, a modest reduction in monetary stimulus provided the economy evolves as expected. Monetary policy guidance like this is not unconditional; it depends, as it should, on how the economy performs. From my conversations with household and businesses, such guidance is both understood and helpful to them when planning their spending and borrowing.

31  All speeches are available online at www.bankofengland.co.uk/speeches  31  Table 1: Growth in the firm-level productivity distribution (aggregate, by region and by sector)  Aggregate  Annualised growth in average firm-productivity between 2004 and 2014 Top 0.1% Top 1% 12% 8%  99% of firms 1%  Region North East North West Yorkshire & Humberside East Midlands West Midlands East of England London South East South West Wales Scotland  7% 6% 12% 30% 19% 16% 9% 11% 23% 0% 13%  5% 4% 3% 15% 10% 8% 8% 6% 12% 4% 7%  0% 0% -1% 1% 0% 0% 2% 1% 1% 1% 0%  Sector Manufacturing Electricity Water Construction Wholesale trade Transportation and storage Information and communication Real estate activities Professional, scientific and technical activities Administrative and support service activities Education Health Arts and entertainment Other services  12% -10% 25% 14% 4% 41% 32% 5% 9% 25% 20% 17% 9% 10%  7% -14% 8% 8% 4% 28% 18% 3% 6% 14% 13% 7% 4% 0%  -1% -13% 1% -2% 0% -1% 3% -1% 4% 4% 0% 2% -5% -5%  Sources: ONS Research Database and Bank calculations. Note: Data refer to non-financial business sector. Calculations over the ten-year period in question are only possible for firms that exist for entire decade period and sampled throughout; these are likely to be larger firms.