samchain/econo-pairs-v1 huggingface dataset:
A stronger variation would be to condition the policy rate path on economic outcomes, that is, to communicate that the policy rate will be zero per cent until, for instance, inflation has reached two per cent. 46  The financial system has changed Swedish companies have historically financed themselves through bank loans, but issuing commercial paper and corporate bonds has now become increasingly common. As the Riksbank purchases these assets when there is turbulence on the financial markets, the risk premiums on the assets may be held back, but the purchases can also help maintain credit granting in a broader sense. Although it is primarily larger companies that obtain funding on the bond market, these companies also often have promised lines of credit from their banks. If problems arise on the bond market, the large companies will often reduce their issuing of bonds and  44 See also Goodhart (2010), Miles (2014) and Vredin (2018) for a discussion of this. 45  For a discussion of the risks with a large balance sheet, see Flodén (2018). 46 See the Committee on the Global Financial System (2019). 19 [35]  instead turn to the bank to borrow, which may mean pushing out other bank lending. The market for mortgage bonds has grown in significance and is currently the largest bond market in Sweden, see Figure 12. It is a market that it important to Sweden's asset purchases as it is so dominant.

BIS Review 97/2008  1  Meeting challenges – people and values There is no magic formula for meeting the challenges I have just outlined. Rather, as always, the fundamentals boil down to having the right people with the right values. In the 2007 Insurance Banana Skins survey conducted by UK’s Centre for the Study of Financial Innovation (CSFI), the quality of talent was cited as one of the key risks facing the global life insurance industry. I am therefore pleased that GE Life is using the FICS framework to proactively develop talent for the company. As for values, I understand that GE Life embraces the 3 core values of integrity, initiative and involvement. In the spirit of this commemorative year, allow me to borrow your values framework to illustrate its relevance to the industry as a whole. Integrity First, integrity. Integrity is the foundation of trust, and for the insurance industry with a longterm relationship, this is crucial. Even as more complex insurance products are being introduced in the market, insurance intermediaries have a duty to ensure that consumers are only offered products they can understand and find suitable. Any undesirable sales practice such as churning and inappropriate switching will undermine the reputation of the insurance industry, and also affect its ability to attract good quality talent. Intermediaries must therefore uphold the highest standards of integrity, professionalism and exemplary business conduct, and ensure that any advice given is fair, objective and in the best interest of the client.
In most of our macro models, long-term variables, such as potential growth or the “natural rate of interest” or the non-accelerating inflation rate of unemployment (NAIRU), play a very important role. They determine, for instance, the output gap, domestic inflationary pressures, and as a consequence the structural indicators that are used to assess fiscal policy and the degree of monetary accommodation. These variables are estimated in large advanced economies like the US as if the latter were a closed economy. They are considered as independent variables for the rest of the world. 1  IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004–07, 10 January 2011. See http://www.ieo-imf.org/eval/complete/pdf/01102011/Crisis_Report_English.pdf  BIS central bankers’ speeches  1  To use some model terminology, most of our models are built on the assumption that Ῡ – which represents the long-term growth rate of the economy – is influenced mainly by domestic factors such as productivity and population growth. Similarly, r* – which represents the world interest rate for most small open economies – is assumed to be determined by long-term equilibrium conditions in the US. Given the importance of these variables for our models, a bias in their measurement would have a direct impact on the assessment of economic conditions, on the forecasts and on the policy prescription. It would seriously undermine surveillance.

The SET plan tackles another important problem, namely the underdevelopment of  4  BIS Review 62/2002  Thailand’s capital markets. If its implementation is successful, Thailand will have a balanced and diversified financial system that is more robust and stable than the one today. The third area that needs to be addressed is good governance. We need to move fast to ensure that firms follow proper accounting standard and information disclosure, to improve the protection of minority shareholders’ right, and especially to assure independence of board of directors from management. For financial institutions in particular, the Bank of Thailand, with the assistance and cooperation from the World Bank and several domestic stakeholders, has assembled a manual entitled the Directors’ Handbook, which provides guidelines of practice for directors of financial institutions. Regulations on the required structure of Board of Directors would follow within “November”. Most important point was the regulation announced in July 2002 which imposes strict conditions on lending to related companies, which was one of the major cause of NPLs in the past. Moreover, the Government has also set up a National Committee on Good Governance, responsible for campaigning for good corporate governance on various inspects simultaneously, with the SET as the secretariat. Instilling the value of good governance in the public sector is as important as in the private sector. On this issue, the current government has expressed an intention to tackle the problem that has long plagued the Thai public sector.
These factors combined have resulted in a large increase in the different measures of inflation, bringing CPI and CPIX1 (a measure of core inflation that excludes perishable foods, energy and regulated tariffs) annual change close to 4%. By contrast, labor cost pressures and other inflation trend indicators are nearer to 3%. Similar problems (i.e., increased inflation due to sudden rises in food prices) have been recently suffered in such diverse countries as South Africa, Brazil, Colombia and China. It is interesting to note that a price measure that excludes foods and energy prices, similar to the CPI core inflation calculation applied by the US, shows annual change below 2% in July (Figure 2). 2  BIS Review 97/2007  Figure 2: CPI, CPIX1 and CPI inflation excluding food and energy (annual change, percent)  Note: In brackets participation in total CPI basket. Sources: Central Bank of Chile and National Statistics Bureau. This phenomenon is not new. Given the supply-side or specific price shocks, the 2000s have seen annual inflation drop below 2% and climb above 4% during temporary episodes. In this picture of higher CPI inflation due to various supply shocks, short-term inflation expectations have increased substantially, but remain close to 3% for medium and long term. Because monetary policy affects inflation with lags that are largely unknown, but long – usually more than a year – not much can be done to reverse a short-term inflation jump.

Therefore, the Central Bank must be attentive to steer monetary policy to avoid secondround effects on other prices, wages, or private sector inflation expectations due to supply shocks, that could end up driving inflation persistently away from the 3% target. Of course it also has to foresee the consequences of the business cycle over inflation. It also The efficacy of this monetary policy over the 2000s is evident (Figure 3). BIS Review 97/2007  3  Figure 3: Deviation of inflation from its target  Source: Central Bank of Chile. The international financial turmoil Regarding recent developments in world financial markets, the first thing to do is recognize that the adjustment they are undergoing is part of an overdue normalization process in credit risk spreads for a large variety of securities, and volatility levels of the riskier assets prices (Figure 4). In fact, for some time our Financial Stability and Monetary Policy reports have stated that a correction in risk premiums and an increase in market volatility were to be expected, because the good conditions would not last indefinitely, in particular given the monetary policy normalization period in the main economies that was already prolonging for some years. It is very likely that today we are witnessing precisely that correction in risk valuation and volatility. Figure 4: Sovereign risk premiums and volatility (basis points)  (1) Risk premium on developed market corporate bonds with less than investment grade risk ratings (CCC to BB), according to Standard and Poor’s.
BIS Review 27/2005  1  measurement issues currently explain between 0.5 and at most 1 percentage point of the growth differential between the EU and the United States.2 We should consider the upper limit of this range as a litmus test to the question of whether there is a structural growth differential between the EU and the United States. In addition to various measurement differences, about one percentage point of the difference in real GDP growth rates between the EU and the U.S. can be attributed to the higher growth rate of labour input in the U.S. for the period between 1980 and 1995. This is attributable to a stronger increase in the working population in the U.S. and a marked relative decline of effective working hours in the EU. Factors causing this decline in individual labour input can be divided into two categories: First, numerous rigidities in European labour markets were introduced over the past decades: working hour restrictions, minimum wage agreements, and other restrictions on the conditions of hiring and firing employees. These restrictions are often valid over a broad range of sectors and geographic areas irrespective of economic fundamentals. Second, changes in taxing labour evolved over time with significant tax cuts realized in the United States.3 In total, overall labour input for the period 1990 to 1995 increased in the U.S. by an average of 1.2% per annum against a decrease of 0.8% per annum in the EU-13. This is pictured in Graph 2.

It had already demonstrated its advantages, even before it was officially introduced, and I have no doubt that it will continue to demonstrate these advantages and reveal new ones, providing for better business conditions in Croatia, higher economic growth and the improved living standards of our citizens. Thank you! 2/2  BIS - Central bankers' speeches
When I BIS Review 77/1999  6  addressed this subject in 1994 I pointed out that the establishment of the HKMA, and the placing of both monetary and banking supervision functions under one roof, had given a much more precise institutional focus to the lender of last resort function, and that the amendments to the Exchange Fund Ordinance in 1992 had further helped to clarify the scope of that function. I should like to reiterate that point this evening, more especially in the context of the world-wide debate about the merits of a super-regulator system, under which supervisory functions would be institutionally separate from central bank functions. Quite apart from the question, which still remains to be answered, of whether monolithic super-regulators really provide the efficient, economic, streamlined system they set out to achieve, there are, in my view, strong arguments, in the interests of efficient crisis management, for having the banking regulator as close as possible to the lender of last resort.

Since the supply of Exchange Fund debt, even at about $ billion, is limited, and there is a lack of other Government debt, the range of collateral against which lender of last resort support would be provided must necessarily be wider than in some other economies. There are three basic instruments that the HKMA would use to provide support: purchase of the institution’s placements with other banks; repos of eligible Hong Kong dollar securities; and a credit facility against the security of the institution’s residential mortgage portfolio. The details are set out in the policy statement and its annexes, and I do not intend to go into them here, but I do wish to highlight three points. First, given that the purpose of liquidity support is to provide a temporary breathing space to allow the institution to sort its problems out, any support provided through repos or through a credit facility would be provided for an initial term of no more than 30 days, although there would be a provision for it to be rolled over for a further 30 days. Secondly, the interest rate charged on lender of last resort support would be pitched at a level sufficient to maintain incentives for good management but not at a level so high as to defeat the purpose of the facility, which is to prevent illiquidity from precipitating insolvency.
A pattern can be discerned here; on several occasions before we have underestimated US consumer demand, in spite of rather optimistic forecasts. Thus, there may be reason to revise down the forecast of households’ saving ratio in the coming years, which if so would point to higher consumption growth. The increasingly weak dollar and stronger euro should also boost US exports, particularly in Europe. In the short term, there is really only one serious concern in the US economy: that employment growth continues to be weak. This could create uncertainty among households and contribute to subduing consumption. But it is hard to believe that it would derail the current upswing. Also with regard to Europe, we began to see signs of somewhat more robust growth and greater optimism at the end of last year. In our assessment in December, we forecast a rise in growth in the years ahead. New data received since December broadly supports this assessment. Business tendency surveys for manufacturing indicate that optimism has continued to increase while industrial production has now begun to rise slowly, although for the euro area as a whole the picture is still not as unambiguous as in the US. The strong performance of the euro could also result in higher imports and lower exports than expected, which of course would have an impact on demand in the economy and growth.

Since the start of the crisis in 2008, Malaysia has experienced three episodes of large foreign capital outflows. Thankfully, our policy framework, a healthy level of foreign exchange reserves, and the robustness of our financial system, have enabled us to withstand such flows without significant disruption of domestic economic and financial activity. The third form of risk is through interest differentials. Very low interest rate in the AEs do not just attract yield-searching foreign funds to the higher yields in the emerging markets (EMs), they also create a very strong temptation for residents in EMs to borrow from abroad. We saw this type of vulnerability in this region in the period before the Asian financial crisis and more recently, in the Eastern European economies. The build-up of unhedged foreign currency debt by residents can be a significant source of vulnerability during times of economic and financial upheaval. Then there are global liquidity spillovers into domestic liquidity that put downward pressure on domestic interest rates. We see this most evidently with the negative interest rates of the ECB, which has resulted in capital flows to the neighbouring countries and pressure on their exchange rates. As a consequence, interest rates in neighbouring Denmark, Sweden and Switzerland have all also become negative. Such contagious fall in interest rates can lead to excessive borrowing, a decline in savings, increases in asset prices, and increases in leverage, which in turn increase the risks of financial imbalances developing and undermining financial stability.
The last time petroleum investment showed a sharp increase, in 1997/1998, growth was substantially stronger than had been assumed. At the same time, the rest of the Norwegian economy was experiencing an upturn. The unexpected increase in petroleum investment contributed to substantially stronger-than-projected economic growth. If oil prices rise further or remain at the current high level for a long period, petroleum investment may again reinforce the cyclical upturn more than projected. Monetary policy and the outlook for the Norwegian economy The analyses in Inflation Report 2/05 are based on a baseline scenario where the key rate shadows forward interest rates up to 2007, and then rises somewhat more rapidly. The krone exchange rate is assumed to shadow the forward exchange rate, which remains broadly unchanged over the next three years. Capacity utilisation in the Norwegian economy is expected to increase this year and next and exceed its normal level. There are prospects that inflation will gradually pick up and be close to 2½ per cent at the three-year horizon. Since the publication of the June Inflation Report, prices for domestically produced consumer goods have risen slightly less than expected. At the same time, oil prices have been somewhat higher than assumed. Energy prices are pushing up consumer price inflation. 4/7  New information since the publication of the June Inflation Report does not provide grounds for changing the assessment of developments in the real economy.

There is also a risk that large imbalances in world trade and low employment in Europe will trigger protectionism, which could reduce growth capacity even further. A pronounced slowdown in growth in the entire OECD area is also likely to lead to markedly slower growth in China and emerging economies in Asia because exports are an important driving force behind growth in the region. This could lead to an appreciable fall in prices for oil and other commodities and weak developments in the shipping industry. Just as Norway has benefited strongly from the sharp international upswing in recent years, the Norwegian economy could be affected by such a downturn. The recent change in China’s exchange rate regime and the revaluation of the Chinese currency by 2 per cent will probably not cause substantial changes in the imbalances in world trade. At the same time, daily fluctuations of 0.3 percentage point between the yuan and the dollar are now possible. This allows for considerable variation and it cannot be ruled out that more pronounced changes in the same direction will gradually occur. So far, the Chinese authorities have maintained a stable course. It will probably be appropriate for both China and other Asian countries to shift more of their production towards domestic markets, which will reduce the large current account surpluses as well as curb the build-up of the official foreign exchange reserves. As part of this adjustment, the relative cost level will gradually increase.
The models used to assess risk in the more novel areas of finance are, by definition, less grounded in experience and less valuable in anticipating how prices and correlations change in conditions of stress. Consensus on the appropriate accounting treatment is less well established. With the dramatic increase in the scope of operations of the major financial institutions, the challenge of pulling together an integrated risk management framework that captures exposures across the entirety of the firm is much greater. The potential for conflicts of interest and opportunities for fraud are greater, placing significant burdens on internal compliance regimes. The changes in regulation and technology that have increased the opportunities for risk transfer mean that more risk may end up in parts of the financial system where supervision and disclosure is weaker and in parts of the economy less well able to manage it. And finally, we have seen substantial growth in the integration of national financial systems. Indeed, a number of foreign and foreign-owned banking organizations are among the largest financial institutions in the U.S., with operations here that run into the hundreds of billions of dollars, and in some cases representing the majority of their global assets. The major U.S. banks and investment banks are more global in the scope of their operations, and their affiliates are a major presence in many of the countries in which they operate, in some cases with a larger share of financial activity than they have in the U.S. market.

Institutions and markets seem better positioned to handle a substantial degree of stress. Shocks may be less likely to result in the type of trend amplifying, self-reinforcing dynamic for sustained periods of time that can threaten the stability of the financial system. But it is important to recognize that that we do not know a lot about the underlying dynamics of financial crises in the context of the evolving financial system I have described. It is also worth reflecting on the fact that the favorable judgment of U.S. financial resilience at present is rooted in a  BIS Review 55/2004  3  period of lower overall volatility in macroeconomic outcomes, with lower inflation and less variability in inflation, and shorter and shallower recessions. Financial innovation has brought about a dramatic increase in the opportunities for diversification and risk transfer and in the sophistication of risk management, but it is unlikely to have brought an end to the periodic tendency of markets to experience waves of mania and panic. The systemically significant financial institutions are larger and stronger than in the past, but they are not invulnerable, and the impact of a failure would be greater. And it would be imprudent to expect that the lower overall magnitude of recent macroeconomic shocks that has contributed to lower volatility in growth and inflation outcomes will be with us indefinitely. What are the implications of these changes for how we think about managing systemic risk in the United States?
Striped bars/broken lines refer to the Riksbank’s forecast. 7  7  Sweden The world  6  6  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 -3  -3 80  82  84  86  88  90  92  94  96  98  00  02  04  06  08  10  Sources: the IMF, the OECD and the Riksbank  10  BIS Review 132/2007  6. Tighter labour market Thousands of persons. Broken lines refer to the Riksbank’s forecasts. 4800  4800 Labour force Employed  4700  4700  4600  4600  4500  4500  4400  4400  4300  4300  4200  4200  4100  4100  4000  4000  3900  3900  3800  3800 81  83  85  87  89  91  93  95  97  99  01  03  05  07  09  Sources: Statistics Sweden and the Riksbank  7. Percentage open unemployed Per cent of labour force. Broken line refers to Riksbank’s forecast.

4  BIS Review 132/2007  A strong Swedish economy with increased cost and inflationary pressures… If we begin with the situation at home, it is clear that the Swedish economy is continuing to show strong growth (slide 5). We see increased cost and inflationary pressures ahead of us and there are a couple of main factors in this development that I wish to highlight. Strong growth Both the statistics in the National Accounts and the survey of Swedish companies carried out by the Riksbank confirm the picture of strong growth in Sweden. Although the rate of increase in GDP has slowed down slightly, it remains fairly high and is expected to be around 3 per cent this year. Our assessment is that we are in a situation where we are currently making more use of economic resources than normal. If we look ahead, we are expecting GDP to grow slightly more slowly up to 2010 than it has in recent years. This is due to several interacting factors; we believe that productivity and the labour supply will increase more slowly, and that international growth will be lower. In addition, we are expecting the interest rate to rise gradually, the exchange rate to be stronger and investment to increase at a slower rate. These factors subdue growth. … and tighter labour market Despite the fact that GDP growth has been strong for several years, it was not until 2005 that employment began to increase (slide 6).