samchain/econo-pairs-v1 huggingface dataset:
According to the price information act, goods sold to individual consumers in Sweden must be priced in the currency relevant to the customer. The act does not state which currency prices should be stated in, but as long as most wages are paid in krona, the retail trade is obliged to price goods in krona. The role of the krona as a means of payment and unit of account is thus protected. Although there is great freedom to choose other currencies, the krona thus has a special position in the Swedish economy. There are also strong economic reasons for Swedish companies and households wanting predictability in their real income to use the krona as contract currency; this applies as long as the value of the krona is upheld, i.e. that there is a low inflation rate, as the real value of the income is determined by price developments on the goods and services consumed by the household/company. In the long term, the development in real purchasing power of the income is determined by productivity developments. Then real purchasing power parity also prevails, i.e. the price of an article is the same in the long term, regardless of the country in which it is sold and the currency in which it is priced. This means that a country with goods and services that cost a lot in foreign currency will sooner or later have to depreciate its currency and/or lower its domestic prices.

The Federal Reserve Act limits the types of securities the Federal Reserve may purchase in its OMOs, and under its Authorization for Domestic OMOs the FOMC only authorizes transactions in us government securities, which includes Treasury and agency securities.1 The staffs that have direct responsibility for executing OMOs are known as “the Desk.” Until late 2008, the primary role of the Desk was to influence the daily federal funds rate by adjusting the aggregate level of reserves in the banking system through transactions in Treasury securities arranged with designated primary dealers–counterparties operating in the  1  For the full Domestic Authorization, see the minutes for the first FOMC meeting of each year. The minutes for the January 2012 FOMC meeting are as follows: http://www.federalreserve.gov/monetarypolicy/ fomcminutes20120125.htm. BIS central bankers’ speeches  1  government securities market. OMOs typically employ an auction format to ensure competitive bidding and are structured in a manner that minimizes disruptions to market functioning. The Markets Group has several other critical transactional responsibilities as well. It is responsible for lender of last resort activities in the New York Federal Reserve District, operating the discount window as a source of short-term loans for banks in sound financial condition but otherwise in need of funding. As fiscal agent of the U.S. Treasury, the Markets Group plays a role in conducting Treasury auctions and facilitates payments and other financial services for the Treasury. The Markets Group also provides important payment, custody and investment services for the dollar holdings of foreign central banks and international institutions.
Let me now come to the second point: the equilibrium interest rate and why it matters for monetary policy. The concept is familiar to economists since the great Knut Wicksell. The “natural” or equilibrium interest rate is expressed in real terms. It equals savings and investment at full employment and price stability. It provides a central guidepost for assessing the monetary stance. For instance, if the market rate is above the equilibrium rate, there is excess saving, as well as insufficient consumption and investment. As a consequence, inflation falls. The equilibrium interest rate is not stable. It has fallen significantly since the financial crisis, possibly to negative levels. To maintain price stability and avoid persistently low inflation, market rates must be reduced as well. In normal circumstances, this can be achieved by lowering the policy rate, with subsequent effects on the yield curve. However, when the  BIS central bankers’ speeches  1  policy rates get to zero – the so-called zero lower bound – this “conventional” approach to monetary policy is not available anymore. To avoid an involuntary tightening of monetary policy, central banks must resort to unconventional measures. As I will describe in a moment, a wide array of such unconventional tools have been deployed in the Euro area. Low equilibrium interest rates can be temporary or permanent. In truth, we don’t really know. We do know, however, that very low inflation, if allowed to persist, can only aggravate the situation, because, everything else being equal, low inflation increases the real interest rate.

This is because the Riksbank only lent money to the banks and did not, like the Fed, the ECB and the Bank of England, purchase bonds and other assets during the crisis.13 If the Riksbank had done so, this could have led to more serious problems when the time came to phase out the support measures. It is of course difficult to estimate the effects of the measures taken by the Riksbank in connection with the crisis as so many other things also had an impact on the course of events, not least fiscal policy and the measures taken by other authorities to preserve  12  The Riksbank also extended the types of collateral that could be approved for loans and provided liquidity assistance to two small banks, Kaupthing and Carnegie. 13  By only lending money, the Riksbank also avoided exposure to a substantial interest rate risk. 6  BIS central bankers’ speeches  financial stability. Nevertheless, it can be noted that the Swedish banks came through the crisis well. Total lending to households and non-financial companies continued to increase throughout the crisis. It can also be noted that the fall in production and employment was less than feared. Domestic demand has been kept up by the expansionary fiscal and monetary policies. Conclusions With hindsight, I think that we can draw two conclusions about the actions taken by the Riksbank in connection with the financial crisis. First, we did not see the crisis coming.
Those costs would ultimately be passed on to European households and businesses. Moreover if the large stock of existing trades of EU firms – tens of trillions of euros in size – was trapped at a CCP which was no longer recognised by the European Commission, those EU firms would face capital charges as much as ten times higher than today unless and until they could move them. 25  Fragmenting liquidity would drive up costs somewhat in the remaining market as well. On current volumes, almost 90% of swaps are traded by non-EU firms and could remain in the main UK-based liquidity pool. Given the size of this market, the impacts could be expected to be much smaller, although not insignificant. Fragmentation is in no one’s economic interest. Nor is it necessary for financial stability. Indeed it can damage it. Fragmenting clearing would lead to smaller liquidity pools in CCPs, reducing the ability to diversify risks and diminishing resilience. And higher costs would reduce the incentives to hedge risks, increasing the amount of risk that the real economy would have to bear. The Bank of England fully recognises European concerns. I know because I shared similar ones as Governor of the Bank of Canada. These were addressed then through common standards and cooperative supervisory oversight, allowing $ clearing to move to a more efficient and resilient hub in London.

Crucially, Malta enjoyed the gains from a range of structural reforms that increased labour force participation, 7  raised efficiency in key economic sectors and led to the diversification of activity into new niche areas, particularly in services. Monetary policy on its own cannot deliver the full range of desirable economic outcomes. When it is accompanied by complementary and consistent fiscal policy actions, as well as by well-designed structural reforms, then monetary policy can deliver on its primary objective of price stability, while maintaining economic activity and employment close to their potential levels. 8
Our knowledge of the economic situation is not complete, and neither is our knowledge of how monetary policy affects inflation and the real economy, the so-called transmission mechanism. There is a considerable time lag before monetary policy measures have an impact on inflation, and the duration of this time lag also varies depending on the circumstances. This impact is normally gradual and becomes apparent over the course of a couple of years. As monetary policy works with a time lag, it is most effective if it is based on forecasts. In order to achieve an inflation rate of two per cent, it is therefore best to set the policy rate so that the inflation forecast a couple of years ahead corresponds to the inflation target. However, during the time it takes for changes in the interest rate to have a full impact on inflation the economy will be affected by new and unexpected shocks. The inflation outcome a couple of years ahead will therefore have been affected by events that could not be predicted when the monetary policy decisions were made. A direct comparison of outcomes and targets for inflation may therefore lead to the wrong conclusions. The inflation outcome may be in line with the target even if the monetary policy decisions were incorrect because the central bank was lucky and unexpected shocks nevertheless resulted in the right inflation outcome.

Some thirty years ago, the founders of the Committee recognised the growing need for cooperation and consistency in the supervision of internationally active banks. As we prepare to adopt a new capital framework, we know that we supervisors will need to cooperate even more in the future to supervise an internationally active bank’s adoption of the more advanced approaches to credit or operational risk. The Accord Implementation Group was created under the leadership of Nick Le Pan, the Canadian Superintendent of Financial Institutions, precisely to share experiences and approaches to applying the new rules. By sharing information on practical matters, we expect that supervisors will apply the New Accord more consistently at home, thereby promoting a more level playing field across countries as well. Based on the AIG’s work to date, the Committee published a paper this past August on the “high level principles for the cross-border implementation of the New Accord.” In this paper, we reiterate our view that the traditional allocation of responsibilities to home and host supervisors will continue. Cooperation will be critical to the effective supervision of institutions under the New Accord, especially considering the challenges an internationally active bank will face in receiving the initial approval to adopt, and then validate, advanced approaches to credit and operational risk at home and in host jurisdictions. Similarly, supervisors will need to find practical ways to cooperate in the evaluations of capital adequacy under pillar 2 and ongoing reviews of compliance with the minimum operational requirements of the New Accord.
Nina Stoyanova: The history of Bulgaria’s money Welcome address by Ms Nina Stoyanova, Deputy Governor (Banking Department) of the Bulgarian National Bank, at the opening of “The History of Money on the Bulgarian Lands” exhibition, jointly organised by Burgas Municipality and the Bulgarian National Bank, Burgas, 10 June 2016. *  *  *  Mayor Nickolov, Dear citizens and guests of Burgas, It is a great honour for me to welcome you at the opening of this exhibition entitled ‘The History of Money on the Bulgarian Lands’. Co-organisers of the exhibition are Burgas Municipality and the Bulgarian National Bank. This exhibition comprises coins and coin-like items minted and circulated on today’s Bulgarian lands from antiquity to the present day, and the major part of these comes from the BNB’s museum collection. Before we go back in time, I would like to mention that the Bulgarian National Bank (BNB) is one of the oldest public institutions in Bulgaria. It was founded immediately after the reestablishment of the Bulgarian state, on 25 January 1879, and on 6 June of that same year the first banking transaction was carried out with the BNB’s involvement. Our central bank is also one of the oldest central banks in the world – the 13th oldest one by date of foundation. Today the BNB still is the independent issuing authority of Bulgaria.

Our financial centre has been built on a wide range of comparative advantages: a financially sound country, a stable political and monetary framework, a long tradition of banking and an internationally oriented economy. All these points are also valid for the United Kingdom. There is a major difference in terms of specialization, however: the City is “the” market place for investment banking and a number of other financial activities in Europe, whereas Switzerland plays a dominant role in asset management. Despite different realities and market positions, Switzerland and the United Kingdom share many common values vis-à-vis their financial centre: –  both countries believe that financial activity requires professionalism, high standards and efficient supervision;  6  BIS Review 13/2002  –  both countries consider money laundering and the financing of criminal activity as major threats for the long term development of their financial system and act decisively against them;  –  both countries favour market competition in general and have a liberal attitude toward tax competition in particular;  –  both countries are reluctant to accept over-regulation and see in the mushrooming of offshore centres a source of risk for the global financial system. I come therefore to the conclusion that there are more converging interests than rivalries between our financial centres. Some diverging views are due to misunderstandings. With its traditions and its experience in asset management, Switzerland attaches great value to financial privacy.
Moreover, rising house prices are likely to encourage a further loosening of credit and appraisal standards that remain unduly tight. Third, the international economic outlook has improved somewhat. Global financial market strains relating to concerns about the euro-area have receded since last summer, though  1  The household obligation ratio is the sum of payments on mortgage and nonmortgage debt, automobile lease payments, rental payments on tenant-occupied property, homeowners’ insurance, and property tax payments divided by disposable after-tax income. BIS central bankers’ speeches  1  recent developments in Cyprus highlight the challenges that remain. Chinese growth appears to be climbing after a slowdown in 2012 and Japan is making renewed efforts to grow faster and exit from a long period of deflation. Fourth, U.S. corporate profits relative to national income are at an all-time record (Exhibit 5) and cash balances are very high. As uncertainty recedes and the outlook improves, I expect business will increasingly shift towards real investment from mainly buying back shares and hoarding cash. Fifth, the U.S. is in the middle of an energy revolution marked by a steady rise in oil and natural gas production (Exhibit 6). Just as significant, the sharp fall in natural gas prices in the U.S. has created a huge impetus to investment in energy-intensive manufacturing, such as in petrochemicals. Because the lead times on such investment are long, this impulse will likely persist for many years.

William C Dudley: The economic outlook and the role of monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Economic Club of New York, New York City, 25 March 2013. *  *  *  Krishna Guha, Simon Potter, Jamie McAndrews, Lorie Logan, Kevin Stiroh, Paolo Pesenti, Richard Peach, Jonathan McCarthy and others on my staff helped with the preparation of these remarks. Clearly detailed accompanying charts to this speech can be found in the pdf document on the US Federal Reserve website. [For clarification, exhibits 8 and 14 have been revised to indicate that the charts show fiscal years]. It is a pleasure to have the opportunity to speak to the Economic Club of New York again. Today, I will focus on the economic outlook and the role of monetary policy. I will argue that the fundamentals underpinning the U.S. economy are improving and monetary policy is gaining additional traction. But this may not immediately lead to stronger growth because of the recent increase in fiscal restraint. As a result, I expect that labor market conditions will improve only slowly and that inflation will remain muted. Consequently, it will be appropriate for monetary policy to remain very accommodative. As always, my views are my own and may not necessarily reflect those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.
Already some host supervisors have found that local managers may be unfamiliar with the parent organisation’s plans for Basel II: this understandably tends to make host supervisors less confident about the quality of an organisation’s planning and its readiness to move to Basel II. Moreover, it increases their need to ask more questions, some of which may duplicate the questions that the home supervisor or other host supervisors are asking. If a bank has already developed sufficiently detailed and transparent plans for its application of Basel II, a substantial portion of the hard work has already been done. Sharing those plans with home and host supervisors, and with managers throughout the bank’s operations and locations, should not require too much more effort. Instead, the bank should be in an even better position to focus on running its business confidently while still implementing its plans carefully for the future. Validation One of the greatest challenges – for both banks and supervisors – of the Basel II framework is the need to validate the systems and processes used to generate the parameters that serve as inputs into the IRB approach to credit risk. Although validation is foremost the responsibility of banks, supervisors must have a thorough understanding of validation in order to ensure overall integrity of bank’s activities in this area. In recognition of the importance of validation the Committee recently published six principles on validation that will guide our future work.

I believe that this should be the Committee’s main focus for the near term. It is important as well to remember that Basel II is not meant to be an exercise in compliance. Its goals are to improve the quality of risk management across the banking sector; to strengthen the resilience of the financial system; and to promote more sustainable economic growth for the good of both consumers and businesses alike. I look forward to continuing to work with you as we all enhance our efforts to make those goals a reality. BIS Review 17/2005  5
The promotion of more effective international cooperation on training and skills development to meet the changing demands of the industry, more comprehensive strategies on talent development and greater mobility that is consistent with the realities of the global economy will support such talent development. Despite these demands, under investment in learning remains in a significant proportion of financial institutions. This is largely due to the focus on keeping short term costs low. This has however resulted in drawing talent from the existing pool which has in turn resulted in rising costs of talent. Surveys suggest that the biggest skills and knowledge gaps faced by financial institutions are in knowledge of regulatory standards, communications, management skills and risk assessment and management. Professional and technical skills, particularly in the middle to senior levels, are still very much needed in many parts of Asia. These skills shortages will intensify as financial institutions expand their operations. Strategies for talent management and development must therefore change if financial institutions want to be competitive and well positioned to adjust and adapt to the changing conditions. The Asian Institute of Finance (AIF) was initiated by Bank Negara Malaysia and established jointly with the Securities Commission in [2009] to respond to the growing needs of the financial industry for high quality and efficient training opportunities that would develop indemand skills.

It will be followed around a year later by a polymer £ note featuring Jane Austen. The decision to move to polymer for these notes follows a three-year review and a broad public consultation exercise. Our research has shown a compelling case for polymer notes. Polymer notes bring three main benefits: •  They stay cleaner than paper banknotes because they are resistant to dirt and moisture;  •  They are more secure because they incorporate advanced security features that make them difficult to counterfeit;  •  And they are more durable, lasting at least 2½ times as long as paper banknotes, ensuring that notes in circulation remain of high quality. Because replacements are needed less often they are both cheaper over time, and more environmentally friendly. These advantages mean that a switch to polymer is a natural step in the evolution of banknote design. But you don’t have to take our word for it. Nearly 13000 people have told us what they thought, in surveys and at over 40 events up and down the UK, and 87% – the vast majority – were in favour of polymer notes, especially once they had a chance to see and handle prototype notes. After that public consultation, we’re confident that the switch to polymer will have broad public support.