samchain/econo-pairs-v1 huggingface dataset:
Øystein Olsen: The conduct of monetary policy Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 29 May 2012. *  *  *  Please note that the text below may differ from the actual presentation. The statement is based on Norges Bank’s Annual Report for 2011, Monetary Policy Report 1/12 and the Executive Board’s assessments in the period to the monetary policy meeting on 10 May. I would like to thank the Chairman of the Committee and thank you for this opportunity to report on the conduct of monetary policy in connection with the Storting’s deliberations on the Government’s Financial Market Report. My statement here today is based on the Bank’s Annual Report, but also on the Executive Board’s assessments for the period to the most recent monetary policy meeting and new information. Norges Bank’s conduct of monetary policy is oriented towards low and stable inflation. The operational target of monetary policy is consumer price inflation of close to 2.5 per cent over time. At the same time, monetary policy shall contribute to stabilising developments in output and employment. When I was here last year, the key policy rate had just been raised to 2.25 per cent. Inflation was low at around 1¼ per cent, but there were prospects that growth in advanced economies was recovering and that both capacity utilisation and inflation in Norway would pick up.

Of course, insurers have significantly improved their risk and capital management under Solvency 2, and the insurance market is now more resilient and better equipped to cope with financial crises. The average SCR ratio in the European Union stood at 241% in the first quarter of 2018. It tends to be even higher for mutual insurers But these positives must not be allowed to overshadow the questions that need to be asked after such a radical change, particularly about the impact on equity investment and the financing of the European economy, as well as issues relating to volatility and complexity. Therefore I invite Insurers to play an active role in the discussions that should come with the so-called “Long Term Guarantee Package” or 2020 review. As was the case with the 2018 review, the ACPR will call for further progress towards a significant simplification of the framework. We also expect the review to better take into account the impact of Solvency 2 on the financing of the economy. This said, and irrespective of the outcome of the forthcoming reviews, the proportionality principle and its harmonised application across the European Union will remain a major concern for EIOPA and of course for ACPR. On a topical note, I would add that it is crucial for supervisors to apply all prudential requirements with equal rigour. The string of failures by insurers doing business on the French market under the freedom to provide services, particularly in construction insurance, is a reminder of the importance of this.
10  Page 11 sur 14   Second, we should follow a clear sequencing regarding the various programmes: (i) the reimbursement of TLTROs comes first, and we should avoid any unintended incentives to delay repayments by banks (ii) at the other end, PEPP should be reinvested until the end of 2024, as stated (iii) this leaves inbetween APP for which the Governing Council has said that reinvestment will continue in full until “well past the date when it started raising the key ECB interest rates”. Here we could start earlier than 2024, maintaining partial reinvestments but at a gradually reduced pace.  Third, the phasing out of the asset portfolio should be orderly, announced cautiously and well in advance. The ‘stock effect’ of asset holdings, which is the key transmission channel, primarily depends upon the expected end-point of the balance sheet normalisation, in terms of both the terminal date and size. Fluctuations in the pace of the run-off during the travel to destination do matter less.  Fourth, as taught by US experience in 2017-2019, the pace of the balance sheet reduction should not be left completely on “automatic pilot”. Starting slowly, assessing markets reaction, and gradually accelerating seems like a sound approach. Some flexibility should be kept, in case of sudden liquidity shocks. Indeed, the ‘flow effect’ may temporarily play a role when market liquidity abruptly dries up. III. A sensitive co-ordination issue This is the way we should run our domestic monetary policy.

In the euro area, core inflation has been above 2% since October 2021 and above 4% since July 2022. Another feature of the inflation shock we are facing is its persistence. This may affect inflation expectations and lead to a de-anchoring. Current inflation levels require that we clearly show our monetary determination. We know, though, that the significant changes in monetary policy we have taken already will take at least a year or more to affect the economy. But it is our clear forecast and will to bring inflation back towards 2% within the next two to three years. I am not convinced either by the trade-off between fighting excessive inflation and avoiding a recession. There are at least three clear reasons to prioritize price stability (i) legal: our mandate is focused on price stability (ii) political: our fellow citizens care first and foremost about inflation and its impact on purchasing power (iii) economic: entrenched inflation would mean less confidence, higher risk premia, and greater price distortion, and hence less long term growth. Furthermore, the euro area economic starting point remains relatively favourable this year. The labour market is very strong with many vacancies and the unemployment rate stood at a historical low of 6.6% in July and August. Annual GDP growth in 2022 is expected to reach 3.0% according to the latest IMF projection – almost twice the US growth -, although a slowdown is forecast in the second half of the year after the robust growth of the first semester.
The analysis of BOT staff is intellectually rigorous yet very clear in their message, enabling me to fully grasp the issues, and the Monetary Policy Committee to make appropriate decisions. However, in a country where the functioning of financial market mechanism is not fully efficient, there is an important role for public communication to help enhance the effectiveness of monetary policy. Public understanding of monetary policy would lead to desirable change of market behaviour and adjustment process. Effective communication would also enable financial market participants to anticipate the direction of monetary policy, thereby enhancing the transmission mechanism of monetary policy. It is in this area that I feel I could contribute. Series of efforts have been made to improve Bank of Thailand’s public communication and I believe nowadays the public is more receptive to monetary policy, while financial market participants could correctly anticipate the direction of monetary policy and adjust their behaviour accordingly. Because this award is based on the work in the monetary policy area, I therefore humbly accept this award-not only for myself, but also on behalf of the Monetary Policy Committee as well as the staff of the Bank of Thailand. And as Mr. Caplen mentioned earlier on, the Thai banking sector also deserves congratulatory note for delivering economic growth in Thailand. The Bank of Thailand would therefore like to thank the banking community for its steadfast adherence to the reform efforts, for its cooperation in strengthening our financial sector and for its support to the recovery of the Thai economy.

M R Pridiyathorn Devakula: Upon acceptance of the award for Central Banker of the Year - Asia 2006 Statement by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the Banker Magazine Luncheon Seminar, Bangkok, 1 February 2006. *  *  *  Distinguished Guests, Ladies and Gentlemen, Back in June 2001, when I landed at the job of Governor of the Bank of Thailand, I was fairly confident that I would be able to do well in the area of bank supervision, given the considerable exposure I’ve had as a commercial banker. I also had some ideas on how to move forward the resolution of NPL and return banks to profitability. But I was a banker and not an economist by profession. My expertise in business administration made me a bit uneasy on matters concerning monetary policy, as I felt that I did not have enough macroeconomic background to master the monetary policy issues. However, I was really fortunate to have a highly competent Monetary Policy Committee as well as BOT staff to support me in this area. Indeed the depth of knowledge and the quality of analysis provided by BOT staff are materials which I can always rely on. All I have to do during the past 4½ years is to pay close attention to their presentation, data analysis and proposals.
The increase in copper export receipts was on account of the rise in both the volume of copper exports by 2.1% to 30,076 metric tons in January 2004 from 29,449 metric tons in December 2003, and an increase in realised prices by 5.5% to 96 cents per pound in January 2004 from 91 cents per pound in December 2003. •  However, cobalt export receipts decreased following the decline in the sales volume by 42.9% to 131.8 metric tons in January from 230.9 metric tons in December 2003. Cobalt realised prices, on the other hand, increased by 46.6% to US $ per pound in January 2004 from US $ in December 2003. •  Non-metal export earnings increased by 1.6% to US $ million in January 2004 compared with US $ million realised in December 2003. The major non-traditional export items that contributed to the rise in export receipts in January 2004 were burley tobacco, cement, cotton lint and sugar. 2. Developments in the financial sector  Banking sector Overview of financial performance of the banking sector •  On the basis of capital adequacy, asset quality, earnings performance and liquidity, the overall financial condition and performance of the banking industry during the month of February was satisfactory. •  The industry’s net worth position increased by 3.2% to K639,660 million from K619,955 million in January. The sector also continued to be adequately capitalised. All banks met their minimum regulatory capital requirements in the month under review.

Further, the Kwacha lost 0.5 percent against the euro, moving to an average of K6,025.64 per euro. •  The continued relative stability in the Kwacha vis-à-vis other currencies was partly explained by the well-functioning broad based interbank foreign exchange system, which has thus far led to an efficient flow of information in the foreign exchange market since its inception in July 2003. In addition, the fall in the value of merchandise imports, coupled with the rise in the value of exports during the month of January 2004, contributed to the observed relative stability in the foreign exchange market in February 2004. 2  BIS Review 27/2004  Real sector developments Agriculture •  As at 29th February 2004, the Food Reserve Agency (FRA) had purchased a cumulative total of 54,773.15 metric tonnes (mt) of maize compared with 54,598.57 metric tonnes (mt) of maize purchases at the end of January 2004. The highest amount purchased was from Eastern Province, 16,052.55 mt followed by 11,935.0 mt from Southern Province. The rest of the purchases were from Central (9,026.15 mt), Northern (8,824.75 mt), North-western (3,100.15 mt), Luapula (2,561.85 mt), Lusaka (2,381.50 mt), Western (498.80 mt) and Copperbelt (392.40 mt) provinces. •  As at 29th February 2004, major milling companies in the country had an estimated maize stock of 58,620.0 mt compared with 74,224.0 mt recorded at end-January 2004. Of this, Lusaka Province was holding 28,670.0 mt, Copperbelt (16,200.0 mt), Southern Province (6,650.0 mt), Central Province (6,000.0 mt), Northern Province (1,000.0 mt), and Eastern Province (1,000.0 mt).
Approximation with best EU central bank standards and practices is a crucial process for a central bank not only for the effective discharge of the duties, but also for the efficient and stable functioning of the financial system, and benefit of the economy, overall. I am confident that the implementation of this project will be characterised by the cooperative spirit between the Bank of Albania and central banks in the region, on the one hand, and the European Central Bank and Eurosystem, on the other. I would like to conclude with a heart-felt appreciation and gratitude for all the stakeholders having an active role in the launching of this project: •  the European Central Bank for coordinating all the activities;  •  member central banks for providing a large number of experts to assist us with the project implementation;  •  Delegation of the European Union in Tirana for funding it. 2  BIS central bankers’ speeches  We highly appreciate the Commission’s assistance with regard to adopting the implementation of the European Union legislation and are seriously committed to continuing with the successful cooperation, established with the Delegation in the last twinning project. In this context, I would like to reiterate my message that the road to European Union integration passes through regional integration. The financial system and central banks spearhead this process. We expect that public and private economic agents will determinedly follow this step we are taking.

I said at the outset that a nation needs an efficient and secure payment system. If it does not function, that nation’s currency will lose its place in the monetary system. And therefore, for every central bank that issues a currency, it is important to govern and control developments in the payment system. This is the core issue: Only Norges Bank can provide final and secure settlement in Norwegian kroner. This will be the fundamental tenet for ensuring that the payment system in Norway continues to be efficient and up-to-date. 5/5  BIS central bankers' speeches
Although the recent trend in interest rates is a considerable relief for many debtors, the rise in bad debts, which will continue over the next few quarters, poses a risk which deposit institutions must manage with great caution. This results in the gradual weakening of the income statements of credit institutions, which requires them to react decisively. Thus, it is of paramount importance that business models and income statements are in step with the new reality. In simple terms, in order for Spanish deposit institutions to remain in a sound position, they will have to face the new challenges of the current situation by finding levers for change which allow them to counter the adverse developments currently putting pressure on their income statements, and incorporating such levers into their business models. Let me give you some figures on the recent trend in income statements. The consolidated profit of Spanish deposit institutions fell at a rate of approximately 20% in December 2008 with respect to December 2007, while in June 2008 it had declined by slightly less than 3% on June 2007. Two general remarks can be made about these figures. First, comparison with the results posted by institutions in other banking systems in developed countries is favourable for Spanish institutions; practically all of them continued to post positive results, mainly due to the factors I mentioned earlier. The complex and rather opaque products that caused notable losses at institutions in other countries were avoided.

But we must also admit that there is not just scope, but also a need, to apply judgement when producing good data and statistics. And trust plays a key role here. People can trust the ECB and the national central banks to apply expert judgement when it is needed. In my speech today, I will focus on key ingredients that have been crucial in building up the ECB’s good reputation over the past 20 years. The first is to have good data and to use them well when taking decisions. The second is to ensure good cooperation. The third is to keep pace with changing times. Good data for good decisions 1/4  BIS central bankers' speeches  I am aware that the need for good data may seem self-explanatory, especially for an audience of statisticians. But that doesn’t make it less important, particularly in the case of the ECB. The stakes are extremely high: whether for monetary policy or banking supervision, our decisions impact the lives of over 340 million people. This gives the data we use, and the analysis we carry out, enormous importance. Our data need to be reliable and our statistics sound. Only then will they be able to form the basis for good decisions. But not all data are created equal. Even well-collected data may fall short of answering the burning questions of our experts. With the 2008 crisis, for example, we learned the hard way why better and more granular data are necessary.
This adjustment was completed with a final cut of 25 bp in our monetary policy meeting last May. The action of the Central Bank has meant accentuating the expansionary orientation of monetary policy, which has kept the MPR below its neutral levels for more than three years. This will cushion the effects of the business cycle downturn and ensure that we achieve the inflation target within the policy horizon. In fact, over the next several months this more expansionary monetary policy will permeate the economy, complementing the impact of better external conditions and the replenishment of inventories and capital, gradually speeding up the pace of economic activity and allowing inflation to converge to target. This will also prevent further deterioration of the labor market and financial compliance indicators. Discerning about the change in the macroeconomic scenario, as well as the magnitude and speed of monetary tightening has been a major challenge for the Central Bank. We have addressed it with the conviction that monetary policy decisions must be based on projections that anticipate events rather than on the latest data or a backward-looking analysis. This approach allows decisions to be made in a timely manner and monetary policy to act whenever needed. 11  To the extent that a more forward-looking approach demands interpretations and opinions based on partial information, different opinions will inevitably exist. Moreover, this diversity is essential to feed the analysis and internal discussion required by institutional decisions.

Figure 2  CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0  0 11 12 13 14 15 16 17 18 19  11 12 13 14 15 16 17 18 19  Mar'17 Report  Jun'17 Report  (*) Gray area shows forecast as from the second half of 2017. Sources: Central Bank of Chile and National Statistics Institute (INE). 13  Figure 3 GDP (real annual change, percent)  8  8  6  6  4  4 Other  2  2  Total  0  0  -2  -2  -4  -4  -6  -6  N.R. -8  -8 14  15  16  17  Source: Central Bank of Chile. Figure 4 Economic activity (real annual change, percent)  10  10 8  Personal services  Construction  6  8 Trade  6  4  4  2  Manufacturing 2  0  -  -2  (2)  Business services  -4 14  15  16  (4) 17  Source: Central Bank of Chile.
In fact, 32% of our survey respondents said that they have fully implemented at least one Regtech solution in their bank. Having said that, we do believe that Regtech adoption can be and should be much wider than it currently is. And to make that happen, some barriers must be addressed. 24. At this point, I would venture a guess that at least some of you are thinking that, when it comes to barriers to Regtech adoption, the HKMA must be one of the biggest barriers. It is true that in our study, Regtech firms ranked regulators as the fifth highest barrier to Regtech adoption. But interestingly, banks thought the opposite. They actually ranked regulators as the third lowest barrier. Well, of course, this may just be an indication that banks are exceptionally tactful in responding to our survey! 25. But joking aside, I am sure you want to know what are the most common Regtech adoption barriers identified in our study? Those include: First, concerns over budget issues There are also concerns about solutions lacking maturity And then respondents talked about a shortage of appropriate talent There are also concerns about the risks involved in applying Regtech solutions; and Finally, there is a lack of awareness of the potential value of Regtech 26. Quite understandably so, budget constraints were consistently named as the top barrier by both financial institutions and Regtech providers. Especially in the current environment, cost management is a key focus for most banks.

By determining the conditions for the banks’ deposits in and borrowing from the RIX system, the Riksbank can affect the overnight rate, that is the interest on overnight loans between the banks. BIS Review 51/2008  3  Deposit and lending rates set the limits for the overnight rate When the payment system closes for the day and trade between the banks in the overnight market has been concluded, the banks’ accounts in RIX must be in balance. This means that the banks must finance their deficits or invest their surpluses. The banks have two alternatives for achieving this. They can either balance their respective deficits and surpluses against one another on the overnight market, or they can use the Riksbank’s deposit and lending facility. The latter means that they can deposit in or borrow from the Riksbank overnight at interest rates published in advance. These are known as the deposit and lending rates, which are 0.75 percentage points below and above the repo rate respectively. This difference creates an incentive for the banks to firstly borrow from and deposit funds with each other at a rate of interest in this so-called interest rate corridor. One could thus say that the deposit and lending rates set the limits for the overnight rate. How does the Riksbank ensure that the overnight rate is stable? But we do not leave it at that. The facilities ensure that the overnight rate remains within the corridor.