samchain/econo-pairs-v1 huggingface dataset:
Let me clarify. In the Russian banking system, a significant proportion of lending is secured lending. On the one hand, collateral is a good way to motivate borrowers to repay loans. However, we are witnessing the fact that many banks, when issuing loans, are immediately factoring the collateral in as part of the loan repayment. In some cases, loans are issued to enterprises on the verge of bankruptcy in view of the quality of their collateral. This is fundamentally wrong because the source of loan repayment should be the borrower’s operating profit, not their collateral. Should the latter be the case, the banking system would turn into a mere big pawnshop. This problem is further complicated by the fact that collateral value can be used to lower potential loss reserves. A lot of collateral is also low liquid. Moreover, in Russia, the value of collateral is 6 / 11  BIS central bankers' speeches  often overestimated. Problems arise when, just prior to a crash, assets are withdrawn as collateral. Despite the restrictions and injunctions imposed on banks, managers and owners can still withdraw assets through collateral agreements. The regulator currently only has the right to limit or prohibit banking operations. It has no jurisdiction over transactions with collateral or other property. Therefore, the Central Bank will seek the right to limit transactions with collateral alongside other banking operations within its framework of supervisory measures. Otherwise, this is what happens. We lower the required reserves due to collateral taken into account.

The forecasts in our main scenario are always based on a combination of model analyses and judgements that take into account factors which the models either cannot capture at all or are unable to capture in a way we consider reasonable. These “hands-on” adjustments become particularly important when the historical correlations on which the models are based appear to have changed. The judgements may be of different types and opinion may be divided as to which factors are most important to take into consideration at any given meeting. My view is that the judgements should as far as possible be reflected in the forecast figures for inflation, the real economy and the repo rate that a monetary policy decision is based on. But I believe that we must learn to live with the fact that it is impossible to quantify all of the factors we monetary policy decision-makers consider should be taken into account in the monetary policy decisions. As I see it, there is no point in trying to produce, at any cost, a quantified adjustment of the forecast just to make a judgement one considers relevant fit into the monetary policy discussion. There must be scope to put forward arguments that appear reasonable, without necessarily having to translate them into exact probabilities or quantifying their effects on inflation and the real economy. As I see it, there is nothing wrong with having “misgivings” about a particular development and allowing this to affect the decision, without being able to exactly quantify the risks it entails.
I should also note that, from April 1st this year, the new Financial Policy Committee (the FPC) of the Bank will also have statutory responsibility and powers to make the financial system more resilient through macroprudential policies,4 and the Prudential Regulation Authority (the PRA) within the Bank of England will take over from the Financial Services Authority the job of micro-prudential supervision of firms. These functions do not depend on the central bank balance sheet and so, in principle, do not need to be undertaken by the central bank. But they are being put in the central bank for very good reasons, which include, for example, exploiting the synergies with central bank operations and skills, and eliminating the underlaps that arise from separate institutional arrangements. Because they do not necessarily involve the Bank in conducting financial operations, I will say no more about macro- or microprudential polices today. (Else I will still be going at midnight!) In summary, the primary operational policy levers available to the Bank of England to influence the macroeconomic outlook are: setting the price or quantity of money; influencing  4  For more on my views about the FPC see: http://www.bankofengland.co.uk/publications/Documents/ speeches/2012/speech550.pdf  2  BIS central bankers’ speeches  the price and quantity of credit; and the communication of our actions, analysis and views5. Let me unpack these policy operations a little further.

Although for basic banking services little personal contact may be necessary, deals in such fields as corporate finance and investment banking appear to require interaction between a number of parties  BIS Review 59/2001  3  face-to-face. Indeed, in recent years the world's major financial centres may, if anything, have become more rather than less dominant as a result of the demonstrable benefits of co-location and critical mass particularly in the context of the higher value-added activities. How does the internet fit into this picture. The new dimension which the internet brings is to revolutionise the access of customers to banks – and banks to their customers. Already we know that huge numbers of customers have moved over to using the internet to carry out their basic banking business. This may in turn have enabled banks to realise cost savings, although it is as yet not easy to find hard evidence to this effect. The implications for the structure of banking are unclear. One may envisage two extreme outcomes. One would be where banks, both established ones and new ones created as internet-only providers, compete fiercely in all areas of banking where human contact is not required. Consumers flit around from one to another in response to the best deals, splitting their banking relationships across a number of banks if that appears cost-effective. The prices of these services are driven down to "commodity" levels. None of the banks makes much of a profit from it.
For example, voices are raised saying that the interest rate has been too low for too long or that the Riksbank should conclude its asset purchase programme, without reference to whether monetary policy tightening is justified from an inflation point of view. This underlines the importance of the Riksbank’s communication constantly being careful to explain monetary policy in light of the inflation assessment and not ‘taking its eye off the ball’; see Jansson (2019). 15 For interesting views on this aspect and thoughts on fiscal policy in general, see Regling (2021). 9 [17]  the same time, however, it means that it has become more difficult to achieve the inflation target.16 It has thus become more difficult for monetary policy to counteract economic downturns. One condition that would change this would be a rise in the global real equilibrium interest rate. Central banks’ average policy rates would then also be higher – in the same way as they have now fallen in line with the equilibrium interest rate. However, no noticeable increase in the global real equilibrium interest rate is on the cards in the near future, according to most analysts.17 In any case, it will not happen so soon as to make my talk here today unnecessary. Another condition that would at least improve the situation would be if the recent rise in inflation were, for various reasons, to lead us closer to the inflation target in a slightly more persistent way in the future.

Sources: Swedish National Financial Management Authority, Swedish National Debt Office, Statistics Sweden and the Riksbank  16 [17]  Figure 3. Swedish public debt ratio low from an international perspective Public debt as percentage of GDP, 2020 300  300  250  250  200  200  150  150  100  100  50  50  0  0  Note. Maastricht debt for countries within the EU. Sources: Eurostat, IMF and the Riksbank  17 [17]
Caleb M Fundanga: Strengthening the Zambian financial services industry through education Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Zambia Institute of Banking and Financial Services 8th Graduation Ceremony, Lusaka, 21 February 2009. *  *  *  • The President, Zambia Institute of Banking and Financial Services, Mr. David Chewe; • Distinguished Council members; • The Chairman, Bankers Association of Zambia, Mr Saviour Chibiya; • Chief executives of Banks and Financial institutions present; • Representatives from other Learning institutions; • Distinguished Parents; • Graduates; • Distinguished Invited Guests; • Ladies and gentlemen It is an honour and privilege for me to officiate at this 8th Graduation Ceremony of the Zambia Institute of Banking and financial services. There is nothing more pleasing than witnessing young men and women climbing the ladder of success in life. Mr President, as we speak, our economy is facing numerous challenges emanating from the global financial turmoil. As you are no doubt aware, the crisis has already resulted in a reduction in commodity prices including that of copper our main foreign exchange earner. The Zambian foreign exchange market has also been adversely affected as is reflected in the volatility and weakening of the Kwacha exchange rate in the recent past. The result of all this is lower Government revenues and more expensive imports which would in turn culminate in higher inflation.

I have no doubt that with increased support from other financial service providers and regulators, the institute will increase in stature in human resource capacity-building aimed at developing a critical mass of professionally qualified and competent bankers. To the graduates, the qualifications in Banking and Finance you are obtaining today will certainly not make you an instant expert to tackle challenges in the financial services sector. It will take hard work, determination, and a variety of continuing professional development programmes for you to be able to begin to understand in a comprehensive manner, the banking industry in its entirety. However as graduates from this special Institution, each of you will be given a unique opportunity to prove yourself. I therefore, urge you to work hard and learn from others around you including those with different views from yours. Let me also mention that as graduates from the Zambia Institute of Banking and Financial Services, your progress and performance will be closely monitored and you will be looked upon as role models. I urge you to set the standards for others to emulate. I am confident that all of you will live up to the highest standards and will not disappoint us. I once again congratulate you and your parents, for it is only through their guidance that you are able to achieve what you have today. I wish you all, especially those graduating and those witnessing the graduation of their loved ones, a joyful and wonderful day. Thank you. 2  BIS Review 23/2009
If the loops don’t communicate, we fall short of the network opportunities that checks, debit and credit cards, and ATM cards offer. The tremendous potential in mobile lies in the eventual speed and quality of the end-to-end experience and in the security of any information on the device or in transit, tough challenges simultaneously to engineer. And beyond mobile payments, achieving the speed and general availability of faster payments seen or planned for in the United Kingdom, Australia and other countries requires tremendous coordination across the payments industry. So, how does the Federal Reserve fit into this period of extraordinary change and challenge? BIS central bankers’ speeches  1  The Federal Reserve has long championed access, including nationwide connection, coordination, as well as the security, efficiency and resiliency of the nation’s principal payments mechanisms. In light of the tremendous increase in payments innovation, last fall the Federal Reserve Banks launched a new strategic plan for Federal Reserve Financial Services. We’re asking how our services may need to change to facilitate the direction of the payments market and how we could enable existing and future innovation by the payments industry. The Federal Reserve Banks are actively engaged in adjusting our planning, our product development and our resources to address innovation in the marketplace. To do that, however, we need to build consensus within the industry around a broad direction, around the benefits of access and connectivity across the nation, and about understanding and managing the risks of new technologies and new business models that emerge.

4/4  BIS central bankers' speeches
For a long time, a stable exchange rate and the level of cost inflation among our trading partners provided an anchor for wage determination in Norway. In order to maintain competitiveness, wage growth in Norway had to be on a par with that of trading partners. Over time, growth in real wages must be consistent with growth in labour productivity. An inflation target of 2½ per cent and trend productivity growth of around 2 per cent, according to updated national accounts figures, imply annual nominal wage growth of about 4½ per cent. These figures are consistent with developments in the 1990s, when wage growth averaged 4½ per cent. This resulted in an inflation rate of 2½ per cent. The krone exchange rate was stable. The output gap shows the difference between actual production (GDP) and trend growth - estimated at close to 2.5 per cent in Norway. At the beginning of the 1990s, the economy was in a deep recession. Production was well below capacity. When growth in the economy picked up, capacity utilisation increased. The output gap closed around 1996. From then on, costs increased and the rise in prices for goods and services produced for the Norwegian market accelerated. The upturn peaked in 1997, with GDP growth approaching 5 per cent. The pace of such a strong upturn could not be sustained.

In autumn 2002, Norges Bank established a regional network as a tool to gauge the level of activity in the Norwegian economy. The network consists of companies, organisations and municipalities throughout Norway. In the two contact rounds in connection with Inflation Report 1/03, discussions were held with 440 contacts. We will be having six rounds of talks each year with business and community leaders concerning financial developments in their enterprises and industries, with about 200 visits in each round. The selection of contacts represents the production side of the economy, both industry-wise and geographically. In the course of 2003, the number of contacts associated with the network will rise to about 1000 persons, who will be contacted once or twice a year. Østlandsforskningen is responsible for the network and conducts contact meetings in Hedmark county. Our assessments are based primarily on official statistics, but because of the time lag involved and revisions of these statistics, supplementary information from other sources is useful. The regional network provides up-to-date information on the state of the Norwegian economy. Regular talks with local business and community leaders provide information that can supplement available official  BIS Review 23/2003  3  statistics. Moreover, we obtain supplementary information about areas not covered by official statistical sources. We also learn which issues are of particular concern to enterprises. Region Inland seems to have felt the impact of the downturn to a lesser extent than other parts of the country. Developments in domestic manufacturing are approximately in step with domestic consumption.
In the words of Cynamon, 2008, “A family, in isolation, might choose a more conservative financial path, but the influence of neighbours, both those who have a physical presence and those whose lifestyles are piped in through the media, drives both consumption and debt higher.”6  4  Reinhart C., Rogoff K. (2010), Growth in a Time of Debt, American Economic Review, American Economic Association, vol. 100(2). 5  Rajan R. (2010), Fault Lines, Princeton University Press. 6  Cynamon B., Fazzari S. (2008), Household Debt in the Consumer Age: Source of Growth—Risk of Collapse, Capitalism and Society, Berkeley Electronic Press, vol. 3(2). BIS central bankers’ speeches  3  Finally, sub-optimal levels of savings and corresponding excessive indebtedness may originate from time-inconsistent preferences that lead human beings to deviate today from behaviour they defined as optimal yesterday. We might, for instance, have planned to save more (and consume less) in the future but – when the time comes – we postpone our plan to save because of so-called “present-biased” preferences.7 This behaviour may result in a reduction of lifetime utility because our “long-run selves” do not appreciate it.8 Already in the 18th century, David Hume wrote “There is no quality in human nature, which causes more fatal errors in our conduct, than that which leads us to prefer whatever is present to the distant and remote”.9 Mitigate the downsides of financial development What lessons can we draw from this multi-faceted diagnosis?

This bias is prevalent in complex and opaque situations which are surely predominant in the modern financial system. Turning to the indebtedness of sovereigns, we cannot put the blame for excessive indebtedness on financial incentives. But the overweighting of current benefits and the overdiscounting of future costs can easily be attributed to electoral considerations and the finite career of elected politicians, careers which become shorter when they cannot “seduce” their electorates. At a cognitive level, I would also put the blame on another factor that could be called a “Keynesian bias”. Here, I refer to the conviction that countercyclical policies should be activated in downturns to mitigate the social cost of output and employment losses, but that they need not be reversed in upturns. This conviction is based on the view that there is no natural, theoretical or even apparent practical limit to state indebtedness, at least for developed economies. This cognitive bias is, in my view, a major explanation for the observed structural deficits in government accounts leading to an ever-rising debt to GDP ratio. In the OECD as a whole, for instance, the public debt to GDP ratio has increased from 70% in 2000 to 103% today! While we can dispute the precise diagnosis, we cannot disagree with the fact that the present crisis should and will serve as a wake-up call. Sovereigns, like banks, need to build up a buffer ahead of potential unfavourable economic developments.
Chart: A countercyclical investor The long-term horizon puts the fund in a position to be a countercyclical investor on a systematic basis. This is done through rebalancing the share of the portfolio allocated to equities. According to the rebalancing rule, when the equity share increases to more than 64 percent of the fund, we sell equities and buy bonds. Conversely, when the equity share falls below 56 percent, we sell bonds and buy equities. This strategy has proved to be profitable for the fund, and has increased the average annual return by about 0.5 percentage point. 2 Chart: International real interest rates So far, the fund has earned an overall annual real return – after inflation and management costs – of 3.8 percent. The cumulative return on the fund in money terms is equivalent to  1  John H. Cochrane (2011): “Discount rates”, The Journal of Finance 66 (4), 1047–1108. 2  For an analysis of the impact of rebalancing, please see Norges Bank (2012): The history of the rebalancing of the fund, Discussion Note 4. BIS central bankers’ speeches  3  more than a third of the fund’s total capital at the end of 2014. Going forward, the returns are likely to be lower. The starting point for calculating the expected rate of return on the portfolio is the real interest rate on high-grade government bonds. In recent years, bond yields in real terms have been close to zero.

Based on the kind of systematic adjustments indicated above, a tailor-made operational portfolio has been constructed. This reference portfolio serves as a basis for more traditional selections of securities. The fund’s largest holdings in terms of ownership share, both in equity and fixed income, are based on our own analyses of investee companies and countries. Chart: External managers The large majority of the fund’s investment decisions are made within our own organisation. Still, we have always used external management companies in areas where developing inhouse capabilities has not been an efficient option. Most of the external mandates have in recent years been directed to specialists in specific sectors or countries. The fund is a long-term, responsible investor. The objective of our management is to achieve the highest possible return at acceptable risk levels. Norges Bank’s work on responsible investing underpins this objective. As a long-term investor, we are dependent upon healthy and sustainable developments in investee companies and markets. Our work with responsible investment rests on three pillars: We promote international principles and standards, and express our expectations as an investor on certain issues. We exercise active ownership through voting and engagement with companies. And we integrate environmental, social and governance issues into the investment process and risk management. BIS central bankers’ speeches  5  Chart: Responsible investment I Promoting good industry standards is an effective way of safeguarding our investments and assets in the long term.