samchain/econo-pairs-v1 huggingface dataset:
These currencies – or, in the case of the euro, the currencies that preceded it – have been floating since the collapse of the Bretton Woods system at the beginning of the 1970s. The US Secretary of the Treasury and the Chairman of the Federal Reserve System say that a strong dollar vis-à-vis other major convertible currencies is in the interests of the United States. I share this view entirely. A dollar that is strong and credible among the major currencies of the industrialised countries is in the interests of the United States, it is in the interests of Europe and it is in the interests of the entire international community. On the other hand, the second topic is that of emerging market economies which have considerable current account surpluses and exchange rates that are not sufficiently flexible. On this issue, commitments have been made by the G20. A move towards more flexible exchange rates, involving a gradual and orderly appreciation of their currencies vis-àvis the major convertible currencies, is also in the interests of the emerging economies concerned and in the interests of the international community. Isn’t there a risk that the fiscal consolidation in the majority of European countries will slow down the economic recovery? No, I don’t think so. A consolidation of the recovery and a return to sustainable growth crucially depend on confidence: the confidence of households, the confidence of firms and the confidence of savers.

The pursuit of credible and reassuring fiscal adjustment measures will contribute to the consolidation of the recovery because such measures inspire confidence in all those on whom economic prosperity depends. But has sufficient account been taken of the social risks involved? The main problem consists of the level of unemployment. As I said, a return to confidence, in particular fiscal confidence, is essential for the consolidation of the recovery and thus for the creation of lasting employment. The confidence to which you refer is measured in particular by the credit rating agencies. Isn’t it necessary to reassess their role? Why can’t the EU have its own credit rating agency? This is one of the major areas that is being looked into at the global level. Past events have shown how risky it could be to rely blindly on the analyses of the credit rating agencies. Financial institutions and investors must assume overall responsibility for the decisions that they take. How can monetary policy and EU economic policy be better coordinated? We have a monetary federation, which has provided monetary stability on a continental scale for 330 million citizens. Necessarily, this must be accompanied by very close monitoring of fiscal policies and strict compliance by fiscal policies with the reference framework that we set ourselves. On behalf of the Governing Council, I have always asked for strict compliance with the Stability and Growth Pact and the introduction of closer monitoring of developments in competitiveness within the euro area.
Svante Öberg: Monetary policy and the elusive resource utilisation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Handelsbanken, Stockholm, 25 May 2009. The original speech, which contains various links to the documents mentioned, can be found on the Sveriges Riksbank’s website. *  *  *  Resource utilisation is falling rapidly and is unusually low. But it is difficult to determine exactly how low it is. And it is difficult to ascertain what consequences the low resource utilisation will have for inflation and monetary policy. These are the questions I intend to discuss in my speech today. I have divided my speech into four parts. I shall begin by discussing the importance of resource utilisation for monetary policy and pointing out the differences as to how the targets for inflation and resource utilisation can be expressed. After that I shall discuss different measures of resource utilisation. I shall go on to describe monetary policy and resource utilisation at present and I shall conclude with a few summarising comments. I wish to make clear from the start that I will not make any new assessment today of the appropriate direction for monetary policy in relation to the Monetary Policy Update that was published at the end of April. I also want to point out that the picture I paint of resource utilisation and monetary policy here is not necessarily shared completely by my colleagues on the Executive Board of the Riksbank.

They make use of technology at many different levels: from traditional cross-harbour ferry and metallic coins to advanced transcontinental passenger planes and real-time electronic clearing. And usually both transport systems and financial infrastructure receive attention only when something goes wrong. Financial infrastructure suffers the further handicap that it is largely invisible – a matter of wires and electronic pulses – with none of the glamour or nostalgia that physical transport can sometimes evoke. So, quite understandably, the general public take it for granted – indeed may not even be aware – that Hong Kong has for some time had some of the most advanced, efficient and secure payment, clearing and settlement systems of any financial centre in the world. One of the responsibilities of the HKMA is to promote the development of these systems in collaboration with dedicated service-providers and the financial industry generally. In addition to its responsibility for Hong Kong's domestic systems, the HKMA also has a specific responsibility for promoting the development of systems in Hong Kong that facilitate the safe and efficient conduct of international and cross-border financial activities. We have been paying special attention to this aspect of our work in recent years in a way that has a very direct bearing on the development of financial markets in the region.
Thus risk-based supervision and proper risk assessment by banks are essential measures to bring about financial stability. In this regard Basel II will no doubt help strengthen our collective financial systems by encouraging banks to adopt stronger risk management mechanisms. Pillar 2 of Basel II will add to the stability of the financial system by providing a deeper and richer mechanism to evaluate a broader range of risks - including risks that will impact on the system more broadly - such as credit concentration risk. Encouraging greater transparency by banks under Pillar 3 also contributes to making financial systems more resilient by providing a consistent framework across national boundaries for analysts to do their job in identifying weak or risky banks. Ensuring the soundness of individual banks – what some people now call the "micro prudential" perspective – is, however, only part of ensuring a sound financial system. Bank supervisors these days now talk about "pillars" and in addition to the three pillars of Basel II I believe that there are also two pillars of financial stability. One of these is the micro prudential perspective. The other one is the macro prudential perspective. They are mutually reinforcing and both are essential for ensuring financial stability. An important movement in the last decade has been a much more explicit emphasis being given to the macro prudential aspects of banking supervision by central banks as well as academics and other market observers. What do we mean by macro prudential aspects?

BIS Review 106/2006  3  Monetary policy influences the economy with a lag. Over several years, interest rates have been considerably lower than what we consider to be a neutral level. Against the background of high growth in output and employment, rising wage growth and a weaker krone, there are prospects of higher consumer price inflation ahead. The interest rate may gradually be raised to a more normal level at a somewhat faster pace than envisaged earlier, although it is unlikely that rates will be raised at every monetary policy meeting. Based on our current assessment, the interest rate will thus continue to be raised in small, not too frequent steps. The forecasts are uncertain. They are based among other things on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Frequent data revisions imply that the current economic situation is not fully known. The chart illustrates the uncertainty surrounding the forecasts. The wider the fan chart is, the more uncertain the forecast. The uncertainty implies that the interest rate should normally be changed gradually, so that we can assess the effects of interest rate changes and take into account new information about economic developments. Changes in forecasts are nothing new to financial market participants. There is no reason to believe that Norges Bank will not also have to reassess its interest rate and other forecasts as new information emerges about economic developments.
But a lot has happened since then, which has accelerated the process of both rate increases and QT in many places. 16 See the Federal Reserve (2022a) for information on the latest statement and the Federal Reserve Bank of St Louis (2019) for a description of monetary policy in the years prior to the coronavirus crisis. 17 See Bank of England (2021). 18 See Bank of England (2022). 19 The ECB has not yet raised its policy rate, but has announced that it intends to start the reinvestment phase of its general asset programme, known as the APP, in the third quarter of this year The policy rate can be raised some time later and reinvestments are planned to continue for a long period after the first increase in the policy rate. See ECB (2022). 7 [19]  is that the holding will gradually decline in the future, and we decided the purchase sum for bonds would be half as much during the second half of the year as the first half of the year. Depending on the Executive Board's future decisions, the holding is expected to decline as securities mature. This means that our reinvestment phase lasts about six months, and that we raised the policy rate approximately in the middle of that phase. Table 2 compares the effects on the economy of raising the policy rate compared to using QT. Increases in policy rates have more direct effects on the economy and dampen inflation more.

Riksbank's asset holdings – no purchases beyond 2022 Nominal amounts, SEK billion 500 400  300 200 100 0 2015  2018  2021  Government bonds Covered bonds Treasury bills  2024  2027  2030  2033  Corporate bonds Municipal bonds  Note. Quarterly data. The figure shows a technical projection of the Riksbank's asset holdings if no reinvestments are made after 2022. Source: The Riksbank. 19 [19]
Together with the mutually reinforcing pillars II and III, of regulatory review and market discipline, Basle II represents a formidable tool to insulate banks against inherent risks in the highly leveraged business of banking. In this process, we must be mindful of the fact that Basle II has been built on the experiences and risk parameters of developed, sophisticated economies. Through customization to suit conditions and markets in emerging economies, which have fundamentally different characteristics, the principles of Basel II should be appropriately adapted to suit such conditions. The “one size fits all” solution of Basle I will not suit the complexities of Basle II. The markets in which we operate have their own peculiarities and their own cultures. Promoting international best practice in such a culture is, indeed, a challenge which demands a fundamental change in credit cultures, attitudes, and policies. The will to change is important and in the case of banking institutions, has to be mandated, if it is to be in the best interests of the major stakeholders, the depositors. Full implementation of Basel II is, indeed, demanding for banking institutions and regulators alike. Capacity building is an imperative on both sides, as is the framework for good risk management built on risk models. The supervisory capacity to assess and validate these models must be enhanced and developed. The magnitude of the investment in technology by the banks must be justified in a business sense. We must ensure that the cost of compliance does not outweigh the benefits from Basle II.

Elvira Nabiullina: Bank of Russia’s strategic objectives and plans for the next five years Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at the International Financial Congress, Moscow, 13 July 2017. * * * I would like to speak about the Bank of Russia’s strategic objectives and plans for the next five years. The present situation suggests that we focus on the planning horizon and determine the overall strategy for financial market development because the Russian economy currently stands on the cusp of a new cycle. The economy has rebounded to deliver positive growth rates although, in truth, they remain low. This year we expect growth of 1.3-1.8%. The agenda of stabilisation and adaptation to external shocks, which has dominated in recent years, has naturally transformed into discussion on how to start up the engine of economic development. That is why the theme of this year’s congress is “Finance for Development". I expect that the two days at the Congress will help us gain a greater understanding of the changes occurring in both the Russian and global financial system. I will start by addressing global economic development. This year marks ten years since the onset of the financial crisis. Contending with the onslaught of the crisis – like waves crashing in one after another for many years – and the economic consequences thereof, the central banks of many countries were forced to take unprecedented steps to stabilise and reverse course.
The incident may also raise some questions about how effectively market forces are acting to restrain those taking outsized risk positions, something that I will return to in a moment. Taken together, these developments provide a strong baseline for financial stability. But the risks that we pointed to in July are still there. In particular, we pointed to the risk that financial firms concerned about losing market share in rapidly expanding markets might pay less attention than they should to their resilience to unexpected shocks. [Chart 1] gives our assessment of developments since July. It shows that a number of the vulnerabilities have edged up a little as leveraged buy-out (LBO) activity and commercial property lending have grown and as the number of personal insolvencies has increased. On the other hand, the slowdown in the US economy and the beginning of a narrowing in its trade balance may have reduced the risks on that side, although we didn’t judge this material enough to change our overall assessment. BIS Review 124/2006  1  We know how easy and how fruitless it can be to draw up long lists of things that could go wrong without paying attention to their likelihood. So we try to take a balanced view that recognises not just what could go wrong but also recognises changes that we think have a positive impact on financial stability.

For example, I have been clear that, in the long run, the growth of derivative markets and the development of new players like hedge funds should help to price risks better and spread them more widely, and thus make the financial system more resilient. However, there is no denying that financial markets are liable to overshoot. And it is particularly important to stay alive to this risk when new records are being set for leveraged bids, returns on equity and City bonuses. Over-optimism in the financial system can have costs not just for the consenting counterparties but more broadly across the economy. By talking to you individually, drawing the threads together with our own analysis and feeding back a dispassionate but informed assessment of what your actions and plans add up to, we hope we can inform your decisions and thus help to head off instability. Low volatility One of the main vulnerabilities on our league table is low risk premia in financial markets – that is, the low level of compensation that investors are demanding to hold risk. In my remaining remarks I want to offer some observations on a closely related and interconnected topic: the low level of volatility in a number of asset classes. My colleague Paul Tucker has recently commented on low historic volatility. [Charts 2 to 4] show how the volatility of asset returns has come down for equities, bonds, and exchange rates to low levels by modern standards.
5  RAMSES stands for the Riksbank’s Aggregated Macro model for Studies of the Economy in Sweden. BIS Review 65/2010  3  together. It is a very useful tool in analysing different scenarios and different action alternatives, and it thus functions as a basis for the discussions on which monetary policy would be best. But the results from model estimates in Ramses and other models are always complemented with, for instance, assessments by sector experts. In the shortest possible perspective – particularly the current quarter, but also to some extent the following quarter – the sector expert often has an information advantage compared with the information contained in Ramses and other models. The sector expert may also have information on different economic policy measures, in addition to monetary policy measures, which could affect the economy throughout the forecast period. One example could be different types of fiscal policy measures that are decided on. It may be difficult to directly include the effects of such measures in the models, due to insufficient resources. The forecasting work at the Riksbank can therefore be described as an interplay between model use and assessments, where the latter can be fairly important, particularly in extreme conditions such as during the financial crisis. A topical example of how the published forecast can differ from the results in Ramses is the GDP forecast for Sweden in the most recent Monetary Policy Update. The published forecast for the coming years is a much higher GDP growth than the Ramses results would indicate.

As a result of keen competition for loan customers, excessive optimism and problems in distinguishing between sound and unsound projects, risk may be underestimated during upturns. The labour market has few available resources. Registered unemployment has remained steady at about 2½ per cent since the beginning of 1998. Long-term unemployment is low, and spells of unemployment are generally brief. Unemployment has edged up in the last few months, primarily in Eastern Norway, while employment growth has been limited. In the aftermath of the terrorist attack on 11 September last year, the aviation and travel industries reported job cuts. Cutbacks have also been announced in the process industry. The guidelines for fiscal policy will stimulate activity because petroleum revenues will now be phased into the economy. According to the Government’s estimate, the guidelines imply an average increase in the use of petroleum revenues in the central government budget of about 0.4 per cent of mainland GDP each year from 2002 to 2010. The government budget that was approved for 2002 implies that the use of petroleum revenues will increase by 0.6 per cent of mainland GDP from 2001 to 2002. The guidelines for fiscal policy imply a substantial stimulus each year. The expansionary impetus varies considerably, and is greatest in the first few years. However, an unpredictable and more expansionary fiscal policy than that implied by the guidelines would have resulted in greater uncertainty. The guidelines provide a stable framework that contributes to reducing some of the uncertainty.
Innovations that integrate payment solutions into firms’ accounting systems could yield considerable gains. More efficient solutions are also needed for cross-border payments. Among the newcomers to payment services we find tech giants like Apple, Google and Alibaba. They have strong market power in other markets and many users, giving them a potential advantage as payment service providers. If they become dominant payment service providers, some of the gains from stronger competition may be eroded. Privacy considerations may also be challenged. Our payment histories contain personal, and potentially sensitive, data. For some of the new payment operators, it is precisely such personal data that form the core of their business. Sensitive data must not fall into the wrong hands. Today, most of us trust that Norwegian banks take privacy seriously. Perhaps this trust will be the banks’ most important competitive advantage ahead. 6 For more information about developments in the payment system, see Financial Infrastructure Report 2018. Norges Bank. 12  In recent years, various forms of electronic money and digital currencies have emerged that differ from traditional forms of money, in particular in that they have no institutional backing. NORGES BANK ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  An example is electronic money used on closed digital platforms, which are operated by commercial companies. Even though these platforms are subject to government regulation, this money may be lost if the company behind it goes bankrupt. This may be what Kristoffer experiences in 2030.

But we must be prepared for a time when the industry is no longer expanding, but gradually declining, and we will need growth in other industries. Businesses must drive structural change and innovation, but the authorities can provide favourable operating conditions to promote an innovative and sustainable business sector. Norway ranks high on the ease of doing business index4, supported by solid institutions, a high degree of confidence and a solid welfare system. History has shown that Norwegian business and industry have a strong capacity to adapt. Many of today’s oil service operators had a long history in other industries before moving into the oil sector. A prime example is the shipbuilding industry, which faced a sharp drop in demand for ships in the 1970s. The industry had resources and skills that could be reoriented to production of platforms and other inputs in the oil industry. In hindsight, this was a fortunate stroke of serendipity. Companies in other industries have also seen the opportunities afforded by new technology or changes in operating conditions. One example is Borregaard. The company has existed through several industrial revolutions. An abundant supply of timber and hydropower from the Sarpsfossen waterfall was a good starting point. Through the years, new technology was adopted – from water-driven sawmills in the 1600s to waterfall power at the end of the 1800s, and to today’s fully automated activities.