samchain/econo-pairs-v1 huggingface dataset:
With the emergence of truly cross-border banks the question is how to share the burden. To what extent would the taxpayers in one country be willing to support the depositors in another country? And to what extent would the depositors in the second country be willing to rely on the potential future support of the taxpayers in the first country? A similar problem applies when a central bank considers providing emergency liquidity assistance to a cross-border bank. Such funding is inherently risky. If not, the market would typically be able to provide the funding. Such assistance is also likely to affect the entire banking group. What happens if a bank is systemically important in one smaller country but not in another perhaps larger country? The smaller country will probably have greater incentive to save the bank but may end up paying for the entire group, if the larger country refuses. Also, there are conflicts of interest if the bank is reconstructed. Any such reconstruction is risky and it is therefore uncertain whether the taxpayers would be willing to take these risks in another country. A third challenge is how to achieve joint assessments. In Europe, there is an agreement to share views and assessments if there is a crisis. However in my opinion, that is not sufficient. In a crisis, most countries are likely to present assessments that support their national interests.

Also, compared to purely national banks, many cross-border banking groups have a more complex structure. This makes the analysis and information gathering more difficult. The functional specialization of cross-border banks also complicates supervision and information gathering. If a cross-border banking group concentrates all its credit assessments in one country it will be difficult for the supervisor in another country to assess the risk of the bank in that country without efficient supervisory cooperation and exchange of information. Further, if the bank puts all its liquidity management in a third country, extensive information sharing will be needed in order for any supervisor to get the full picture of the group’s total risks. In principle the parent bank – and therefore the parent bank’s supervisor – should have a full overview but in a crisis, positions may change quickly and thus complicate the collection of all relevant information. Such extensive information sharing becomes acute in a crisis but is also necessary in the day-to-day supervision. A second challenge is that conflicts of interest multiply. Banking problems can be very costly and the ultimate guarantee for financial stability can only be given by the government, since only the government has the power to tax. In most countries the deposit guarantee schemes are only able to  2  BIS Review 96/2006  finance the problem if it is confined to minor banks. For systemic problems, the government would have to intervene. With predominantly national banks, how this is done is fairly straight-forward.
In practice this means that non-financial companies may obtain funds by issuing and selling certificates to the banks, which in turn use them as collateral for loans from the Riksbank. This credit facility is also available through an auction, where the minimum rate is the current repo rate plus a premium. Since it is mainly large companies that issue certificates, it is they that will benefit directly from the advantages of these facilities. But since banks can increase their liquidity by using the certificates to borrow from the Riksbank, there is less risk of them cutting back on loans to small and medium-sized enterprises that are directly dependent on bank financing. The way ahead? When the dust after the crisis has settled, we face a major task. We must carefully analyse the crisis and determine the areas in which supervision, regulations, etc. need to be  4  BIS Review 140/2008  tightened up and in which areas the problems are best solved by players from the finance industry. Crises create space and acceptance for necessary reforms. At the same time, extreme situations such as this always generate demands for extreme measures. Careful deliberation is therefore important before implementing new regulations. It is all too easy to go too far and implement regulations that are too far-reaching and extensive. Such regulations could control and conserve market structures for a long time to come or involve major costs that reduce efficiency. This crisis will need follow-up care.

Mortgage bonds that were difficult to sell could be converted into a liquid asset, which meant that the measure simultaneously helped the situation on the mortgage bond market. About the same time, the Riksbank also made it easier for banks to borrow from the Bank by accepting additional types of securities as loan collateral. Covered mortgage bonds issued by an institution with close links to the counterparty could now be used as collateral to a greater extent than in the past. This measure is also helping the situation for mortgage bonds. … a shortage of dollars the second The next problem to address was a general shortage of financing opportunities in US dollars. Since the Swedish banks are not counterparties to the US Federal Reserve (Fed), they cannot be sure of benefitting from the Fed's liquidity injections. In late September, mutual currency arrangements with the Fed were established by the Riksbank and several other central banks. With these swap facilities the Riksbank can borrow US dollars against Swedish kronor. The Riksbank then offered its counterparties large loans denominated in US dollars. The loans are granted against collateral at an interest rate determined by auction, though no lower than a minimum rate related to the expected policy rate in the United States. General measures to promote liquidity Since the beginning of October the Riksbank has been implementing measures to support SEK liquidity, aimed at securing bank funding, facilitating the supply of credit and improving the functioning of the financial markets.
One is that it normally gives a more realistic picture of future monetary policy. That makes it easier to evaluate our forecasts. It also becomes easier to compare our forecasts with those of other forecasters. The longer forecast horizon makes it clearer how inflation is being influenced by various temporary shocks. The reasons for the changes are to provide a more comprehensive set of data for monetary policy and to improve the pedagogical aspect of the monetary policy message. It is important to point out that the changes in methods do not entail any fundamental change in the Riksbank’s monetary policy strategy. Our interest rate decisions will continue to be guided by the ambition that inflation normally should be returned to target within two years. The new repo rate assumption is a technical forecasting assumption, which should not be interpreted as the Riksbank’s stance regarding which interest rate path it considers to be most desirable. The interest rate path that underpinned the forecast in the October Inflation Report was judged to imply a reasonable development of inflation in the coming years. Our conclusion was that if this development were to continue in line with our assessment at the time, the repo rate would need to be raised in the period ahead. At the same time, we pointed out that there also were different conceivable paths for the future repo rate that could give roughly the same outcome for inflation.

One example of when this happened was during the banking crisis at the start of the 1990s. During the years 1992-93, fully 40 per cent of the banks’ loan losses stemmed from the commercial property market. Let me begin by discussing how I view the developments in the commercial property market and then move on to the analysis of the housing market. Because the two markets have shown completely different developments in recent years. The commercial property market The equity market decline in 2000 was accompanied by a weakening in demand for office premises, and rents and prices for commercial property began to fall as the number of vacancies rose. In recent years, turnover of properties has risen again. Presently, the drop in prices seems to have decreased and in some regions prices have even risen. Even though it is difficult to determine whether there has been a definite turnaround yet in the price developments for commercial property, such a turnaround can be expected to come when demand for labour recovers more clearly. Vacancy levels are still high, though, which means that rents have not yet risen more generally. In the long run, a rise in property prices should be accompanied by an increase in rental income, since rental income is the underlying return on property investment. The situation today differs considerably from the conditions seen at the time of the property crisis in the early 1990s, when property prices had risen rapidly over a long period without any corresponding upswing in rental income.
Conclusion  We stand on the threshold of a cyclical economic recovery amid profound structural changes to the global economy. For the first time, emerging economic powers, China and India, are thrusting themselves into the global economy. They are forcing a major reordering of the economic landscape, whether in terms of new competition for investments and exports, or new markets for products. Despite all the problems and complexities that Asia faces, this is the most dynamic region in the world. We need to continue to restructure the Singapore economy and move up the value chain of economic activities. Singapore will continue its role as an important financial centre despite the changing  environment and challenges posed by China and India, and must find ways to benefit from these developments. Financial services will continue to be an area in which we have a competitive advantage. The economic recovery presents great growth potential. We need to position ourselves to capitalise on the opportunities. Market players must seek out and seize the business opportunities as they arise. They must continually reassess their strategies to remain competitive in this changing world, and more importantly, implement the good strategies vigorously to create new opportunities for themselves. MAS will continue to ensure the integrity of the financial sector, so that Singapore remains an attractive regional hub for financial sector activities. It will also adapt and respond to market developments to facilitate a more competitive operating environment.

But it will strive to supervise institutions without placing unnecessary regulatory burdens on well-managed individual institutions or inhibiting the innovation and dynamism of the financial sector. Compliance costs of supervisory actions will be commensurate with the risks posed by the individual institutions. We will seek consistency in applying equivalent prudential and market conduct standards to financial institutions conducting similar business activities that are subject to the same risks. Harmonising and integrating regulations and supervisory practices across financial activities will reduce opportunities for regulatory arbitrage. Working towards more win-win outcomes for Singapore and the region Second, we must work towards more win-win outcomes for Singapore and the region. The growth and development of Singapore depends on the health of the world economy, and the wellbeing of our neighbours and trading partners. As a hub and gateway in this region, Singapore benefits if the region is competitive and attractive to investors and new businesses. Southeast Asia must work together to make itself more attractive, especially with new opportunities and competition arising in North East Asia. Last month, ASEAN leaders agreed in Bali to build an ASEAN Economic Community by 2020 - a single market and production base with free flow of goods, services, investments, capital and skilled labour. Asian countries need to foster closer cooperation and integration between financial systems and markets in the region. This will facilitate the financing, and payment and settlement of intra-regional trade.
Here on an LFS basis the rate of unemployment fell from the recent peak of over 10½% in November 1993 to below 6% in July this year for the first time since these data were collected; and, on the Claimant Count basis, unemployment, which touched 10% in the winter of 1992--93, had fallen to 3.8% in August, the lowest rate since June 1975. But I freely acknowledge that it doesn't necessarily feel like that today - certainly not to everyone. I am only too well aware that there are a lot of people in every part of the UK - both business people who've been under real pressure and employees who have lost their jobs - who will react to these statistics by saying "Well you could have fooled me!" That may well be true of some of you here this evening. The Bank receives detailed reports every month from each of our 12 agencies throughout the UK, including reports from Sue Camper based in Cardiff. Many of you will know Sue already - and I encourage those who don't to make yourselves known to her. The reports which she and her fellow agents make each month, based on their direct, first hand, knowledge of what's happening in their area, are fed directly into our Monetary Policy Committee process. They play a vital part in informing our understanding of the macro-economic statistics which in themselves can only capture the overall, aggregate, picture.

Of the 2.2 million increase in the UK’s population between 2014 and 2019, 20% was in London and 13% was in the South East. These areas have seen above average house price growth. But as well as these fundamental drivers, house prices also depend on expectations and on whether households are able to obtain and afford the credit that will allow them to get onto the housing ladder. There is substantial evidence, both theoretical and empirical that credit conditions – both the cost and the availability of credit – have played a leading role in driving house prices in the UK and the US. Empirical cross-country estimates vary, but would suggest that a 1% increase in the policy rate, which would translate into higher borrowing cost, all else equal, reduces house prices by around 2-11%, with the majority suggesting a drop between 6-9%.5 The more purchasers are constrained by either the price or the availability of credit, the larger the impacts of a change in credit conditions on house prices is likely to be.6 Credit constraints are most likely to affect first time buyers. Conversely, the greater the proportion of purchasers that are not dependent on credit, the weaker the impact of credit conditions on prices will be. Such ‘deep-pocketed’ investors can act as arbitragers, selling when house prices are high and rental returns therefore low and, conversely, buying when prices are low. There is some support7 for the existence of such an arbitrage mechanism in the UK8.
First and foremost, the project itself is still work in progress and it is always advisable to partake from the inside in the construction of a mechanism that we will eventually have to join anyway. Secondly, with the Banking Union in place, the domestic financial system will be affected regardless of whether Romania is a member or not, so it is better to have a say in the decision-making process that generates such effects, since the latter will impact us one way or another. Besides, Banking Union membership is expected to benefit participating countries through the removal of an incentive for deleveraging on the part of foreign banks, more effective supervision by improving access to information and eliminating the possibilities of jurisdictional arbitrage, as well as the creation of a more competitive market by reducing distortions and entry barriers. Given the share of foreign capital in Romania’s banking system, it makes even more sense to support the project. In light of the above, Romania aspires to be part of all three pillars of the Banking Union. It is our view that adhering to this European project will strengthen financial stability, further increase confidence in the national banking sector (through the harmonisation of supervisory practices and deposit guarantee schemes), as well as foster sustainable lending and economic growth (by reducing the fragmentation of the European financial markets). I shall stop here, thanking you for your attention. I wish you a fruitful outcome of the conference, and hope you enjoy your stay in Bucharest!

The efforts seem to have already paid off – the year 2013 marked a turnaround in Romania’s economic development: economic growth of 3.5% driven mostly by robust export and industrial output on the supply side; a small current account deficit; historically low inflation; while the fiscal deficit was kept well below 3%. And I have every reason to believe that Romania will see further growth in the years to come. And that, unlike in the pre-crisis period, this time sustainability will be the name of the game, as hopefully we all have learned our lessons from our previous mistakes. As they say, no one really learns but from his own mistakes…  BIS central bankers’ speeches  1  Talking about sustainable economic growth, one needs to put things into perspective in order to ascertain whether the economy is on the right track. This means that short-term policies must be harmonised with the long-term vision and goals. Euro adoption could serve as such a long-term goal. And Romania has chosen to use it as an anchor. Let me say a few words about this subject. In the post-crisis period, all non-euro area EU countries in Central and Eastern Europe with floating exchange rate regimes (Czech Republic, Hungary, Poland and Romania), as well as Bulgaria, shifted to a wait-and-see approach as regards euro adoption, even though, in some of them, Maastricht criteria were already fulfilled or within reach.
However, looking ahead workers’ pressures to regain lost purchasing power might be significant, especially since upcoming wage negotiations will take place in a context of a tight labour market. The unemployment rate remained at 6.6% in December, its lowest level since the euro was launched, and firms’ perceived degree of labour shortage has also stabilised at very high levels in historical terms. Thus, we should monitor wage and mark-up development to identify the potential emergence of second-round effects on inflation. 9  This depreciatio n increased the co st o f euro area pro ducers, given that mo st impo rted inputs are deno minated in do llars, resulting in so me expo rt market share being lo st (estimated at aro und 2.5% in 2022). 10  Leiva-Leo n, D., J. Martínez-Martín and E. Ortega (2022). “Exchange Rate Sho cks and Inflation Co-movement in the Euro Area”, International Journal of Central Banking, 18(1), pp. 239-275 11  Data fro m Indeed, an emplo yment website that aggregates jo b listings fro m tho usands o f websites, including job bo ards, staffing firms, asso ciations, and co mpany career pages. 5  The global context and the reopening of China Weaker global demand, particularly in key advanced economies, is contributing to the moderation of commodity prices on international markets and easing inflationary pressures. Economic growth in the United States continues to slow due to tighter financing conditions.

6 In this regard, the symmetry of the downward response is also an open question. Some support for this hypothesis can be found in recent developments in upstream stages of the price formation process. In particular, non-energy industrial consumer prices are still accelerating (as the flash estimate for January shows). However, industrial prod ucer prices (excluding energy) have decelerated significantly since last spring and this deceleration is rather widespread among components. In any case, the transmission and broadening of inflationary pressures is occurring at different speeds and intensities across expenditure components. Pressures on underlying inflation have so far been highly concentrated in particular expenditure items like household equipment and maintenance, transport, and activities involving more social contact. Some of their prices are more cyclically sensitive, others are more directly affected by the increase in the cost of energy, food prices or bottlenecks, while, in general, a fast pass -through has been facilitated by particularly strong demand during the pandemic (especially in the case of durable goods) and the reopening phase (notably in the case of services). These items’ prices continued increasing very strongly in December, in both year-on-year and month-onmonth terms, pointing to strong underlying inflationary pressures. 7 Excluding these items from the basket, core inflation stood at 2.8% in December, 8 with a slight upward trend that also points to an incomplete and slow pass-through.
There was also a risk to the stability of the financial system. The economic slowdown that had begun could thus become more profound and prolonged than was previously anticipated. The easing of economic policy after the terrorist acts contributed to some recovery in international and domestic economic activity. In spring 2002 we made the assessment that inflation one to two years ahead would exceed the target level. A gradual upturn in the underlying inflation rate, combined with unexpectedly high wage increases in the services sectors in particular, indicated that resource utilisation could be higher than we had assumed. The repo rate was raised in two stages. Steering interest rates in several other small countries were also raised at this time. However, during the summer and autumn we saw more and more signs that the recovery had come to a halt. Industrial activity weakened and geopolitical unease increased, as did the concern that the heavy stock market fall that began in 2000 would affect households and firms more than expected. The Riksbank, like the  4  BIS Review 20/2004  ECB and the Federal Reserve, began to reappraise the prospects for economic activity and inflation. Towards the end of the year, we made a downward adjustment in the inflation forecasts and the repo rate was cut by as much as it had been raised during the spring. With hindsight, it could perhaps be claimed that raising the interest rate in spring 2001 and 2002 was unnecessary. However, this would not lead to a fruitful discussion.

In a comparison with a number of other inflation-targeting countries, it is evident that Swedish inflation was closest to the target level last year, measured as an annual average, and that it was fairly average with regard to deviations from the target level. As monetary policy’s effect on inflation has a time lag, the outcome of inflation in 2003 is largely a result of the monetary policy conducted in 2001 and 2002. Let me therefore report some of our considerations in the light of the developments and forecasts made then. At the beginning of 2001 the repo rate was 4 per cent. During the spring there was a severe depreciation of the krona. Despite the fact that economic activity in Sweden and abroad was in a weakening phase, domestic resource utilisation was at a high level, while inflation had increased significantly during the spring and exceeded the upper tolerance limit. Inflation expectations had also begun to rise. Given this, we raised the repo rate in summer 2001. Economic developments and monetary policy considerations in Sweden differed from those in many other countries, where monetary policy in many cases had begun to be more expansionary. The decision to raise the interest rate in July 2001 was not self-evident. Three Executive Board members entered reservations against the decision, with reference to the weakening economic activity. The terrorist actions in September 2001 caused us to cut the rate by half a percentage point. Our assessment was that confidence among both households and firms would deteriorate.