samchain/econo-pairs-v1 huggingface dataset:
4  BIS Review 48/2002  Domestic debt securities markets Outstanding as a percentage of GDP, 2001 180 160 Public sector Private sector Total outstanding  140 120 100 80 60 40 20 0 Denmark  Finland  Norway  Sweden  Germany  France  UK  US  Source: OECD SG Kommunalbanken, 30.august 2002  The Norwegian bond market is very small on an international scale, whether it is the government bond market or the private bond market. Corporate debt issues in Norway are more limited than in most comparable countries. The chart shows that this market is also small in a Nordic context. Foreign investors have recently shown a growing interest in NOK-denominated bonds as a result of strong growth in the Euro-krone market. This is the result of the relatively high level of interest rates in Norway. International operators are issuing NOK-denominated bonds on a large scale. At the same time, this provides life insurance companies and investment funds with an investment alternative in NOK. Issuers in the Norwegian bond market 31.12.2001. In billions of NOK 200 180 160 140 120 100 80 60 40 20 0 s ent ment rance prise vernm overn enter d insu al go ocal g ivate ks an r L n p Centr a r b e st., Oth Fin.

Thanks to your hard work, and thanks to the cooperation and support from many supervisory agencies and central banks, we are confident that the New Accord will represent the best possible framework. In last summer’s consultations, the industry acknowledged the many improvements in the proposals that we have achieved to date. At the same time, public comments identified a number of technical concerns related to the treatment of credit-related losses and of some of the most sophisticated financial instruments and activities. We took these comments to heart and spent the next several months developing solutions. In October 2003, the Committee agreed in Madrid on a breakthrough plan to resolve these issues by the middle of this year. I must say that I have been pleasantly surprised by the progress the Committee has made in the extremely short period of time since then. Just three weeks ago, for example, we published three detailed technical notes outlining changes to the proposals. These covered revisions to the treatment of expected and unexpected credit-related losses and of securitisation exposures, as well as principles on the recognition of operational risk capital across home and host jurisdictions. I’d like to share with you the latest information on each of the areas addressed in the technical papers and in the press releases. EL/UL First, let’s turn to the New Accord’s treatment of expected and unexpected losses, or “EL” and “UL” as we say in Basel.
The unrest in the international financial markets in the wake of the US subprime crisis has also led to an increase in the price of risk, which means for instance that it has become more expensive to borrow. In this way the effects can be compared to the effects of tighter monetary policy. But apart from the changed pricing, the uncertainty has also led to greater caution in general. This also has a certain dampening effect on economic activity. In Sweden, the effects of the unrest in the financial markets have been more limited than in, for instance, the United Kingdom, the United States and Germany. Over the past weeks there appears to have been some stabilisation. But the US mortgage market may present further surprises. If, for instance, house prices were to fall more than expected, this could once again increase the unrest in the markets and lead to rising interest rates and falling stock prices, not only in the United States. In a slightly longer perspective, this can also slow down growth in the US economy and even have contagion effects in Europe and the rest of the world. BIS Review 112/2007  5  …but strong developments here at home If one looks at developments in the Swedish economy, our assessment in September was that it was actually stronger than in June. Here the labour market and productivity deserve special attention. These are two of the most important factors, which determine how cost pressures and thereby inflation will develop.

This was one of the reasons why we changed over  1  At present the central banks in Iceland, Norway, New Zealand and Sweden publish their own paths for the policy rate. BIS Review 112/2007  1  in autumn 2005 to basing our assessments on the assumption that the repo rate would develop in line with market expectations. But although this was a more realistic assumption, it was still the case that the forecasts did not necessarily reflect the Riksbank’s assessment of the most probable economic development. This is because market expectations do not necessarily agree with the interest rate path the Riksbank considers to be most appropriate. Now that our analyses are based on our own path for the repo rate, they describe the course of events we are actually expecting to see. This has several advantages. For one thing, it is possible to say something about how accurate our forecasts have been and how well the Riksbank has done its job. And for another thing it will also be easier to internally evaluate and improve the models and methods of working used as a basis for our forecasts. Finally, it makes it more worthwhile to compare our picture of the economy with the picture painted by other forecasters. Reasoning and considerations made clearer The second advantage of an own interest rate forecast is that it becomes easier to show why we believe in a particular policy and how we reason when we make our decisions.
By moving the banking industry collectively back to Figure 1 from Figure 2, the “bad state of the world” becomes less likely. In the SCAP, we had to make a number of important decisions. These included:   The appropriate capital target. We focused on the Tier I common ratio because we believed that this was the most credible form of capital. This put much greater emphasis on common equity than previously.   The severity of the stress test. We assumed a stress scenario with an unemployment rate 1.5 percentage points higher than the baseline scenario, and further home price declines of about 29 percent compared with 18 percent in the base case. We were aiming for a stress test scenario that had about a 5 percent to 10 percent probability of being realized.   The capital target at the end of 2010 and the stress test severity were both important in terms of the credibility of the SCAP. Going in, we were worried that with our capital goal, the BHCs’ needs might turn out to be higher than the available  BIS central bankers’ speeches  3  resources from the private sector and the U.S. Treasury. We decided not to compromise the credibility of the stress test to save on needed capital resources.

So what are the implications of the U.S. experience? The context and purpose of any stress test should dictate the form it takes. Both the SCAP and CCAR models likely have some lessons for other such exercises, but in circumstances of market stress, the SCAP model is more relevant than the CCAR model. In such episodes, our experience suggests:   First, the stress scenario needs to be severe to be credible.   Second, disclosure of the results is needed at a sufficiently granular level so that private analysts can make their own independent assessment.   Third, the results need to be credible in terms of expected losses.   Fourth, there needs to be a credible capital backstop so that market participants can be sure banks will be able to raise the capital that they need under a stress environment, one way or another. One tricky issue is how to treat sovereign debt exposures. This was not an issue in the U.S. SCAP exercise. This is difficult because there is a complex interaction between fiscal soundness and bank soundness, which is very hard to model. This illustrates a wider point – that all situations are importantly distinct and that while we can all learn from each others’ experiences in this field, there is no one-size-fits-all approach. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches
Financial systems are instrumental in mobilizing savings and helping smooth consumption patterns. They are also key in transforming risk and allocating capital to its more productive uses. Many of these functions are directly linked to some of the problems that Asian countries have been trying to solve over the past decade. To name but a few: very high saving ratios, possible investment overcapacity and slow takeoff of private consumption. Although the investment-consumption patterns may already be changing in parts of Asia, there is still a large scope for improvement and more efficient and competitive financial systems can provide a fundamental support. Ten years after the Asian crises, financial systems in the region have come a long way: asset quality has improved, profitability has been on the rise and so have capital ratios. Regulation and supervision have been upgraded as a result of the crisis. Financial depth is considerably higher in Asia than in Latin America and Eastern Europe, when measured by basic indicators such as the ratio of credit to the private sector as a share of GDP. Nevertheless, it is also true that credit is heavily biased towards the corporate sector in Asia. In the last years, consumer loans have been on the rise – along with home mortgage credit – in emerging market regions, such as Latin America or Eastern Europe; in Asia consumer loans have also taken off, and this is a positive development.

Fundanga: Islamic banking – building partnerships for development Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, to the Islamic Banking Conference “Building partnerships for development”, Lusaka, 20 October 2008. *  *  *  The Guest Speaker, Mr. Ahmad Zaini Bin Othman Chief Executive Officers of Banks and Non bank financial institutions; Distinguished invited guests; Colleagues; Ladies and gentlemen; On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important conference on Islamic Banking. To our Guest Speaker, Mr Ahmed Zaini Othman, I wish to extend a special welcome to you to Zambia and in particular to Lusaka, the capital city. Like the rest of Zambia, Lusaka is a city of tranquility with an easygoing African charm. The city is not short of interesting sites and places to visit. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Lusaka offers. I also wish to extend my sincere thanks to Standard Chartered Bank Zambia Plc, the Islamic Council of Zambia and the Eastern Province Chamber of Commerce and Industry for graciously accepting to make presentations at this conference. Ladies and Gentlemen, the Bank of Zambia is honoured and delighted to host the first Islamic Banking Conference in Zambia that begins today, the 20th and ends on 21st October, 2008.
6  Other societies espouse comparable principles, “It cannot be acceptable in a democratic society that a group of unelected individuals are vested with important responsibilities without being open to full scrutiny and accountability.” Cf. speech given by Alan Greenspan on 5 December 1996 on “'The Challenge of Central Banking in a Democratic Society,” Washington D.C. Also, “Democratic principles demand that, as an agent of the government, a central bank must be accountable in the pursuit of its mandated goals, responsive to the public and its elected representatives and transparent in its policies.” Cf. speech given by Ben Bernanke on 26 May 2010, on “Central Bank Independence, Transparency and Accountability,” Tokyo. BIS central bankers’ speeches  3  responsibility for its own area.7 Each year we submit an Accountability Report to the Federal Assembly, in which we outline how we have fulfilled our mandate. Also, on frequent occasions we are called upon to provide a full account of our actions to the relevant parliamentary commissions. In addition, we provide the general public with regular information about our assessment of the economic situation and monetary policy – in press releases or half-yearly media conferences immediately after our quarterly monetary policy assessments, in speeches and in interviews. In this way we ensure transparency. Through our legal status as a joint-stock company, we also have duties towards our shareholders which we fulfil each year, at the General Meeting, within the framework set out by the National Bank Act.

The cantons – our majority shareholders – are well represented in our supervisory body for operating matters, the Bank Council. As you see, the special characteristics of the Swiss system are taken into account. Federalism is mirrored in the composition of the Bank Council and in the distribution of our shareholdings and – not least – in the distribution of profit. The Swiss constitution and the National Bank Act provide for the SNB’s profit to be paid to the Confederation and the cantons. Two-thirds accrue to the cantons and one-third to the Confederation. However, a distribution can only be carried out if the balance sheet and the SNB’s result allow for this to be done. The robustness of our balance sheet, in other words, setting aside provisions for currency reserves, takes first priority over a distribution. This can be derived directly from the legislation. The appreciation of the Swiss franc against most other currencies weakened our balance sheet last year. In addition, very volatile results may be expected in the next few years because of the current size of the balance sheet and the uncertain situation in the capital markets. Consequently, the possibility that distributions to the Confederation and the cantons will have to be suspended in certain years cannot be excluded. Fiscal interests must take a back seat when it comes to ensuring our long-term monetary policy freedom of action and independence. The Governing Board is also genuinely Swiss.
Where these have been general concerns - often reflecting the rapid evolution of the market place or rising public expectations - they have mostly been addressed by reinforcing the rules of the game. Or where they have reflected the behaviour of individual firms or their employees they have been pursued - not least to encourage others. Of course we need to remain constantly vigilant in all these areas to retain confidence in our market place. But all the evidence suggests that such confidence remains strong by any international standards. There are three characteristics of the City’s market ethos that I would point to in particular. Quite early on in my career at the Bank - more years ago than I care to remember - I was profoundly influenced by the man then responsible for administering Exchange Control - Brian Bennett. He had, framed on his desk, a wartime poster which read “Freedom is in peril - defend it with all your might.” And he explained to me that this was to remind him that his job was not simply to apply the 4 Exchange Control regulations - though that certainly was his job; it was also to help people to do what they were seeking to do consistently with both the spirit and the letter of the law. I like to think that that philosophy has informed - and continues to inform - the approach to applying the rules of the game more generally in the City.

And, at the retail level, too, we will all eventually need to learn to live with totally new, and more efficient, ways of doing things - though that will no doubt come harder to people of my generation! I don’t think anyone at this stage can see at all clearly the end-point of all this or even necessarily the appropriate next steps. And that is why we are seeing a continuous, and often bewildering, stream of new individual and collective initiatives, many of them involving the same participants, both in this country and abroad. Some of these initiatives will inevitably fall by the wayside - that’s part of the process by which the market as a whole discovers the way ahead. But those that do succeed will succeed because they add value by meeting more effectively the needs of the consumers of the products and services they provide. As an intensely interested - but non-commercial - observer of it  3  BIS Review 134/1999  all, I find the whole process hugely stimulating and encouraging. I recognise that I might feel differently if I were a commercial rather than a central banker, but I’m impressed by the fact that most of the commercial bankers I talk to see it in terms of opportunities rather than threats.
However, we cannot rule out that more serious events can occur with more severe and longer-lasting effects on global markets, in light of their renewed political difficulties to implement fundamental structural reforms, and where the banking sectors are still dealing with deteriorating portfolios due to slow economic activity. Another risk coming from abroad has to do with how the conventional and unconventional measures of monetary stimulus will ultimately be withdrawn in the United States. Having no history in this creates uncertainty in the markets, mainly about the financial effects it might have. There may be an overreaction of the markets, with increased stress and sharp rises in long-term interest rates. The rising cost of financing this would entail for emerging markets and some Eurozone economies more dependent on external financing, would pose important policy challenges for them. In Chile, this could lead to increases in both the cost of external financing of companies and banks and higher long-term interest rates domestically. As emphasized in our Financial Stability Report, it is important for banks in this context to keep the exposure of their balance sheets at bay. In any case, the U.S. monetary authorities have argued that if confronted with an unwanted reaction the process could be delayed or even reversed to some extent, so it is possible for the effects of the withdrawal to be fairly limited.

Paul Tucker: Inflation, growth and stability – balancing the Bank of England’s economic priorities Remarks by Mr Paul Tucker, Deputy Governor of the Bank of England, at The Institute of Economic Affairs’ 27th Annual Conference ”The State of the Economy”, London, 23 February 2010. *  *  *  Many thanks for input to Peter Andrews, Roger Clews, Iain de Weymarn, James Proudman, Gareth Ramsay and Victoria Saporta. For background work to Michael Grady and for secretarial support to Sandra Bannister and Cheryl Feeney. It is an understatement that the current macroeconomic conjuncture poses major challenges for policy. There are also major lessons for the overall framework for preserving stability in our economy. I shall talk about both. Both the challenges and the lessons stem from the source of the crisis: a crash in the credit system affecting a domestic and global economy which had become severely imbalanced. Broadly, from the autumn of 2008 onwards, the sharp falls in economic activity were most pronounced in areas heavily dependent on credit and optimism (Chart 1). There was a vicious spiral down in world trade, where supply chains had become longer, with more counterparty risk and so more dependence on credit. Likewise in industrial production (Chart 2). Business investment collapsed (Chart 3). There was sharp destocking, helping to alleviate firms’ financial pressures. Things are better than they were. Capital markets have mostly reopened, but spreads are still higher than before funding markets deteriorated during 2007 and bank lending has been very weak.
In addition, household net worth has recovered sharply, boosted primarily by higher financial asset valuations, but also by some recovery in home prices. Third, the fiscal restraint that has held back growth in recent years has ended, with the federal budget deficit now at a level consistent with a stable to slowly declining federal debtto-GDP ratio. In the aggregate, state and local governments have also ended their retrenchment. One important piece of evidence in this regard is the fact that state and local  1  See, for example, the latest Blue Chip consensus survey (volume 39, no. 11, November 10, 2014). The median real GDP forecast for 2015 (fourth quarter over fourth quarter) is 2.9 percent. BIS central bankers’ speeches  1  government employment is now rising at between 5,000 and 10,000 per month, after generally contracting during the 2009 to 2012 period. Now that these headwinds have subsided, buoyant financial market conditions spurred, in part, by a very accommodative monetary policy should do more to support economic activity. In particular, compared to historical patterns, the current household net worth-to-income ratio is high relative to the personal saving rate. This suggests some scope for a decline in the household saving rate. If this were to occur, consumption growth would outstrip income growth. Similarly, financial market conditions are conducive to sustained gains in business fixed investment. Equity prices are high, borrowing costs are low, cash flows are strong and corporate balance sheets are healthy.

BIS central bankers’ speeches  7  Conclusion In my remarks today, I have provided my current thinking about the U.S. growth and the inflation outlook, and the implications for monetary policy. To sum up, the U.S. economic outlook looks brighter, with growth likely to be somewhat above the trend of the past five years. The risks to growth appear generally balanced, without unusually high risks that growth will either be much stronger or weaker than my forecast. On inflation, I remain confident, despite the recent softening, that inflation will begin to move up towards our 2 percent objective next year. This move will not likely happen immediately, however, given the recent weakness in energy prices and the fact that non-energy import price trends are also likely to soften a bit over the near-term. With respect to monetary policy, I believe that market expectations as captured by the most recent New York Fed’s surveys of primary dealers and market participants are reasonable – with lift-off expected to take place sometime around the middle of next year. But, life is uncertain and my judgment of the appropriate timing could change in response to incoming data and other factors that change the economic outlook. When we do begin to tighten monetary policy, the pace of tightening will depend not only on the outlook but also on how financial market conditions respond as we begin to remove monetary policy accommodation. Financial market conditions are an important transmission mechanism of monetary policy.