samchain/econo-pairs-v1 huggingface dataset:
Stocks in different companies in a variety of sectors, loans to governments and corporations, and real estate investments in a number of global cities are all parts of the portfolio. At the end of 2014, the fund had investments in securities from almost 10 000 issuers in 75 countries. The fund is a global investor. Prices in financial markets carry information about the risk and return prospects of different assets, and the markets are fairly efficient most of the time. Hence, a natural starting point for the allocation across regions is the size of the different financial markets. However, the weights assigned by the fund to different geographical regions are the result of a trade-off between various considerations. The fund is a minority shareholder and dependent on good corporate governance and protection of our rights in legal systems. Regulatory conditions in investee countries must be relatively stable, and we must be reasonably sure that our investments are safe. From the start in 1998, a large share of the fund was allocated to Europe. At that time, the emphasis was on exchange rate risk related to the trade pattern of the Norwegian economy. As European countries are our most important trading partners, Europe was overweighted compared with market weights. Three years ago, the Ministry of Finance concluded that exchange risk had diminished, partly due to increased globalisation. Consequently the fund’s overweight in Europe was reduced. At the same time, the allocation to emerging markets was increased.

Thankfully, all this is now also being worked on internationally in the Financial Stability Board. A second and obvious policy inference that one could draw from Shleifer’s paper, and one I want to spend a little more time on this evening, is that it is absolutely vital that (regulatory) capital requirements for banks more or less truly capture their risks. Two thoughts on that, of rather different kinds. First, it was very obviously a false step when, in Basel 2, the international-standard setters tried to follow the techniques and calibrations of private sector risk managers rather than engaging with the externalities that warrant State intervention in this area in the first place. Second, more particularly and more concretely, this underlines the vital importance of the current Basel work to review fundamentally the capital requirements for banks’ trading books. In short, Basel has recognised that the amount of capital a bank should hold against a liquid trading position often has good reason to be smaller than needed for a hold-to-maturity portfolio, ie where the bank can shed its exposure. But it failed utterly to recognise that since such books are marked-to-market (or model) and since the boundary conditions for solvency derive partly from accounting measures of asset values, it is vital that banks hold capital against the risk of violent swings in liquidity premia. Yet that is exactly what torpedoed a fair fraction of the largest banks and dealers in the world through their (levered) holdings of leveraged loans and super senior tranches of CDOs.
Surveys from the National Institute of Economic Research indicate that households expect rising interest rates in line with the Riksbank’s repo rate forecast. This is probably one reason why saving among households is at a historically high level. That said, however, there are a number of uncertainty factors to consider. … but major differences among different groups The aggregated figures conceal vary large differences among different households, a fact substantiated by the Riksbank’s analysis of data on individual households’ debt. 13 We can categorise households based on their indebtedness. Figure 8 shows how much an interest rate hike of 1 percentage point will subdue disposable income expressed as a percentage for all borrower households and for the most indebted. 14 For borrower households as a whole, disposable income will slow by just under 2 per cent. For the 10 per cent most indebted households, disposable income will slow by more than 6 per cent. The repo rate will be raised by about 1.5 percentage points during the three-year forecast period. See K. Blom and P. van Santen, “The indebtedness of Swedish households –-Update for 2017”, Economic Commentaries No. 6, 2017, Sveriges Riksbank. 14 The calculations only capture the dampening effect of rising interest expenses on disposable household income, as the data material does not contain details on households’ interest-bearing assets. See P. Gustafsson, M. Hesselman, and B. Lagerwall (2017), “How household cashflows and consumption are affected by higher interest rates?”, Staff Memo, Sveriges Riksbank. 12 13  10 [13]  Figure 8.

But I think that the situation on the Swedish housing market is still very uncertain. Weaker developments than in our forecast pose a significant risk to the Swedish economy. Those components of domestic demand that would be negatively affected first of all would be housing investment and household consumption. But as I am here at the Swedish Property Federation today, I would also like to mention that the weaker developments on the housing market since last autumn have not escaped housing developers. You can read more about this in an article in our Financial Stability Report, published in November. 16 An important conclusion we can draw from developments in recent years is that housing developers have burdened households with substantial risks during the building process. In  16  See “The new production of housing and financial stability”, article in Financial Stability Report 2018:2. 12 [13]  the prevailing market situation, these risks have come to the fore, causing households’ interest to wane, especially when move-in dates to new homes are far-off in the future. This will require modified business models in order to rekindle the interest of prospective house-buyers in newly built homes. My assessment is also that newly built homes are currently far too expensive for many groups. Cheaper new builds and better turnover in the housing stock could help untangle this knot. There are of course many uncertainty factors not only surrounding future economic developments, but also surrounding inflation.
For the world as a whole, the IMF calculated that inflation will rise from around 4 per cent in 2007 to almost 5 per cent in 2008. Inflation expectations have also risen in several countries. The most probable development is that inflation will slow down next year. When adjusted for energy and food prices, inflation has been relatively stable. Normally, inflation slows down when growth slows down, even if this is with some time lag, and our forecast in the Monetary Policy Report is for growth in the world to be lower this year and next year. At the beginning of the summer we were also able to note that, unlike the situation in the spring, monetary policy expectations had swung towards higher interest rates in several countries. A tight monetary policy contributes to dampening inflation. But there is a risk that the inflation process will be more prolonged. It was estimated that growth in the world will continue to be relatively strong, despite a slowdown in the United States and the euro area. In a slightly longer perspective, when the slowdown in the United States and the euro area becomes an upswing once again, there is also a risk that the problem of rising commodity prices will return. Several emerging countries will experience rapid growth for some time to come. 2. Developments in Sweden  Weaker growth and labour market in Sweden Growth will also slow down in Sweden.

 Inflation is high, but will fall towards the 2% target over the coming years. BIS Review 100/2008  7  Outline  International developments  Developments in Sweden  M onetary policy  What has happened during the summer  Basis spread Difference between interbank rates and expected policy rates Basis points 120  100  120 M PR 2008:2  Sweden USA Euro area  100  80  80  60  60  40  40  20  20  0 jan-07  0 apr-07  jul-07  okt-07  jan-08  apr-08  jul-08  Sources: Reuters EcoWin and the Riksbank  8  BIS Review 100/2008  GDP growth in the USA Quarterly changes in per cent calculated at an annual rate, seasonally-adjusted data 8  8  6  6  4  4  2  2  0  0  -2  -2 00  01  02  03  04  05  06  07  08  09  10  11  Note. Broken columns represent the Riksbank’s forecasts in M PR 2008:2. The dot is the outcome for Q2 2008.
I thus consider that it should be the Riksbank that decides the size of the foreign exchange reserves, as well as how they should be funded. In crises and times of unease, the Riksbank must always consider all the  22 [25]  possibilities for performing its remit. If there are no other possibilities for the Riksbank to secure access to foreign exchange other than issuing promissory notes in foreign currency in its own name, then such a measure must, of course, be considered and, indeed, implemented when circumstances demand it. A central bank must be able to use its balance sheet I have returned to the central bank’s balance sheet several times, This is because I consider there is a great probability that this will play an important role in monetary policy in the period ahead, just as it did earlier, at least if we are prepared to look further back in time than the Great Moderation. In addition, if real interest rates continue to remain on the weak levels we have seen over the last ten years, changes in the terms for the monetary policy facilities and securities purchases will become necessary parts of normal monetary policy. It is therefore important that the new Sveriges Riksbank Act does not restrict these possibilities. References Agrawal, R. and M. Kimball (2015), “Breaking Through the Lower Bound”, IMF Working Paper No. 15/2015. Andersson, B., M. Jonsson and H. Lundvall (2020), “The new macroeconomic environment after the global financial crisis”, Sveriges Riksbank Economic Review 2020:1, Sveriges Riksbank.

Turning to the monetary analysis, broad money (M3) continues to expand at a robust pace, with an annual rate of growth of 4.7% in February 2017, after 4.8% in January. As in previous months, annual growth in M3 was mainly supported by its most liquid components, with the narrow monetary aggregate M1 expanding at an annual rate of 8.4% in February 2017, unchanged from the previous month. The recovery in loan growth to the private sector observed since the beginning of 2014 is proceeding. The annual growth rate of loans to non-financial corporations declined to 2.0% in February 2017, from 2.3% in the previous month, while the annual growth rate of loans to households remained broadly stable at 2.3% in February. At the same time, the euro area bank lending survey for the first quarter of 2017 indicates that net loan demand has increased and bank lending conditions have further eased across all loan categories. The pass-through of the monetary policy measures put in place since June 2014 continues to significantly support borrowing conditions for firms and households and credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for a continued very substantial degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2% without undue delay.
Euro area banks’ issuance of medium and long-term debt picked up in the first two months of 2012 compared with the subdued levels in the second half of 2011. In this period, euro area banks issued about € billion in senior unsecured debt, which is about as much as was issued in the entire second half of 2011. Banks also issued € billion in covered bonds. While term debt issuance was mostly concentrated in some AAA euro area countries in the early phase of market reopening, the issuer base broadened thereafter. In particular, February saw the issuance of senior unsecured debt by some large banks from Italy and Spain, as well as some increased covered bond issuance by large banks and new issuance by “second-tier” lenders from these countries. In another sign of improving funding conditions, the cost of medium and long-term funding has decreased since December 2011, as illustrated by the drop in European debt yields for financial and non-financial corporations (Slides 4 and 5). Unsurprisingly, the change in yields was particularly pronounced for the lower-rated bonds, confirming that the LTROs have managed to sharply reduce risk premia. The resulting perception that liquidity risks for euro area banks have diminished and that capital adequacy has improved thanks to the capital exercise might also have contributed to the recent strong performance of the stock markets of many euro area countries (Slide 6). 4  BIS central bankers’ speeches  Euro area sovereign bond markets have rebounded dramatically.

2  BIS central bankers’ speeches  Thanking you for your attention, allow me to announce the winners of the Best Diploma awards for 2011:   The third prize is awarded to Ardit Azizaj, an MA student of the New York University in Prague, for his dissertation “What Albania’s possibilities are, in future, regarding the world division of labour?” His dissertation focuses on the impossibility of a country to transform its economy successfully from a poor and centralised to a developed economy.   The second prize is awarded to Ledia Sulejmani, a student of the University of Tirana for her dissertation “Economic developments in Western Balkans, future challenges.” Her dissertation describes distinctions and characteristics of Western Balkan countries as regards economic indicators, in light of a common area and its future challenges.   The first prize is awarded to Borana Angjeli, an MA student of Marin Barleti University in Tirana for her dissertation “Pension systems”. Drawing on results from a survey to employees close to their retirement, the thesis points out some of the shortcomings of the pension system in Albania and makes recommendations on changes to the actual pension scheme, in line with European principles, without being a heavy burden for the state budget. Thank You! BIS central bankers’ speeches  3
At the same time, it is also clear that there may be negative side effects.5 Accordingly, the Governing Council will continue to assess the case for mitigating measures, which is especially relevant if further rate cuts are envisaged. Forward guidance on interest rates Our interest rate forward guidance with its state-contingent and date-based legs has become the principal tool for adjusting the monetary policy stance, especially following the end of net asset 4 / 19  BIS central bankers' speeches  purchases. The state-contingent leg expresses the anchor of our policy-setting expectations: policy rates will not be raised until we are sufficiently confident that inflation will reach levels that we consider most consistent with the ECB’s price stability objective. This, in turn, allows interest rate expectations to adjust dynamically in a data-dependent manner, which results in automatic easing if the convergence path is delayed. Through the date-based leg, the Governing Council affects interest rate expectations by expressing its views about the rate path in the near term that, given the outlook for inflation, is most conducive to reaching the objective over the medium term. This removes unnecessary uncertainty about the policy orientation over horizons that are not stretching too far into the future and prevents an unwanted weakening of the monetary policy stimulus. The evidence shows that our enhanced forward guidance has been effective. The statecontingent element is clearly understood by investors and is influencing their expectations.

Philip R Lane: Monetary policy and below-target inflation Speech by Mr Philip R Lane, Member of the Executive Board of the European Central Bank, at the Bank of Finland conference on Monetary Policy and Future of EMU, Helsinki, 2 July 2019. * * * I would like to thank the Bank of Finland for inviting me to speak at this conference in Helsinki today.1 In my contribution, I wish to share some thoughts on the conduct of monetary policy in a lowinflation environment. This is a global topic that generates similar challenges for most of the central banks represented at this event. To a significant extent, this sequence of low inflation rates reflects the prolonged adjustment dynamics that characterise the aftermath of a major global financial crisis, together with a substantial downward shift in the realisation of shocks to inflation that we have observed in recent years. At the same time, regardless of the underlying origins of the current low inflation environment, some observers may be tempted to query whether and how central banks will meet their inflation objectives, especially under conditions in which monetary accommodation is already quite extensive. To address these concerns in respect of the euro area, I will demonstrate the effectiveness of the policy instruments that we have deployed to ensure that inflation climbs to meet our objective over the medium term.
In this year in particular, we are seeing a strengthening of the international dimension of our financial sector. This essentially serves to strengthen our economic and financial inter-linkages with the global economy. Some notable developments in this direction include the liberalisation of the foreign exchange administration rules earlier this year to allow for greater flexibility and efficiency in foreign exchange transactions as well as to increase foreign participation in issuing ringgit papers in our bond market and thus contribute to contribute toward enhancing the depth of the market. Another major development this year was the move to a managed float exchange rate regime for the ringgit. This is essentially to better position the nation to respond and benefit from the structural changes occurring in the region and the global economy. Other further developments to strengthen our international integration include the increase in foreign participation in our domestic financial system. This includes the issuance of new licences for foreign Islamic banks to operate in Malaysia, the issuance of new stock-broking licences to foreign players as well as increases in the permitted foreign interest in our Islamic subsidiaries and investment banks. All this will serve to enhance the international integration of the domestic financial system. The launch of the ABF Malaysian Bond Index Fund is also aimed at promoting greater integration among the regional bond markets. On the domestic front, the year 2005 marks a significant milestone for the merchant banking industry.

Forecasts for a low inflation level in the period ahead have dictated the implementation of an accommodative monetary policy in the last quarters. The policy rate cuts have already been passed through to interest rates in the interbank and deposits market, and to most of government securities’ yields. Interest rates on loans have also reflected the expansionary stance of the monetary policy of the Bank of Albania, but they continue to contain high risk premiums for credit risk and other risks related to long-term investment. The slow performance of the economy is also reflected in the monetary indicators. Money supply continued to increase at low annual rates, standing at 2.1% in March. This performance has reflected the decrease in credit to the private sector and the lower financing needs of the public sector. Credit to the private sector shrank 2.4% in March. Besides the weak demand from businesses and households, the sluggish performance of credit reflects the banks’ conservative lending policies. This approach is reflected not only in the interest rates on loans, but also in other lending standards applied by the banking system. In this regard, the Bank of Albania deems that the banking system in Albania has room for and should adopt a more appropriate behaviour towards crediting the Albanian economy. The country’s economic and financial reality, on-going monetary policy easing and our liquidity-injection operations, as well as the adaptation of our regulations to the market situation provide the premises for faster crediting to the economy.
The degree of intrusiveness in regulatory requirements will swing from one end of the pendulum to the other, before settling somewhere in the between. This process can often be disruptive and unproductive, not only to financial institutions, but also to the wider economy. This leads me to my next point on the broader social and economic consequences of weak compliance. In most banks, the compliance function has mainly served to ensure that a bank is operating within permitted legal and regulatory boundaries. In such cases, the compliance function effectively does little more than constrain a bank from activities that increase compliance risks. So rather than work with business units and customers to close gaps that contribute to heightened risks, compliance officers are seen as gatekeepers rather than partners. This is an important distinction with potentially significant consequences for a bank’s risk-taking activities. I can give you at least three examples of this. When we issued revised standards on loan provisioning, one of the requirements was for banks to classify loans as “impaired” if the loans were restructured or rescheduled following an increase in credit risk. Rather than focus on how banks might strengthen internal assessments to better identify and measure changes in credit risk, many banks simply withdrew altogether 2/5  BIS central bankers' speeches  from entertaining requests from borrowers to restructure and reschedule their loans. SMEs were hit the hardest, requiring Bank Negara Malaysia to intervene.

$ equity listing Related to the bond market is the development of the Asian equities market. Companies will increasingly turn to the equity market to raise capital or reduce their debt-equity ratios. They will either seek to list in their home exchange or list abroad, and their shares will often be traded on more than one exchange. The Singapore stock exchange aims to be one of the centres in the Asian equities market. Foreign companies seeking to list on SES often want to do so in $ This enables them to tap the local investor base, which contributes significantly to liquidity, and hence to higher stock valuations. However, we have required foreign companies wanting to list in $ to have at least 20% of their revenues, profits, or expenses attributable to Singapore. MAS has now decided to remove this requirement. We will allow all foreign-owned companies to list $ denominated shares freely on SES, without consultation, subject of course to meeting SES’ listing  1  Defined in the Companies Act (Cap 50) as an individual whose total net personal assets exceed $ million or its equivalent in foreign currencies or whose income in the preceding 12 months is not less than $ or its equivalent in foreign currencies; or a corporation whose total net assets exceed $ million in value or its equivalent in foreign currencies as determined by the last audited balance sheet of the corporation. BIS Review 130/1999  4  requirements.