samchain/econo-pairs-v1 huggingface dataset:
The countries that have the weakest public finances in Europe are forced to implement tightening measures despite the weak state of their economies because the high level of debt is creating uncertainty about the ability of the countries to repay further loans. In Sweden, on the other hand, there is scope for active fiscal-policy stimulation measures if they were needed. 4  OECD Economic Outlook, November 2012; IMF WEO, October 2012. The surplus target is that public sector net lending should average one per cent of GDP over an economic cycle. 5  The fiscal-policy framework comprises a budget-policy framework, principles for stabilisation policy, principles for government intervention on the financial markets and principles for openness and transparency. In turn, the budget-policy framework comprises a surplus target for the public sector as a whole, an expenditure ceiling for the central government, and demands that the local-government sector should exercise sound financial management and have balanced budgets and a strict budget process. 6  Automatic stabilisers consist of the effects that arise when tax revenues and various grants and benefits adapt to the economic cycle without active decisions being made. 6  BIS central bankers’ speeches  Figure 6.

This is particularly true in comparison with other European countries, as shown in Figure 1. But, it is a problem that monetary policy has not been expansionary enough to keep inflation at a rate of around 2 per cent and to bring unemployment down to a long-run sustainable rate. 11 Why hasn’t monetary policy been expansionary enough? One reason is that to a certain extent we overestimated the strength and duration of the temporary recovery in the Swedish economy in 2010 and therefore also overestimated inflationary pressures. Another reason is the fear that a more expansionary monetary policy would increase the risks associated with household indebtedness. Here, it is once again the events in other countries during the financial crisis that have given rise to such fears. In several countries with a high level of household indebtedness and high housing prices, substantial falls in housing prices have led to a fall in consumption demand, which in turn has weakened the development of the real economy. In some areas, this has also led to higher loan losses and risks to financial stability. Risks associated with household indebtedness Personally, however, I do not believe that the risks associated with household indebtedness have represented a weighty argument against conducting a more expansionary monetary policy recently. There is of course every reason to avoid a situation in which housing prices fall dramatically. However, I find it difficult to see that current developments regarding housing prices and loans to households in Sweden are such that they justify further measures.
It is assumed that overall activity will decline somewhat when the Snøhvit and Ormen Lange projects are completed, but high oil prices are expected to contribute to maintaining investment at a relatively high level throughout the projection period. BIS Review 35/2006  3  The Government Pension Fund – Global, previously called the Government Petroleum Fund, will increase substantially in the years ahead. The fiscal rule entails a gradual phasing-in of petroleum revenues into the economy, approximately in pace with the expected real return on the Fund, which is estimated at 4 per cent. On the basis of our assumption in the March Inflation Report for developments in oil prices (oil futures prices), the fiscal rule allows for an increase in petroleum revenue spending of more than NOK 30 billion from 2006 to 2009. If the Norwegian economy continues to exhibit solid growth, it will nevertheless be in line with the fiscal guidelines that petroleum revenue spending is lower than the expected real return for a few years. Our projections are based on the assumption that fiscal policy will provide some stimulus to aggregate demand and output in 2008 and 2009, but somewhat less than a mechanical application of the fiscal rule based on our oil price assumption would imply. High growth in the global economy has contributed to pushing up prices for non-oil commodities as well. Over the past year, cobber prices have almost doubled and aluminium prices have risen by around 50 per cent.

On the other hand, the objective of bringing inflation up to the target of 2.5 per cent and anchoring inflation expectations suggested in isolation that further interest rate increases should be delayed until there are clearer signs of a further rise in inflation. The trend in prices for consumer goods over the past two or three years is a result of favourable developments in the Norwegian and global economy. The shift in trade towards low-cost countries has led to lower prices and higher real income. In addition, the changes in the world economy have provided Norway with higher income because our terms of trade have improved. Increased competition has curbed the rise in prices for a number of domestically produced goods and services. When inflation deviates substantially from the target for a period, the interest rate will be set with a view to gradually returning it to the target, so that we avoid substantial variations in output and employment. Through the 1990s, inflation generally remained in the interval 1½ – 3½ per cent. Inflation has varied slightly more in the past few years. In a period of increasing cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variation in inflation and deviations from the target, as we have witnessed over the past two to three years. An overall assessment implies that the interest rate in the baseline scenario gradually increases to a more normal level.
However, the balance that we seek is between simplicity and risk sensitivity: indeed, the banking industry has been quite clear in saying that we should not blindly pursue simple solutions if they would result in unnecessarily conservative estimates of capital requirements. Achieving a balance between simplicity and risk sensitivity is particularly difficult in an industry like banking, where a culture of constant innovation makes it a tall order for regulators to develop simple rules that fit all banking products and services in all their permutations. Paraphrasing Einstein, we might say that a good capital framework should be as simple as possible, but not simpler. So while Basel II is admittedly a more complicated document than the 1988 Accord, I would suggest that much of its apparent complexity stems from the diversity existing in real world. The text provides multiple options in part because some banks and supervisors thought that a “blanket rule” would unfairly burden them. By providing a range of options, we are better able to fit the regulatory framework to each bank’s risk profile, rather than the other way around. Similarly, some of the complexity in Basel II stems from the details we provide to promote a more level playing field. Many bankers and supervisors asked the Committee to provide greater details where they thought a danger existed for differences in interpretation to arise across jurisdictions.

Financial Times, 15 December. Turner, Adair (2015), The Case for Monetary Finance – An Essentially Political Issue. Paper presented at the 16th Jacques Polak Annual Research Conference, IMF, 5–6 November. Yellen, Janet L. (2015), Inflation Dynamics and Monetary Policy. Remarks at The Philip Gamble Memorial Lecture, University of Massachusetts, 24 September, Board of Governors of the Federal Reserve System. BIS central bankers’ speeches  13
The initial measures announced so far by the United States and then China only cover about 1% of global imports and should have limited direct effects on inflation and activity. But they have logically triggered retaliation by other countries or regions and the risk of an escalating and global trade war is no longer unthinkable. The classical analysis of the macroeconomic impact of higher trade tariffs treats it as a negative supply shock involving a trade-off between lower output and higher prices, at least in the short run. Studies that use this rather mechanical approach tend to find significant but still relatively limited effects. The IMF, for example, has examined the fairly severe scenario of a global rise in tariffs that causes a 10% increase in import prices but conclude that this would only lead to a 15% fall in global trade and a drop of around 2% in world GDP after 3 years. Page 4 sur 5 This type of analysis, in my view, seriously underestimates the possible effects because it ignores the shock to confidence through two channels. Firstly, uncertainty can increase risk aversion in financial markets and reduce the supply of credit. Second, a loss of business confidence can deter investment. Both uncertainty channels would tend to depress demand. What’s more, they can be front-loaded and occur before any trade restrictions come into effect. Indeed the damage can be done even if no additional trade restrictions are actually imposed. A good example of outcomes before the facts is Brexit.

While not questioning the basic framework, they suggest 3 that inflation targeting central banks should aim to hit a rather higher inflation rate of around 4%, so as to give more room to cut official interest rates in the face of a collapse in demand before they hit their natural floor of zero. Thus, during the years leading up to the crisis, Bank Rate averaged around 4½%–5% and inflation averaged around 2%, so the real interest rate averaged 2½%–3%. If instead, inflation had been averaging 4% and Bank Rate 6½%–7%, i.e. the same real interest rate as before, then we would have been able to lower Bank Rate by another two percentage points before it approached its lower limit. The thinking behind this seems entirely reasonable. But, aside from ignoring the fact that monetary policy, in the shape of asset purchases 4 , can still be effective even when the policy rate reaches zero, it underplays the costs of higher inflation. Inflation at 2% or less is  3  Olivier Blanchard, Giovanni Dell’Ariccia and Paolo Mauro, “Rethinking Macroeconomic Policy”, International Monetary Fund, January 2010. 4  As well as more exotic options; see Willem Buiter, “Don’t Raise the Inflation Target, Remove the Zero Bound on Nominal Interest Rates Instead”, Citibank , 5 March 2010. BIS Review 31/2010  5  generally felt to be low enough that businesses and households do not have to consciously plan for rising prices – it is “close enough” to price stability, in other words.
These bonds fund lending for housing purposes and are also reported on the banks’ asset side, as the Swedish banks largely own one another’s covered bonds. The banks utilise the bonds in their liquidity portfolios, in their role as market makers, as collateral in repos, and so on. In Sweden, the market for covered bonds with mortgages as collateral is currently larger than the market for Swedish government bonds. The outstanding stock corresponds to over half  9  See Iacoviello, M., ”Housing Wealth and Consumption”, Board of Governors of the Federal Reserve System International Finance Discussion Papers 1027, 2011. 10  See, for example, “The Riksbank’s inquiry into risks on the Swedish housing market”, 2011. 8  BIS central bankers’ speeches  of Sweden’s GDP. In other words, covered bonds are one of the central linchpins of the Swedish financial sector. A large proportion of the covered bonds are held by foreign investors (see Figure 9). The Swedish banks are therefore dependent on foreign investors’ confidence in the Swedish mortgage market. A fall in housing prices makes it more difficult for the banks to obtain funding – foreign investors have turned out to be volatile, for example in conjunction with the last financial crisis (see Figure 9). Sweden has a large banking system, in which the banks’ assets correspond to almost 4 times GDP. The potential effects on the economy are thus also magnified.

That said, regulatory changes and competitive pressure also pose an important challenge for these institutions which will require them to maintain sufficient levels of operational effectiveness, effective control of risk concentration and, especially, sound foundations for ensuring that regulatory capital is preserved and, if necessary, increased. Consequently, in line with the recent announcement made by the Minister of Economic Affairs and Competitiveness, possible regulatory adjustments need to be studied which, while conserving the essential core of the current business model of credit cooperatives and without calling their identity into question, ensure the soundness of the sector in a more demanding environment. I think that the organisation of credit cooperatives in other advanced economies, where they represent a larger share of the banking business than in Spain, are a useful reference for the reflection I referred to earlier. Thank you very much. 6  BIS central bankers’ speeches
There are essentially two objectives here. So there is a missing set of instruments. And the big question is whether a set can be devised that stack up not only in theory but in practice; instruments that can be used in the real world. Having first flagged 18 months or so ago that the Bank would work on this general area, earlier this year I set out four questions which the debate would need to address; 7 objectives,  6  See, Bean C. R “The Great Moderation, the Great Panic and the Great Contraction”, Schumpeter Lecture at the Annual Congress of the European Economic Association, Barcelona, August 2009 and “Some Lessons for Monetary Policy from the Recent Financial Turmoil”, remarks at Conference on Globalisation, Inflation and Monetary Policy, Istanbul, November 2008. Also Dale S, “Inflation Targeting: Learning the Lessons from the Financial Crisis”, remarks at the Society of Business Economists’ Annual Conference, London, June 2009. 7  My remarks at the Institutional Money Market Funds Association Annual Dinner in London on 2 April 2008 included the following on macroprudential policy: “Looking ahead further, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst.

We must not again find ourselves in a position where the authorities in different countries are developing as they go along how capital support should be provided: what triggers it, its terms, and who pays. I have aired the possibility of eventual losses falling on the surviving banking system, as a way of avoiding burdening the general taxpayer and as an incentive for firms to recognise and act upon their interest in the health of the system as a whole. But the more important point is the need to have a plan. And of course the fiscal support comes after drawings in any private sector provision of contingent capital. Banking and the credit system: might there be macroprudential instruments? At this point, I should issue another caution: that however all those issues are resolved, the banking-structure debate is resolved, I doubt they could prove sufficient to rule out bouts of instability, even crises, in the future. That is because I am doubtful that the tendency to excess can be curbed solely by addressing the circumstances of individual firms. Booms are spurred by plausible illusions and collective-action problems. The current crisis has, in my view, been at root a crisis of liquidity – of an over abundance of liquidity in the upswing, succeeded by a drying up of liquidity during the crash. Usually, material rises in asset prices are initially triggered by reasonable perceptions of a favourable shift in fundamentals.
the obligation to constantly justify and explain policies to the general public. Institutions themselves represent a set of rules. They are a way to reduce reliance on individual moral behaviour in the pursuit of desirable objectives. They clearly delineate the power of individuals and limit their discretion in the exercise of power. As a consequence, institutions - if designed appropriately - should in general prove to be more reliable and durable carriers of trust and reputation than can be expected for individuals. At the same time the institutional solution of an independent central bank allows for greater flexibility than the adoption of any strict mechanical rule. Friedman 5  BIS Review 96/2000  himself, in the essay mentioned above, acknowledged that one “cannot dispense fully with the rule of men” since “no law can be specified so precisely as to avoid problems of interpretation or to cover explicitly every case”. A high degree of accountability and transparency can, nevertheless, help to monitor the conduct of monetary policy and to establish appropriate incentives for the behaviour of central banks. Explicit performance contracts for individual central bankers have been suggested as one way of providing such incentives and of reducing the reliance on trust in individual ethical behaviour. For example, salaries of central bank governors could be linked in some way to the measured inflation rate or they could be dismissed if a certain inflation threshold is reached. One difficulty with this approach is the one pointed out already by Friedman.

This is the basis for central bank independence. If price stability, by contrast, were regarded as just one out of a long list of political and economic objectives - rather than as a common goal and a precondition for the successful pursuit of other objectives - then there would be no legitimacy for entrusting this task (and only this task) to independent central banks. Making value judgements when trading-off different objectives and balancing conflicting interests is the legitimate job of elected politicians with a popular mandate and not of appointed technocrats. An independent central bank thus pre-supposes a broad consensus on the “quasi-constitutional” nature of the common good of price stability. Assigning the central bank a clear overriding objective also imposes limits on its discretionary exercise of power and makes it easier for the public to hold the central bank accountable for its mandate. This is important to keep in mind if we entertain the possibility that while, yes, “money is too important to be left to the politicians” one could similarly concur with Poincaré that “money is too important to be left to central bankers” (as quoted by Milton Friedman in his 1962 essay on “Should there be an independent monetary authority?”). In other words, why should one trust central bankers more than politicians?
1 See the speeches “The role of the media in promoting evidence-based policies” at the Líderes de la  Información award ceremony and “Long-term considerations in economic policy” at the awarding of the Gran Cruz al Mérito en el Servicio de la Economía by the Consejo General de Economistas (General Council of Economists) to the Banco de España. 2/2  BIS central bankers' speeches

In 200 and 500 Lekë banknotes, the portraits of Naim Frashëri and Ismail Qemali have been notably improved. 1/2  BIS central bankers' speeches  The designs on both the obverse and the reverse of the banknotes have been reconfigured and enriched with new or improved security features. The dominant colours have been preserved, but they have been given a fresh look, with more vivid and balanced colours for the eye. The design composition of each banknote is in harmony with the rest of the series. The overarching goal was to create a series of banknotes that are modern and easy to use, still in balance with tradition. The personalisation, versus unification, of some of the security features for each denomination is a new approach. The reduced dimensions make the banknotes more user friendly. Special attention has been paid to features for the visually-impaired. The nominal value on each side of the banknote is easier to read, the dimension of each denomination are different, and the raised print that may be felt on the edges of banknotes has been kept to help identify different banknotes. For the first time in Albania, the new series introduces polymer banknotes. This plastic material, which is more durable than cotton paper, was selected to be used for the 200 Lekë banknote, taking into account the higher frequency of changing hands and a lower paper quality evidenced in this denomination over the years.
See, for instance, Michael Mussa, “Asset Prices and Monetary Policy”, in: W. Hunter, G. Kaufman, and M. Pomerleano (eds. ), 2003, Asset price bubbles: The implications for monetary, regulatory, and international policies. Cambridge and London: MIT Press, 41-50; Stephen. G. Cecchetti, Hans Genberg, John Lipsky, and Sushil Wadhwani, 2000, "Asset Prices and Central Bank Policy", Geneva Reports on the World Economy 2, CEPR and International Center For Monetary And Banking Studies. ; or Otmar Issing, 2002, "Monetary Policy in a Changing Environment", Contribution to the Jackson Hole Symposium on Rethinking Stabilization Policy, Federal Reserve Bank of Kansas City. 13  See Bertrand Rime, 2005, “Too Big to Fail”, The Financial Regulator 10, 47-51. 14  See Alan Blinder, 2002, "Through the Looking Glass: Central Bank Transparency", Center for Economic Policy Studies. Working Paper No. 86; Michael Woodford, 2005, "Central Bank Communication and Policy Effectiveness" NBER Working Paper No.11898; Otmar Issing, 2005, "Communication, transparency, accountability: monetary policy in the twenty-first century," Review, Federal Reserve Bank of St. Louis, March, 65-83; or Alan Blinder, Charles Goodhart, Philipp Hildebrand, David Lipton, and Charles Wyplosz, 2001, “How do central banks talk?”, Geneva Reports on the World Economy 3, ICMB Geneva. 4  BIS Review 141/2007  its accountability in a democratic society. Moreover, we have learned that transparency renders monetary policy more effective and helps achieve low and stable levels of inflation. 15 Many central banks have augmented transparency beyond a clearly stated inflation objective, the publication of inflation reports or published minutes of board meetings.

Niklaus Blattner: Review of the Swiss economy Introductory remarks by Prof Dr Niklaus Blattner, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Geneva, 14 June 2002 *  *  *  Gold sales Since May 2000, the National Bank has been selling gold that is no longer required for monetary policy purposes. A total of 1,300 tonnes of gold is planned to be disposed of under the agreement on gold sales concluded on 26 September 1999 between fifteen European central banks. This agreement limits the total quantity of gold that can be sold by the signatories until September 2004 to 2,000 tonnes. To date, we have sold almost 520 tonnes of gold, which corresponds to 40% of the total quantity earmarked for sale. As shown in our periodic Bank returns, we are conducting regular sales of approximately one tonne a day. We consider this method more flexible, less costly and better suited to the characteristics of the market than the strategy chosen by the Bank of England, which is holding gold auctions of its own. Our average selling price has by now reached USD 279.4 per ounce (level of 31 May 2002), which is USD 2 higher than the average London gold fixing price, the benchmark price for gold. This performance has, to some degree, been realised thanks to the National Bank having been allocated a somewhat higher portion of the central banks' total annual quota of 400 tonnes since September 2001.