samchain/econo-pairs-v1 huggingface dataset:
In the long run, we will need to rebalance our economy away from domestic spending and towards exports, to reduce our trade deficit, to repay our debts, and to raise the rate of national saving and investment. So you are probably puzzled by the fact that we seem to be doing exactly the opposite of that today. Almost four years ago now, I called this the “paradox of policy” – policy measures that are desirable in the short term appear diametrically opposite to those needed in the long term. Although we cannot avoid the long-term adjustment to our economy, we can try to slow the pace of the adjustment in order to limit the immediate damage to output and employment. Loose monetary policy today will eventually give way to a tighter stance of policy as the economy recovers. In confronting the paradox of policy, the Bank has had to show some of the same fleetness of foot and ability to feint as my Cambridge contemporary, Gerald Davies. So let me try to explain this evening what monetary policy can do and what it can’t. BIS central bankers’ speeches  1  In doing this I am not going to pretend that I shall be entertaining. But these are serious times and you deserve a serious explanation of what we at the Bank can do and what we can’t, or shouldn’t. Let me start with what monetary policy can do. When banks extend loans to their customers, they create money by crediting their customers’ accounts.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the South Wales Chamber of Commerce, Cardiff, 23 October 2012. *  *  *  Of the many memorable moments in an eventful summer, recall that balmy night in late July when attention was diverted from the economy by the Opening Ceremony of the Olympic Games. The sound of Welsh children singing Cwm Rhondda on that beautiful beach in Rhossili filled the Olympic stadium. Inside the stadium, we saw not manna descending from heaven, but thousands of athletes and volunteers rising to their challenge. If the Olympics aimed to inspire a generation, the challenge for economic policymakers is to give that same generation the opportunities to make the best possible use of their talents in a vibrant economy. After a period of lopsided expansion, with growing trade deficits and debt levels, and a collapse of their banking systems, advanced economies across the world are facing a huge adjustment. Such is the scale of the global adjustment required that the generation we hope to inspire may live under its shadow for a long time to come. During the course of this year, the challenge has grown as the economic sky has darkened. The storm clouds coming from the Euro area have not yet lifted, and in other parts of the sky new clouds have drifted over. China, India and Brazil, the three largest emerging market economies, are all slowing.
Kristina Persson: Economic conditions and welfare in Sweden and the Nordic countries Speech by Ms Kristina Persson, Deputy Governor of Sveriges Riksbank, at Union conference of the Nordic Teachers’ Council, Marienlust, 23 October 2003. *  *  *  Thank you for your invitation to participate in this conference. I would like to begin by clarifying the Riksbank's role after the referendum in which the Swedish people said a clear "no" to introducing the euro in Sweden. Then, I would like to take the opportunity to account for our current view of the economic outlook and inflation prospects. I shall do this in the light of the year's third Inflation Report, which was published last week. This formed the basis for the Executive Board's decision to leave the repo rate unchanged. Subsequently, I shall discuss some longer-term factors that are of great importance for welfare in the Nordic countries. Different economic-policy situations in the Nordic countries The result of the referendum means that the Riksbank will continue to conduct monetary policy as before. The repo rate is set according to the outlook for economic activity and inflation in Sweden. The Riksbank has defined the objective of monetary policy, to maintain price stability, as keeping the rate of change of consumer prices at 2 per cent, with a tolerance for deviations of +/- 1 percentage point. The Riksbank's experiences of inflation targeting have been positive, and there is therefore no reason to change our monetary policy strategy as a result of the referendum outcome.

The supporting financial infrastructure includes a robust regulatory and supervisory framework reinforced by the legal and Shariah framework, the payment and settlement systems, the development of the pool of expertise and talent to support the industry. The sukuk market that is, the Islamic bond market is fast emerging as the most significant form of financing that continues to receive strong interest as a means for raising funds and for investment. The global sukuk market has been increasing at an average annual rate of 40 percent, with 90 percent of the issuances by the corporate sector. In Malaysia, the issuance of sukuk has now surpassed the issuance of conventional bonds. Strong demand for sukuks have also come from the high savings economies including from Asia and the Middle East. As a new asset class, it has generated demand from both conventional as well as Islamic financial investors. The sukuk is therefore not only an attractive instrument for investment but it is also a competitive means for raising long term funding needs. Strengthening synergies between financial centres Two important trends have increased the integration of Islamic finance into the international financial system – the accelerated development of the Islamic financial markets and increased liberalisation. The development in the Islamic financial markets has contributed to the availability of a wide spectrum of Islamic financial instruments that has ranged from instruments to manage liquidity, to structures for financing of mega investments.
This has shown up in  2  BIS Review 33/2002  concrete form in the severe operational losses suffered by a number of international institutions. The Committee has therefore decided to take the lead in promoting greater understanding of operational risk and more consistency in the way in which it is measured, managed and controlled. This would by itself be relatively unobjectionable. However, the Committee has decided to put some teeth into its recommendations by proposing an explicit capital charge for operational risk in the New Capital Accord. This is controversial for two reasons. First, there is no firm consensus on how to measure the capital required to support operational risk - the Committee is currently proposing three approaches to this, which range from the very basic to the quite sophisticated. Second, the amount of capital charge that the Committee originally had in mind was considered to be much too high. In response to this, the Committee is proposing a reduction in the proposed target of operational risk capital from 20% to 12% of minimum capital. A further reduction would potentially be available to those banks which use the more advanced measurement approaches. This is an example of how capital requirements can be used as an incentive to banks to improve their risk management practices. This, in our view, is where the real value of the New Accord lies.

Ardo Hansson: Celebrating the tenth anniversary of Estonia’s accession to NATO and EU Opening speech for Europe Day by Mr Ardo Hansson, Governor of the Bank of Estonia (Eesti Pank), at the Seminar on the impact of the European Union on Estonia, Eesti Pank, Tallinn, 9 May 2014. *  *  *  Today we are celebrating Europe Day. We have just passed the tenth anniversary of Estonia’s accession to the European Union, though the move towards Europe had started when the country regained its independence and linked the Estonian kroon to the German mark. To people in Estonia, being part of Europe means democracy, freedom, security and well-being. Closer integration with the European Union has been driven by the desire to ensure that these benefits are maintained. These core European values remain more in the background in our everyday life as we take them for granted, but events in Ukraine have given a sharp reminder of their importance. Accession to the EU has increased Estonia’s influence on the world. Estonia’s voice is heard better in Europe than ever before and Estonia is involved in setting the joint economic policy of Europe and the euro area. This gives us the power to affect processes ourselves, and the responsibility to do our work as well as possible and to answer for the results. As the central bank of the Republic of Estonia and a member of the Eurosystem, Eesti Pank has also contributed to the sustainable development and increased prosperity of the Estonian economy.
This means that where the Accord treats exposures too harshly relative to their inherent risks, we expect to reduce the capital requirements. A good example would be the treatment of retail exposures, where the Committee found good economic evidence supporting a significantly lower requirement compared to earlier drafts of the new rules. But where the risk is greater, and where the existing rules fail to assign adequate capital, it should not be surprising that capital requirements are raised. We will continue to evaluate the assumptions in the New Accord and their relative degrees of conservatism in the final months ahead. Competition and consistency of application Conservatism in the framework raises concern in the industry partly because banks welcome the great flexibility they will enjoy in other areas of the New Accord. A key example would be the ability to develop their own risk measurement tools and use their own models to estimate the drivers of credit – or operational – risk. Yet the great flexibility banks will enjoy raises the concern among some that too much flexibility might allow competitors at home or abroad to employ methods subject to less rigorous supervision. This brings us to the final theme we noted in our consultations, namely the need to maintain a level playing field and promote competition. Ensuring the consistent application of the New Accord in its entirety is a critical concern for the Committee.

At the same time, the industry has asked the Committee not to sacrifice risk sensitivity where it makes sense, even if it means that the rules may become somewhat complicated. Indeed, the complexity of the New Accord stems partly from the options the industry requested to ensure that a blanket rule would not unfairly disadvantage a particular business or exposure. You need only read a few of the comment letters on our website to see that many of the latest suggestions would tend to increase the complexity of the New Accord even further. Nonetheless, the Committee is aware that it is easier to enforce a simpler rule than a complicated one. As we complete the text of the new rules, we will continue to simplify and streamline the framework. Conservatism A second important theme addressed in comment letters suggested that the Committee may have adopted an overly conservative approach to some aspects of the framework, resulting in much higher capital charges than banks feel are necessary. Respondents attribute what they view as excessive levels of conservatism to different sections of the New Accord, including, as I mentioned earlier, the calibration of capital requirements to both EL and UL. We have heard similar concerns about conservatism in the securitisation proposals, in the treatment of certain credit risk-related hedges, and in the recognition of insurance products within the operational risk proposals. Questions about conservatism are important, as we are trying to align capital more closely to risk.
Second, legal provisions in other countries could be modified so that the one-day stay that applies to qualified financial contracts governed by U.S. law is also enforceable for those contracts governed by foreign law. Either or both of these actions would help ensure that the FDIC’s SPE mechanism could be successfully executed without unduly disrupting financial markets and counterparty risk positions. Given the cross-border activities of the G-SIFIs, the effectiveness of resolution mechanisms also will depend on the degree of coordination across national authorities. For example, we do not know for certain how foreign authorities would react if the parent of a U.S.-based GSIFI were placed into a Title II resolution proceeding. Uncertainties exist regarding whether foreign authorities either might choose, or be required, to take defensive actions such as ring-fencing that could disrupt the smooth implementation of the resolution process. An important task going forward is for authorities to work cooperatively and expeditiously to resolve these uncertainties. A well-crafted and well-executed resolution process for G-SIFIs can still be expected to create some strains in financial markets, especially considering the likely unsettled state of these markets at the time a resolution is being implemented. This suggests that it is also important to work on improving the resiliency in financial markets so that any shocks associated with a G-SIFI resolution are dampened rather than amplified. Two areas of work that show promise along these lines are new funding requirements and the move to central clearing for many OTC derivatives.

Once the preserve of large and complex risks such as property catastrophe and mortality risks with a long history of well modelled losses, it is now considered for lines previously deemed uninsurable, such as cyber. 1/4  BIS central bankers' speeches  ii. Second, the catastrophe ILS market is no longer dominated by wind exposure in the United States, and spreads over perils like earthquakes and floods in other regions such as Japan, Europe and recently Latin America. b. On ILS structures, the market is moving beyond ILS bonds and increasingly issuing collaterised reinsurance, sidecars, an d industry loss warranties. Asia is the next frontier for ILS growth 7 As ILS funds continue to seek diversification opportunities for their investment portfolios, Asia is poised to be the next frontier for ILS growth. At first glance, the economics of ILS in Asia appear to be challenging. Asia is still a developing market with low insurance penetration. Traditional reinsurance coverage is still competitive in the region. Apart from more mature markets such as Japan and Australia, a large part of Asia has yet to tap the capital markets for their growing insurance needs. 8 Yet, it is likely that ILS will achieve a breakthrough in the coming years, as the protection gap in Asia widens. Over the last 20 years, Asia has accounted for almost half of the world’s economic losses from natural disasters, amounting to more than $ billion. Economic losses in Asia Pacific is projected to exceed $ billion annually by 20302.
They have maintained, and in many cases increased, their strength during a prolonged period of financial crisis, at a time of far-reaching change to the banking industry worldwide and important regulatory reforms at home. A large part of this programme of reform has aimed at enabling our banking system to build further on its strengths and to channel them more efficiently. An important theme in the reform programme is the removal of barriers to competition with the aim of driving efficiency and energy in the banking sector. One of the outcomes has been the considerable progress made recently towards the consolidation of banks into institutions of a size and scope that can make them more capable of deploying their strengths in an increasingly globalised environment. The complementary theme in the reform programme is improving and expanding safety measures, not with the aim of sustaining weak institutions, but in order to prevent systemic contagion should a bank run into difficulties and to provide a greater measure of protection to the small depositor. In 1999 we clarified our role as lender of last resort, a measure of some importance in times of economic or financial uncertainty. We have made progress in implementing our risk-based supervisory approach, which is intended to produce a more focused and accurate assessment of the areas of greatest risk to individual institutions - and to take pre-emptive actions.

And how far, in any case, would we be able to avoid importing US monetary policy even in the absence of the Link? The experience elsewhere in the region does not give ground for much optimism. The third question is how far the Link is fuelling deflation, and how far this is detrimental to our economy. Internal price deflation is indeed a part - and a necessary part - of the process of adjustment imposed on the economy under the Link when there is a fall off in external demand. It is also, incidentally, a feature of our longer-term economic integration with the Mainland of China. It is the counterpart of currency depreciation under a floating regime, except that the adjustments that it forces to take place tend to involve less overshooting, less instability, and more lasting restructuring. Price deflation brings pain to those who see the value of their assets shrink dramatically, and, as we know, there are many in Hong Kong who are, sadly, in this position. But there are many more who have seen their purchasing power increase, as prices for the whole range of goods and services steadily decline. And the effect, equivalent to that of devaluation, on adding to the attraction of Hong Kong as a regional centre, and as a destination for tourists, can only be positive. The concern comes when price deflation, as part of the adjustment process under the Link, turns into the kind of spiralling deflation that inhibits investment and fuels recession.
More than 60 per cent now have access to the Swish payment app. 10 [14]  years. Demand from the general public has fallen from almost SEK 100 billion in 2007 to around SEK 60 billion today. 13 Banknotes and coins in circulation falling rapidly in Sweden  Note. Annual average for cash outside the banking sector, that is, cash held by companies, households and government agencies. Source: Statistics Sweden  One can say that the Riksbank's banknote monopoly has almost had its day, as a number of rapid and simple electronic means of payment are being supplied by private agencies. You see, in Sweden, there is no legal requirement for cash to be accepted as a means of payment in the retail trade. Nor do the banks have a legal requirement to supply cash services. The fact that we have gained more efficient means of making payments has on the whole been good for Sweden. But this development also entails a number of difficult challenges, for instance, that the infrastructure for cash management is being phased out in Sweden. 14 15 Most indications are that this development will continue, which raises a number of difficult questions: What happens if the general public no longer has access to cash, or if it is not possible to use cash anywhere? Sweden is on the verge of a situation where commercial interests determine whether the general public shall have access to central bank money and ultimately what payment methods can be used.

Svein Gjedrem: Financial crisis – lessons from the Nordic experience Article by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), in the Financial Times, 3 February 2009. *  *  *  With the financial crisis gathering strength and spreading to the real economy, it is instructive to learn the lessons from the Nordic crisis of the mid-1990s. There are some important similarities today: but also some important differences. The financial strength of the banks, and hence their ability to continue to supply a steady flow of financing, can be bolstered in either of two ways: by injecting capital; or by removing highrisk loans from the banks’ balance sheets – and in turn creating a “bad bank”. In the Nordic banking crisis 20 years ago, we did both, and learned three important lessons: First, government crisis resolution measures do not have to be costly for the taxpayer. The state injected equity capital, while private share capital was written down on the basis of a realistic assessment of loan losses. This ensured that the equity capital injected by the state could benefit from upside opportunities. In Norway, the state assumed 100 per cent ownership of the three largest banks. The board of directors and senior management in each bank were replaced. Then, in the years following the crisis, the state gradually sold its shares in the nationalised banks – at a profit. Second, it is not always necessary to take the bad loans off the banks’ balance sheets.
Despite that, as we have seen only too clearly, it is next to impossible to stabilise activity in the face of a financial crisis, as indebted households, businesses and intermediaries all seek to de-leverage simultaneously. Moreover, the upswing of the credit cycle is frequently associated with an increase in lending to purchase assets, especially property; that was certainly true on this occasion. If the consequence is an investment or construction boom – as was the case in the United States, Ireland and Spain – the result is a capital overhang that needs to be worked off. There are welfare gains from avoiding such capital misallocation. That leads naturally to my fifth lesson: prevention is better than cure. 5  The marginal funding cost is the three-month Libor plus the average of the five-year CDS premia of the major banks. The corporate loan rate is the three-month Libor plus the average of the spread on sub-investment grade syndicated loans. 6  If no other policies were available, then one might be tempted to conclude that the inflation target should just be higher in normal times, as advocated by Olivier Blanchard, Giovanni Dell’Ariccia and Paolo Mauro (2010). By ignoring the other policies that are available to deal with, and prevent, financial crises, to my mind this is giving up too easily. 6  BIS central bankers’ speeches  But how best to do that? Could a different choice of monetary policies have led to a better outcome?

In the monetary sphere, that takes the form of purchases from the private sector of longer-term public and private securities, financed by issuing claims on the central bank. As we saw in Charts 1 and 2, both the Bank of England and the US Federal Reserve have made substantial large-scale asset purchases, worth about 15% of GDP in each case. The aim of such purchases is to drive down the yields on these and similar assets by increasing their scarcity, so boosting demand. Commonly referred to as “quantitative easing”, the moniker is somewhat misleading as it focuses attention on the associated reserve expansion, rather than the change in the portfolio composition of the central bank and private sector. But do they work? Under Ricardian equivalence the answer would be No, as the associated transfer of risks from private sector balance sheets onto the public sector’s is matched by offsetting movements in future taxes (Gauti Eggertson and Woodford, 2003). Be that as it may, event studies by Joe Gagnon and others (2010) for the United States, and Mike Joyce and others (2010) for the United Kingdom suggest that long-term bond rates in each jurisdiction fell by around 100 basis points as a result of the purchase programmes, though the ultimate impact on aggregate demand is harder to judge. From this I draw my fourth lesson: central banks do not run out of ammunition when policy rates reach their zero lower bound.