samchain/econo-pairs-v1 huggingface dataset:
Instead the objective was to assess their capital needs under a deeper and longer recession than was the consensus in early 2009, and then require them to meet these capital needs in the very near term, before the adverse scenario developed. One important rationale for the program was that the presence of the additional capital would make the adverse scenario less likely. The credibility of this strategy was dependent on the availability of the U.S. Treasury’s Capital Assistance Program to provide capital if the private market was unable to do so. Moreover, a brave decision was made to be transparent about the procedures the supervisors were using in their assessment and to pre-commit to disclose detailed results. In addition, the main measure of capital needs would be in terms of common equity rather than the preferred equity that was used in the U.S. Treasury’s Capital Purchase Program. BIS Review 81/2010  7  The assessment process took just under three months to complete. It involved many innovations in the supervisory process that will continue to influence the approach to the supervision of large complex financial institutions in the future. The results of the assessment were striking. Under the more adverse scenario of a longer and deeper recession, the twoyear loss rates on average across the 19 banks were projected to be as high as experienced during the Great Depression. Further, this average hid an incredible amount of heterogeneity across both banks and asset classes.

But, while these developments are certainly encouraging, it is far too soon to conclude that we are out of the woods in terms of generating a strong, sustainable recovery. On the inflation front, the year-over-year rate of consumer price inflation has slowed in recent months, and despite the recent rise of gasoline prices, we expect inflation to moderate further in 2012. Here in Buffalo, the economic restructuring has positioned the region’s health and education sector as a potentially solid base for longer-term growth. Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  5
Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at a dinner hosted by the IoD South West and the CBI, Bristol, 22 January 2008. *  *  *  It is four months since Northern Rock came to the Bank of England for support. And the headlines continue to be dominated by its fate. Northern Rock, however, is not the epicentre of the present global banking crisis. That lies in the very substantial losses made by many banks in the main financial centres as a result of the collapse of the US sub-prime mortgage market. Those losses, and the fear of future losses on a wider range of loans, pose a threat to the ability of the banking system to finance continued economic growth – the so-called credit crunch. Concerns about the implications of a credit crunch, not only for the health of the US but for the world economy, lie behind the sharp falls in global equity markets over the past week. So the next year will pose economic challenges for all of us – more so than at any time since the Bank of England was given its independence in 1997. Both industrialised and emerging market economies have been affected by the fall in asset prices but conditions vary across countries. It is striking that the banking crisis originated at the heart of the world’s major financial centres.

In the past few years insolvency laws have been amended, in particular in Spain, Italy and Portugal, to better support early rescue of viable firms, to help the deleveraging process and to free up resources for further investment and thus productivity growth. I believe that these reforms, if the effort to implement them continues, will help us to grow out of the current high private sector debt problem. Of course, there are other possibilities and the list of potential reforms is long. I could elaborate further, but my time here is unfortunately limited so I chose to constrain myself to this crucial area of structural reforms. Conclusions Let me now conclude. As I said at the beginning, the euro area can make a much stronger contribution to global growth than it has done so far. The conditions are very favourable for a strong push for reforms; in particular, our monetary policy stance is supportive. Reforms should now focus on boosting productivity and reducing the burden of the high debt stock. Work in this direction has started and is ongoing, but the euro area governments need to continue on this track with more determination and impetus. BIS central bankers’ speeches  3
My answer to the first question is that we should continue to bring these activities and entities within regulation, for three reasons. First, and most obviously, the need to protect consumers/investors. Whether or not one thinks it is sensible to invest or trade in the highly speculative assets that make up most of the activity in the crypto world, investors should be able to do so in transparent, fair and robust marketplaces, with the protections that they would get in conventional finance. There will probably always be some who prefer – for a variety of reasons – to invest and trade in an unregulated, opaque world. But we should not push the majority who do not want those risks into that world because there is no regulated alternative. My second reason is the need to protect financial stability. While the crypto world, as was demonstrated during last year’s crypto winter and last week’s FTX implosion is not at present large enough or interconnected enough with mainstream finance to threaten the stability of the financial system, its links with mainstream finance have been developing rapidly. We should not wait until it is large and connected to develop the regulatory frameworks necessary to prevent a crypto shock that could have a much greater destabilising impact. The experience in other areas of digitalisation has demonstrated the difficulty of retrofitting regulation on new technologies and new business models after they have reached systemic scale.

Ida Wolden Bache: The policy rate has been raised to bring down inflation Introductory statement by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), at the press conference following Norway's announcement of the policy rate, Oslo, 4 May 2023. ***  Accompanying charts to the speech Chart 1: Policy rate raised by 0.25 percentage point Norges Bank's Monetary Policy and Financial Stability Committee decided to raise the policy rate by 0.25 percentage point to 3.25 percent. Norges Bank's task is to keep inflation low and stable. The operational target is inflation of close to 2 percent over time. We are also mandated to help keep employment as high as possible and to promote economic stability. Chart 2: Inflation is too high Inflation is now markedly above the target. In March, consumer prices were 6.5 percent higher than one year earlier. High energy prices are a key driver of inflation, but other goods and services prices have also risen rapidly. Price stability is crucial for maintaining a well-functioning economy. The policy rate is being set with the aim of bringing inflation back to the target of 2 percent. At the same time, we want to avoid a slowdown in economic growth beyond what is necessary to tackle inflation. We have not yet seen the full effects of our past rate hikes. Our March forecasts indicated a policy rate increase to around 3.5 percent this summer.
It seems likely that a number of different factors played a role, including the increase in the pace and depth of an increasingly globalized economy and the accompanying increase in competition, policy reforms that produced more flexible financial, labor and product markets, pockets of improvement in fiscal policy, and perhaps a reduction in the size of shocks. These factors made the art of central banking easier in some respects, but they seem inadequate to fully explain the improvement in inflation outcomes. Better monetary policy choices seem likely to be a significant part of the story, and they will be critical in the future in determining whether these improvements are sustained. The sources of the improvement in the quality of monetary policy also are varied and complex. Some relate to overall improvements in knowledge of inflation dynamics and the transmission mechanism of monetary policy. Some are the result of a fundamental change in the tolerance of citizens for high inflation, which has transformed the political context in which central banks operate. Some of these gains seem principally the consequence of the actions of individuals and the quality of leadership at the helm of the central bank. Some are the result of evolution in the institutional arrangements of central banking.

At the same time, the regulatory framework for the banks’ operations was improved significantly. Now we have a banking system that primarily serves domestic households and businesses and, in terms of total assets relative to GDP, is about 15% of its precrisis size. As can be seen in their high capital adequacy ratios and sound liquidity position, the banks are quite resilient. Their capital ratios have fallen in recent years as a result of dividend payments, and it can be said that there was scope for such a reduction. But now their capital ratios are much closer to the Financial Supervisory Authority’s capital requirements, and under current conditions of elevated economic uncertainty, it would be imprudent to lower them much more with dividend payments. In this context, it is important to bear in mind that the current capital requirements also include buffers that can be used without the banks being deemed to have failed. These capital buffers are a sort of cushion, and if they are tapped, resilienceenhancing measures such as restrictions on payments of dividends and bonuses will be adopted. Furthermore, the countercyclical capital buffer can be lowered very quickly if conditions warrant it, although it has been decided to increase it to 2% in the coming term. On the whole, the 2008 IMF programme objective of rebuilding the banking system on firmer foundations was met successfully.
The large post-war cohorts will only reach ordinary retirement age after 2012, but are now nearing the age when they are eligible for early retirement. If they opt to retire under the scheme as it functions today, the number of pensioners under the contractual early retirement scheme will increase by 16 000 in six years. Similarly, the ageing of the population will result in an additional 41 000 disability pensioners. The incentives embedded in pension rules, benefits and taxes encourage early retirement. The pension rules make it costly for companies to recruit older workers. The wage trend perceived by a wage-earner as appropriate over a lifetime may also deviate from the trend in work capacity expected by the employer. The basic problem seems to be that individuals are not sufficiently exposed to the social costs associated with leisure and early retirement. Nor are the right incentives offered to individual businesses. 5. Saving and returns in the Government Pension Fund Our labour force is clearly our most important national resource, but Norway also has substantial petroleum wealth. The state’s share consists partly of the value of oil and gas under the seabed and partly of the financial wealth accumulated in the Government Pension Fund – Global. It is misleading to look upon the cash flow from petroleum activities as income. The appropriate economic perspective is to see the transfer of the cash flow to the Government Pension Fund as a way of transferring capital from one account to another – from petroleum to foreign securities.

The Government Pension Fund has a prudent investment strategy, with broad risk diversification, and a real return of 4 per cent is expected in the long term. There are examples of companies and investors that achieve a considerably higher return on capital over time. However, it is important to remember that for each successful investor earning high returns, there are many others with the same ambition and risk willingness, but with a record of poorer performance and bankruptcies. The Government Pension Fund cannot run the risk of ending up among the worst performers. The globalisation of financial markets provides the Fund with good opportunities for investing and diversifying risk. However, we cannot insulate the Fund from wide annual swings in the value of the  12  Most of the central government’s cash flow from the sale of oil and gas is derived from the extraction of wealth under the seabed (economic rent), while the remainder is a normal return on invested capital. 8  BIS Review 10/2006  investments. We invest in international equity markets where prices fluctuate widely. These fluctuations are the reason why equity investments generate a higher return over time. The best year in the Fund’s history so far was 2003, when it posted a real return of 11 per cent. This stood in sharp contrast to the previous year’s result, which was -6 per cent.
Over the past 12 months, Core Index I has risen by 2.7% and Core Index II by 2.4%. Underlying inflation is therefore somewhat closer than the CPI to the Central Bank’s target. It is interesting to examine the development of individual components of the CPI. The housing component, for example, has risen by 13.6% over the past 12 months and the upward trend shows no sign of coming to an end. Public service prices have also had a considerable impact on the CPI over the past 12 months, but the rate of increase has slowed down. Measures taken to forestall an inflation-  BIS Review 45/2003  1  triggered national wage review in 2002 included a freeze on public service prices, which was relaxed when the risk connected with exceeding negotiated inflation ceilings had abated. There has also been a slowdown in the twelve-month rise in private services, which are highly sensitive to domestic wage increases. On the whole, goods are more sensitive than many other index components to changes in the exchange rate. Last year’s strengthening of the króna is clearly reflected in goods prices, with a significant drop in import prices. In 2003 prices of both imported and domestic goods have fluctuated somewhat. For decades, a far too high rate of inflation was one of Iceland’s main economic problems. This had an adverse effect on businesses, making effective planning difficult. It also had an adverse effect on households, partly because a large proportion of household debt is indexed to inflation.

The economic downturn and unemployment which often follow when the bubble bursts will primarily affect the most vulnerable segment of the labour force and have very negative distributional effects. Monetary policy cannot and shall not steer price developments in the housing market or other asset markets, but a monetary policy that inspires confidence will curb wealth effects because the potential for the emergence of bubbles is reduced. Nominal stability is the best contribution monetary policy can make to the distribution of income and wealth. Interplay between economic policy components - the role of monetary policy The basis for achieving stable economic growth is created through a successful interplay between the various components of economic policy, ie between fiscal policy, monetary policy, the system for income settlements and other measures aimed at improving the functioning of the economy - often referred to as structural policy. The Norwegian economy is vulnerable to abrupt shifts in the global economy. We cannot fully shield ourselves against external shocks, but we can curb the effects to ensure that economic developments are optimal in the long term. Fiscal policy in Norway has had an important role in stabilising demand and production. The Petroleum Fund shelters the mainland economy from the effects of oil price fluctuations to some extent. Developments in the real economy are of importance to price and cost inflation and hence for Norges Bank’s setting of interest rates.
These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems. So far, I have discussed the Bank of Thailand’s role as a catalyst for digital infrastructure development and as a facilitator of innovation. One should not forget that our core mandate is being a regulator to safeguard financial stability. To this end, we proposed the new Payment Systems Act which became effective earlier this April. The Act unifies previously fragmented payment laws and regulations under a single Act, and empowers the Bank of Thailand with the authority to both regulate and oversee development of Thai payment systems in a manner conducive to new 8/10  payment innovations. Beside the Payment Systems Act, supervisory practices are also being updated to improve and safeguard cyber security risks. The updated guidelines on management of information technology risks of financial institutions were released in December last year to ensure that banks have appropriate governance structure in place and can swiftly respond in the event of cyberattacks. Our efforts also extend to ensuring safety of the payment system, and awareness among both financial service providers and consumers. Let me now turn to another area that is important for our region, which is the promotion of regional financial connectivity. Over the years, the Bank of Thailand has made multiple arrangements with regional central banks to support the use of local and regional currencies in trade and investment.

You may take this as an official response, as I have already discussed this issue with our Minister of Finance. Conclusion Ladies and gentlemen, Before ending, I would like to emphasize again that Thailand has gained significant ground since the aftermath of the 1997 crisis. Macroeconomic stability has been restored, progress has been achieved in financial restructuring and strengthening bank supervision, and external vulnerability has been substantially reduced. At this juncture, however, there is no room for complacency. The key challenge facing the authorities is to maintain macroeconomic stability while accelerating the pace of reforms amidst the global slowdown and heightened market uncertainty. Through careful management of domestic policies, greater regional cooperation, as well as consolidation of restructuring efforts, Thailand and the surrounding region should weather the global slowdown and return to a sustainable growth path. I would like to thank you once again for the opportunity to address this distinguished forum and wish you all the best. Thank you. 4  BIS Review 99/2001
First, how do we establish a more coherent framework for crisis management, that recognises and reconciles the countervailing forces of large and rising capital flows on the one hand, and small and limited official lending on the other. Second, given these constraints, is it possible within that framework to establish a role for standstills that are efficient, equitable and expeditious. I discuss each in turn. A framework for crisis management The Cologne Summit statement by G7 finance ministers and central banks in June 1999 was a step towards establishing a framework for international crisis management. It listed the “principles” and “tools” underpinning this framework - if you like, the ingredients. It did not, however, provide a recipe for combining these ingredients. The official community’s framework for crisis management remains a discretionary, “case-by-case” one. BIS Review 70/2000  6  This approach has benefits. Crises clearly differ in form and severity, which calls for flexibility in the official sector’s approach to dealing with them. But discretion also carries some costs. For private creditors, it adds to uncertainty when framing their lending plans. The IMF’s latest Capital Markets Report states that the private sector is “highly uncertain, if not outright confused about the official community’s approach to achieving its goals”. Discretion also has costs for the official community. It risks “gaming” by the private sector, with the official sector providing more money ex-post than would have been optimal ex-ante.

First, it sets out a method for measuring the riskiness of assets. Second, it sets out a definition of capital. And third, it lays down a minimum ratio between capital, the numerator, and risk assets, the denominator, namely that capital should be at least 8% of risk-adjusted assets, with at least 4% of this consisting of Tier 1 capital. What changes will the new Accord make to these elements? BIS Review 70/2000  2  The work has to date been heavily focused on the first element of the framework, the method for measuring risk. There will be substantial changes here, with the aim of introducing more risk sensitivity to the existing crude measures and to widen the coverage of the measures beyond just credit risk and market risk which was addressed in the previous review of the Accord. The direction of the changes was laid out in the Committee’s consultative paper of June last year and I do not intend to go into a description here. On the second aspect, the Committee has stated that “With respect to the definition of regulatory capital, the Committee will maintain at this stage the existing rules set out in the 1988 Accord.” In other words, they will not at this stage be revising their definition of capital. Just to remind you, this definition of capital broadly divided capital into two tiers, of which Tier 1 mainly consists of shareholders equity and reserves and Tier 2 of certain subordinated debt instruments and an element of general provisions.