samchain/econo-pairs-v1 huggingface dataset:
Monetary policy that is oriented towards low and stable inflation will contribute to a stable krone exchange rate over time. If we take steps to counteract an appreciation of the krone when there are pressures in the economy, we reduce the possibility of curbing inflation and increase the risk of fluctuations in the economy. Maintaining stability in the internal value of the krone must thus take precedence. The implementation of monetary policy has been delegated to Norges Bank. Norges Bank sets the interest rate on the basis of our understanding of the regulation. Our interpretation places emphasis on the Government’s rationale behind the regulation, on the objective as formulated in the first paragraph and on our knowledge about the relationships between the interest rate, the krone exchange rate, output, employment and inflation. The interest rate influences price inflation indirectly via domestic demand and via its effect on the exchange rate. When interest rates rise, it is more profitable to save and more costly to borrow. This has a dampening impact on consumption and investment. Lower demand in turn curbs the rise in prices and wages. Higher interest rates make it more attractive to take krone positions and borrow in foreign currency. As a result, higher interest rates normally lead to an appreciation of the krone. This reduces prices for imported goods. In addition, a strong krone curbs activity, profitability and the capacity to cover labour costs in the internationally exposed sector. It is important to be aware of the relationships between employment, output and inflation.

Bank lending to business has risen more sharply in France than anywhere else in Europe: up 4.5% in annual terms at end-November 2015, compared with a rise of 1% in Germany, and 0% in Italy. Moreover, interest rates in France are among the lowest in Europe. Interest rates on new bank lending are currently below 2% on average, compared to 5% in 2007. However, I would like to stress the fact that access to cash loans is more difficult for very small enterprises. Their fragile financial position may be one reason; but there is an ongoing misunderstanding with the banks that the latter must seriously address. French households’ savings must also adjust to the low interest rate environment. This is an opportunity to encourage more “risky” and more long-term investments, both in the interest of investors themselves and of our economy. Today only 31% of French households’ financial investments are made up of risky assets, against 45% in the euro area. This requires taking action in two directions. First, the decrease in interest rates should be gradually passed on to risk-free investment returns – this is why I proposed lowering the rate on the PEL, the French housing savings plan, this is also why we must resolutely continue to lower the returns on life insurance invested in euro funds. Second, new products should be developed: probably less liquid, with or without a capital protection over the long term, and possibly offering the best equity performance over time.
The 2008 subprime crisis is a textbook example of how backward-looking data is not a good indicator for the future economic environment. Hence, organisations need to be pragmatic and shift towards more forward-looking and proactive risk identification, assessment and management. In a recent financial industry survey conducted by the Bank to gauge the top operational risks among financial institutions, it is evident that most financial institutions are still focused only on “typical” risks such as card fraud and operational errors, rather than proactively anticipating and preparing against emerging risks. This has to change. In this regard, the Bank highly encourages pre-emptive and forward-looking risk management practices such as scenario analysis to anticipate the potential impact of future threats to an organisation and provide sufficient time for remedial actions to be taken. Incorporating culture into risk management Let me now move on to another element that a good risk manager cannot ignore, which is the importance of incorporating culture into enterprise risk management. At the heart of every corporate scandal is the failure of the people at different levels of the institution to uphold the highest standards of ethical behaviour and integrity. This is the reason why organisations need to do more than just comply with rules and regulations. The accounting scandal at a major Japanese conglomerate recently, illustrates this point. The company was once seen as exemplary in corporate governance. Such was its reputation that it frequently appeared as a case study in books on governance.

Donald Joshua Jaganathan: Enterprise risk management harnessing disruption Opening remarks by Mr Donald Joshua Jaganathan, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Institute of Enterprise Risk Practitioners (IERP) Annual Conference 2017 “Enterprise Risk Management – Harnessing Disruption”, Kuala Lumpur, 23 May 2017 * * * It is my pleasure to have the honour of addressing you this morning. I would first like to take this opportunity to congratulate the organisers for successfully gathering an array of distinguished speakers to share their broad-ranging and invaluable experiences. The breadth of the programme over the next few days reflects how vast the area of Enterprise Risk Management (ERM) has evolved, and how much there is for risk managers today to discover, learn and master. In my speech this morning, please allow me to share my thoughts on risk management, amid the so-called “age of disruption”. Technology and risk management Amongst all ‘disruptions’ witnessed thus far, perhaps none have been as forceful and impactful as technological disruptions. Take the smartphone, its use has permeated almost every aspect of our daily lives and has become almost like another limb for some of us. I’m no longer woken up by an alarm clock, nor do I read the papers on “paper” or take photos on a camera. In the palm of my hand I hold a music player, internet browser, GPS navigator, torchlight, and compass, even a wallet in more and more places.
The ongoing rigidity in prices of the services group and the volatilities in prices of agricultural products due to weather conditions are being closely monitored for the achievability of inflation targets. After dwelling on the latest developments in inflation and the interest rate policy of our bank, I would like to present the general outlook of the floating exchange rate regime and the exchange rate policy. The floating exchange rate regime applied under formal inflation targeting is the main element of our policies as it has been during the past five years. When the legal framework for setting the exchange rate regime is analyzed, we see that the exchange rate regime is set with the Government, while the design and application of the exchange rate policy to be conducted in the framework of the regime is under the authority and responsibility of the Central Bank. The essence of the floating exchange rate regime is that the value of the Turkish lira against foreign currencies is formed under market conditions and according to developments in supply and demand conditions. In this respect, the Central Bank conducts two kinds of transactions in markets: Firstly, the Central Bank purchases foreign exchange to build up reserves. These purchases are made via FX purchase auctions. In 2006, the daily purchase amount for these auctions including options is USD 60 million. These auctions were suspended on May 16, 2006 due to market conditions and the decline in FX supply. When the conditions for these auctions mature, they will be resumed.

The authorities responsible for the economy are in coordination and they are monitoring developments pertaining to the current account deficit very closely. As long as the steadfast implementation of the current program is continued without concessions, the current account deficit’s potential to pose a risk will diminish. Today, I am delighted to be here with you and to have the opportunity to explain the latest developments in the Turkish economy, as well as the Central Bank’s policies. I would like to take this opportunity to reiterate the message that our active communication strategy will continue together with the same transparent and steadfast attitude. Thank you very much. 2  8  A.T. Kearney, FDI Confidence Index, Global Business Policy Council 2005, Vol. 8. BIS Review 68/2006
Have the IMF/EU 1  financing agreements paid off? And what remains to be done in order to have our house in order? Romania itself faced a severe economic downturn which started in the fourth quarter of 2008 and continued until 2011 - first and foremost because of its domestic vulnerabilities. In the year before the crisis, the current account deficit exceeded 13%, the structural deficit was close to 9%, the economic growth was based on consumption of imported goods, and it was driven by loose fiscal policy and by the credit boom based on foreign exchange denominated loans, while the real estate bubble reached unprecedented levels. All that it was needed for a crisis was a sparkle. That sparkle was the global financial crisis, which led to massive speculative capital outflows, although the Vienna Initiative was a useful tool for damage control in this region. The rest is known and I do not want to insist upon it here. The diagnosis that I put in 2009, in my book “The end of illusion economics. Crisis and anti-crisis” is still valid. Since then, Romania witnessed a decade of major transformations. Under three successive IMF/EU programs, we have made a long way to reform the economy and to make it more resilient to further external shocks. In what follows, I will argue that Romania is now more developed and better equipped to deal with external shocks than it was ten years ago; but risks coming from unwarranted domestic policies remain.

Solvency ratio of the banking system percent 20 18 16  14 12 10  Solvency ratio  mar.-18  sept.-17  mar.-17  sept.-16  mar.-16  sept.-15  mar.-15  sept.-14  mar.-14  sept.-13  Minimum regulatory capital requirements = 8%  Note: Solvency ratio = Total own funds/ Risk weighted assets  Source: NBR  mar.-13  sept.-12  mar.-12  sept.-11  mar.-11  sept.-10  mar.-10  sept.-09  mar.-09  sept.-08  mar.-08  8  Source: NBR Source: NBR NPL ratio (NBR definition)  Jun. 2018  percent  Mar. 2018  Dec. 2017  Sep. 2017  Jun. 2017  Mar. 2017  Dec. 2016  Sep. 2016  Jun. 2016  Mar. 2016  60  Dec. 2015  Loan-to-Deposit ratio, %  Sep. 2015  70  Jun. 2015  90  Mar. 2015  100  Dec. 2014  percent  Sep. 2014  Dec. 2017  Apr. 2017  Aug. 2016  Dec. 2015  Apr. 2015  Aug. 2014  Dec. 2013  Apr. 2013  Aug. 2012  Dec. 2011  Apr. 2011  Aug. 2010  Dec. 2009  Apr. 2009  130  Aug. 2008  Dec. 2007  Figure 11. LTD and NPL ratio Non-performing loans  25  percent 61  120 60  20 59  110 58  15 57  56  10 55  80 54  5 53  52  0 51  NPL Coverage Ratio (rhs)  Figure 12.
The real return is assumed to be 3 per cent per year on average. About 20 per cent of the Norwegian government budget is currently financed via the oil fund. But who owns the oil fund’s wealth? And who receives the return on the oil fund’s wealth? The direct answer is the Norwegian state. Indirectly, however, it is the Norwegian tax-payer who owns the oil fund’s wealth and benefits from it. However, this is not wealth created as a result of the decisions of private individuals to buy assets of different kinds, which can then rise in value. The decisions to create the oil fund and on how it is to be managed have been political – the wealth of the fund is collective in nature. Neither can Norwegians sell their “shares” in the oil fund. * I would like to thank Iida Häkkinen Skans who has helped me with this speech. I have also received valuable comments from Martin Flodén, Jesper Hansson, Ann-Leena Mikiver, Cecilia Roos-Isaksson, Marianne Sterner and Anders Vredin. 1 [6]  Do we have anything similar in Sweden? Both no and yes. We do not have natural resources that have created such substantial value as Norwegian oil has.1 So in this sense, we do not have anything that resembles the Norwegian oil fund. But through the years, a number of political decisions have been taken that have led to funds being built up. Two examples are the system of National Swedish Pension Funds and the premium pension system.

We will do whatever is necessary to ensure that this pandemic, which is having a massive economic impact, does not turn into a debt crisis or a crisis of the financial system. We will not allow this to happen. We are dealing with a situation which requires us to act with extreme intensity. You have said that the measures taken by the Spanish government and other European governments are appropriate. But you have also hinted recently that the European Union has perhaps not responded quite as effectively. Are you afraid that a crisis of this kind could take its toll on the European project? Let’s hope not. The ECB has already acted. Basically what remains is for Member States also to act and continue to act through their fiscal policies. And we need a pan-European response. We need a coordinated EU fiscal policy response. I am sure that this is what will happen in the end. The ECB cannot be the only policy tool used from an economic standpoint. Monetary policy cannot be the only instrument employed. I am certain that Member States will do something about this and they will adopt a coordinated position in terms of the fiscal policy instruments employed by the EU in response to this huge crisis. The economic impact will be enormous. We just hope that it will be temporary.
Structural reforms are incomplete and a possible roadmap for euro-accession or just for further convergence cannot be done without a detailed program of these reforms which should cover governance issues (both in the public and private sectors), investment prioritization, better tax collection, broader reporting, centralized procurement, addressing the issue of companies with negative capital, and much more. In the financial sector, the recent Financial Sector Assessment Program undertaken by the IMF and WB has issued a number of recommendations for structural reforms, including a series of macroprudential policies which the National Bank has already started to implement. Agustin Carstens, General Manager of the Bank for International Settlement, said at the presentation of the 2018 Annual Report in Basel: “We must seize the day. Addressing vulnerabilities is key to keeping the growth momentum on track. The stronger performance gives us a window to pursue necessary reforms and recalibrate policies. Let’s not miss this opportunity”. On this note, let me conclude here and wish you all not to miss the opportunities. 7  Figure 1. Real and potential GDP* 1060 1055 1050 1045 1040 1035  GDP  Potential GDP  Source: NBR Note: *logarithmic scale = computed as 100*log(GDP at constant prices)  2018Q1  2017Q3  2017Q1  2016Q3  2016Q1  2015Q3  2015Q1  2014Q3  2014Q1  2013Q3  2013Q1  2012Q3  2012Q1  2011Q3  2011Q1  2010Q3  2010Q1  2009Q3  2009Q1  2008Q3  2008Q1  1030  Figure 2.

The popular media sometimes calls Singapore the “Switzerland of Asia”. We have always taken the comparison as a great compliment. Switzerland is known the world over for its stability, prudence, efficiency, and diligence – all attributes that we in Singapore also aspire to. Both Switzerland and Singapore are small trading nations with a shared interest in promoting free trade and maintaining an open, rulesbased global economy. Switzerland is an important economic partner to Singapore. Many Swiss multinationals have a strong presence in Singapore and they are a source of high value-added investments. Similarly, Singapore companies are actively making direct investments in Switzerland. Today, Switzerland is our 5th largest trading partner in Europe while Singapore is Switzerland’s 4th largest trading partner in Asia. As central banks, SNB and MAS share some common challenges. Since the financial crisis, the openness, financial soundness, and strong fundamentals of our two countries have made us highly attractive to global capital, with implications for monetary and exchange rate policies, on which we exchange views. Our two institutions also have to manage a growing pool of official foreign reserves in a global market that is increasingly uncertain. The opening of SNB’s Singapore branch is an important milestone in the strong friendship and good relations between Singapore and Switzerland, and between MAS and SNB. Through this branch, our two institutions will come even closer together and I look forward to new areas of cooperation. BIS central bankers’ speeches  1  We value highly our relationship with SNB.
In response, the ECB has announced the Outright Monetary Transactions (OMTs) – interventions on sovereign bond markets to repair the transmission channel when the level of spreads hampers monetary policy transmission and reflects market’s perception that the single currency might break up. OMTs would be implemented to the extent that they are warranted from a monetary policy perspective for countries under an EFSF/ESM macroeconomic adjustment or precautionary programme, as long as programme conditionality is fully respected. IMF involvement will also be sought. OMTs would not be carried out while a given programme is under review, but they would resume after the review period once programme compliance has been assured. The announcement of the OMTs has reduced concerns about the materialisation of destructive scenarios. But it is essential that governments continue to implement the necessary steps to reduce both fiscal and structural imbalances and proceed with financial sector restructuring measures. The structural reason that the transmission channel is malfunctioning is the tight link between sovereign and bank funding conditions. The risk that banks’ balance sheets would be contaminated by sovereign risk was highlighted at an early stage by Barry Eichengreen and Charles Wyplosz (1998). 1 If banks are to transmit monetary policy impulses evenly, they need broadly similar funding conditions. However, if the ultimate responsibility for the stability of the banking system falls within the domains of individual sovereigns, clearly the two are linked and when one of the two becomes riskier, this risk is transmitted to the other.

The inflation target for monetary policy, the fact that the Riksbank now has statutory independence and the fact that we now have sound public finances, a budget ceiling and balance targets for fiscal policy – all of this has contributed to much greater stability in the economy than we had in the 1970s and 1980s. The current regulations mean that economic policy as a whole can never seriously clash with the monetary policy target in the way it actually sometimes did during the period with a fixed exchange rate regime. Both public authorities and banks also learned a lot about financial stability during the crisis in the 1990s. The Riksbank now has an organisation that continuously analyses the stability of the financial system and maintains a preparedness to act in a potential crisis situation. This gives us the opportunity to detect and counteract at any early stage any changes and vulnerabilities that could lead to a serious crisis. It also makes it easier to manage the problems if a crisis were to occur. The experiences of both the Riksbank and others have definitely given us better resilience to the current global financial crisis than we would otherwise have had. There are several reasons why we now have greater credibility and better conditions to do our job efficiently. One is most probably that openness and clarity have long been, and still are, of central importance.
Shocks are by definition something we cannot foresee. Asymmetric shocks are shocks that affect only selected member(s) of a monetary union. Such events are considered the biggest threat to unions (Mundell 1961), because joining a common currency area substantially reduces the set of policy tools which could be used to mitigate the impact of the shock. Let us assume that a negative demand shock affects the Polish economy (e.g. consumers decide to buy less goods and services). In the short and medium run this brings about a reduction in output and higher unemployment. As long as Poland has its own currency, it can use both monetary and fiscal policy to stimulate demand and reduce the impact of the shock on output and employment. Moreover, the exchange rate might adjust (depreciate) and thus make our exports more price-competitive. Once in the eurozone, two of these channels are closed. First, there is no independent domestic monetary policy which could lower interest rates, and one should not expect the ECB to react to a local shock. Second, after joining the eurozone the exchange rate disappears, so there can be no exchange rate adjustments. Accordingly, the only policy tool left after euro area accession is fiscal policy. For this reason it is of crucial importance to run a balanced budget in the medium run, so that in case of negative shocks, there is room for increasing the deficit and thus buffer the shock. Additionally, there are also economic forces which can bring the economy back to equilibrium.

Guidelines for identification of Important Business Services Given this divergence in approach, you might reasonably ask me whether these differences are justified, what the ‘right’ answer is, and why the regulators do not just specify what it is? In response, I think it’s important to recognise that we have deliberately built some flexibility into the policy to allow firms to identify IBS in a way that best suits their specific business models. So a degree of difference is absolutely expected. As we continue our supervisory work we will be asking firms to clarify how they have incorporated the key points of the policy that make clear that IBS should: deliver a specific outcome or service to an identifiable external user. This means if it’s more than one outcome, or the user cannot be identified, then the granularity is too high; be granular enough that they are distinguished from business lines which are a collection of services; be at a level where one impact tolerance per regulatory objective can be set; not be at the level of internal services (where the granularity would be too low); and be at a level where boards can make prioritisation and investment decisions. We expect these guidelines for setting IBS to inform firms thinking and that differences in approach will narrow over time. Bodies such as UK Finance also have an important role to play in facilitating and encouraging information sharing across firms, which in turn is likely to help increase consistency where appropriate.