samchain/econo-pairs-v1 huggingface dataset:
One thing that is immediately apparent when comparing today’s balance sheet with the one from ten years’ ago is that the debt items the Riksbank does not pay interest on, that is, notes and coins and equity, have gone from comprising almost 100 per cent to hardly 40 per cent of the Riksbank’s total funding today. This means that the probability of the Riksbank making losses in certain years has increased. I will return to this, but let us first look a little closer at the changes in the Riksbank’s balance sheet. The foreign currency reserve has strengthened The largest change in the Riksbank’s balance sheet is the strengthening of the foreign currency reserve. One can say that a central bank has three reasons for holding a foreign currency reserve. The first is to make interventions in the foreign exchange market, the second is to maintain a readiness to supply the financial system with liquidity in foreign currencies and the third is to meet obligations to international organisations. The Riksbank’s foreign currency reserve was strengthened partly because Sweden’s commitments to the International Monetary Fund (IMF) have increased, but mainly because the Riksbank is to manage the task of ensuring that the payment system in Sweden functions safely and efficiently. The serious situation abroad and the Swedish banks’ extensive funding in foreign currencies mean that the risks of disruptions to the financial system are higher than before.

Unlike many other central banks, the Riksbank did not buy any government bonds or covered bonds, but these possibilities were discussed. One important lesson from the crisis is that new measures require considerable preparation. After the crisis, we therefore decided that it is a good idea to make practical preparations for a crisis even during normal circumstances by supplementing the Riksbank’s toolbox with a limited securities portfolio in Swedish krona. This ensures that necessary systems, agreements, routines and knowledge are already in place if it becomes necessary to quickly implement extraordinary measures. Given that we now have a repo rate close to zero and we are discussing which unconventional measures might be appropriate if inflation does not rise towards two per cent, it is good that the Riksbank has created the possibility and knowledge to manage a bond portfolio. This means that we now can quickly and simply purchase and sell bonds, something that would previously have taken us much longer. So, in technical terms we are prepared to increase the size of the portfolio if and when it should prove necessary. The general public’s use of cash is declining One important item on the liabilities side of the balance sheet is outstanding banknotes and coins. The Riksbank has the monopoly on issuing banknotes and coins in Sweden and is responsible for supplying the country with cash. The size of this item depends on the demand from the general public for cash.
Within this range, the FPC judged that a structural level of capital requirements and buffers of 11% would allow it to meet its financial stability target, and maximise the longer-term level of expected GDP.25 Chart 17: FPC’s benchmark for optimal capital requirements is 11% Estimated cost/benefit of capital  11% optimum  Annual GDP cost of moving away from the appropriate capital ratio (in % of GDP) 0.02 0 -0.02 -0.04 -0.06 -0.08 -0.1  Optimal range -0.12 7  8  9  10  11 12 13 14 System capital ratio (% of RWAs)  15  16  17  In addition to this structural capital requirement, UK banks are required to hold a Countercyclical Capital Buffer (CCyB) that varies over the financial cycle, matching the level of banking system resilience to the level of risk. The CCyB was introduced internationally following the crisis, as part of the Basel III package of measures in 2011. It better optimises the balance between the primary macroprudential policy objective to reduce GDPat-risk, and the secondary objective to support economic growth, compared to a fixed capital requirement that does not vary with the level of risk.

The FPC’s responsibilities are encoded in the Bank of England Act and the Chancellor’s annual FPC remit letter.7 The FPC’s primary objective is to identify, monitor and take action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK’s financial system.8 Subject to meeting their primary objective, the FPC has a secondary objective to “support the economic policy of Her Majesty’s Government, including its objectives for growth and employment”. The emphasis on supporting economic growth over the medium to long term is underpinned by the so-called “stability of the graveyard clause” in the Bank of England Act, which does not “required or authorised the Committee to exercise its functions in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”. The FPC’s actions support its secondary objective in several ways. The FPC minimises the negative impact of financial stability policies on growth including in the near-term by implementing financial stability policies gradually, and by choosing targeted policy tools. The FPC’s remit letter also tasks the FPC with taking actions to promote actively productive finance and growth as long as these actions do not compromise the primary objective of financial stability. These actions 7 The Chancellor’s annual “Remit and Recommendations” letters to the FPC, alongside the FPC’s responses, are  available here.
None of these mechanisms would breach the Currency Board rules, since the Hong Kong dollar liquidity thus created, in the form of the addition to the Aggregate Balance of the banking system, would be BIS Review 77/1999  4  matched either by a decline in another component of the monetary base (the Exchange Fund paper) or an increase in US dollar assets. Beyond this, we have stated on several occasions in the past that, in exceptional circumstances, where there is a risk that large-scale Hong Kong dollar transactions might create extreme conditions in the LQWHUEDQN PDUNHW DQG DIIHFW WKH VWDELOLW\ RI WKH H[FKDQJH UDWH  WR DQ H[WHQW XQZDUUDQWHG E\ DQ\ economic fundamentals - the HKMA may temporarily lend or borrow Hong Kong dollars to or from the interbank market to dampen these extreme conditions. Should an imminent bank failure pose the threat of triggering extreme conditions in the money and foreign exchange markets, there may be justifications for the HKMA to inject liquidity directly into the interbank market, on a temporary basis, to ensure systemic stability. This would represent a departure from the strict rules of the Currency Board system. The availability of excess foreign currency reserves allows some scope for discretion, but the intention would anyway be that this injection should be only temporary.

It turned out that the customer satisfaction level was much higher than in the call centres across Europe. The next step involved customer services of higher value added (such as, e.g., lost cheques, where the employee’s own invention is required – such a customer call cannot be fully described with procedures). The subsequent step consisted in taking over phone investment consultancy from Europe, which was even more demanding in terms of qualifications. This was possible due to much higher educational standards represented by the employees (often at the level of PH.D. degree, holding appropriate licences) than those of typical employees of call centres across Europe. 10  See e.g. Landefeld R., Mataloni R. “Offshore Outsourcing and Multinational Companies”, BEA working paper WP2004-06. 11  Baily M., Lawrence R. “What Happened to the Great U.S. Job Machine? The Role of Trade and Electronic Offshoring”, Brookings Papers on Economic Activity, 2004. 12  Conference of the Financial Times “Global off-shoring and outsourcing”, London, 17 May 2006. BIS Review 64/2006  7  Companies whose business activity consists in the implementation of off-shoring processes are growing rapidly. For the majority of companies in India, this growth amounts to a few dozen percent per annum. The scale of the activity is also growing, as it is not confined to simple call centres any more, but it also includes outsourcing of ever more advanced business processes (e.g. related to IT, logistics, etc.).
But there is also evidence, which is harder to evaluate, of more intensive retail price competition, squeezing retail margins, and that could hold down prices at least for a time. And this last effect could intensify and extend further into the future as a result of the spread of e-commerce. Meanwhile we are faced with familiar uncertainties about the prospective strength of domestic demand and about overall demand pressure. Final domestic demand growth, including the growth of consumer spending, did apparently moderate in the middle of last year - as it needed and still needs to do. But there is plenty of evidence to suggest that consumption growth will in fact remain quite buoyant: the strength of the equity market; rising house prices - certainly led by London and the South-East but followed, not all that far behind, by Edinburgh, and spreading out across the UK; strong borrowing, including mortgage equity withdrawal, by the household sector; and rising incomes from employment. Meanwhile, on the supply side of the economy, there is little evidence as yet in the overall productivity data that would suggest an imminent, abnormal, pick-up in the underlying rate of capacity output growth such as they have seen in the US, however fervently we might hope to become infected by what is happening there!

Mr George takes a look at recent developments in the UK economy against the background of global influences in the international financial environment  Speech given by The Rt Hon Eddie George, Governor of the Bank of England, at the City Council Dinner hosted by the Glasgow Chamber of Commerce on 18 January 2000. *  *  *  Mr Chairman, my Lord Provost, Ladies and Gentlemen, I always enjoy my visits to Scotland. And I’ve been particularly looking forward to this visit since I read a Business Comment headline, in one of your newspapers on Friday, referring to the warm welcome I could expect on this occasion - following last week’s decision by the Monetary Policy Committee to put up interest rates! It has to be said that some of the rest of the article, and some other press comment on Friday was less welcoming! We - the MPC - were variously accused of “ignoring the pain suffered by firms north of the Border”, of “being willing to sacrifice Scotland’s economy just to cool the overheated London property market”; and of causing the Scottish economy once again to suffer because South-East England is overheating. Well I’m a great believer in free speech, but let me give you some relevant facts. The MPC sets interest rates to achieve the Government’s target for retail price inflation in the UK economy as a whole consistently over time. Those are our marching orders.
However, we need to be mindful that this shift in policy most likely will be accompanied by some degree of market turbulence. Moreover, the normalization of U.S. monetary policy could create significant challenges for those emerging market economies (EMEs) that have been the recipients of large capital inflows in recent years. This leads to an important question: what can the Federal Reserve do to address these risks? I will make three observations about the potential international spillovers from normalizing U.S. monetary policy. First, what we may see in terms of market strains and macroeconomic adjustment during this normalization process will not be new. Changes in Fed policy, and especially the tightening of monetary policy, have often created challenges for countries abroad, especially EMEs. Second, these EMEs, as a group, are better equipped today to handle those challenges than in the past. This reflects the fundamental improvements and stronger policy frameworks that many of these countries have put in place over the past 15 years. Third, given the dollar’s role as the global reserve currency, the Federal Reserve has a special responsibility to manage U.S. monetary policy appropriately in order to promote global financial stability. As always, what I have to say today reflects my own views and not necessarily those of the FOMC or the Federal Reserve System. 1 The U.S. economic outlook and the implications for monetary policy Since the official end of the Great Recession more than five years ago, the U.S. economy has grown at a disappointing 2.3 percent annualized rate.

Which central bank path is the most likely over the next 25 years? Your guess is almost certainly as good as mine. AA Milne ends his 1924 poem: “And all sorts of funny thoughts Run around my head, It isn’t really anywhere It’s somewhere else instead!” A quarter of a century on, I am confident central banks will be “somewhere else instead”. I am much less confident precisely where, whether upstairs or down. Central banking may need to await the 50th anniversary of Central Banking to find out. BIS central bankers’ speeches  5
The economy appears to be less inflation prone than before. Indications of somewhat higher potential growth may also be discernible. The new economy, with IT as a central component, may have contributed but there is still no definite evidence of this. 5. Monetary policy considerations  In order to dispel any misunderstandings, I should like to point out that - contrary to what is sometimes implied in the public debate - the Riksbank does not dismiss all talk of the new economy and its possible implications, in the first place for monetary policy. After all, the existence or otherwise of the new economy is a matter that does not differ in principle from the forecasting problems we have to deal with all the time. As I mentioned earlier, extensive structural changes have occurred time and again, not least in the past decade. So even without the new economy hypotheses, it is difficult to form an exact picture of either the path for trend growth or the extent to which the general workings of the economy have changed. BIS Review 18/2000  6  Assessments of this type are accordingly very uncertain. This is evident not least from the revisions we have been obliged to make, as I mentioned earlier. It should be underscored, however, that output gap estimates, for example, are not the sole foundation for either our current or our earlier inflation assessments.

Therefore, as a token of their appreciation to UNZABECA, they have made a generous donation in the sum of K9.5 million. This donation, I hope, will go a long way in supporting UNZABECA programmes. However, may I caution you to manage these funds prudently and ensure that they are applied towards the attainment of the intended UNZABECA objectives. Please, do not be wasteful now that UNZABECA coffers are liquid! In conclusion, as Patron of UNZABECA, I look forward to being involved in UNZABECA activities. In this regard, I undertake to promote your activities, at any slightest opportunity, to other institutions, which would benefit from your services. With these few remarks, it is now my honour and privilege to declare the Bank of Zambia UNZABECA Lecture Series officially closed. I thank you. 2  BIS Review 74/2004
Experience has shown that the monetary policy passed this demanding trial with flying colours and no one should any longer doubt its value for the Icelandic economy. It works in Iceland just as it does everywhere else. The Central Bank responded to imminent inflationary pressure by raising its interest rates in 1998 and still further in 1999 and 2000. The interest rate increase served to reduce excess demand in the economy and the ISK exchange rate rose, thus slowing increases to the consumer price index (CPI) in an overheated economy. Early in 2000 the fluctuation bands for the króna were widened, in part because the previous limits were then felt to be restraining the rising exchange rate, which was regarded as necessary to counter inflationary pressure. The exchange rate peaked in the spring of 2000, when it was just over 12% higher than at present. Market expectations changed in the spring of 2000, and the exchange rate began a downward trend. There are no doubt various explanations as to why this occurred but probably the major factors were concern at a sizeable current account deficit and the resulting enormous need for foreign financing, together with Icelandic investments in foreign securities during that same year, not least by pension funds. The downward exchange rate slide lasted until late November 2001. Several times during the period from mid-2000 until well into 2001, the Central Bank intervened in the currency market in an attempt to prevent a further decrease in the exchange rate.

Norman Chan: Welcome remarks - 2018 Green and Social Bond Principles Annual Conference Welcome remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the 2018 Green and Social Bond Principles Annual Conference, Hong Kong, 14 June 2018. * * * Financial Secretary, Martin, distinguished guests, ladies and gentlemen, 1. Welcome to the 2018 Green and Social Bond Principles Annual Conference, co-organised by the Hong Kong Monetary Authority (HKMA) and the International Capital Market Association, supported by the Hong Kong Financial Services Development Council. 2. Today’s conference is the flagship event in the world of green finance, and rightly so. Since the publication of the Green Bond Principles (GBP) in 2014, it has become the de facto global standard for green bond issuance. These days, a majority of the green bonds issued globally follow the GBP framework, and many major markets base their local green bond standards on the GBP. In this Conference, we will have the opportunity to hear more about the latest enhancements to the GBP, and how green standards have been developing in different parts of the world. 3. Today’s conference is notable also because of its location. As Martin said, it is the first time that the conference is held in Asia. Looking at the turnout, it is a good choice. I am not just referring to over 900 registered attendees – this is clearly impressive.
For example, a mezzanine CDO tranche might have attachment and detachment points of say 7% and 10%, meaning that for losses on the underlying collateral of less than 7% they continue to pay out at par, but become worthless when losses reach 10%. The pay-offs to such instruments are therefore highly sensitive to quite minor changes in expected credit conditions. In a full-information world with known probability distributions, instruments with such highly sensitive pay-offs are no more difficult to price than any others. But when lack of complete information makes the future uncertain, in a Knightian sense, contracts with highly sensitive pay-offs to slight changes in credit conditions become increasingly risky. Moreover, innovative instruments inherently will not have a long run of performance data. Those seeking to summarise their likely performance using statistical metrics based on limited data and drawn from very benign circumstances have a very difficult task. Many investors in RMBS and ABS CDOs linked to US sub prime mortgages have been surprised by the extent to which the performance of these instruments has fallen short of even their worst expectations. Securities with complex pay-offs, therefore, are highly vulnerable to increased macroeconomic uncertainty. 20 Second, information loss is built into the securitisation process because of the separation between the originator of the loan and the end investor. Chart 2 illustrates how information is lost at every step in the chain of risk transfer. To some extent, holding a diversified pool of underlying loans acts as protection against a lack of information about idiosyncratic risk.

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The extension also expands the FLS to cover lending to financial leasing and factoring corporations (which are a source of credit for SMEs). We have been clear that the design of the extended FLS particularly encourages lending to SME’s in determining access to the FLS. Incentives to lend to SME’s are therefore in place,  BIS central bankers’ speeches  3  no doubt about that. But we cannot promise that the results will follow almost as night follows day, because there is more to it than that. Let me end, by advertising a piece of work done by your chairman-elect, chairing a group that recently produced a report on SME lending in Northern Ireland. In that report, Kate and her colleagues point to structural market failures affecting the supply of finance to SMEs, which mainly relate to imperfect or asymmetric information, and which tend to be exacerbated in times of heighted economic uncertainty and risk aversion. Likewise, the report points to information failures on the demand side for businesses seeking finance. The report goes on to note that over the last five years there has been a market correction as banks have moved away from a lending approach based on property as security to one that is more based on evidence of a business plan that indicates returns to the firm that will repay borrowing.

There is, I have to say, a sense of déjà vu here, in that twenty years ago, coming out of the recession of the early 1990s there was a concern about SME lending. Then, too, it was hard to untangle lack of supply and lack of demand as causes. A lot work was done then, including by the Bank of England, to seek to understand better the causes of the problem. This time, there remains a need for such work, a point that I will come to in a moment. But, as the central bank, we have this time put our toolkit to work more directly. It is important here to be clear on the role of a central bank. Our role is to ensure access to credit – to take steps to unblock the supply of lending. Although we can have some influence over the supply of credit generally, as we have with the FLS, it is not for us to judge the credit risks of, and hence the access to and price of credit (in terms of the risk premium above the risk-free rate) for individual borrowers. Coming out of the crisis, we want to see the market economy restored and functioning. We have recently announced an extension to the Funding for Lending Scheme, so that drawings are now possible until early 2015. We expect that this should provide confidence to scheme members to expand their lending to the real economy by virtue of them having greater confidence in their future access to funding.