samchain/econo-pairs-v1 huggingface dataset:
However, that being said, the domestic policymaker understands best the context of the local situation that the country is facing. There should be no doubt in this. Third, policymakers must not be afraid of instituting bold policies if they are deemed necessary. This is especially important during times of stress or market failures that risk the orderly functioning of the economy and financial system. Intervention in markets should not be a knee jerk reaction. As a matter of principle, public policies should always first strive to facilitate a selfregulating free market to correct itself. However, when markets fail, it is incumbent upon the regulator to correct market failures. This ought to be the cardinal rule, especially for small and open economies with sizeable financial markets. More often than not, corrective public policy can be unpopular among the masses, but it is important to not lose sight of the bigger picture, for the greater good. Often times, short-term pain is necessary for longer-term gains. Fourth, clear and transparent communication is crucial. Policies will not be effective if the motivations and understanding between policymakers and the public are not aligned. At the end of 2016, the Bank actively sought out the feedback of industries and market participants that were affected by the financial market development measures we introduced in November 2016. This became an important source of information for us to continuously fine-tune the implementation of the measures to help those affected to better adapt to the new environment.

Ultimately, regulations exist to promote a safe, efficient and sound financial system that is competitive and where consumers’ interest are protected. Regulatory regimes promote the foundation of trust and confidence that is crucial in any financial system. If people do not trust the system, financial intermediation cannot take place in any shape or form. As the modalities for financial intermediation and payments are transformed by technology, regulation should play an 6/7  BIS central bankers' speeches  active role in creating a similar environment of trust to ensure overall financial stability. The boundaries of regulation will evolve to provide the freedom for participants in the Malaysian financial system to innovate and adopt technology to exploit efficiencies and create new and better solutions. Solutions that not only deliver better experience for consumers, but that better align the responsibilities that we all carry as responsible citizens, to lift people out of poverty, provide our fellow Malaysians a decent living standard, eliminate discrimination and protect our environment. Regulation is never intended to make market players ‘boring'. If they feel that way, it only tells us one thing – that they have become too complacent in their comfort zone and should undertake a reality check. Malaysia’s financial institutions especially must not lay idle as innovations will be relentless in accessing and penetrating the traditional market long enjoyed by the banks. Using the disguise of being tied by regulations is not a valid excuse.
Ten years on: Lessons from Northern Rock  Speech given by Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  Single Resolution Board Annual Conference, Brussels Friday 29 September 2017  1  All speeches are available online at www.bankofengland.co.uk/speeches  th  This month marks the 10 anniversary of the failure of Northern Rock. The failure of a middle size British mortgage bank was followed by the collapse of much bigger and globally systemic banks. But the picture of the queues forming outside the branches of Northern Rock remains for many the picture of the start of the financial crisis. Prior to September 2007, I knew of the existence of bank runs from economic history books, the experience of developing and emerging economies and the film of Mary Poppins. Seeing one happen in London brought home that it is never different “this time”. The fundamental basis of the financial system is trust. And trust, if not properly managed and protected, can disappear instantaneously. And once that happened, the UK had no effective way of managing the failure of a bank. And no way to avoid the taxpayer having to step in to stop such a failure leading to the loss of critical services to the economy and contagion to other banks.

Their downgrading to junk bond status sent a small shockwave through the relevant market segments; other segments have so far remained largely unaffected, however. The credit risk premiums of other corporate debtors rose only slightly and have remained at a historically low level (cf. Graph 2). Meanwhile, those of emerging markets have developed in line with the economic fundamentals of their respective countries. 2. Investment policy  A large proportion of the SNB’s assets comprise currency reserves. An internationally accepted means of payment in crisis situations, they serve as a safety net for the Swiss economy and the Swiss franc. In order to fulfil this function, these reserves need to be invested in foreign currencies – primarily in the reserve currencies such as the dollar and euro – and in gold. The Bank’s leeway for investment was extended considerably with the entry into force of the new National Bank Act in May 2004. This has allowed the SNB to invest part of its currency reserves in foreign equities and corporate bonds. In mid-February 2005, the SNB – having already invested in corporate bonds since June 2004 – turned its attention to the expansion of its equity portfolios. At present, a little over CHF 3 billion are invested in internationally diversified equity portfolios. As the equities are index-managed by external asset  BIS Review 46/2005  1  managers, the SNB takes no active decisions regarding the weighting of individual sectors or securities.
0609  0209  1008  0608  0208  1007  0607  0207  1006  0606  0206  -1  Processed Unprocessed 16,70  -0,43 0608 0708 0808 0908 1008 1108 1208 0109 0209 0309 0409 0509 0609 0709 0809 0909  27 24 21 18 15 12 9 6 3 0 -3  2,5  Source: TURKSTAT, CBRT. Given the current economic climate, assumptions on foreign economic activity remain increasingly important in building medium-term forecasts. Therefore, as I have mentioned earlier in my speech, better-than-expected growth figures regarding the second quarter and continued recovery in leading indicators pertaining to economic activity in the third quarter together has bolstered perceptions that the worst part of the crisis is over. Accordingly, while producing medium-term forecasts, assumptions pertaining to global economic activity have been revised slightly upwards compared to those in the July Inflation Report and the forecasts were made on the assumption that external demand would remain weak for an extended period (Table 1). Furthermore, revised forecasts envisage world interest rates to remain low for an extended period of time. Regarding fiscal policy, it is assumed that the consistent framework outlined in the Medium Term Program (MTP) will be implemented and further enhanced by structural measures that would strengthen fiscal discipline. In this respect, it is assumed that the fiscal stance will remain expansionary – but less so than the one in 2009throughout 2010, and fiscal tightening will gradually be adopted starting from 2011.

The infrastructure that an e-krona would require could also be open to private agents willing to offer payment services linked to the e-krona. The Riksbank would cooperate with the market, both payment suppliers and fintech companies, when offering an e-krona to the general public. In this way, an e-krona system could also provide a platform that promotes competition and innovation. E-krona is a possibility Almost three months ago, the Riksbank published a first interim report which contains much of what I have talked about today. There is also a general description of how an e-krona might look. It should be available to all, banks, public authorities, companies and households. It should be possible to use it in real time, 24 hours a day and 365 days a year. It should be possible to use off-line, which means it could be used even where there is no access to a mobile network, for instance. Perhaps it could contain some element of anonymity, and perhaps it could be designed so that even groups who currently find digitalisation difficult to handle can easily use the e-krona. These are our initial thoughts and the reason why we published the report before we have thought it all through is that we want to have a dialogue with the market and other interested parties, as it is such a complex issue. The dialogues have now been initiated. We have already identified a number of questions that require further analysis.
From the oil crisis, stagflation and repeated devaluations of the krona during my first period at the Riksbank, to the aftermath of the IT crash and terrorist actions on 11 September 2001, the invasion of Iraq and substantial fluctuations in energy and commodity prices during my time on the Executive Board. In between this we had the early 1990s with an economic crisis, severe problems in Swedish banks and the transition from a fixed exchange rate to a floating krona. The global financial crisis we are now in the midst of is the latest addition to the list. But the major events have not only been in the outside world. Partly as a result of these “external” developments, the way we work at the Riksbank has also undergone a dramatic change. This applies to everything from the actual task we have and our working methods to our communication and degree of openness. There have been plenty of challenges, and there are probably plenty more waiting around the corner. At the moment we are in a much more difficult situation for the economy than we have experienced for many years, with a worldwide financial crisis and a period of weak growth ahead of us. But at the same time, we are much better equipped to manage this type of situation today than when I first started at the Riksbank. Both we and others have learnt a lot along the way, remedied various deficiencies and tried to create something that works better.

The financial crisis has made the link between the Riksbank's two areas of activity – conducting monetary policy and safeguarding financial stability – very clear. The fact that financial stability is a necessary condition for monetary policy to function efficiently is fairly self-evident, but it is not perhaps something one thinks about as long as everything is functioning normally. But now that the financial markets are no longer functioning efficiently, this link becomes more important. As a result of the uncertainty and distrust prevailing between the banks and other financial institutions, the interest rates paid by the general public are higher than normal, seen in relation to the repo rate. Access to credit is also declining. The economic situation is therefore tightening more than the current level of the repo rate would normally allow. The crisis may also, if it is not counteracted, have significantly negative effects on inflation and growth. It affects the banks’ loan losses to some extent, which in turn has significance for financial stability. We need measures regarding both financial stability and monetary policy to resolve the confidence crisis causing a gridlock in the credit markets and to alleviate the effects of the financial crisis on the Swedish economy. The most recent measure taken was the interest rate cut of 1.75 percentage points to 2 per cent last week, when we also brought forward the meeting we would have held on 17 December.
Failure to act promptly will only exacerbate the intensity and duration of the problem, making it more costly to solve. Indeed, the actions that the Central Bank must take to ensure its convergence to 3% in two years’ time depend significantly on the outcome of policies with macroeconomic impact. The 7  ongoing fiscal consolidation process is a key element on the road to restoring economic balances. In fact, the baseline scenario of this Report assumes, first, that the future path of fiscal spending will be as outlined in the latest Public Finance Report, a document that proposes a reduction of the structural deficit to -0.3% in 2026 and, second, that demand stimulus policies such as those we had during 2020 and 2021 are not repeated. The Central Bank is responsible for maintaining low and stable inflation, but doing so efficiently at the minimum costs possible requires coordinated action with the different policies. If the projections presented in this Report prove true, inflation would be approaching a turning point. The pace of price increases will slow down in the coming months and annual inflation will begin to decline.

In conditions of reduced import prices, the inflation continues to slow down, so that the average as well as the annual inflation rate for February equaled 1.2 and 0.7 percent, respectively. Inflationary developments within the first two months of this year show that inflationary path for this period is under the projected one. Such deviations, to a large extent may be explained with the fast decline of oil prices on world markets and with even faster deceleration of food prices. In conditions of risks for a possible bigger then expected deceleration of domestic demand, as well as due to higher reduction of  2  BIS Review 60/2009  import prices, risks about the projected inflation are towards realizing lower then projected level of inflation. Figure 1 Inflation (in %)  3)  In the external sector during 2008 the highest ever current account deficit of 12.7 percent of GDP was realized, which is a significatn increase (by 5.5 percentage points) compared to the previous year, and to a large extent it is explained by the trade deficit worsening and reduced net inflows from private transfers. Yet, such a gap, during the most of the year has not created strong pressures towards NBRM foreign exchange market interventions, having in mind that in a significant part it was financed by direct investments, as well as through foreign assets of domestic banks.
The Riksbank’s inflation targeting policy today An explicit target and a clear intellectual framework The Riksbank’s decision in 1993 to let its policy be guided by an inflation target was a fairly new approach at the time.1 The idea had only really been tried in three other countries before (New Zealand, Canada and the United Kingdom). An inflation target has considerable advantages over the methods of conducting monetary policy under a floating exchange rate that have been tried before, e.g. a target for the growth rate of money. Communication becomes simpler when the operational target agrees with the final one. In addition, an explicit target facilitates a stabilisation of inflation expectations and enables policy to be evaluated. The inflation target also has the advantage of capturing all important variables in one single variable. The inflation forecast is influenced not only by interest rates but also by an assessment of credit developments, the exchange rate and other factors of significance to demand. The monetary policy objective laid down by Parliament is to maintain price stability. The Riksbank has operationalised this objective in the shape of a quantitative target for the inflation rate: the annual increase in the consumer price index, CPI, should be 2 per cent. Around this target is a tolerance band of +/- 1 percentage point, the purpose of which is both to make clear that inflation from time to time will deviate from 2 per cent and that the Riksbank’s ambition is to limit such deviations.

Lars Heikensten: Thoughts on how to develop the Riksbank’s monetary policy work Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at the Swedish Economics Association, Stockholm, 22 February 2005. *  *  *  Introduction Allow me to begin by thanking you for the invitation to once again visit the Economics Association and speak about monetary policy. Since I was here a year ago there has been a relatively lively debate, by Swedish standards, on monetary policy. Some commentators have focused on the currently low inflation rate, but what has really added fuel to the debate is the rise in unemployment that has occurred despite record-low interest rates and strong growth. Other participants have centred on the low interest rates, voicing concerns over their implications for credit growth, household debt and the housing market. I don’t intend to enter into this discussion today, however. Instead, I would like to take advantage of the opportunity to have a more fundamental discussion about the Riksbank’s monetary policy framework, its monetary policy analysis and the possibilities to improve the material underpinning our decisions. I shall describe the changes that we are planning to make to our methods. At the same time I should stress that it is not a question of changing the Bank’s monetary policy strategy.
It is its very flexibility that should make the PEPP our preferred marginal instrument for dealing with the consequences of the crisis, and I would now like to expand on its components. First, flexibility in terms of time. We are not bound by a monthly allocation. And the programme is clearly intended to be temporary: the Governing Council “will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over, but in any case not until the end of this year [2020]”. There is a risk that the economic consequences of the crisis may continue beyond the end of 2020, possibly justifying an extension to the PEPP; I then believe it would be advisable for us to clarify the criteria, “state-dependent” on the economic situation, upon which we will base our decision to close the programme in the future. Second, flexibility in terms of volume. Unlike the PSPP, we are not committed to a fixed amount – today, the PEPP can go “up to EUR 750 million”, and we stated on 30 April that we were prepared to go further if need be. However, in my opinion this would only make sense if at the same time we ensure the maximum effectiveness of the PEPP. And this brings me to my third point, flexibility in terms of allocation between countries.

During the previous discussions I had the opportunity to point out that these questions had been raised at least twenty years before, and they have been answered repeatedly, even in the last months and weeks. For example, just a few months ago the Economic and Social Council to the National Assembly approved an analysis about the implications of Bulgaria's euro area accession for the economic development, inflation and incomes in the country. This analysis was conducted at the request of the Speaker of the National Assembly and was brought to the attention of the members of Parliament. Let me highlight that by law the Economic and Social Council is a consultative body expressing the will of civil society organisations regarding the economic and social development, with its members representing trade unions, employers, industry organisations, organisations of pensioners, the socially weak and the disabled, women's organisations, as well as distinguished independent scientists who are specialists on the issues of the economic and social policy. The conclusion made by the Economic and Social Council, which represents such a wide variety of civil society organisations, is that the benefits from Bulgaria's euro area membership far outweigh the risks and costs. 1/5  BIS - Central bankers' speeches  Quite recently, a collective monograph 'Challenges facing the Bulgarian economy on its way to euro area membership' was published by Sofia University to mark the 120th anniversary of the Department of Economics within the Faculty of Economics of Sofia University – the oldest department of economics in Bulgaria.
Partly because the Matching Adjustment benefit to holding sub-investment grade bonds is low, the great majority of these bonds are investment grade. The overall credit quality of the investment-grade bond universe has deteriorated significantly over the past decade. The share of BBB-rated bonds in the sterling market, for example, has increased from under 10% to nearly half since 1998 (Chart 5). Within this BBB-rated segment, analysts have drawn attention to potential ‘fallen angels’ at risk of downgrade to sub-investment grade or even default. These issuers may be at risk because of a combination of excessive debt, structural change in the economy and poor management. Insurers face a risk of reduced Matching Adjustment benefit if issuers are downgraded and financial loss if they default. They should be reviewing the credit quality of their corporate bond investments and focusing in particular on any lumpy exposures. It is reassuring that the proportion of BBB-rated bonds in UK insurers’ aggregate Matching Adjustment portfolios has remained more or less unchanged notwithstanding the increasing share in the wider market. These proportions do vary considerably across individual insurers, however (Chart 6). Firms with higher proportions of BBB assets should be stress testing to make sure that they can comfortably absorb downgrades at a time when markets may be less liquid and they cannot easily rebalance their assets. We will explore this in our upcoming Insurance Stress Test.

The financial core countries at the beginning of the period (such as the US and UK) remain core at the end; the offshore financial centres (Hong Kong and Singapore) remain significant throughout; while emerging markets remain, in the main, on the financial periphery. To illustrate that, the share of intra-advanced country external asset stocks in the global total was 77% in 1980. By 2005, that fraction had actually risen slightly to around 80%. Over the same period, the contribution of advanced to emerging market external asset stocks in the total fell from 13% to 5%, at the same time as the GDP share of emerging markets rose from 13% to 16%. So despite rising significantly in absolute terms, financial globalisation has not obviously closed the gap between core and periphery. These aggregate patterns mask two important, more recent trends. The first is the well-documented accumulation of official foreign exchange reserves by emerging market countries, in particular since 2005. The stock of global official reserves stood at $ trillion by end-2010, having more than doubled since 2005. These flows are in some respects an oddity of international finance, with capital flowing “uphill” from emerging to advanced economies and with emerging market investors exhibiting a “foreign bias” for debt securities (Prasad, Rajan and Subramanian (2007)). 1  A similar database has been developed by Lane and Milesi-Ferretti (2007). Von Peter (2007) looks at the pattern of the international banking network.