samchain/econo-pairs-v1 huggingface dataset:
We at the Riksbank prefer to present our more detailed views on the evaluation during the consultation rounds, so today I intend to make a few more general comments. Regarding financial stability – we need clear legislation and efficient institutions I do not believe that anyone would still doubt that the risk of a financial crisis is a very real risk that we must learn to live with and to manage in the best possible way. It is probably also quite clear what is at stake here – a financial crisis could entail substantial costs for society. We must therefore learn from the experiences of the crisis and ensure that we are as wellequipped as possible to face any new crises in the future. This requires in an initial stage taking an overall approach to both crisis management and crisis prevention work, something that the government’s recently-appointed financial crisis commission has been tasked to deal with. Ultimately, the goal is to establish effective legislation and efficient institutions. The financial crisis that we have lived with over the past few years has tested institutions and legislation to breaking point, in Sweden and abroad. This has highlighted some old weaknesses in the legislative framework, and we have also discovered some new deficiencies. Even before the Committee on Finance’s evaluation was published, the Riksbank pointed out a number of weaknesses that require attention in a proposal to the Riksdag.1 It is therefore gratifying that Goodhart and Rochet clearly point out largely the same weaknesses.

SPEAKING POINTS DATE:  2017-12-07  SPEAKER:  Deputy Governor Cecilia Skingsley  VENUE:  International Economic Forum of the Americas, OECD Conference Center, Paris  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  What role for monetary policy in achieving inclusive and sustainable growth? • I intend to say a few words about the role of monetary policy in achieving inclusive and sustainable growth. • I would like to start by saying that in general, a well-balanced monetary policy, including a price stability target, contributes to sustainable growth, and that sustainable growth is normally positive for equality. • Achieving the monetary policy goal of keeping inflation low and stable leads indirectly to positive effects on equality, as households with low incomes don’t have the possibility to shield themselves from the costs connected with high and volatile inflation. • The press release from 15 January 1993, when the inflation target in Sweden was announced, stated: “Price stability is a prerequisite for sustained economic growth as well as full employment and it prevents an arbitrary redistribution of income and wealth”. • If inflation is higher than expected, borrowers benefit because the value of their debts declines, while lenders and those with large savings lose out. This type of large, arbitrary redistribution between lenders and borrowers was common in Sweden during the 1970s and 1980s, but is now history.
Indeed, there was so little urgency that, unfortunately, in the last 15 years there has not been a single labour reform capable of preventing our rigid labour markets from suffering, for the third time, an adjustment along the old familiar lines of leaving millions of Spanish workers jobless. Voices are sometimes heard casting doubt on whether labour reform is urgent, arguing that the labour market is not at the root of this crisis. This is quite true, but it is an argument which does not constitute grounds for ignoring the prime importance of this reform. If you allow me the metaphor, our labour market has shown itself to be a fragile ship which, each time there  6  BIS Review 27/2010  is a storm, springs leaks which are enormously costly to seal. Obviously the storm is not the fault of the ship’s captain, but he can make repairs before it is sunk by the storm. But, what is more, our labour ship also functions poorly when there are no storms. In the periods of highest growth of the world economy, we continue to have the highest unemployment rate and our labour productivity growth is mediocre, limiting the scope for wage increases. The ship does not sink but it sails – in terms of productivity and of reducing unemployment – at a poor speed in comparison with the rest.

As I have said on previous occasions, the greatest cause for concern at present should not be predicting exactly when positive quarter-on-quarter growth will resume, but rather determining to what extent the Spanish economy is ready – or not – to move into a long phase of robust growth. During the last upturn, the Spanish economy built up some significant imbalances, such as the excessive weight of real estate activities, a swollen external deficit, a relative loss of competitiveness, and high corporate and household debt. Over the course of the crisis, some of these imbalances have begun to be corrected, but others are still significantly holding back a pickup in growth. With the crisis, these pre-existing structural problems have been compounded by an increase in unemployment to levels far higher than those of any other developed countries and by the sharp deterioration in public finances. These are now undoubtedly the two main problems affecting our economy. To embark on a sustainable economic recovery, the imbalances built up by the Spanish economy before and during the crisis must be reversed. Job destruction must be halted and unemployment absorbed. And, further, an ambitious plan must be devised and set in place to cut the budget deficit, to redress the financial position of the private sector and, in sum, to mitigate all those structural shortcomings that are currently weighing on the recovery and contributing to reducing the growth potential with which our economy will face the new expansionary cycle.
The annual increase in private residential property prices slowed significantly from 18% in 2010 to 5.9% in 2011, and further to 2.8% in 2012. In sequential quarter-on-quarter terms, price increases have dipped below 2%. The motor vehicle market is another example of macroprudential policy in action, this time complementing monetary policy in addressing concerns regarding consumer price stability. BIS central bankers’ speeches  7  Singapore has perhaps the most stringent restrictions on car ownership in the world. Anyone who wishes to register a new vehicle in Singapore must first bid for a Certificate of Entitlement (or COE), which represents a right to vehicle ownership and use of our limited road space for 10 years. The number of COEs is tightly controlled, so as to minimise the number of cars on the road. As the supply of COEs dwindled and demand for cars remained firm on the back of strong income growth and low interest rates, COE prices rose rapidly in the last three years. At their peak early this year, COE prices averaged around $ nearly five times the level in January 2010. This in turn drove up the overall inflation rate, and started having spillover effects on the rest of the economy and shaping price expectations more generally. There was also a growing risk that buyers were over-extending themselves by purchasing more expensive cars, given the low interest rate environment. In February this year, MAS announced measures to restrict the financing of car purchases for private use.

Caleb M Fundanga: Barclays Bank home loan product Vote of thanks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the Barclays Bank home loan product, Lusaka, 25 January 2006. *  *  *  •  The Minister of Finance and National Planning, Hon. Ng’andu Peter Magande M.P. •  The Board Chairman of Barclays Bank Zambia PLC, Mr Hakainde Hichilema and Board Members present here today  •  The Acting Managing Director Barclays Bank Zambia PLC Mr Daniel Nel,  •  Barclays Bank Zambia PLC staff,  •  Distinguished Invited Guests, Ladies and Gentlemen  I feel greatly honoured to be invited to give a vote of thanks to the Honourable minister’s speech at the launch of the Barclays Bank Home loan product. On behalf of Bank of Zambia and indeed on my own behalf, I would like to congratulate Barclays Bank Plc Zambia for leading the way in establishing long-term finance for the real estate sector. Distinguished invited guests, its just a few months ago that I was invited to talk to an audience on the theme, “Investment opportunities in the Zambia real estate business: The role of Bank of Zambia” at a workshop on Investment Opportunities in Zambia – Integrating African Property Markets. I remember telling the audience then that although the share of the real estate sector in GDP has been increasing over the years, it could perform even better if certain issues were addressed.
In its August 2021 communication, the MPC judged ‘that the impact on monetary conditions of a reduction in the stock of purchased assets, when conducted in a gradual and predictable manner and when markets are functioning normally, is likely to be smaller than that of asset purchases on average over the past’. Mechanically, selling assets in well-functioning markets implies the market functioning channel of QE transmission should not be relevant. If market dysfunction were to take hold, asset sales could, if necessary, be paused. Moreover, undertaking sales in the background as I have described implies a weakening of the signalling channel of QE transmission. Thus the design for a gilt sales programme I have described here is likely to deliver an outcome in line with last August’s MPC statement. But that is not to deny that asset sales have the potential to tighten monetary and financial conditions. I would expect them to do so. [19] The staff study I mentioned a moment ago concludes that asset purchases – and thus probably also their unwind – largely work via their impact on asset prices. [20] As long as we undertake any gilt sales programme in a predictable and well-communicated manner, the impact of these sales will be – indeed, already may be – ‘priced into’ financial prices, notably gilt yields. These are observable and are used to condition our regular MPC forecasts and other analysis.

Of course – as I have explored in previous talks (Pill, 2022) – assessing how supportive any particular stance of monetary policy will prove is difficult, since it relies on conceptually and empirically uncertain measures of neutral benchmarks for policy, such as the natural rate of interest or R-star. 9. On Tuesday, the ONS published an unemployment rate for March 2022 of 3.5% (single month basis) (‘Labour market overview’, Office for National Statistics  ). 10. Private sector regular average weekly earnings (AWE) growth increased to 4.8% in Q1, while annual whole economy AWE growth was 7.0% (‘Labour market overview’, Office for National Statistics ). In part, the difference between these two indicators reflects the strength of bonuses in the data, which – despite adding to household income – are not ongoing costs to firms. 11. Of course, that means the assumption of stable energy prices has not proved very accurate in the recent past. But commodity prices are hard to forecast, and the random walk forecast has performed as well as alternatives over most periods. In particular, there is scant evidence that the path of commodity prices embodied in market futures pricing has outperformed the random walk assumption. 12. See Broadbent (2022). 13. See the discussion of a Brexit ‘doppelganger’ model reflected in Chart 1 of my MPC colleague Catherine Mann’s recent speech (Mann, 2022). 14. See Nickell (2005). 15. See the discussion of labour market trends and long Covid reflected in Figure 6 of my MPC colleague Michael Saunders’ recent speech (Saunders, 2022).
Conclusion The changes in the financial system since 1998 confront us with a mix of benefits and challenges. The larger size and scope of the core institutions, the greater opportunities for risk transfer and hedging provided by innovation in derivatives, the improvements in risk management, the larger role played by a much expanded number and more diverse mix of private fund managers seem likely to have improved the stability and resilience of the financial system across a broader range of circumstances. The same factors that may have reduced the probability of future systemic events, however, may amplify the damage caused by and complicate the management of very severe financial shocks. The changes that have reduced the vulnerability of the system to smaller shocks may have increased the severity of the large ones. Supervisors need to continue to focus attention on reducing the vulnerability of the market to these low probability, but extreme events, while preserving the benefits that have come with these changes in financial markets. The limitations of the conventional risk-management tools in assessing potential losses in the adverse tail of possible outcomes in today’s financial system magnify the risk that individual institutions will operate with less of a cushion than might be desirable for the market as a whole. As the structure of markets change, we need to continue to review whether the overall framework of supervision over the core banks and investment banks provides the right balance of efficiency and resilience for the system as a whole.

Jean-Pierre Roth: The economic situation – la vie en rose? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at a meeting with representatives of Ticino industry, Centro di studi bancari, Vezia, 28 November 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is true that our exports continue to benefit from a buoyant global economy, that areas of concern such as the volatility of oil prices or the possibility of a significant and lasting downturn in the US economy have partially receded, and that the current economic recovery has led to an improvement in the labour market without endangering price stability. Is this la vie en rose (living life through rosetinted spectacles)? A brief outline of the situation in the national and international economies is given, indicating that the overall perspective remains favourable. It concludes with a concise evaluation of the risks, showing that the current euphoria may conceal significant risks that we must not lose sight of. BIS Review 116/2006  1
Back in February this year the MPC asked the Bank to take steps, and the PRA to engage with PRA-regulated firms, to ensure negative rates could be implemented in practice if needed; that work is due to complete in August. And the MPC have begun work to reconsider our previous guidance on the appropriate strategy for tightening monetary policy, as we committed to in our February minutes. Of course I am just one of nine members of the MPC navigating a path for the economy on this journey – different MPC members will have their own views about where the economy is heading and what the appropriate path should be. The personnel on the expedition are also changing; at the August MPC meeting we will temporarily be down to eight members and there will be two new members joining later in the year. Back in March last year the outlook for the economy was in pretty uncharted territory. Over time prospects have become clearer and we have become more able to rely on the map provided by our forecasts. Now that the recovery is becoming more established, and the risks are once again two sided, we are heading back to more familiar, but still challenging, ground. The map is becoming more detailed and the contours for the immediate path ahead are filling in, but at the same time choosing the precise direction of travel is becoming less straightforward.

Other labour market indicators have also been strong, with a 200,000 increase in HMRC payroll numbers in May and an increase in job vacancies to above pre-pandemic levels. Most strikingly, private sector regular pay rose by 5.6% in the April data – though it is important to note that this is boosted by compositional effects, and by a base effect from spring last year. Aiming off for these transitory factors ‘underlying’ pay growth appears close to pre-pandemic levels. As Andrew Bailey set out in his recent speech, the compositional and base effect in the data meant that even if the level of average earnings was flat for the rest of the year, the growth rate would peak at nearly 8%. Putting all that together I expect to see another high reading in the May earnings numbers when they are published tomorrow. The latest REC survey for June reported labour demand growth at record highs, staff availability declining at a record rate, and pay growth rising fast. Against that backdrop it is not surprising that the labour market is a recurring theme of the intelligence on economic conditions that we receive from our agents and from our (virtual) regional visits. Finally there has also been significant news in inflation. UK CPI inflation rose to 2.1% in May, and then to 2.5% in this morning’s June data release. That represented material upside news to our May short-term projections, and as a result also represents a faster move to above-target inflation than we had been expecting.
Prior to 1970 published accounts understated the true level of banks’ capital because they did not include hidden reserves. The solid line adjusts for this. 2009 observation is from H1. (c) Change in UK accounting standards. (d) International Financial Reporting Standards (IFRS) were adopted for the end-2005 accounts. The end-2004 accounts were also restated on an IFRS basis. The switch from UK GAAP to IFRS reduced the capital ratio of the UK banks in the sample by approximately 1 percentage point in 2004. Sources: Bank of England, Financial Stability Report June 2009 and “The British Economy, Key Statistics 1900–1970”, published for the London & Cambridge Economic Service. From 1968 the liquidity ratio is: Cash + Bank of England balances + money at call + eligible bills + UK gilts as a percentage of banks’ total asset holdings. Prior to 1968 the ratio is calculated as the liquid assets of the London Clearing Banks as a percentage of gross deposits, as defined in “The British Economy, Key Statistics 1900–1970”. Furthermore, in recent years the quality of banks’ capital deteriorated as banks exploited the availability of new hybrid capital instruments which often had the tax advantages of debt. In practice hybrid capital did not absorb banks’ losses despite being treated for regulatory purposes as if it was like equity.

In the decade that followed that honour, the UK has been through a searing financial crisis and a recovery that has been even slower than that following the Great Depression. Once the financial system was fixed, however, the UK became, until recently, the fastest growing economy in the G7. Unemployment nationwide has fallen from 8.5% to 4.3%, a 42-year low. In Liverpool, the unemployment rate has declined steadily to 4.7% today, around 2 percentage points below its pre-crisis rate. The recovery here is being aided by further regeneration, both economic and physical – building the infrastructure that will enable businesses and households to flourish. These efforts are building on past successes, with Liverpool now home to many award-winning museums including the Museum of Liverpool, the International Slavery Museum, and Tate Liverpool. Liverpool Council is working in partnership with businesses and other organisations to exploit the best of what each can bring. For example, Liverpool Council, Liverpool FC and Your Housing Group are working together to bring new vibrancy to the Anfield area. I personally heard last night about some of the great work that Everton in the Community are doing to tackle problems like homelessness and boost educational attainment. And the club of course has ambitious plans for a new stadium at Bramley Moore dock. Liverpool’s Science Park provides office space alongside commercial labs, right at the heart of the city’s Knowledge Quarter.
We can only strengthen the euro area, to the benefit of all, if all member countries imagine themselves in comparable positions behind a veil of ignorance. This is why resetting all our economies onto a path of sustainable rebalancing is essential. Sustainable rebalancing is key to reducing risks. It is key to creating the preconditions for all euro area countries to stabilise, grow and converge. And it is key to laying the groundwork for Economic and Monetary Union to be completed. The euro area has been going through such a rebalancing process for several years now. So what I would like to do in my remarks is review where we stand today. How far has rebalancing come? Is that rebalancing sustainable? And, if not, what do we need to do to make it sustainable? These questions do not only matter for the euro area. They matter for the rest of the world as well, since rebalancing has important implications for global growth. If every economy were to react to their domestic challenges by exporting their slack, it would only trigger a race to the bottom. Therefore, only through achieving a truly sustainable rebalancing can the euro area start generating rather than absorbing global demand. Dimensions of sustainable rebalancing So what is sustainable rebalancing? There are four aspects we need to consider. The first is that external and internal rebalancing are twin concepts. For rebalancing to become truly sustainable, progress on both fronts is required.

Our response to the nature-related crisis should therefore be as ambitious as our response to the climate-related one. The world needs to account for, manage, and mitigate the financial risks posed by biodiversity loss. The NGFS has set up a task force to mainstream the consideration of naturerelated risks across all its work. A key focus of this effort is to develop a conceptual framework for nature-related risks that central banks and supervisors can utilise to develop policies and actions on nature-related issues. The financial industry can also play a positive role in addressing the degradation of nature. First, do no harm.Financial institutions should disincentivise production processes that are harmful to biodiversity and proactively manage the risks that would arise from biodiversity loss. Second, provide the necessary funding to develop resilient and sustainable production systems that factor in the interdependence of food, water, and energy systems. Let me conclude. The financial industry working together with central banks and financial regulators can make a decisive difference in addressing climate change and environmental degradation. To enable this collaboration, the NGFS aims to be a pathfinder for emerging initiatives to strengthen the climate resilience of the financial system and to facilitate financing flows for the transition to a net-zero world. I encourage you to participate actively in today's Workshop, so that we can collectively advance our understanding of the issues we need to tackle. I wish you fruitful and productive discussions. 5/5  BIS - Central bankers' speeches