samchain/econo-pairs-v1 huggingface dataset:
The interest rate differential shows the difference between Swedish and German 10-year government bond yields. Sources: Macrobond Financial and the Swedish National Debt Office. The overall picture is that the reforms implemented have benefited Sweden well. Both companies and households have benefited greatly. The economy has functioned better and prosperity has increased. Let me highlight three lessons from the crisis and subsequent reforms: First, well-functioning frameworks make crisis management easier. Sweden was well equipped to deal with the economic consequences of both the financial crisis and the pandemic. Both fiscal policy and monetary policy could contribute to counteracting the economic slowdown and help the recovery in the Swedish economy on these occasions. Sweden therefore managed the economic effects of both the financial crisis and the pandemic better than many other countries in the western world. Second, one must be careful about declaring that things will look a certain way for all time, even if that has been the case for a while. Too much consensus on the possibilities of the fixed exchange rate thirty years ago meant that it took too long to embark on a more favourable economic path. More recently, we have seen that inflation was not ‘dead’ as some commentators argued not very long ago, and a monetary policy with low interest rates and bond purchases was not something that lasted forever (‘low for long’ and ‘QE infinity’). Third, reforms are painful in the short term, but often produce faster and greater results than expected.

Furthermore, companies are financing themselves much more often in the market today, by issuing certificates and bonds. Thirty years ago, most of them borrowed from banks. Changes in financial markets can affect the transmission of monetary policy, which we need to take into account in our monetary policy assessments. Diagram 9. Borrowing among non-financial corporates Percentage of GDP, quarterly data 100 80 60  40 20 0 1990  1995  2000  2005  2010  2015  2020  Loans from monetary financial institutions Securities borrowing  Note. Includes securities borrowing in both Swedish kronor and foreign currency. Sources: Statistics Sweden and the Riksbank. In short, the development of the Swedish economy over the past 30 years may be summarised as good on the real economic side, but with some worrying signs on the financial side. 12 [16]  Forward planning difficult but important I would like to broaden the perspective a little. Thirty years ago, Swedish economists and politicians alike agreed that a steadfast defence of the fixed exchange rate was the only way to break with the weak development of the Swedish economy and lead it onto a new path. Many in Sweden were stuck in a particular way of thinking, a paradigm, where we did not realise that economic reality had changed so much that our frameworks also needed to be fundamentally changed. With free capital movement, a deregulated credit market and a poorly functioning economy, the fixed exchange rate was not a good instrument for creating economic stability and prosperity.
We are not sure, however, that the answer lies in making the framework less sensitive to risk, perhaps by smoothing over bad news in some form, for example by ignoring or delaying recognition of rating changes. This would involve the same dangers that I recall from the days of hidden reserves in UK banks, when the knowledge that unwelcome events could be hidden from view led occasionally to a lack of rigorous risk assessment in business decisions. In fact, part of the underlying problem of procyclicality is that risks are not recognised early enough, in time to allow lenders to exert a more gradual and beneficial discipline on borrowers. The capital framework - and, equally important, bank provisioning policies - need therefore to be as forward looking and dynamic as possible. Since ratings - whether external or internal - are influential in provisioning and will in the future be influential in capital, they in turn have to be more forward looking. This is why in the sovereign context we place particular emphasis on the importance of countries adhering to international transparency standards. No rating can be reliable without adequate information on the economic and financial situation of the country. The Basel paper does of course propose that compliance with the IMF’s Special Data Dissemination Standard is a pre-condition of a lower risk weight.

The FSB report10 was released in July and Governor Powell11 has recently described the Federal Reserve’s plans to support the two primary components of the reform of LIBOR. First, we are considering, in cooperation with the LIBOR administrator and other members of the official sector, ways to broaden the definition of LIBOR to more adequately represent current patterns of bank funding and to anchor it more firmly in observable transactions. Second, we believe it is important for market participants to have access to a range of appropriately created and governed reference rates that best suit their particular business needs. For example, some activities such as interest rate derivatives might be better served with a risk-free or near risk-free reference rate, rather than one that embeds a bank credit risk component. I would like to emphasize three points in support of the FSB recommendations and our own efforts. First, the FSB recommendations make clear that there is not one single path for all jurisdictions to achieve the common objective of more robust and resilient reference rates. Rather, each jurisdiction must take into account its own specific institutional, legal and market practices and arrive at its own best solution. In the U.S., I believe it is important to identify alternative reference rates that are grounded in a strong governance framework as laid out in the IOSCO principles and that are supported by market transactions.
I am not saying that attention must not be paid to the exchange rate beyond its effects on inflation. Excessive deviation from its long-term fundamentals may create problems in terms of resource allocation and the business cycle. The exchange rate should be influenced through accumulating or reducing reserves. Some conditions must be met, however, in order for this to be effective and convenient. In the first place, it must be consistent with the inflation target, in order for the intervention not to threaten the credibility of the monetary policy. Secondly, to safeguard monetary policy independence, once the intervention is announced it must be implemented mechanically. All this shields the conduct of monetary policy, typically carried out in regular pre-established meetings, from the extraordinary decision of buying or not buying foreign currency. In particular, the sterilization of intervention decisions permits to preserve both the credibility and the independent management of monetary policy. Finally, and because of this sterilization requisite, the cost of intervention must be properly considered, because it entails a quasi-fiscal component that could be significant. In any case, to the extent that the decision to intervene is taken because of evident real exchange rate misalignments, the risk of suffering quasi-fiscal costs should be limited. Intervention would occur within the context of an extraordinary episode where the central bank would estimate that there are sufficient elements to evaluate that the current exchange rate dynamics are unsustainable and the market is not properly internalizing the long-term prospects of the real exchange rate.

Percent 16  16  Consumer price index Five−year moving average Inflation target  14 12  14 12  10  10  8  8  6  6  4  4  2  2  0  0  –2 1973  1978  1983  1988  1993  1998  2003  2008  2013  –2 2018  1) Projection for 2018 Q1. Sources: Statistics Norway and Norges Bank  The formal monetary policy regimes remain intact, but lessons have been learned along the way. Initially, central banks had high ambitions to steer inflation to target within a clearly defined time horizon. But the experience with these regimes provided useful insight, and the ambitions were later adjusted. When confronted with shocks, small open economies in particular experienced that a rapid return to the inflation target could have undesired consequences for the real economy.11 Norges Bank addressed this concern by giving greater weight to output and employment. The inflation target horizon has been extended and monetary policy has gradually become more flexible. 11 See for example Wheeler G. (2014): “Reflections on 25 years of Inflation Targeting”, Reserve Bank of New Zealand, speech delivered on 28 November 2014 and Norges Bank (2017): “Experience with the monetary policy framework in Norway since 2001”, Norges Bank Papers 1/2017. 12  Monetary policy shall contribute to monetary stability. It does so by ensuring that inflation stays within a range somewhat above zero, while being kept under control.
The Financial Action Task Force (FATF) was established by the end of the eighties of the last century and the Financial Action Task Force for the Middle East and North Africa (MENAFATF) was founded in the middle of this decade. The Kingdom is an active member in these two groups. BIS Review 54/2010  1  In 2003, the Anti-Money Laundering Law, which provided for criminalizing offenses related to money laundering was issued, followed by its Executive Regulations. The issuing of this Law and its Executive Regulations has helped government organs and their subordinate entities concerned with combating money laundering to develop necessary mechanisms and procedures to implement the Anti-Money Laundering Law and related rules and ensure that they are fully complied with. These organs have established specialized departments responsible for implementing these rules (compliance function), appointed qualified human resources (compliance officers), and allocated human and financial resources necessary to enable them to perform their functions properly. At the same time, each supervisory government authority has enacted rules and regulations derived from the provisions of the Anti-Money Laundering Law and its Executive Regulations and included them in its by-laws in a way commensurate with the work of those organs. Within the framework of the kingdom’s efforts to combat money laundering, I would like to highlight the following: 1. The Permanent Committee for Combating Money Laundering, which consists of representatives from seven ministries and government departments, has been established at SAMA to deal with issues related to money laundering. 2.

18  Figure 12  Output gap (1) (2)  (level, percentage points)  Dec.22  8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16  19  20  Mar.23  21  Counterfactual (3)  22  23  24  25  (1) Constructed using seasonally-adjusted data. Dotted lines show forecasts. (2) Forecasts use structural parameters updated in the December 2022 MP Report (trend) with methodological revision of potential GDP. (3) Counterfactual estimate for 2022.Q4 is based on the assumption that the value added measure of the Transportation sector remains at its 2022.Q3 level, which is equivalent to zero velocity. All other non-mining sectors use published velocities. For the fourth quarter, both the effective and counterfactual gaps are calculated using the same potential GDP. Source: Central Bank of Chile.
The third risk factor relates to the possibility that said increase in credit risk, together with the observed reticence on the part of banks in using their capital buffers, could lead to a slight credit tightening, which could weigh on real activity and on the economy’s capacity to recover. In 2021 to date, there has been an easing in credit growth. Thus, in March 2021 new lending fell 13% year-on-year; this decline was concentrated in credit to non-financial corporations, whereas a more expansionary behaviour was observed in the mortgage segment. In any event, the fall was largely attributable to: i) the base effect stemming from the strong increase in the first few months of the pandemic, and ii) the lengthening of the average maturities of financing to firms that have made use of the ICO-managed public guarantee programme. 10  The responses to the Eurosystem’s Bank Lending Survey and the econometric analysis of the data show that the recent reduction in the volume of lending to firms is attributable to lower demand than in previous quarters and a slight tightening in supply. In the household segment, credit supply conditions have remained looser since 2020 H2, and the negative demand-side factors were concentrated in 2020 Q2, owing to the stringent mobility restrictions. 11  Fourth, and from both a short and medium-term standpoint, the main challenge facing the sector, which is common to most European banking systems, continues to be low profitability. Efficiency gains remain key to improving the situation.

BIS Review 64/2006  1  where savings and investment needs are matched through the exchange of assets or instruments on financial markets. In the last decades, in industrialized and, more recently , in emerging economies, financial markets have played a growing role in the allocation of savings, a process commonly designed as "disintermediation". Has disintermediation increased or decreased the efficiency of financial markets? Or, in other words, is there a superior type of financial structure, an optimal mix of financial intermediaries and markets for promoting long-run economic growth? This “century old debate”, to quote Ross Levine, has received conflicting answers 3 . •  According to the “intermediary-based” view, banks are more growth-enhancing than markets, particularly in the early stages of development, because they are better at monitoring firms and better equipped for reducing moral hazard. According to the “market-based” view, markets are inter alia more suited than banks to finance innovative and high-risk projects. •  Against this background, it could be tempting to establish a link between the acceleration as from the mid 1990s of productivity growth in the United States, in line with gains arising from the production and use of ICT (information and communication technology) and the marketdominated American financial system. During the same period, productivity growth slowed down in two major bank-dominated areas, Europe and Japan. •  However, empirical research argues that distinguishing countries by financial structure does not help in explaining cross-country differences in long-run economic growth 4 .
John Gieve: Seven lessons from the last three years Speech by Sir John Gieve, Deputy Governor of the Bank of England, at the London School of Economics, London, 19 February 2009. *  *  *  Introduction As you know I am about to leave the Bank of England after three years as the Deputy Governor responsible for its work on financial stability and as a member of the Monetary Policy Committee. It has been a game of two halves. The first 18 months from January 2006 to July 2007 were the tail end of the Great Stability, a period of nearly 15 years of continuous growth, low inflation, and falling unemployment. They were guided by and reinforced a wide consensus that economics had discovered the right way to manage the economy and that the UK was a good model of how to put it into effect. The second 18 months have seen an extraordinary reversal: with turmoil in financial markets, the credit crunch, and the onset of a severe global recession calling into question nearly every part of that consensus. The immediate challenge is to limit the depth and duration of the recession and bring the economy back onto a sustainable path with low but positive inflation. But we have just set out our analysis of the economy in our February Inflation Report and Charlie Bean explained the policy options we face in a speech earlier this week.

As you will have so many other matters to discuss, apart from the economy and the euro, you must forgive me for dedicating so much time to my own specific subjects. To conclude, I am sure these present Tertulias will, as in all the previous meetings, be successful, that the participants will enjoy themselves, and that our British friends will have very good memories of this visit to Madrid. Thank you. 2  BIS central bankers’ speeches
The same is true for your Study group: you are about to release a seemingly very attractive study on “net worth at risk” which aims at describing the ability of companies to face an external financial shock, with a focus on recent years: it will certainly attract a lot of attention when you publish this work. As it is time to conclude, I would like first to confirm that BDF, a founding member of the ECCSBO, is still very dedicated in all that is related with corporate analysis. Your presence here today is certainly the expression of a commitment similar to our own one; it is a good augur for your future works and an encouragement for our joint efforts to be pursued. Finally, I would like to thank personally President Manuel Ortega because I know all what you do to keep the dynamics of this Committee. Many thanks also to all of you for being here today, for your support and your participation in this meeting, because I have  2  BIS central bankers’ speeches  no doubt that you will have fruitful debates. If I may, I would add a special thanks for my colleagues from the Companies Directorate and for the protocol office, who deployed a lot of efforts in organising this event for the better: without their help we wouldn’t have been able to meet at this venue. Thank you for your attention. BIS central bankers’ speeches  3

This leads to increased price competition and to inflationary pressures being lower temporarily. But despite the rapid technological changes, the productivity growth figures have fallen both in Sweden and abroad. 3 We are becoming increasingly aware of the problems linked to climate change. This also contributes to changing our consumption and production patterns. The adjustment to such changes may be difficult and may also lead to the measured GDP growth being lower. But this adjustment can also in many ways lead to new markets and new opportunities opening up and to new, large-scale investment needs arising. Why are economies slowing down now? We would normally believe that structural changes occur slowly and that they therefore should not be behind a rapid change in the sentiment of the economy. But there are nevertheless many indications that the subdued economic growth and the rapid fall in confidence shown by the indicators over the past year have several links to the structural changes. When the number of trade barriers increases, the opportunities to benefit from economies of scale and international specialisation decline. The uncertainty regarding the rules for international trade dampens the willingness to invest. The uncertainty regarding future regulations and taxation of, for instance, diesel and petrol driven cars reduces demand for them. The intensive discussions on the climate impact of air travel may dampen demand for air travel. In Sweden, for instance, travel by domestic flight has declined. Monetary policy cannot affect these structural changes or ensure that we attain a certain level of economic growth.
The Committee as a whole needs to explain its view of where the economy is heading. The Inflation Report has been the main vehicle for expressing the collective view of the Committee. Together with the minutes of the monthly meetings, it provides an explanation of past actions which should enable others to understand how we are likely to behave in the future. At the same time, the voting records of individual members of the MPC are in the public domain. That disclosure improves the quality of decisions, as well as the accountability of Committee members, because there is no better incentive to cast one’s vote for the policy most likely to hit the inflation target than the prospect of having to defend that voting record in public. Of course, all members of the MPC are well aware that there is no certainty about the precise level of interest rates which is desirable in any given month. That is why we discuss with each other at great length the appropriate course of action before each member makes up his or her own mind. For such a system to work it is crucial that MPC members give their best judgment and do not try to reach an artificial consensus. How, then, should we balance the need to give a clear view about how the Committee sees economic developments and the requirement of individual accountability? There have been two main criticisms of the MPC in this respect. First, that the MPC has been too open about differences within it.

One of these towns is Sibiu or Hermannstadt, where Romania’s current President was born and where the Informal Summit of Heads of State or Government of the European Union will take place in May. 2/3  BIS central bankers' speeches  On a lighter note, children in Romania enjoy playing with Lego, Denmark’s registered trademark. As regards Finland, Mika Waltari’s books have consistently been bestsellers in Romanian bookshops and Angry Birds ranks as one of the most popular mobile apps among young Romanians. As surprising as it may seem, there is a link with Sweden as well. In the early 18th century, King Charles XII, after the battle of Poltava, moved southwards to Romanian lands, turned into an entrepreneur and built the Colțea Tower, the tallest building in Bucharest at the time, which stood very close to the current headquarters of the National Bank of Romania. The importance of Austria and of its capital city, Vienna, for Romania is unquestionable. It should be pointed out that the Austrian influence is not confined to Transylvania. To give you just one example of a Romanian landmark figure who refined his personality in Vienna, our national poet Mihai Eminescu studied a few years in this prestigious academic hub. I cannot conclude without mentioning that Romania is inhabited by diverse minorities belonging to nations in the region, namely, Hungarians, Czechs, Poles, Slovaks, with whom we have so many things in common that it would take me too long to talk about.