samchain/econo-pairs-v1 huggingface dataset:
The infrastructure of business laws, accounting rules and public disclosure requirements must also be conducive to prudent management and market transparency. Payments systems must be enhanced to reduce the risk of systemic instability. 29. These are all areas where progress is being made throughout the region. I detect few signs of complacency among my fellow regulators or of a tendency to rest on past successes. We all recognize that banking stability is something that requires constant attention to keep up with changes in the economic environment and with market developments. There is also, I believe, a strong appreciation of the need to work together to promote stability. This is shown by the regional initiatives, through groupings such as EMEAP, to promote cooperation in supervision and in other financial sector issues. International institutions such as the Asian Development Bank also have an important role to play in encouraging financial market development. I am sure that this Forum will be helpful in addressing some of the issues involved, and I am grateful to the ADB and the IIF for organizing the event and for giving me the opportunity to speak. BIS Review 55/1997

This was formalised in guidelines set out in the Exchange Rate Regulation laid down by Royal Decree of 6 May 1994. If stabilisation policy is to have the intended effect, all components of policy must function effectively. This has not been the case in the last three years. For several years, average annual growth rates and employment growth have been markedly higher in Norway than the average for the rest of Europe. In part fuelled by the sharp expansion  BIS Review /1998  –2–  in petroleum investment, pressures built up in the economy, accompanied by growing labour shortages. Following the currency crisis in autumn 1992, Norwegian interest rates rapidly fell to European levels. The interest rate level in Europe fell after the turmoil early in the 1990s. As growth gradually picked up in Norway, the economy was stabilised by tightening fiscal policy. In order to stabilise the krone exchange rate, Norges Bank reduced its key rates at the beginning of 1997 after the krone had appreciated markedly over a period. Fiscal policy is an important instrument for smoothing fluctuations in the economy. However, it has proved difficult to prevent fiscal policy from being influenced by mood shifts that occur when the economy approaches a peak and memories of earlier recessions fade. Monetary policy shall provide a nominal anchor for economic developments. With exchange rate stability as the anchor, monetary policy may be pro-cyclical in periods.
In 2020, the Central Bank sold foreign currency in the amount of 144 b.kr. in order to prevent lower interest rates from causing excessive, unwarranted depreciation of the króna. It is also possible to imagine that, in the future, the Central Bank could absorb excess capital inflows into Iceland if this should prove necessary. In the future, the Central Bank will need to use its balance sheet to ensure effective monetary policy transmission and ward off potential financial side effects. Nevertheless, in the long run, the future of monetary policy lies in using a greater number of policy instruments and in coordination with macroprudential policy and financial supervision. Here lie the opportunities for Iceland’s tiny currency area. Honoured guests: Yet another anniversary is uppermost in my mind today: the one-year anniversary of the merger between the Central Bank and the Financial Supervisory Authority – the reunification, we could say. The Financial Supervisory Authority was once part of the Central Bank, called the Banking Supervision Department. But in 1998 the banking supervision function was carved out of the 3/5  BIS central bankers' speeches  Bank, right around the time the two State-owned banks were being prepared for privatisation.

And from then until last year, we had a central bank that had been deprived of the authority to intervene in the functioning of the financial system. But the Central Bank is not alone on the stage. Sound economic policy is a triumvirate comprising the Central Bank, the Treasury, and the labor market partners, all of which must work together to keep the economy in balance. These three members of the triumvirate must act in concert in order to ensure stable prices, stable purchasing power, and low interest rates for the long term. We can do this just like other countries can. We will do it. And the Central Bank will do its part. Sixty years of Central Bank operations should give us a reliable roadmap to the future. We who work for the reunified Bank are champing at the bit in our excitement to take on the tasks that await us. Now let us watch the video about the design of Iceland’s banknote series, in commemoration of the 40th anniversary of the redenomination of the Icelandic króna. Thank you  5/5  BIS central bankers' speeches
Finally, I would like to discuss the importance of Islamic finance as an important mode for financing economic transformation. Islamic finance requires financial transactions to be supported by an underlying productive economic activity that will generate legitimate income and wealth. This gives rise to a close link between financial transactions and productive flows. Therefore, the growth in Islamic financial assets is generally in line with the growth of underlying economic activities, thereby ensuring that the financial system is always grounded to the real economy. Other inherent features arising from risk sharing also contribute to the stability and integrity of Islamic finance. Thus, Islamic finance, embraced in its entirety, is supportive of sustainable economic growth. Islamic finance offers an extensive range of innovative financial products and services from consumer financing, asset and wealth management to Islamic insurance and capital markets. The sukuk market has become a highly competitive fundraising option for large scale projects and infrastructure development. With an annual growth rate of 40 percent, sukuk instruments are fast emerging as an attractive new asset class for investors, while evolving to become a preferred financing and capital raising option for issuers. In Malaysia, the sukuk market now accounts for more than fifty percent of our bond market, drawing the participation of not only our own corporates but also a wide range of international corporations and multilateral agencies. In Malaysia, a comprehensive Islamic financial system operates in parallel to the conventional financial system. This is now internationalized to enhance our interlinkages with other emerging economies and traditional markets.

Our global coordinators were amazed by our determination to create an innovative “Tap Facility” to allow the continued block creation of more Tracker units from the remaining portfolio of shares. Also we insisted on not giving any discount to the public at launch of the IPO and instead we offered an innovative back-end loaded incentive scheme in the form of a loyalty bonus. From the Government perspective, we had by April 2001 recouped more than the $ billion used by the Exchange Fund in the stock market operation. In total, we sold $ billion worth of shares into Tracker, received $ billion from dividends on our shareholdings and still retained $ billion in the Exchange Fund’s long term equity portfolio when the "tap" into Tracker was terminated. We could not have achieved this without the dedication and support of our highly professional project team members: Tracker Fund’s manager and custodian (our hosts tonight), the three global coordinators, the lawyers, the Marketing & PR Firms, colleagues at  BIS Review 142/2009  1  the SFC, HKEx & CCASS, and of course the Chairman (Mr TL Yang), all the directors and fellow staff of EFIL. If one were to mark the Tracker Fund as an exit strategy, I think it deserves a fine report card. We did dispose of the shares with minimal disruption to the market.
The domestic legislative and regulatory requirements are largely in place, and firms have provided their plans to implement them in time for the government’s 2019 deadline. Firms are working to implement the plans. There are many challenges ahead. We will work closely with firms as they change their structures and transfer business activity, assets and liabilities between entities. They must manage the impacts on customers, employees and other stakeholders. The implementation process coincides with a period of heightened uncertainty before the UK – and therefore the banking system – adjusts to a new relationship with the European Union. I won’t pretend this is a perfectly happy coincidence: in an ideal world we would not restructure our banking system and extricate ourselves from the EU at the same time. But the execution risks of managing these changes simultaneously are outweighed by the benefits of increasing firms’ resolvability and removing the public subsidy from banks. So it is full steam ahead. Alongside ring-fencing, the other major reform which is progressing through implementation, and is key to making big banks resolvable without recourse to the taxpayer, is bail-in. Here in the UK work on this is being led by my colleague Sir Jon Cunliffe, and we will shortly publish our final policy. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  At these two frontiers, and across the whole reform programme, we must secure the progress that has been made as memories of the last crisis fade.

6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  happy to debate this and I expect there will be good grounds for some exemptions. We will seek views on this, and weigh the costs and benefits, before deciding how to move forward. Sharp edges  So while the design of the reform programme is clear, we are still mid-step in implementing it. Of course things could go wrong, in transition or in the end-state. The world certainly gives us plenty to worry about. But I am absolutely unwilling to have things go wrong because we have retreated from the reforms agreed over the last eight years. For the avoidance of doubt: what was intended will be implemented. I hear many pleas for “tweaks”. Some of these are not quite as modest as is claimed. We are wise to the disguise. But we will of course work to identify and pursue opportunities to give a smoother finish to the reforms, addressing unintended consequences. Solvency II provides one example. It introduced a risk margin: the compensation that a third party would require to absorb the assets and liabilities of another firm that runs into trouble. This provides an extra degree of protection for policyholders, and therefore advances the PRA’s objectives. But because of its design under the current legislation, the risk margin is very sensitive indeed to risk-free rates. This level of volatility is not justified by the historical evidence and does not in my view serve a useful purpose.
The economic environment we live in today is inherently dynamic and continuously evolving. We therefore need to be aware of both old and new challenges to inflation targeting as a monetary policy framework. Some observers have cautioned that Thailand’s inflation targeting regime has not been truly tested. In particular, there has not been an incident that gives rise to a severe tension between inflation stabilization and other objectives. For example, Thailand has not experienced sharp exchange rate movements that come into conflict with the inflation objective. Nor has the country been in a situation where persistent supply shocks lead to a significant slowdown of the economy amidst rising prices. Operationally, there are also issues on how far we should push transparency. A few inflation targeting central banks now put forecasts of policy rates in their inflation reports. Should Thailand follow these practices? Should we publish our MPC minutes as the FOMC does? And should we announce the weight we put on output gap stabilization relative to inflation stabilization explicitly in the inflation report. In the past, we only mentioned these weights occasionally in passing. All these questions will sooner or later have to be tackled when our inflation-targeting regime gains maturity. Ladies and gentlemen, The issues I have mentioned, as well as other challenges confronting the conduct of inflation targeting in emerging economies, are the main focus of this international symposium.

Figure 2 GDP and final demand (annual change, percent) 20  20  15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15  -15 04  05  06 GDP  07 08 09 Domestic demand  10  11 12 Final demand  13  Source: Central Bank of Chile. BIS central bankers’ speeches  7  Figure 3 Inflation indicators (annual change, percent) 10  10  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6 06  07  08  09  10  11  CPI  12  13  CPIEFE  Source: National Statistics Institute (INE). Figure 4 Real exchange rate (*) (index, 1986=100) 120  120  110  110  100  100  90  90  80  80  70  70  ( )  88 g  90y  92  94  RER  96  98  00  02  1998-2012 average  04  06  08  10  12  1993-2012 average  (*) Includes information up to 27 August. Source: Central Bank of Chile.
Mandate Most economists would agree that the core task is ensuring price stability. This consensus rests on the conviction that in the long term, when all the lag effects have come to an end, monetary policy only determines the price level, not, however, output or employment. Thus the primary obligation of a central bank to maintain price stability does not imply that priority is given to price stability in preference to full employment. Rather, it is in the economic nature of monetary policy instruments that they are suited for influencing price level trends, not, however, growth or employment trends. Yet in the short term, ie within the monetary policy transmission process, monetary policy does have real effects. The problem can easily be illustrated if one tries to picture a shock, eg a massive rise in oil prices. The immediate consequence will be an increase in the price level and a fall in production. This constellation confronts the central bank with a trade-off between price stability and growth. If the bank’s sole concern is a quick restoration of price stability, it will raise interest rates and consequently exacerbate the loss of output. If, on the contrary, it reacts solely to the production effect, it will strengthen the shock-induced deviation from the goal of price stability by lowering interest rates. Reacting to shocks may lead to a trade-off between the variability of output and the variability of the price level (King 1999, p 12). This trade-off in itself is an extremely complex phenomenon.

37  Nor was this decision criticised by the business sector or the press, and in its publication “Økonomiske utsyn over året 1949”, Statistics Norway wrote that “the Norwegian external economy is so closely linked to that of the UK, that there was hardly any alternative to following the pound sterling”. See Jahn, Eriksen and Munthe (1966), p. 371. The decision to devalue the krone in 1949 is also discussed in Jansen (1975). BIS Review 147/2010  9  that alone. From a consequentialist standpoint, it matters little whether the intentions were good, if the consequences of the decision were not. Our decisions are good only if we reach the objective of price stability. As mentioned, our performance cannot be measured by whether inflation is always at target, partly because the economy is frequently exposed to abrupt and unexpected shocks. We will nearly always be slightly over or slightly under the target. But over time we can expect that these disturbances will even out, and in the long run we must also be evaluated on whether or not we achieve the objective of monetary policy. Have we, or have we not, achieved price stability these past ten years? 8. Conclusion  Making a good decision is of little use unless one also manages to have it implemented. Norges Bank enjoys a privileged position. When we make a decision, we can also implement it. Our independence gives us the freedom to decide what the key policy rate shall be.
But much of my talk will focus on the unique complications associated with negative nominal interest rates and the extent to which these complications constrain how low the rates can be set. After outlining these challenges, I’ll suggest that the zero lower bound on policy interest rates is much like the low tide mark on a beach: Standing at that border between the land and the ocean, you can continue to lower your elevation by walking into the water, but with each additional step, you will need to push against the increasing resistance of the water. There is a distinct qualitative difference between positive and negative nominal interest rates, just as there is a distinct qualitative difference between the beach and the ocean. The zero lower bound is marked by this same qualitative difference: zero is a rate below which a central bank encounters the distinctive and increasing costs of a negative nominal rate, relative to a nonnegative rate of interest. Purpose In September 2014, the ECB lowered its deposit rate to its current level of negative 0.2 percent. More recently, in late 2014 and early 2015, the SNB, DNB, and Riksbank reduced their policy rates to levels below zero, with the SNB and DNB setting their rates at negative 0.75 percent. 1 These central banks established their negative rates for various reasons. Both the SNB and DNB established negative policy rates primarily to deter capital inflows and reduce the appreciation pressure on their currencies.

4, part 2 (November 2000): 1007–35; Miles Kimball, “How and Why to Eliminate the Zero Lower Bound: A Reader’s Guide,” Confessions of a Supply-Side Liberal blog, September 20, 2013. BIS central bankers’ speeches  privacy. If these aren’t enough however, let me suggest another, very important benefit of currency that I explored in a paper with Charles Kahn and William Roberds. 3 The anonymity afforded by currency transactions prevents a buyer from suffering from any actions taken after the transactions that could exploit the knowledge gained by the seller of the buyer’s identity. For example, identity theft, or theft of credit or debit card information, is avoided through the use of currency. This is an economic benefit that is distinct from valuing privacy from a civil liberties point of view. If currency cannot be used in transactions, buyers are at a disadvantage, and many otherwise beneficial transactions (not related to buyers seeking to engage in tax evasion or otherwise illicit activity) would not take place. It is important to consider whether the move to eliminate currency, or to alter radically how currency works, represents a degradation or an improvement in technology. Should society voluntarily abandon a widely used technology that has enormous benefits and features that are currently irreplaceable, such as the privacy that comes with an untraceable transaction? While some of those features are used by criminals to facilitate socially destructive activities, the vast majority of currency uses are legal and productive.
In July, the repo-rate path was lowered substantially, and without this downward revision to the path, the forecast for inflation would have been even lower. 8  See also my speech “Monetary policy and macroprudential policy”, published on 25 January 2013. 4  BIS central bankers’ speeches  In principle, macroprudential policy tools can reduce the risks linked to household indebtedness in two different ways. First, one can increase the resilience of the financial system through, for instance, higher capital levels in the banks. It reduces the risk of a macroeconomic shock, for instance, a sharp fall in Swedish housing prices, developing into a banking crisis if the banks have more capital to absorb loan losses. Second, one can try to directly slow down growth in household indebtedness through, for instance, different types of limits to how much household are allowed to borrow. However, Sweden has long lacked a framework for macroprudential policy, with clear guidelines as to which authority should take action and what tools they should use. I and several of my colleagues have called for such a framework on many occasions. Now we have this framework in place. I now intend to describe the framework, the measures that have been taken and what remains to be done. The allocation of responsibility for the tools and the establishment of a Financial Stability Council The Government announced last autumn that Finansinspektionen would have the main responsibility for decisions on macroprudential policy measures and that a Financial Stability Council would be established.

An independent regulator for utilities is the norm throughout mainland states. By leveraging the expertise and reputation of existing independent regulatory agencies, Puerto Rico may improve the efficiency of its public corporations while reassuring investors. As a fifth step, the Commonwealth could benefit from adopting fiscal institutions more like mainland states. Balanced budget rules are far from perfect, but by following the states’ model – splitting the budget into an operating piece that must be balanced and a capital piece that can be financed with debt – Puerto Rico could better align financing methods with its spending priorities. A sixth step is for the Commonwealth to implement a framework to help ensure that budget targets are met. A key aspect of such a framework would require that the authorities implement multi-year budgeting, in which revenue and expenditure plans are articulated over a three to five year horizon. Such a framework should also incorporate a review of the central government’s macroeconomic and fiscal forecasts by a non-partisan independent entity, the views and analysis of which could be published in coordination with the Commonwealth’s proposed budget for any given fiscal year. New York City, for instance, uses this type of framework. The steps should be viewed as potential ways to improve Puerto Rico’s finances over time and I present them to you for consideration and discussion. The decisions are obviously up to you. Other countries, U.S. mainland states and municipalities facing similar fiscal issues have been able to overcome them.