samchain/econo-pairs-v1 huggingface dataset:
A published repo-rate path makes it easier to explain the Riksbank’s view of developments and its reasoning to the public and the financial markets when the monetary policy decisions are made. The aim is to improve the Riksbank’s ability to steer expectations regarding the monetary policy that will be conducted in the future. Expectations regarding the repo rate influence the more long-term interest rates which in turn are important to the economic decisions of the households and companies. The Riksbank updates its repo rate paths at the monetary policy meetings, which are held approximately every other month. During this two-month period, new information on the development of the economy may emerge. If the Riksbank is successful in communicating the principles for monetary policy, the market participants should be able to predict rather  11  See T. Jonsson and P. Österholm, “The Properties of Survey-Based Inflation Expectations in Sweden”, Working paper no. 114, 2009, National Institute of Economic Research. 18  BIS Review 32/2010  well how new information will affect the Riksbank’s repo rate path. This should then help to ensure that there will be only small deviations between the market’s expectations on the day before the publication of a repo-rate path and the repo-rate path that the Riksbank actually publishes. The Riksbank’s repo-rate paths in 2007 and 2008 were, by and large, well predicted by the market.

12  See TNS SIFO Prospera’s surveys of expectations of inflation and GDP growth among money market participants in 2009. See also Lars E.O. Svensson (2010), “Policy expectations and policy evaluations: the role of transparency and communication” Sveriges Riksbank Economic Review, No. 1, 2010. 20  BIS Review 32/2010  Monetary policy has mitigated the effects of the crisis The Riksbank has reacted forcefully and successfully to the major shocks that have occurred since the autumn of 2008 – even if I personally, as revealed by my reservations during the course of 2009, would have liked to have seen the Riksbank react even more forcefully and thus stabilise inflation and resource utilisation even better. The global recession that followed in the wake of the financial crisis surprised us all and was met by a marked shift in monetary policy that entailed rapid and repeated cuts in the repo rate up to the summer of 2009. The repo-rate cuts led to lower mortgage rates, which in turn pushed down CPI inflation. However, the cuts helped to keep CPIF inflation close to the target. The series of repo-rate cuts that began in the autumn of 2008 was necessary in order to mitigate the effects of the financial crisis on the real economy and to achieve a better attainment of the inflation target. Without these substantial reductions in the repo rate, GDP would have fallen even more. Monetary policy was also complemented by extensive lending to the banks.
So the message is: consumers of financial services have to be responsible for the decisions they make and the consequences of such decisions. Think twice before you sign on the dotted line. Conclusion To conclude, the key takeaways are: •  banks must treat customers fairly by looking after their interests and not treating them just as target of sales; and  •  bank customers must learn to become “smart” as well as “responsible” consumers of financial services. Then how do we go about in achieving these two objectives? For banks, the HKMA will ensure that there is a set of robust but fair rules governing banking conduct. We will enforce these rules vigorously through on-site examinations and off-site surveillance. We will investigate and, if appropriate, take enforcement action against breaches when they are reported by customers or detected by the HKMA. But we appreciate no external forces can be as effective as internal controls and culture in guarding against breaches. We therefore consider it important for the boards and senior management of banks to share and cherish the same value as we do in terms of treating customers fairly.

Resolution authorities must also ensure that a firm can continue to meet conditions for authorisation and to be sufficiently well capitalised to command market confidence post-resolution. These principles are reflected in the final TLAC calibration: we worked on the basis that minimum capital requirements would be eroded on the way into resolution, and that G-SIBs would need to be recapitalised to at least a level to continue to meet minimum conditions for authorisation and maintain market confidence on the way out. The FSB agreed that TLAC corresponding to 18% of risk weighted assets (RWAs), or 6.75% of leverage, would provide the minimum necessary to meet these goals, but that more may be necessary depending on  2  BIS central bankers’ speeches  firm-specific considerations. Indeed, in transposing TLAC in domestic regulation, several jurisdictions have already indicated that they consider higher requirements to be appropriate for G-SIBs based in their jurisdictions. But the common floor provides a base level that should allow G-SIBs to operate cross-border with something of a level playing field. If this is the agreed minimum end-point for TLAC, in the course of the last year, on the basis of a quantitative impact study (QIS), we also agreed a viable transition path for G-SIBs to implement TLAC. This is reflected in the two-stage conformance period under which G-SIBs need to comply with TLAC of 16% RWAs and 6% leverage by 2019 and at least 18% and 6.75% by 2022.
BIS Review 72/2001  3  Looking ahead Before I take a look at future tendencies, it may be in place to emphasise that the Swedish economy is fundamentally sound, with a good potential for growth and employment, accompanied by surpluses on the current account as well as the public finances. The recent temporary increase in inflation at a time of slowing activity is a problem that Sweden has in common with other countries around the world. Global economic growth has slowed, as I mentioned, during the spring. The fall-off has been deeper and more protracted than many observers counted on at the beginning of the year. Information received during the summer confirms the impression of a somewhat more drawn-out course, with an upturn that looks like being delayed, in many respects because the key player in the global economy - the United States - is still limping. The imminent recovery presaged by signals early this summer, above all from the financial markets, now seems somewhat more doubtful. The outlook for the Japanese economy is still highly uncertain. And in Europe the growth forecasts for the leading economies have had to be revised downwards. It is perhaps not surprising that after a series of years of strong growth it is taking time to overcome the tensions that arose in the wake of the economic euphoria in the United States. Neither is it odd that with an increasingly integrated global economy, the American slowdown is affecting many other countries, too.

After massive investments over a period of years, American companies are now having to cut back plans for expansion. With the abrupt weakening of demand, stocks have become somewhat too large. Share prices, above all in the IT and telecom sector, have fallen sharply during the past year, in keeping with declining profit expectations. American households have had strong expectations about future income and wealth, as indicated by high consumption and rising debt in recent years; these expectations have now been scaled down and consumption has been affected. The U.S. Federal Reserve cut its instrumental rate six times during the spring, bringing it down to 3.75 per cent. But even with this monetary stimulus, the slowdown still seems to be holding its grip on the American economy. As we know, however, it takes time for interest rate cuts to exert their full effect on economic activity. In order to form a picture of what lies ahead, one can start from three alternative explanatory models. The first concerns the notion of the new economy and stresses the U.S. economy’s higher growth potential, with a rising underlying rate of productivity growth and increased corporate profits that in turn underpin a higher future return on assets, including listed shares. A more rapid expansion of production capacity and better facilities for managing fluctuations in stocks pave the way for higher demand and smaller cyclical fluctuations in the future. This is the view that favours a rapid recovery or a V-shaped decline and upswing.
Accordingly, an easing of the pressure on domestic productive resources was also expected, together with a reduction in the trend current-account deficit. Later on, beginning last June, we drew attention to the international financial conditions which were beginning to normalize, after announcements by the Federal Reserve Board of the United States. We noted then that this process could create increased short-term volatility in the global economy and the international financial markets, as portfolios were adjusted and spending plans were reviewed, but that, at the medium term it was a healthy development because it would create an environment that would help prevent the incubation of financial vulnerabilities. At the same time, we noted that the Chilean economy was on a good stand to address this transition in international liquidity. Our inflation-targeting and floating exchange rate regimes, our sound fiscal accounts and strong financial system, together with our healthy external financial structure allowed us to confront with relative calm this process and help cushion its impact on our economy. Throughout the past year, we have seen both a moderation in the investment impulse in Chile as the gradual normalization of global financial conditions. Investment has adjusted more sharply than anticipated, such that our economy grew less than we projected in late 2013, which also reflects in a downward revision of Chile’s growth forecast for 2014. Still, I would like to say that other mineral exporting economies have given a surprise in the same direction, hand in hand with the worsening of China’s economic outlook.

Machinery and equipment posted negative y-o-y growth in the third and fourth quarters of 2013, while construction and other works decelerated significantly during the same period (figure 6). BIS central bankers’ speeches  3  This correction to investment growth owes to various factors. For one, there is the aforementioned investment cycle of mining and related sectors, plus the postponement of some investment plans. Although this was an expected development, its magnitude was unclear. Another factor is the low basis for comparison of the same months of 2012, which were swollen by unusual imports of transportation material, which affects the y-o-y variation of capital goods imports. There is also the downturn of expectations reflected in business confidence surveys and our business perception report Informe de Percepciones de Negocios. Lastly, there is the drop of public investment in real terms during the last quarter of the year, and the depreciation of the real exchange rate, which raises the costs of foreign capital goods. Accordingly, private growth forecasts for this year have been revised downward. Our March Economic Expectations Survey lowered GDP growth in 2014 from 4.1 percent in November to 3.7 percent in March. Thus, the baseline scenario of this Report has lowered the GDP growth estimate for 2014. The Board estimates that this year our economy will grow between 3 and 4 percent (3.75 to 4.75 percent in December), that is, less than last year and below trend.
That process is at the heart of the events unfolding here in the UK and around the world. But the crisis here was not triggered by rising household defaults or corporate failures in the UK; in fact they have started to rise only recently. The crisis started in the US housing market and spread to the rest of the world through the banking system. And the problems in the US were themselves a reflection of global imbalances in trade and capital flows between advanced and emerging economies. The rapid growth of exports from Asia, and latterly the Gulf, was reflected in a substantial build up of savings which financed a rapid growth of credit in the West. When losses emerged in US sub-prime market, they ricocheted through the international financial system, including British banks. Not only did they face losses on their portfolios of structured credit but sources of funding on which they had become dependent, particularly securitisation, dried up. A global economic slowdown Initially, the impact of the crisis seemed to be concentrated in the US and a handful of European banks while the emerging economies of Asia continued to boom. With wages and prices rising, many of the people I met in India and China this time last year rather welcomed the prospect of a fall in Western demand as a means of taking a little of the heat out of their own economies. But the picture has changed since then.

However the distinguishing feature of this recession is that it is centred on the banking system, which is at the heart of the allocation of resources through the economy and of the transmission mechanism for monetary policy. It is no surprise therefore that both in this country and elsewhere interest rates have been supplemented by measures that have directly focussed on banking and financial markets. Credit is a critical lubricant in a modern economy. It can bridge the gap between expenditure and income. It supports investment: allowing households and companies to bring forward the purchase of expensive assets, which would otherwise require an extended period of saving. And it allows spending to be smoothed in the face of unexpected shocks to income. As credit became more scarce, the economy was bound to slow, amplifying the slowdown in the real economy that was already in train. A feedback loop started to gather momentum. 4  BIS Review 5/2009  The more the banks reined in lending, the worse the economic outlook became, and the greater spectre of rising credit losses on the banks’ loan portfolios, encouraging further cuts in lending. Policymakers had to intervene to cut this feedback, to prevent funding markets for banks and industry from freezing up, and to ensure that the banks have the capital, the funds and the confidence to continue lending.
All of this has important implications both from a historical perspective and for the future evolution of the labor market and the women’s place in it. For example, the female participation rate has fallen back ten years in terms of the progress women had attained in the labor market. It is possible that this historical setback and the burden of household work may largely explain women’s perceptions of the economic situation, which surveys have shown to be more negative than men’s: in May of this year, 73 percent of women had a perception of a stagnant or deteriorated economy, compared to 68 percent of men.3 Finally, the impact of the crisis on the insertion of women in the labor market may have significant implications not only for the evolution of social variables, but also for the economic recovery process itself. From a social standpoint, three elements stand out:   First, the high proportion of extremely poor households headed by women—52 percent of all households in extreme poverty, according to the 2017 CASEN Survey—means that a deterioration in the economic situation of the latter could have a major impact on the country’s poverty and inequality.

In financial law, the accession countries need to satisfy a number of provisions of the Treaty which have been applicable to the EU Member States since before the establishment of the ECB and the start of the third stage of EMU. In particular, statutory provisions providing credit facilities for public entities with a national central bank have to be revoked, together with provisions providing access for public entities to funds from credit institutions on terms which are not market-oriented. Moreover, capital movements need to be liberalised and statutory obstacles to the freedom of capital movements removed. BIS Review 84/2001  3  Some of these changes may be difficult to introduce before accession, and several accession countries will only achieve full compliance at a later stage when accession is imminent. In the area of banking law, more immediate progress has been achieved. For instance, several accession countries have introduced completely new banking legislation, aiming at compliance with the standards for EU financial markets in accordance with EU Directives relating to credit institutions. A similar need for legal implementation pertains to the areas of capital markets and payment and securities settlement systems, but in these fields further changes are required. Finally, the reduction of risks related to central bank operations also requires a legally sound collateral regime, which provides legally effective arrangements not only for repurchase and pledge transactions, but also in relation to insolvency proceedings. Again, this is a technically difficult area where the accession countries still need to catch-up with EU standards.
Financial institutions, together with their staff, were at the frontline of this mobilisation: banks by distributing EUR 130 billion of state-guaranteed loans – a record in Europe, and keep up the commitment – but also insurers – and this has been less frequently mentioned – with numerous payouts on claims not covered in policies. Your teams have demonstrated remarkable operational agility. This resilience also stems from the efforts of banks and insurers who went into the crisis on a firm financial footing, with large French banking groups having almost doubled their own funds since 2008 to 15%, and insurers’ capital requirement coverage averaging 239% at end-September 2020. But although we don’t currently need to worry about their financial soundness, we still need to remain vigilant: there is still a high degree of uncertainty, which calls for the maintenance of our fiscal support measures and an accommodative monetary policy. I won’t talk about the latter today as we are in the “quiet period” before the meeting of the Governing Council on 20 and 21 January. Page 2 of 4  II. The challenges for 2021 After a few more difficult months at the start of the year, 2021 should see the end of the pandemic and the beginning of the reconstruction. And in the financial industry itself, we will need to capitalise on 2020’s resilience to meet four challenges that I shall sum up using the four cardinal points of the compass. 1/ The first, of course, is Brexit, so in the North.

But falls in oil and commodity prices can have a more lasting impact on inflation – and hence become relevant for monetary policy – if they feed into core inflation. That can happen under two circumstances. The first is if price falls are symptomatic of weakening global demand, rather than a boost to global supply. Then, lower oil prices might be accompanied by declining net exports, which could in turn cause firms to cut back on investment and drag down core inflation. This blunts the growth-bolstering effect of lower commodity prices. Imported inflation might also be depressed as foreign producers cut prices in reaction to weakening global growth. The second circumstance is if there is a succession of supply shocks that keep inflation low for a long period and cause firms and households to revise down their inflation expectations. In that situation, low oil and commodity prices can have “second round effects” as lower expectations feed into wage bargaining and price setting, thereby affecting core inflation. Then, the effect of supply shocks becomes more similar to demand shocks. In both cases, central banks end up facing a situation not of a benign supply shock, but rather of an adverse demand shock that, if left unaddressed, could derail price stability over the medium-term. That would call for a more forceful monetary policy response. Importantly, there were signs in the past that such circumstances were present in the euro area.
Let me complement that with one for markets: “Adapt and survive”. But let me add the positive rider - “Those who survive will thrive”. What is the role of the authorities in this future I have described? It is, very simply, to provide as best we can the economic and regulatory environment in which financial markets can do their job - of allocating capital to where it can be most productively deployed - more effectively. On the economic front that means steady growth with low inflation. On the regulatory front it means a framework of rules that provide for the transparency that is essential for the proper assessment and management of risk and sets clear behavioural standards which do not unnecessarily distort business decisions but provide clear guidance to market participants - whether they are end-users or intermediaries - as to what is expected of them and what they can reasonably expect of others. The picture I have painted is one of challenge and change. The flip-side of course is great opportunity. In fact there has never been a time when the markets here in London did not face change and uncertainty. But there has never been a time either when you, we, all of us, did not rise to the challenge. I am sure we will all do so again - and I wish you all possible success. 3  BIS Review 15/2000

So far, deposit institutions do not appear to be significantly increasing their exposure to risk, although there are some factors where we are exercising greater watchfulness. In fact, the total volume of lending granted by deposit institutions in Spain to the nonfinancial private sector has continued to fall (-1.2% in June), or shows muted increases when the construction and real estate development sectors are excluded. Moreover, the debt ratios of the non-financial private sector have continued falling, standing at levels below the euro area average. Specifically, the debt/GDP ratio of the non-financial private sector was slightly above 130%, 3 pp down on a year earlier, and 2 pp less than the euro area average, having declined by more than 70 pp from its peak during the crisis. 5/10  In the case of non-financial corporations, overall external financing has continued to expand at year-on-year rates of close to 2%, with significant growth in bond financing and a fall-off since the start of the year in new bank lending extended to non-financial corporations. Overall, the reduction in the deleveraging of non-financial corporations exceeds 50 pp of GDP, from the peak reached during the crisis. Further, in recent years banks appear to be setting greater store by variables such as productivity in lending standards, which results in a more efficient allocation of credit. Nonetheless, some firms still show a certain degree of financial fragility.