samchain/econo-pairs-v1 huggingface dataset:
However, in view of the high level of unsold homes and properties in the US, it is uncertain whether the interest rate weapon will be as powerful as in the past. Thus, there is a risk that the US economy is entering into a downturn in spite of the interest rate cuts. Should weaker developments in the US lead to a broad-based pause in global growth, there may be a number of repercussions for the Norwegian economy. First, a downturn in the world economy may adversely affect activity and profitability in export industries and perhaps even the oil sector. It may be more difficult to sell goods in a falling market, and prices for domestically produced goods may fall. Second, turbulence and weaker growth prospects may increase uncertainty among Norwegian households and businesses. As a result, new projects and investments may be postponed, or enterprises may be reluctant to recruit new employees. Third, the financial market turbulence has a more direct impact on the business sector. Banks and investors now apply a higher premium and higher prices for providing capital for acquisitions, restructuring and investment, and highly leveraged companies have to pay high loan risk premiums. Falling external interest rates have resulted in a wider interest rate differential against other countries. This may lead to a stronger krone, but there are also opposing forces in the foreign exchange market. In the long run, the krone exchange rate is determined by changes in the terms of trade and permanent differences between domestic and external inflation and productivity.

Minouche Shafik: Making markets fair and effective Speech by Ms Minouche Shafik, Deputy Governor for Markets and Banking of the Bank of England, at the London School of Economics, London, 27 October 2014. *  *  *  Accompanying figures can be found at the end of the speech. Making markets fair and effective It is a real pleasure to be giving my first speech as Deputy Governor of the Bank of England at the London School of Economics (LSE). It resonates on so many fronts. The LSE has produced many members of the Monetary Policy Committee, Deputy Governors and indeed Governors of the Bank of England as well as vast numbers of its staff over the years. I was taught macroeconomics at the LSE by Charlie Bean, one of my predecessors at the Bank as well as by my host this evening, Nick Stern, when I did the MSc in economics. And the topic of my speech tonight resonates with the origins of the LSE as an institution that always sought to bring the best of academic thinking to the pressing problems of the day. As you will no doubt realise by the frequency of misconduct stories in the papers, Fixed Income, Currency and Commodity (or FICC) markets are certainly dealing with pressing problems.
3  See for example this comment which appeared in the July 2005 edition of The Economist: “ […] The pursuit of price stability is a means to an end (to achieve maximum sustainable growth), not an end in itself. While the ECB's prime task is price stability, it is also legally charged with supporting growth. Last year it could have cut interest rates to offset the impact of the rising euro; today it should stand ready to ease monetary policy to cushion the impact of structural reform and fiscal discipline.”  4  See, for example, O. Blanchard e F. Giavazzi (2005), “Credibility does not require dogmatism - only clarity of purpose”, at www.voxru.org. 5  S. Cecchetti, H. Genberg and S. Wadhwani (2002), “Asset Prices in a Flexible Inflation Targeting Framework,” NBER Working Paper No. 8970, June, and N. Roubini (2006), “Why Central Banks Should Burst Bubbles”, International Finance 9, No 1. 2  BIS Review 66/2009  harder to interpret financial asset prices and to derive from them indicators regarding the risks of instability. And it is even more difficult to adjust the course of interest rates on the basis of these indicators. For this reason, the proposition of leaning against the wind remains an abstract concept for now. It would be important to develop economic models which give a more precise idea of the quantitative dimension of these phenomena, in particular of the correlation between monetary policy variables and financial asset prices.

This publication aims to enhance the knowledge and information about remittances in the Albanian market, and to convey messages in the context of needs for intervention and the potential of remittances for various actors in the economy. For all the issues addressed above, especially related with the commitment of various stakeholders in the modernisation of payment systems in Albania, I invite you to actively participate and contribute to this conference. Concluding, I would like to wish you fruitful conference proceedings and thank you for your participation and attention. 2/2  BIS central bankers' speeches
My final point, therefore, is that the authorities will have no excuse if they don’t solve the TBTF problem through resolution regimes and reforms. The necessary technology is clear. The necessary restructuring of firms is clear. The necessary degrees and forms of cross-border co-operation are clear. It is a matter of: just do it. 8  Committee on Payment and Settlement Systems (CPSS) and International Organization of Securities Commissions (IOSCO). 4  BIS central bankers’ speeches

Internal Audit does not participate in management decisions, and our General Auditor reports to the Chair of the Audit and Risk Subcommittee of the Bank’s Board of Directors. In addition to defining clear and comprehensive risk management roles and responsibilities using the three lines of defense model, the Bank’s risk framework establishes governance, escalation, and reporting processes around risk exposures, risk decisions, and risk events. A  2  BIS central bankers’ speeches  strong governance regime provides assurance to stakeholders (Management Committee, the President, and the Board) who delegate risk-taking authority to the business lines. From first-line businesses and support functions, risk information flows to the second line, and then to the Risk Subcommittee of our Bank’s Management Committee. The Risk Subcommittee discusses significant emerging and existing risks, provides perspectives on managing and mitigating risks, and supports Management Committee review and decision making. The Audit and Risk Subcommittee of the Bank’s Board of Directors and the Board of Directors itself are at the top of the governance chain, although there are limitations on their roles with respect to supervisory and monetary policy issues. 3 Operational risk management The Bank’s operational risk approach sits within, and is shaped by the Bank’s overall risk framework. Roles and responsibilities as well as escalation and reporting follow the general structure I previously described. At this point, though, I can drill down into operational risk specifics.
–  From the beginning of January 1999, cross-border money market transactions increased sharply, to reach almost two-thirds of total activity on all money market segments. The unsecured deposit interbank market —which is mainly concentrated on the shortest maturities— is highly integrated. The integration of interest rate markets within the euro area is a key achievement which deserves to be underscored. EONIA and EURIBOR have provided the market with uniform benchmarks that are fully accepted by all market participants. This is reflected, for instance, in the amount of daily transactions and the huge development of the euro interest-rate swap market. These structural changes in the euro area money market have prompted market participants to concentrate their euro cash management activity in order to take advantage of the higher liquidity levels on the secondary market. Needless to say, such integration has to be brought to fruition in the other segments of the money market, i.e. the repo market and the short-term securities market. Further integration will enhance the efficiency of the euro area financial markets and will be beneficial to both borrowers and investors. –  As regards stock markets and bond markets, major progress has been made in terms of integration. According to recent statistics, the euro, together with the dollar, appears to have been a major bond issuance currency in the first semester of 2001, with the euro accounting for close to 40% of total issuance.

Furthermore, European investors have substantially diversified their bond portfolios since the introduction of the euro, prompted by the removal of the exchange rate risk. This enables them to achieve better performances for a given level of portfolio risk. 4  BIS Review 96/2001  Additionally, I would like to draw your attention to current trends in mergers or close cooperation between stock exchanges, securities settlement systems, clearing houses, and similar institutions. Had the euro not been created, would it have been thinkable that the Paris, Brussels and Amsterdam exchanges merge to create EURONEXT and recently conclude another major alliance ? Undeniably, the introduction of the euro is fostering very large-scale market restructuring throughout Europe. There are still some barriers to further integration of EU capital markets. In this regard, the Eurosystem has welcomed the objective of the European Council meeting in Lisbon in March 2000, to accelerate completion of the internal market for financial services, and to set a tight timetable so that the Financial Services Action Plan may be implemented by 2005 ; a regular review of this Plan is made by European authorities, and progress is well under way.
These effects could reduce or even counteract the stimulus from negative rates. If deposit rates don’t fall but loan rates do, that will impact banks’ profitability, particular for those who are most reliant on retail deposit funding – in the UK that is small banks and building societies. Banks can offset the impact on profitability by not reducing lending rates, but in doing this they would further reduce the amount of stimulus provided. Some banks, particularly those already under balance sheet pressure, could even be incentivised to reduce lending. That would be a particular concern in the current situation where, while the banking sector as a whole starts from a position of strength, risks to balance sheets are likely to be rising. These considerations led the MPC to note in its August Monetary Policy Report analysis that, given the effects of Covid-related disruption on banks’ balance sheets at present, at a time when they have an important role to play in helping the UK economic recovery, “negative policy rates at this time could be less effective as a tool to stimulate the economy”. That consideration still applies as far as I am concerned. While there might be an appropriate time to use negative rates, that time is not right now, when the economy and the financial system are already grappling with the effects of an unprecedented crisis, as well as the myriad uncertainties the crisis has created. But they are certainly in the toolbox for potential use in future as my assessment of their effectiveness changes.

The MPC set out its collective assessment of the potential issues that a negative policy rate in the UK could raise, and how that might impact the effectiveness of negative rates as a monetary policy tool, in its August 2020 Monetary Policy Report.13 I won’t repeat all of the analysis from the Report; instead I want to draw out three key points. The first is that the effective lower bound is likely to be different across different countries, reflecting different macro-economic circumstances, structural features and financial systems. This is a simple point but an important one. Just because negative rates are appropriate in one country does not mean they would be appropriate in another, and for some countries and in some circumstances the effective lower bound may well be positive. The second point is that while some aspects of the transmission mechanism would be the same as any other rate cut, others could be quite different. In all use-cases, market interest rates would fall, asset prices would rise and the exchange rate would depreciate, and that would stimulate demand and raise inflation in the usual way. But evidence from other countries’ experience suggests that while corporate deposit rates can turn negative, household deposit rates would be unlikely to fall below zero, meaning that pass-through could be somewhat weaker than for a normal rate cut. Building on this, the third point I want to draw out is that there can be knock-on economic effects through the banking system.
Rodrigo Vergara: Chile’s latest Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Honorable Senate of the Republic, Santiago de Chile, 5 September 2012. The Monetary Policy Report of September 2012 can be found at http://www.bcentral.cl. *  *  *  Introduction Mr. President of the Senate, Senator Camilo Escalona, honorable senators. I am grateful for your invitation to the Board of the Central Bank of Chile to present our latest Monetary Policy Report. As usual every year in September, this presentation coincides with the annual report of the Central Bank Board to the Senate, which contains our view on recent macroeconomic and financial developments in Chile and in the world, as well as their outlook and implications for the conduct of monetary policy. In the last few months, the differences between the performance of the global economy and the Chilean economy have deepened. The situation abroad is still very complex. Forecasts for world growth have weakened, mainly because of sharper than expected deceleration in emerging market economies (EMEs). Tensions in international markets have eased in recent weeks, but fundamental problems are still present. The Chilean economy, however, in contrast with most of the rest of the world, is performing strongly. In the second quarter, domestic output and demand grew above projections, showing that, so far, the effects of the frail external scenario on the local economy have been mild.

The reserves accumulation carried out by the Bank in the past few years, as well as management thereof – details are provided in an Appendix – should suffice to confront extreme episodes. Chile also has sovereign wealth funds that could help alleviate the financing needs in case of increased external tensions as well. The foreign funds of institutional investors can also act as stabilizing agents in this sense. On the other hand, we must always bear in mind that any intervention has associated costs. First, it can blur the objective of the Central Bank: inflation or exchange rate target. In our case, we have dealt with this problem by carrying out transparent, sterilized interventions, with a publicly known timetable that does not conflict with the formulation of monetary policy. In addition, our communication has been straightforward in stating that the objective of our monetary policy is price stability. Second, an intervention entails a significant financial cost for the Central Bank and the country. International reserves are invested in highly liquid assets abroad, whose yield is lower than the interest paid on the debt securities in pesos that are used to sterilize the purchase. In the current scenario, in which external-domestic interest rate differentials are significant and expected to remain so for some time, the financial cost of holding reserves is substantial and negatively affects the Bank’s balance sheet continually.
16 Property and direct investment assets backing annuities have risen to more than £ billion from £  billion when Solvency II was introduced in January 2016. See also Rule (2019), Chart 3. 17 See Carney (2019a). 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  Financial firms will, of course, seek to adapt their business models to help adjust to a low for long environment. From a financial stability perspective this could make some financial services to the real economy unviable and shift risks to sectors less able to bear them. Banks, for example, can pursue cost cutting and consolidation but, as an exploratory stress test carried out by the Bank in 201718 of the major UK banks’ illustrated, there are limits to both strategies. There may therefore be pressure for more significant shifts of business model – for example expansion into fee generating areas such as asset securitisation. The 2017 test also suggested that under low for long pressure banks may reduce their balance sheet share of less profitable activities, such as SME and corporate lending. Low for long may also change business models in other parts of the financial sector. Continued pressure on insurance companies’ solvency and defined benefit pension fund funding gaps will reinforce and accelerate current pressures that are shifting the insurance and pension industries further towards providing ‘self-insurance’, with a larger proportion of pensioners retaining their own longevity and investment risks and less risk sharing.

We believe there is a need for financial advisers to possess a larger body of financial and technical knowledge, that includes a deeper awareness of latest developments in the industry and opportunities available, and to be able to apply this knowledge to a client’s advantage. Other core competencies that need to be given greater emphasis include effective communication and problem solving skills. The second priority is to identify and address the barriers that are preventing qualified parties from entering the industry, and the constraints that are limiting the ability of financial advisers to recommend the best solutions to their clients. We are close to making an announcement on revised minimum entry requirements for financial advisory business. The Bank is also currently working on measures to create a more level playing field with respect to product offerings among the insurance intermediaries. The Bank and the Securities Commission will also continue to coordinate closely in facilitating the ability of financial advisers and financial planners to provide advice on a broad range of financial solutions. In this respect, further enhancements are expected to be made to regulatory processes to improve efficiency and further ease the regulatory burden on the existing players. The third priority is to improve the alignment between the interests of consumers and financial advisers. We believe how incentives are structured have an important role in shaping the quality of advice that a consumer receives.
The general point is that we cannot reasonably expect markets to make a proper assessment of the risks of their investments, including particularly their short-term lending if they do not have adequate information in accessible form, so that we need to provide appropriate incentives for countries to provide such information. The corollary is that where they do have adequate information, financial market participants can be expected to accept the penalty if their judgements prove ill-founded - as indeed they largely do already in respect of many forms of overseas investment. The second condition for more stable capital flows is stronger financial systems. That includes for example the broadening of capital markets so that the allocation of capital is less concentrated on local banking systems. It includes robust financial infrastructure - for example payments and settlements systems. And it includes crucially more effective financial regulation and supervision. A key feature of future arrangements for me in this area is the encouragement, not just of more published information about the short-term foreign currency assets, relative to liabilities, of the public sector and the banking system, but more positive management of the country’s foreign currency liquidity position, taking account of the nature of the exchange rate regime. It was weaknesses in this area, above all, in my view that turned the Asian financial problem into a panic. These various steps - which need a great deal of elaboration and refinement - in themselves represent a huge agenda for the future.

The mood is to continue cautiously down that path, but to emphasise the need, not only for sound macro-economic policies, which everyone accepts as a sine qua non, but also for steps to accompany capital account liberalisation designed to reduce the risks of volatility. These relate in part to the process of capital account liberalisation, where there is now a good deal more stress on ‘sequencing’ - that is on liberalising potentially more stable, longer-term, capital inflows initially, rather than short-term borrowing denominated in foreign currency. BIS Review 49/1998  -4-  But they relate particularly to three key conditions for living with free capital movements. The first is “transparency”. In a broad sense a need for greater transparency is recognised in relation to public policy, to the relationship between the public and private sectors, to corporate governance, accounting standards, and so on. In a narrower sense there is seen to be a need for more reliable, and greater and more timely disclosure of, financial information generally, at the level of individual borrowing entities, but especially also in relation to countries’ true foreign exchange short-term asset and liability positions. This is especially important in relation to the foreign currency liquidity position of the monetary authorities and of the banking system.
On the contrary, we should continue to adhere to increasing openness to competition and to the foreign investment that has contributed so much to our well-being in recent decades, focusing our efforts on promoting a climate conducive to business activity and on removing all obstacles and rigidities that hamper enterprise. To conclude, I wish to affirm my confidence that the Spanish economy has sufficient factors of resilience to successfully face the inevitable slowdown, even in an unfavourable external environment. Such resilience has been built up through the efforts of everyone (State, central  BIS Review 44/2008  7  government and other government bodies, and social agents), and has demonstrated the benefits of policies geared towards stability and long-term growth, particularly when the economy faces significant challenges such as those at present. Thank you very much. 8  BIS Review 44/2008

The relevant horizon will depend on disturbances to which the economy is exposed and how they will affect the path for inflation and the real economy in the period ahead. The primary instrument in monetary policy is Norges Bank’s sight deposit rate. This rate determines the very short interest rates in the money market with maturities from one day upwards, normally up to Norges Bank’s next monetary policy meeting. Longer-term rates are determined by expectations concerning Norges Bank’s use of instruments in the future and by the degree of confidence in monetary policy. It may be useful to distinguish between three channels through which the real interest rate influences inflation: The demand channel: As interest rates increase, household and municipal consumption and investment will tend to slow down. This is because they have less money left over after servicing their debt and because borrowing is more expensive. Corporate finances are weakened and investment may become less attractive. Lower demand leads to lower output and employment. Wage growth may  BIS Review 22/2006  1  slow down. Lower wage growth combined with reduced profit margins will result in decreasing inflation. The exchange rate channel: The effect of interest rate changes may be amplified because the interest rate also affects the krone exchange rate. When interest rates are higher, more people will invest and fewer will borrow in NOK. Higher interest rates will thus normally lead to an appreciation of the krone. Imported goods will then become less expensive and inflation will decelerate.