samchain/econo-pairs-v1 huggingface dataset:
In the small community of Polden, in the Hamsun trilogy August, far away from large capital markets, the inhabitants live impoverished lives, subsisting on a little fishing and agriculture. But the community changes when wealth arrives in the form of a herring windfall. August says: “… you’re not to plant anything you can eat near your door. It doesn’t look right. I’ve got something better to put there – bushes, garden shrubs.” 9 Farming is abandoned, and then, a few years later, the herring disappears. The Norwegian government has not followed August’s advice, but has spread its wealth. It is partly invested in ownership interests in Norwegian companies, partly in infrastructure, partly in oil and gas and partly in equities and bonds abroad. When there are prospects of markedly slower growth, as is the case now, the value of all government assets falls. This also applies to buildings, roads, the power supply and other infrastructure where the government does not concern itself with regular valuations. Investments abroad by the Government Pension Fund – Global are also spread between equities and bonds from all over the world. The equity portion is now being increased from 40 to 60 per cent. A long-term investor receives extra compensation because the value of equities fluctuates considerably. Many are now incurring losses on equities and corporate bonds. This experience will result in higher required returns in the future. Under the Fund’s strategy, more equities will be bought when equity prices fall and fewer when they rise.

But who could have foreseen in 1990 that we were on the brink of a golden decade that would see a boom in the IT and communications industry? And who would have imagined in 2002 that Norwegian manufacturing would experience a new wave of growth? Fortunately, there are also many examples of innovation, particularly when times have been bad. Nokia managed to make the transition from rubber boots to new technology when the Finnish economy collapsed at the beginning of the 1990s. In Norway, the Norwegian telecom system was deregulated and Telenor developed into a large international company. During the downturn at the end of the 1980s, Tandberg started developing video conferencing systems. In the industrial centres Mo i Rana, Raufoss and Kongsberg, rich technological communities emerged after the collapse of government enterprises in the 1980s. The merchants behind the grocery chains Rimi and Rema started business on a small scale during the downturn at the end of the 1970s. The furniture producer Stokke – makers of the world-famous Tripp Trapp chair for children – started operations in western Norway in the midst of the economic crisis in the 1930s. Economic policy The measures now being implemented are intended to provide a bridge until market economies generate new growth under their own steam. The authorities in many countries are now testing the boundaries of active economic policy. And some have overstepped them.
In other words, a 25 basis point tightening would still leave the UK monetary policy stance significantly more accommodative than a year ago. Conclusion  So where does this leave the balance of arguments? Having weighed the evidence, I think that the balance of risks associated with tightening “too early”, on the one hand, and “too late”, on the other, has swung materially towards the latter in the past six to nine months. The risks of tightening “too early” have shrunk as growth and, to lesser extent, inflation have shown greater resilience than expected. And if policy tightened “too late”, this could result in a much steeper path of rate rises later on, contrary to the MPC’s collective expectation that Bank Rate would increase ‘at a gradual pace and to a limited extent’. 25  As the balance point between these risks has shifted over the past 9 months, that has left me judging that a partial withdrawal of the additional policy insurance the MPC put in place last year would be prudent relatively soon, provided the data come in broadly as expected in the period ahead. Certainly, I think such a tightening is likely to be needed well ahead of current market expectations. How soon is “relatively soon”? I considered the case for a rate rise at the MPC’s June meeting. I felt then there were strong grounds for holding back until later in the year, for two reasons. First, despite upwards pressure on inflation, there are still few signs of higher wage growth.

An illustration of this can be found for instance in the Memorandum of Understanding on high-level principles of co-operation in crisis management situations that have been agreed on, in March 2003, between the EU banking supervisory authorities and central banks. Third, because banking supervision ultimately ends up into the surveillance of individual institutions, supervision at the national level and the role of domestic supervisors remain strategic. The specificity of this domain calls for the preservation of two major principles: the participation of supervisors and central banks to the drafting of regulation on the one hand, the permanent improvement of an efficient decentralised and highly co-operative supervisory approach on the other hand. Again, Memoranda of Understanding (MOU) currently organise the bilateral exchange of supervisory information, for instance covering the special information needs in case of financial troubles. 2.3 Second, I would like to focus on the necessary restoration of public confidence in financial markets. Over the past year, in both the United States and Europe, reforms have been undertaken in the area of corporate governance and financial disclosure with a view to restoring investor confidence in listed companies. These legal and regulatory reforms mainly concerns three areas: External and internal audit, financial transparency.
BIS Review 76/2010  3  The first three factors – information asymmetries, exchange and sovereign risk – account for the well known “home bias” exhibited by most investors and asset managers who tend to privilege their own domestic assets when deciding on portfolio allocation. They also explain why, until recently, most emerging economies had to live with the “original sin” of not being able to issue public debt denominated in their own currency. Because information asymmetries have been reduced through the development of modern securities markets, emerging economies have somehow freed themselves from this constraint, although less than often assumed (Hausmann and Panizza, 2010). The last two factors – differences in financial development and public interventions – may be more pervasive and significant. Together, they have a major impact on the composition and direction of capital flows, as well as the level and persistence of global imbalances. Global imbalances in the 21st century Current account imbalances have increased both in amplitude and durability during the last decade. In fact, they have become a permanent characteristic of our economic environment. This, by itself, may be a consequence of increased financial integration and greater reallocation of savings across national borders. Since, at the same time, real long term interest rates have kept to historically low levels, the situation has been characterized, as a “saving glut” (Bernanke, 2005), a concept which has come to dominate our thinking about the international economy.

As far as it has been established through research, a national policy on financial sector consolidation in other countries has been formulated and implemented only in response to a more damaging and widespread crisis in the past. However, the initiative by Sri Lanka to consolidate the financial sector is a unique paradigm, marking a record in global economic history, as this proposal is a prudent and forward looking regulatory move to prevent and minimise the costs of future crises. Recently, the Governor of the Reserve Bank of India, Dr. Raguram Rajan was in Colombo to attend the SAARC Governors’ Conference and the Central Bank arranged a special evening presentation for him to deliver a lecture on the banking industry. There he reminded us, I quote, “Regulators need to take right actions at the right time”. We believe the consolidation programme is the “Right Action” taken by the Central Bank at the “Right Time” to reform the Financial Sector in order to facilitate the rapid transformation of our economy. Distinguished guests, the Government and the Central Bank believe the financial sector consolidation will result in cost efficiencies, productivity gains and improvements in corporate governance in the financial sector while enhancing the sector’s contribution to uplift nationwide economic activity to facilitate the inclusive growth required for raising the country’s per capita income to over USD 7,000 by 2020. Part II: Financial sector consolidation: how? Ladies and gentlemen, let me now move onto the second part of the oration.
Eddie Yue: Renminbi – a new era and the role of Hong Kong Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Global Offshore RMB Funding Forum 2012, Hong Kong, 23 May 2012. *  *  *  Tony (Shale), Mark (Johnson), Distinguished Guests, Ladies and Gentlemen, Thank you for being here this morning, and thanks to Euromoney for inviting me to speak at this “Global Offshore RMB Funding Forum”. It’s indeed an honour to have this opportunity to discuss this important topic in such distinguished company. I understand that we will have a very comprehensive programme today, with editors, economists, bankers and financiers talking about the exciting developments of dim-sum bonds and other innovative products in the offshore RMB markets. By way of opening the dialogue, I’d like to focus my remarks on the bigger picture, and on three things in particular:   First, the scale of change in the global economy, which is the backdrop for our discussion;    Second, the expanding role of the RMB, past and future; and    Third, the impact this all has on our role and opportunities here in Hong Kong. China’s increasing integration with and contribution to the world economy So, first, the scale of change. The foundation for any discussion on the role of the RMB, of course, is China’s growing economy.

And the growing liquidity in the offshore RMB market has led to the development of RMB financing and forex markets, with an estimated daily turnover of around 2 to 4 billion US dollars for spot and forward transactions. I will come back to the development of Hong Kong as the offshore RMB business centre later. So, we are seeing a trend that RMB is increasingly used in Mainland China’s external trade, followed by direct investments and portfolio investments. The offshore RMB market is growing with increasing breath and depth, serving the useful function of the intermediation of RMB funds. And these developments are bringing tremendous business opportunities, which corporations and financial institutions cannot ignore. 2  BIS central bankers’ speeches  What next? Now, it’s worth emphasising that this has all taken place only since 2009. So, they are very much just first steps and we should expect further developments in the future. If we look ahead a little, what might we see? Well, given what we’ve seen in terms of economic growth and liberalisation of policy, it would not be at all surprising to see the proportion of trade being conducted in RMB continue to rise in years ahead. Longer term, many ask about the possibility of the RMB playing a more equal role alongside the dollar and the euro. On this, I would point out that the more widespread use of RMB has been a progressive and market-driven process, and I expect this to continue.
When the conversion from petroleum wealth to financial assets has been completed, the objective will still be to restrict withdrawals so that the real value of the Fund’s capital is maintained - in principle, indefinitely. The Petroleum Fund functions as a buffer against movements in the krone exchange rate when oil prices vary. The cash flow from an increase in oil prices will accrue to the Fund and be invested abroad. In this way, the Fund contributes to limiting an appreciation of the krone and maintaining a stable exchange rate. At times, it seems that participants in the foreign exchange market underestimate the Petroleum Fund’s buffer mechanism. Since the summer of 2004, the krone, measured by the trade-weighted exchange rate index (TWI), has appreciated by about 5 per cent. The chart shows the exchange rate and the price of oil since 1999. There does not appear to be any clear relationship between the nominal exchange rate and oil prices over time. The krone has appreciated in periods with high oil prices, but the same has occurred when oil prices have been low. The correlation between the oil price and the krone exchange rate has varied over time. Since inflation targeting was introduced in March 2001, the average correlation has in fact been zero. This result is worth noting and indicates that the export of capital via the Petroleum Fund has protected the nominal exchange rate from price fluctuations in the oil market.

The scope is relatively moderate, but appears nonetheless to have reduced bottleneck tendencies in some industries where demand has increased sharply. Traditionally, many workers from our neighbouring countries have contributed when the labour market in this country has been tight. In 2001, close to 30, 000 persons resident in Sweden were employed in Norway for all or part of the year. Swedes who have registered as residents in Norway come in addition. An increased supply of labour from new EU member states to Norwegian enterprises may lead to a higher-than-normal increase in potential output for a period. Many of the foreign workers work for a shorter period in Norway without being employed in a Norwegian enterprise. Examples include foreign contractors and self-employed in the construction industry who carry out various building projects in Norway, as well as others who carry out other types of projects. Aker Kværner, for example, has contracted 300 consultants in India who are working from India on the Ormen Lange project in the western part of Norway. An increase in the use of these short-term contracts will appear as an increase in Norway’s service imports, which contributes to increasing the supply of goods and services without drawing on domestic resources. Protectionist measures may dampen the impact on the Norwegian economy of an increased supply of labour from the new EU member states. The transitional rules from 1 May last year stipulate that foreign workers shall have Norwegian wages and working conditions.
Should we publish voting records and the minutes of the Executive Board’s deliberations? Central banks have chosen different solutions. In Sweden, the central bank publishes the voting records and provides an extensive report with the views of members by name. The Bank of England publishes a similar report of the minutes, but members remain anonymous. Norges Bank does not publish a report of the minutes of the Executive Board’s deliberations, but instead publishes a detailed account explaining the Executive Board’s background for the interest rate decision. The interest rate decision is based on a strategy that is described in the Monetary Policy Report. The Report also presents the analyses underlying the strategy. The basis for interest rate decisions is thus available to the general public. The difference in practices partly reflects the different character of the monetary policy committees in the three countries. 27 Sveriges Riksbank and the Bank of England have committees that are referred to as “individualistic committees”. Each member is individually responsible for his/her vote, and the decision 28 is normally decided by majority voting. In Norway, the Executive Board is more of a “collegial committee”, where the members are unanimous in their decision. The ECB’s system is of the same type. One cannot have both a collegial committee and minutes with individual views. If all members publicly explain their own views, communication may become unclear.

On the other hand, banks with activities in several countries should be in a stronger position to cope with a recession or a crisis situation in a given country than banks whose activity is confined to one single country. This is positive from a financial stability point of view. 5.2  The Internet as a distribution channel for financial services  Let me now turn to the impact of the Internet on the banking and financial services industry. The Internet creates new opportunities for traditional banks. For example, banks should be well positioned to become key operators in trading on the Internet. They have a large customer base and strong brand names, and can offer payment transmission services, advertising space and links on their home pages. Internationally, many banks have agreements with Internet or telecommunication companies for the development of Internet banking and marketplaces on the Internet. This is probably just the beginning of a trend towards increased cooperation across industry boundaries. The Internet poses great challenges as well. It is clearly intensifying competition in the industry. This is partly because it is easier for customers to compare prices and terms and partly because it is simpler for new operators to penetrate the market. The Internet may also change the relative positions of existing market participants. Many Nordic banks have established some form of Internet banking. So far, most services offered on the Internet are relatively simple, for example loan applications, bill payments and account transfers.
SPEECH DATE:  17 May 2022  SPEAKER:  Deputy Governor Henry Ohlsson  VENUE:  Department of Economic History, Uppsala University  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Monetary policy and inflation in times of war* The 2020s could certainly have begun better. Following a pandemic, which we still haven’t quite seen the end of, another war has broken out in Europe. As information now spreads faster than ever before, via news channels and social media, and as it is a country quite close to us that has been affected, the war in Ukraine has shaken us more than usual in our safe Swedish everyday lives. That, at least, is how I feel. However horrific the war in Ukraine may be, it is not the war as such that I intended to talk about today, but its economic consequences – and those of war in general. After all, it is in the field of economics that I have my comparative advantages, and as policy-maker at a central bank, monitoring the economic consequences is, of course, something that is part of my job. I will focus on the effects on inflation, as they are particularly important for a central bank. When major and unusual events such as a war occur, there is no ‘manual’ for how to act as an economic policy decision-maker.

Knut Wicksell, perhaps Sweden's most famous economist, was among those who argued that the gold standard should not be reintroduced, but should be removed for all time. He argued instead for a free standard, without any metallic base.13 On the other hand, he too seems to have supported the idea that the price level needed to be lowered and that this would not cause any major problems, given that the policy was expected.14 Swedish monetary policy became more restrictive than in other European countries and in the United States. The tightening caused real interest rates to rise sharply and the economy to enter a recession. In 1924, Sweden was the first European country to return to the gold standard at the pre-war parity. However, the cost of deflation in the form of unemployment and stagnation had been extremely high, and this undermined confidence in the gold standard as a monetary system.15  Second World War and Korean War gave short inflationary peaks At the time of the Second World War, policy-makers were determined not to repeat the economic-political mistakes of the First World War. Extensive regulations such as currency regulation and rent regulation were introduced early on to dampen expectations of sharply rising inflation.16 Nevertheless, inflation rose quite a lot during the first years of war, but in 1942 the government approved a programme drafted by a specially appointed commission. The main objective was to stabilise prices and the most important means of doing this was a general price and wage freeze.
BIS central bankers’ speeches  7  That need was behind the recent transformation of the Bank of England’s sterling market framework for banks, and it is why I can announce that, in the coming year, the Bank will widen access to our facilities to include the largest broker-dealers regulated in the UK and to those central counterparties authorised to operate in UK markets. We will also look into whether we should further develop our capacity to lend in currencies other than sterling. Conclusion As tonight’s announcements demonstrate, promoting a durable and balanced expansion will sometimes require coordination between the Bank, the Treasury, other public authorities and the private sector. The Bank will also have to act on its own by using all of its tools in as complementary a fashion as possible. The FPC is considering using macroprudential tools to insure against potential vulnerabilities associated with the housing market. Doing so could reduce the need for monetary policy to be diverted to address a sector-specific risk. However, macroprudential policy is not a substitute for monetary policy. If it is used for insurance it won’t necessarily affect the path of interest rate increases. The need for internal balance – to use up wasteful spare capacity while achieving the inflation target – will likely require gradual and limited interest rate increases as the expansion progresses. The start of that journey is coming nearer. Unlike a canoe trip, the quest for economic balance never ends.

Whether it’s the increases in risk weights of certain types of exposures, or the overall imposition of leverage constraints, the new capital rules are designed to build a more resilient financial system that is better prepared to handle and weather the next crisis. The capital requirements for large banks are supplemented by a liquidity framework. Thinking back to the financial crisis it’s fairly clear from the experiences of most firms during that period of time that liquidity was essential in survival. Those firms that didn’t have sufficient liquidity suffered greatly. Here, too, the Basel Committee has played an important role in developing and implementing an internationally-agreed-to-framework for enhancing liquidity across large international firms. The new framework currently includes a short-term requirement – the Liquidity Coverage Ratio (LCR) and discussions are underway to include a longer-term requirement – the Net Stable Funding Ratio (NSFR). While capital and liquidity rules for large financial institutions are in the process of being implemented – and significant progress has already been made in bolstering levels of both capital and liquidity in banking organizations – there are still areas within the financial system where additional focus on building resilience continues to evolve. In particular, enhanced risk management standards for financial market utilities have been adopted by international  2  BIS central bankers’ speeches  standard setters and, in the U.S., the agencies have recently proposed new rules to adopt these standards for U.S. firms.