samchain/econo-pairs-v1 huggingface dataset:
I think this is unfortunate, as it will limit the Riksbank's capacity to safeguard a smoothly-functioning financial system. 38 The Sveriges Riksbank Act should be flexible and not govern in detail under what conditions and in what sequence monetary policy tools should be used. Technical and detailed limitations linking different items on the Riksbank’s balance sheet to different purposes – as the Government proposes in its new bill – would make it difficult to adapt monetary policy to the requirements of a particular situation. My picture is that the draft law deviates from international practice in the area of monetary policy and goes completely against the experiences that we have gained during the pandemic and earlier crises. I find it difficult to understand what one intends to achieve with the new proposal. The role of the balance sheet in monetary policy The Riksbank has several tools it can use in its monetary policy. Most people are familiar with the Riksbank’s policy rate. This is a short-term and risk-free interest rate that affects interest rates with a longer maturity, risky rates and ultimately the interest rates charged to households and companies. The impact of the policy rate on other interest rates can vary over time, and depends on factors such as the situation in the economy, conditions on the financial markets, and the structure of the financial sector. The Riksbank's other tools can be divided up, somewhat simplified, into extensive asset purchases and various forms of direct liquidity support to the banks.

It is hard to see how this fixed buffer, supposed to be on top of the minimum requirement, would not be perceived as a new regulatory minimum. Also, it is very hard to see how this mechanism may not have adverse impact on banks’ share ownership. Another avenue to address procyclicality through prudential rules is by putting in place a countercyclical capital buffer. The logic is simple and, in principle, appealing: the mechanism, indexed on a macroeconomic variable, would force banks to build capital reserves when they can do so and allow them to consume such reserves in a downturn. This would be expected to ensure that banks accumulate and use self-insurance in synchronization with the financial cycle. In practice, we still need to clarify the conditions and the set up for triggering the release of surplus capital accumulated through the mechanism. Such a mechanism may not necessarily be cumulative with others and we may have to choose. Systemic risk and moral hazard As techniques for managing and allocating risk became more sophisticated, the network of counterparties expanded in scale and in complexity. This was, truly, a systemic change that was properly understood but not fully captured by regulators at the time. Credit and market risk was supposedly more broadly spread. But counterparty risk increased. Overall, the overall impact on financial stability may well have been negative. There might be a temptation to assess systemic risk through a crude “size” criterion. “Too big to fail” certainly warrants special treatment.
“Life beyond Solvency II: A view from the top of the regulator” Speech given by Charlotte Gerken, Executive Director of Insurance Supervision  Remarks delivered at the Association of British Insurers (ABI) Prudential Regulation webinar keynote address 19 May 2020  I would like to thank Megan Bell, Fred Schneider, Alan Sheppard, Manuel Sales, Lewis Webber, Santosh Pandit, Stefan Claus, Paola Vega and Patrick Cleary for their help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Good afternoon. Many thanks to the ABI for inviting me to speak at this prudential regulation webinar. When I was asked to give a view from the top of the regulator, I can’t say I’d been expecting to give that view from south west London. Thinking about the theme of today’s webinar, ‘Life beyond Solvency II’, the scope of my talk is two-fold: Firstly to reflect on what we have learned about Solvency II during a first test of the regime, to inform how our regulatory framework may develop following the end of the EU withdrawal implementation period. And secondly beyond the Solvency II regulatory regime, what some of our key supervisory priorities are. As a result of the challenges presented by Covid-19, we – like you – had to shift resource from our longer term business priorities – including supervision and policy reform – to short-term crisis management.

These lessons are helpful when it comes to thinking about the future UK regulatory landscape. For example, some early observations. Solvency II was written to facilitate insurance business by eliminating significant differences between Member States’ regimes and thus aims for uniform rather than dynamic application. We could think about measures that would improve the PRA’s ability to supervise firms through a cycle. An alternative could have been for firms to hold additional regulatory capital during more benign times, buffers which the PRA could then allow to be released during a market down-turn. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  This would be similar to the effect of the symmetric adjustment. At present, buffers held in excess of the solvency capital requirement (SCR) are determined by each insurer’s risk appetite to avoid breaching the SCR, and are thus less likely to be used in a stress. In relation to internal models, we could review the balance between assessment against tests and standards and supervisory judgements concerning calibration of the overall capital requirement. Ultimately, the extent to which the UK’s regulatory framework is similar to or different from EU regulation after the implementation period is a political choice. But as Solvency II is based on the same principles as the preceding UK regime, revolution is less likely than evolution.
Therein lies our biggest challenge. Prices for services have been rising at a fast rate as the economy has recovered from the recession. In particular, rents for new leases have climbed rapidly. And labor shortages are everywhere, leading to higher labor costs. Indeed, inflation pressures have become broad-based across a wide range of goods and services. Good News and Bad News What does the future hold? I will start with some good news. First, prices of many commodities, such as lumber, are in retreat. Absent further supply disruptions, I expect slowing global growth, in part reflecting tighter monetary policy here and abroad, will continue to reduce demand for these products. This should put downward pressure on commodity prices and help ease inflationary pressures, especially for goods and services that are heavily reliant on commodity inputs. Second, we have seen significant improvement in global supply chains, and I expect this to continue. At the New York Fed, economists have developed the Global Supply Chain Pressure Index, which measures the extent of global supply-chain disruptions by summarizing a variety of data, including reported delivery lags and the costs of transporting goods. The Index soared to unprecedented levels late last year but has  2/5  BIS - Central bankers' speeches  now reversed about two thirds of its rise. Although significant supply-chain problems are still affecting some industries, such as autos, improvements in supply should help ease supply-demand imbalances and result in lower prices for affected products. 3 Unfortunately, that's it for the good news on inflation.

1 See Faust, J. and Leeper, E.M. (2015), “The Myth of Normal: The Bumpy Story of Inflation and Monetary Policy,”  in Inflation Dynamics and Monetary Policy, Federal Reserve Bank of Kansas City, Jackson Hole, pp. 263-358. 2 See Bernanke, B. (2020), “The New Tools of Monetary Policy”, American Economic Review, Vol. 110, No 4, pp. 943-983; Rostagno, M., Altavilla, C., Carboni, G., Lemke, W., Motto, R. and Saint Guilhem, A. (2021), “Combining negative rates, forward guidance and asset purchases: identification and impacts of the ECB’s unconventional policies”, Working Paper Series, No 2564, ECB; and Altavilla, C., Lemke, W., Linzert, T., Tapking, J., von Landesberger, J. (2021), “Assessing the efficacy, efficiency and potential side effects of the ECB’s monetary policy instruments since 2014”, Occasional Paper Series, No 278, ECB. 2/2  BIS central bankers' speeches
Peter’s review of “What’s the Use of Economics”, the book of proceedings from a conference organised and edited by Diana Coyle, another former student who gave the second of these lectures, held at the Bank of England nearly a decade ago, is Peter at his kaleidoscopic best and as relevant now as when he wrote it. 2  For me as an undergraduate student in the early 1980s it was incredibly stimulating to be learning from Peter about Keynes’, Hicks’ and Leijonhufvud’s contributions to disequilibrium economics, all framed by Peter’s  own quantity rationing exposition of multiple equilibria. It was even more exciting to be taught by someone who was writing about the real-world economic problems of unemployment and how policy could help to achieve a better equilibrium – Peter penned a comprehensive overview article with Derek Morris in the second edition of OxRep in 19853 which is still a very good read today.4  It should therefore come as no surprise that one of the many other topics that Peter turned his prodigious mind to was QE and monetary policy.

William C Dudley: The US economic outlook and monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Club of New York, New York City, 12 November 2015. *  *  *  Jonathan McCarthy, Paolo Pesenti and Joseph Tracy assisted in preparing these remarks. It is a pleasure to have an opportunity to speak here at the Economic Club of New York. As the current chair of the Club, I’m admittedly biased, but this is a great venue to have the opportunity to share my thoughts about the U.S. economic outlook and the implications for monetary policy. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Before I start, I want to be clear about one specific issue I will not address today – that is, whether or not I expect the monetary policy normalization process to commence at the next FOMC meeting in December. Let me just say that my view will depend on how incoming data, broadly defined, influences my assessment of the prospects for further improvement in the U.S. labor market and my confidence that inflation will return to the FOMC’s 2 percent objective over the medium term. With that caveat out of the way, how do I assess the U.S. economic outlook?
As pointed out in the Economic Commentary “The lower limit of the Riksbank’s repo rate” (Beechey and Elmér, 2009), which was published on the Riksbank’s website last autumn, one cannot find any problems in the financial markets that can be attributed to low interest rates. Since then a few more months have passed. Both the Monetary Policy Department and the Financial Stability Department at the Riksbank closely follow developments in the financial markets and have very good information about them. There are still no signs that low interest rates have entailed any problems with regard to financial stability or the functioning of the financial markets. The profitability of the major banks, in the form of the net interest margin, has been stable and their share of deposits from households has not changed noticeably. The redistribution of capital on the fund market has also been moderate. The financial infrastructure has not been affected by any problems during the period of low interest rates and resilience against disruptions of the financial infrastructure is deemed to be high. The final paragraph on page 28 mentions risks linked to exaggerated lending and rapid increases in house prices. These risks have been closely studied in both the Riksbank’s most recent Financial Stability Report and by Finansinspektionen (the Swedish financial supervisory authority) in its report on the Swedish mortgage market and bank lending (Finansinspektionen, 2010).

It is therefore reasonable to calculate the alternative forecasts for inflation and the real economy on the basis of expected deviations from the main scenario. The effects of expected deviations are somewhat greater than the effects of unexpected deviations. Figures 2.13–2.15 in the Monetary Policy Report are calculated using unexpected deviations. 6  The effects of anticipated and unanticipated deviations are calculated using the methods presented in Laséen and Svensson (2009) and Leeper and Zha (2003), respectively. BIS Review 22/2010  5  Figure 3 The effects of expected and unexpected deviations from the repo rate path of 0.25 percentage points over four quarters.
The Central Bank itself takes the view that criticism of its work is desirable. Within the Bank, all are aware that, for every decision made, several options were possible, and the decision to embrace one option over all others is accompanied by a variety of consequences. In making decisions under such circumstances, there must be ample room for comment, contrasting viewpoints, and criticism. And – thank goodness – the Central Bank has not been free of such comments and criticism. Indeed, most comments have been presented in a responsible and appropriate manner and have been both helpful and useful in the broadest sense. That is not to say that there aren’t exceptions – predictable canting litanies that are of little use to anyone – but valuable comments have nonetheless been salient and they are heard and considered. Last Tuesday, after the Easter holidays, the Bank announced several amendments to its internal rules and terms. Those amendments were designed to grease the wheels of the financial markets, which must now tolerate deteriorating operating conditions. The Icelandic government has also announced a bond issue that is launched with the same objective. Though the Central Bank does not wish to make too much of these changes, the purpose is to pave the way for easier operation of the financial system during at time of difficulty on the global front.

Ravi Menon: A supervisory push for transition planning and blended finance Opening remarks (virtual) by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore and Chair of the Network for Greening the Financial System, at the Green Swan conference 2023, Basel, 31 May 2023. *** Ladies and gentlemen, I am happy to join you again at the Green Swan Conference. On behalf of the Network for Greening the Financial System (NGFS), I would like to express our gratitude for the opportunity to co-host this conference with the Bank for International Settlements, the Central Bank of Chile, and the South African Reserve Bank. The world is still not on a transition path that is aligned with the goals of the Paris agreement. According to the latest report by the Intergovernmental Panel on Climate Change, we need to cut global greenhouse gas emissions by 43% in the next 7 years to reach net zero by 2050. We are now one third of the way through this "critical decade" and nowhere near this target. Emissions are still rising, not falling. We need to convert commitments to plans and plans to outcomes. More countries and corporations are committing to achieving net zero emissions by 2050 so as to limit global warming to 1.5 degrees Celsius. But few have drawn up concrete plans to do so. Without credible transition plans and financing strategies to support them, climate action will be sporadic and ineffective.
But some general policies are also emerging. Here in the UK, the government is requiring the domestic retail banking business of the largest banking groups to be ring-fenced. And for the EU, Erkki Liikanen has produced an important report on  BIS central bankers’ speeches  3  the structure of banks which would involve essentially ring-fencing the trading business. Both of these approaches, which are similar in many respects, work with the grain of the FSB’s approach to resolution. Single-point of entry resolution: bail-in of the debt of the top company The central principle running through this whole endeavour is that after equity is exhausted, losses should fall next on uninsured debt holders, in the order they would take losses in a standard bankruptcy or liquidation process. Although all resolution strategies have that effect, it is the particular focus of what has come to be called “bail-in”. I should perhaps say that bail-in isn’t about identifying a special type of bond that can be written down or converted. “Bail-in” is a verb not a noun. It’s about giving the authorities the tools, the powers, to effect a restructuring of the capital and liabilities of a bank that isn’t toxic all the way through; as such it will be recognisable to specialists as broadly akin to the US Chapter 11 system for business reconstructions, but speeded up for the exigencies of banking. Bail-in is not unique in putting losses on bondholders. All resolution tools do that.

Banks can also choose to be exposed to sovereign debt in some countries as the alternative (private lending) is riskier given existing legal and institutional imperfections. Finally, the current regulatory setup gives preferential treatment to sovereign exposures, as banks’ exposures to domestic government in domestic currency are subject to low or even zero risk weights. 1/2  BIS central bankers' speeches  While banks’ sovereign exposures in advanced countries are considered to hover at reasonable levels, exposures in many emerging market countries are significant. The current level or its buildup is becoming a relevant concern to emerging market countries, mainly owing to credit and concentration risks. As the sovereign debt crisis in Europe showed recently, the zero risk weight commonly applied to sovereign exposures in domestic currency might not be fully consistent with empirical observations of the risks of sovereign debt defaults. Hence, the default risks of sovereign issuers need to be reflected accurately in risk weights to ensure that banks have appropriate ex-ante incentives to take on such exposures. Besides credit risks, excessive sovereign exposure concentration reinforces the link between sovereign and banking sector stress. In fact, the close relationship between sovereigns and banks is seen as one of the major reasons for the severity of the Eurozone crisis. Therefore, breaking the sovereign-bank nexus is needed in order to strengthen macroeconomic stability. Nevertheless, our prudential treatment of sovereign exposures needs to strike a balance. It has to bear in mind the specific role sovereign debt plays in financial markets.
In particular, financial assets managed by the Singapore asset management industry reached a new high in 2009. Total assets managed grew by 40% to reach $ trillion $ billion), exceeding the pre-crisis peak in 2007. Average daily trading volume of foreign exchange (FX) and FX derivatives have recovered to $ billion in April 2010, an increase of 11% from six months ago in October 2009 and near pre-crisis levels. We are also today one of Asia’s leading commodity derivatives trading centres. 25. The financial sector’s strong recovery is, in part, due to our strong fundamentals, as well as action taken by the industry. We will continue to take steps to ensure that the financial industry remains vibrant. One key lesson from this financial crisis is that we need to strengthen the nexus between the financial system and the real economy, to ensure efficient intermediation of capital to support growth and development. 26. The Singapore Exchange (SGX) implemented a series of measures to facilitate fund raising by listed companies in the midst of difficult external market conditions. Earlier this year, MAS and SGX introduced a concurrent review process for initial public offerings (IPOs) and a reduction in public exposure period for prospectus review from 14 days to 7 days. These steps to shorten the time-to-market would make Singapore a more attractive listing destination. 27. To give investors a broader range of investment products, MAS will continue to enhance individual investors’ access to debt capital markets, building on initiatives undertaken earlier for Singapore Government Securities.

Øystein Olsen: The conduct of monetary policy Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 9 May 2019. * * * Accompanying slides of the speech. Please note that the text below may differ from the actual presentation. Thank you for this opportunity to report on the conduct of monetary policy. My introduction here today is based on Norges Bank’s Annual Report for 2018 and our monetary policy assessments up to the monetary policy meeting yesterday. Since 2001, the main objective of monetary policy in Norway has been low and stable inflation. In March 2018, a new Monetary Policy Regulation was laid down. The inflation target was lowered from 2.5 to 2 percent. At the same time, the Regulation specified that inflation targeting shall be forward-looking and flexible so that it can contribute to high and stable output and employment and to counteracting the build-up of financial imbalances. When I stood here about a year ago, I concluded that the outlook for the Norwegian economy was bright. We were emerging from the downturn that followed in the wake of the oil price decline in 2014. Growth was again on a firm footing and unemployment had declined. There were prospects that the policy rate would shortly be raised. I emphasised that this was a good sign.