samchain/econo-pairs-v1 huggingface dataset:
But the attitude of international businesses and investors outside Euroland to the euro will be coloured, to a degree, by perceptions of its likely volatility, and in that sense the start has not been as auspicious as one might have wished. Prospects and opportunities But I suspect that those of us living a long way from Euroland tend to underestimate the impact which the euro is having in terms of cost savings and risk reduction in cross-border trade, although we may see and feel something of the side effects in terms of heightened competition and usage of the euro in world business. At the same time, as I tried to elaborate earlier, the euro has the potential to become a force in global financial markets. As that happens, we in Hong Kong hope to play our part. Indeed, we believe we are excellently placed to be involved in the expansion of usage of the euro in international financial markets. As a central banker I must repeat that I hope and expect that the ECB will be a staunch guardian of monetary discipline. This certainly does not mean that we can make accurate predictions about the exchange rate or interest rates, but it is likely to mean that the euro should in due course consolidate itself as a leading world currency in trade and finance, not least in this part of the world. Meanwhile, the unified currency provides Euroland with the opportunity to strengthen its collective economy, albeit an opportunity which has to be worked upon.

Yes, but we are employing fiscal policy as an additional instrument to the flexible structure of our market economy, whereas in Europe the danger would be of it being regarded more as a substitute, although I acknowledge that a significant part of budgetary spending there is nowadays directed towards achieving the necessary structural reforms. And in Hong Kong we are working from a position in which monetary policy is clearly quite tight and has to remain so for the moment (given our link to the US dollar), whereas euro monetary policy is not so rigidly constrained. In the broader sweep of history, a regime of fixed exchange rates is by no means an outlier. Remember that most of the world’s currencies were fixed on some sort of metallic standard until the first world war, and that the world enjoyed 25 years of virtually fixed rates after the second. Interestingly, I have seen it argued that one of the reasons (though certainly neither the only one nor the primary one) for it being impossible to sustain fixed rates in the inter-war period may have been the growing rigidity of labour markets as the century progressed. And one of the main reasons for the breakdown of the Bretton Woods arrangements at the beginning of the 1970s was the collapse of budgetary discipline of one member in particular the United States. There are no doubt lessons from history, even though the read-across to the present day may be subject to many qualifications.
Capital inflows, depending on the degree of variability, may cause speculative pressures on the Denar exchange rate, which would increase the vulnerability of the economy. The experience of the more advanced transition economies shows that these effects may be partially mitigated by attracting foreign direct investments and securing their dominance in the composition of inflows, where the generally higher rates of return on investments provide certain protection from quick and sudden changes in the capital flows. Another issues is the size of the capital inflows that given the implementation of the strategy of exchange rate targeting potentially puts at test the capacity of the NBRM for their sterilization and causes certain implications upon the monetary policy conduct, and the exchange rate regime. Through the presentations that follow we will likely see a number of such experiences. 2. Foreign capital inflows, especially the facilitated access of the banks to foreign capital, may cause credit boom and expansion of the domestic consumption. That may generate additional increase in the current account deficit. From the point of view of the current situation, the upward trend of credit growth that started in the Republic of Macedonia in 2003, largely emerges from the low starting point and at the same time indicates the natural process of increase in the degree of financial intermediation.

I am pleased that our current Agents, David Buffham and Will Dowson receive a warmer welcome from Chamber members and others as they travel around the region. Our agents are the eyes and ears of the Bank. They make sure that we take account not just of the economic statistics, which at best tell us what has just happened (and all too frequently fail to do that), but also know what businessmen and women are saying about their own outlook and plans. The Monetary Policy Committee receives a report from each region each month and I can assure you it always receives a lot of attention. All the members of the Committee also get out to meet businesses themselves and that is why I am here in the North East for two days. The main subject of my speech tonight is the wider economy, and in particular the tale of two cycles – the downswing of the financial cycle and the upswing in the commodity price cycle. The economic environment in context But first, it is important to recognise that the last ten years have been a period of remarkable stability for the UK’s economy. It has certainly been the most stable and successful period for the economy in my lifetime. 1 When the MPC was set up, Charlie Bean – then a leading academic, soon to be my fellow Deputy Governor – estimated that inflation would be away from the target by more than 1 percentage point in nearly 5 months of every year.
The establishment of specialized international institutions has enabled Malta to place 34th among 134 countries in terms of financial market sophistication, according to the Global Competitiveness Report 2008/09, published by the World Economic Forum. The same report ranks the balance sheet soundness of Maltese banks in the 10th place. The sustained growth of the financial services industry is having positive effects on the real economy. The number of persons employed in the industry rose from 4,300 in 2004 to around 6,000 in 2008. Furthermore, these figures do not include the substantial employment created by support activities such as professional and business services. The ingredients all seem to be in place, therefore, for this industry to continue to prosper in the future. The 2008 Global Financial Services Index, published by the City of London, ranks Malta fourth among the financial centres that have the potential to become significantly more important over the next few years, and fifth as the centre where organisations are most likely to open up new operations. The report describes Malta as a country “worth watching as it consolidates its position in the EU after adopting the euro”. The way forward: challenges in the short-term … The challenge now is to live up to these lofty expectations. In the short-term, Malta’s banking system must endeavour to emerge from the current downturn well equipped to seize the opportunities that will no doubt arise once the crisis has run its course.

Jean-Pierre Roth: Once a student, always a student Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the University of Bern, Switzerland, 9 February 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Like all decisions relating to the future, monetary policy decisions involve numerous uncertainties. Economic researchers are divided as regards both the effects of monetary policy and the form that this policy should take. There are a number of competing models in economic theory, and their policy recommendations often vary. Relationships that have been stable in the past may change at any time, due to the fact that the structural equations used in economic models are not based on the laws of nature. The Swiss National Bank's monetary policy concept takes account of these uncertainties. Our inflation forecast is a key element in this concept and combines the results obtained by a variety of different models. Research is extremely important in our changing world. We can only be sure of identifying new developments as early as possible and basing our monetary policy decisions on a solid foundation if we engage in constant research. BIS Review 9/2006  1
6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Chart 6: Bid/offer spreads on gilts  Chart 5: Gilt yields 5 year  10 year  30 year  5 year  Per cent  10 year  Basis points 4  1.6  19 Mar: Further BoE package (Bank rate cut 15bps and additional £ asset purchases)  30 year  19 Mar: Further BoE package  3.6  1.4  3.2  1.2  2.8  1  2.4  0.8  Jan 20  Feb 20  Mar 20  Apr 20  May 20  2  0.6  1.6  0.4  1.2  0.2  0.8  0  0.4  -0.2 Jun 20  Sources: Bloomberg Finance L.P., TradeWeb and Bank calculations  Jan 20  Feb 20  Mar 20  Apr 20  May 20  0 Jun 20  Source: Eikon by Refinitiv  Moment 4: congestion in sterling money markets When our sterling desk received a call from a large asset manager to let us know that – highly unusually – it had been unable to liquidate its holdings of bank certificates of deposit (CDs) to meet a margin call, we knew the dash for cash had reached the sterling money markets. The coming days brought stories of companies and local authorities also seeking liquidity – whether through greater borrowing3, selling assets, or drawing down their holdings in sterling money market funds (MMFs).

It requires the consent of society in order to operate, innovate and grow. Repeated episodes of misconduct have called the social licence of finance into question. In a system where trust is fundamental it ought to be of grave concern that only 20% of UK citizens now think that banks are well-run, down from 90% in the late 1980s. 4  1  For example, their capital requirements have increased 10-fold. And in response these banks have raised over $ trillion of capital in recent years. 2 There are multiple root causes: (i) market structures presented opportunities for abuse and were vulnerable to conflicts of interest and collusion; (ii) systems of internal governance and controls were incapable of asserting the interests of firms – and society – over those of staff; (iii) compensation packages rewarded short-term returns and ignored long-term value creation and good conduct; (iv) and dearth of personal accountability. 3 For misconduct costs see BCG report, “Global Risk 2017: Staying the Course in Banking, March 2017 http://www.bcg.com/publications/2017/financial-institutions-growth-global-risk-2017-staying-course-banking.aspx. Estimates of the impact on lending capacity are Bank of England calculations. 4 British Social Attitudes Survey (2013). 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  From ethical drift to ethical lift  The scale of these shortcomings is why the Bank of England has been pursuing a series of measures to convert ethical drift into ethical lift. Domestically we are working closely with the Financial Conduct Authority (FCA) and HM Treasury.
The global economy has weakened and this is already affecting Singapore. Downside risks have grown, and some of these risks may have prolonged effects. We need to be alert but there is no need to be alarmed. There are pockets of resilience that should provide a degree of support to the global economy. The Singapore economy is in for a rougher ride but is well placed. Our economic fundamentals are robust and policy buffers are healthy. Asia’s growth, digital transformation, and the resilience in modern innovative services play to Singapore’s strengths. While external headwinds will slow Singapore’s pace of growth in the short term, domestic economic restructuring is proceeding well and will enable the economy to emerge stronger. The financial sector is a good example. Growth will be slower than last year given the sector’s exposure to the external environment. But the relentless effort by financial institutions to promote innovation, harness technology, transform jobs, and upskill the workforce, will position the sector well for the future. MAS will continue to closely partner the industry to make Singapore the leading global financial centre in Asia, supporting the region’s growth and creating good jobs for Singaporeans. Let me stop here and we will be happy to take your questions. 1 10 / 11  BIS central bankers' speeches  1 This refers to growth in the finance and insurance industry, excluding holding companies. The unadjusted  growth rate for the sector, published by DOS, was 5.8%.

The Federal Reserve has shifted to a ‘wait-and-see’ stance and markets are expecting cuts in interest rates. This has significantly loosened financial conditions, and bond yields have fallen across the board. US GDP growth for this year, projected at 2.5%, is still the strongest among the G3 economies. China has eased fiscal and monetary policy significantly since late 2018. The Chinese government has stepped up support for infrastructure investment. Efforts are underway to enhance credit flows to small firms and private enterprises. But the effects of the stimulus will be somewhat restrained. The high level of indebtedness is likely to constrain the scale of stimulus measures. Policy stimulus is unlikely to be able to prevent China’s GDP growth falling below last year’s 6.6% but may be able to avoid a slippage below 6.0%. Private consumption remains resilient in the major economies as well as in Asia, underpinned by healthy labour markets. Unemployment in both the advanced economies and in Asia is at low levels, and wage growth is picking up gradually. 3 / 11  BIS central bankers' speeches  With strong labour markets, household consumption is providing an important support to global growth. In ASEAN, domestic demand has so far proven resilient to the slowdown in trade. The services sector has continued to be resilient globally. The global services PMI averaged 53.1 in the first four months of this year, similar to that for the whole of last year. However, it fell to 51.6 in May.
I shall not enter that discussion but simply note that a number of important decisions have been made in the past ten to fifteen years. They include the deregulation of credit and foreign exchange markets, the reform of the tax system, changes to components of the transfers system and the enhancement of competition. All this has helped the Swedish economy to function better. Moreover, price stability is now monetary policy’s statutory objective and the Riksbank, now also formally independent, has been made accountable for this. Other steps, in the form of a far-reaching consolidation of the government budget, provide a stable and credible framework for this objective. As a further move in the new direction of economic BIS Review 99/2000  2  policy, Sweden joined the European Union in 1995. This opened up sectors that previously had been protected from international competition. Competition grew in many fields and prices for some goods and services began to be adjusted downwards towards European levels. The economic policy realignment, which began some time in the 1980s, has coincided with larger changes in the global economic environment. The Swedish economy has therefore been in a position to benefit from the developments elsewhere and so far this has led to a favourable economic path. The realignment of economic policy and the ongoing globalisation were accompanied in the 1990s by a rapid development of the new information technology, globally as well as in Sweden. The innovations have been adopted successively in various segments of our economy.

In the event, the damage was contained, and world economic activity is now recovering far more quickly than anyone could have expected. But, encouraging though it is, the recovery is taking place in a context of large external imbalances within the world economy and large imbalances between strong domestic and weak external demand in a number of industrial countries most notably in the US and here in the UK. The challenge now for the major industrial countries - as we discussed at the G7 meeting last weekend in Tokyo - is to secure a more balanced pattern of growth among our economies in order to help sustain the global expansion. This chain of international events has also had a major impact on the pattern of exchange rates. Many emerging countries and some transition economies saw their exchange rates fall dramatically; but there were also important effects on the relationships between the currencies of the major industrial countries. The dollar and sterling have in fact remained reasonably stable against each other for most of the time since sterling withdrew from the ERM. The yen, which had been notably weak on the Japanese recession, has since picked up strongly as the prospect of recovery in Japan improved. But the most puzzling development in the exchange markets has been the disappointing weakening of the euro since its historic introduction at the beginning of last year.
The requirements for diversification of assets would introduce stringent restrictions on the ability of the insurance companies to hold housing bonds. Representatives of the industry claimed that considerable volumes of housing bonds would be sold by the insurance companies for this reason and that this would affect the market and increase costs for borrowers sharply. The gilt-edged bonds could at least partly solve the problem since, according to the EC directive, they would not be affected so much by the rules for single-party commitment. Others were doubtful about introducing special rules for insurance companies to give them an incentive to have a larger proportion of housing bonds in their portfolios than they would normally choose. There are no good arguments for letting insurance policyholders subsidise either housing loan institutions or their customers. Now the new investment rules were introduced for the insurance companies without this leading to any of the terrible consequences that had been predicted. The housing loan institutions began to borrow abroad to an increasing extent, which was a good idea from many respects. Hopefully, then the desire to create space for a larger proportion of housing bonds in the Swedish insurance companies’ portfolios will then no longer serve as a motivation for the gilt-edged bonds. As long as the insurance companies had their undertakings in kronor, some concentration of investments was explicable.

However, the day that Sweden becomes a member of EMU and we have the euro as currency, the portfolios of the insurance companies will appear rather remarkable if a predominant part of the risks in interest-bearing securities is in five housing loan institutions. Even if housing bonds are as gilt-edged as possible, the insurance companies in this situation will feel a need of increased diversification. The main argument for enabling the Swedish housing companies to issue gilt-edged bonds is naturally that competitors in Europe issue them and they are established in the market. They would be easier to sell to investors, carry a higher liquidity and provide lower interest rates than traditional Swedish housing bonds. This would facilitate financing and hopefully give the consumers lower interest rates. There is undoubtedly something in this line of reasoning. However, the Riksbank has taken a critical attitude to this proposal more for reasons of principle. The housing institutions have every opportunity themselves – via clauses in the bond contracts or even in articles of association – to create the collateral arrangements that they consider appropriate and thus give their bonds the gilt edge that they consider necessary to facilitate financing. If the state assumes the responsibility of legislating about the design of bonds and moreover to check compliance by institutions, this is a regulation that cannot be motivated by concern for the stability of the financial system but rather aims at improving the institution’s profitability by reducing financing costs.
Banks, their managers and owners, which are affected by supervisory measures must be able to appeal the decisions, although in some circumstances the measure must remain in force while the judicial process is underway. We should not forget the importance of the so called preconditions, the major external factors which fundamentally affect the supervisors’ ability to conduct efficient supervision. The preconditions are, for example, a stable and sustainable macro economic environment; adequate laws and a good judicial system; good accounting and auditing rules; and an adequate system to deal with problem banks and other institutions. In the Swedish pre-crisis situation there was macro-economic instability with excessive price volatility. Inflation had been high and fluctuating, and current account and fiscal deficits had remained high for many years. This made it difficult for the authorities to assess the underlying financial stability of banks and other institutions. Recent important regulatory issues for the financial institutions As you are aware, countries around the world are presently preparing their banks and authorities for the implementation of the Basel II capital requirements. It implies huge financial costs and workloads, but is expected to provide benefits in the form of better managed banks, lower losses and more precise capital requirements. Swedish banks will start implementing the Basel II from 1 January 2007 so their preparations are now at full steam.

2  BIS Review 111/2006  First, the earlier strict regulations on lending meant that banks did not really acquire the skills to evaluate the creditworthiness of customers and loan projects – only those with very high creditworthiness had had access to the limited amounts available for bank lending to non-prioritised purposes. The restrictions on lending to other purposes led to a large unsatisfied demand from potential borrowers. After deregulation, bank lending increased extremely rapidly without banks’ credit managers really having much experience on how to evaluate borrowers’ creditworthiness. A similar weakness applied to the supervisory authority – they had supervisors with good skills to check the banks’ formal compliance with laws and regulations but not to evaluate credit decisions. At the outset, the central bank took the erroneous view that the loan expansion in the banks could to a large degree be explained by old loans moving out of the former “grey sector” and into the banks. Since this had different implications than an extension of new loans, the central bank found that there was no need for the authorities to worry. Second, a large share of bank lending went into the real estate and commercial property business. There was a building boom in Sweden during the 1980s and prices rose rapidly – paving the way for additional lending. When real estate prices collapsed in the early 1990s the value of the collateral for many bank loans fell sharply and banks suffered huge credit losses from non-payments.