samchain/econo-pairs-v1 huggingface dataset:
The Treaty states that for two years before the examination the national currency is to have been inside the normal fluctuation margins provided for by the Exchange Rate Mechanism (ERM). The process by which the initial group of participants was selected suggests that the criterion could be interpreted somewhat more freely. Finland and Italy were both approved in May 1998 even though their currencies had then been participating in the ERM for only around eighteen months. The other countries may also have reasons for not insisting too strongly on a strict interpretation of formal participation by outsider countries. Considering the apparent strength of British opposition to a fixed exchange rate arrangement, such an attitude might obstruct a British membership of the euro area. It seems to me that in this respect the United Kingdom is in a more difficult position than Sweden. Our Government and the Riksdag have stated that participation in ERM II can be seen as a direct preparation for joining the monetary union; the Riksbank has noted that we do not see any problems with that. In a future situation where a referendum or a general election has resulted in a positive attitude to the monetary union, it is difficult to envisage Sweden’s participation in ERM II as posing any major political problems. Regardless of the formal requirements that may apply at the time of the examination, the assessments in May 1998 indicate that a central factor in the evaluation will be how the exchange rate has actually developed.

Exchange rate stability will probably be analysed with respect to the period before as well as during participation in ERM II. The relationship between the krona and the euro1 has been relatively stable since the beginning of 1996. Disregarding the exceptionally turbulent period last autumn, during this period the fluctuations around a krona/euro rate of 8.70 have been largely inside a margin of ±2.25%. 1  The synthetic euro up to the turn of 1998. BIS Review 96/1999  2  How is a reasonable exchange rate decided? When, or if, the time approaches for a Swedish decision to join the monetary union, it will thus be necessary to consider the question of participating in ERM II. Since the beginning of this year, the matter of whether and when the krona is to be included in the Exchange Rate Mechanism is something that the government decides, albeit in consultation with the Riksbank. At the same time, the krona’s central rate with the euro in ERM II and the margin for fluctuations are matters for which the Riksbank is accountable. So in practice, the new allocation of responsibilities means that the government and the Riksbank have to reach a consensus on the terms for the krona’s participation in ERM II. But these terms are not decided by Sweden alone. The central rate and the band width will be negotiated between Sweden, the countries in the monetary union and the non-euro countries that are members of ERM II. The negotiators include finance ministries as well as central banks.
It is important that these matters are discussed, particularly as one cannot expect the economy to transform itself automatically. We have made good progress in recent years by establishing macroeconomic stability, with sound government finances and stable prices. Efficient wage formation and a financial system that functions properly are other important pieces. The fact that I have concentrated on these two factors this evening should obviously not be taken to imply that they are all that is needed to complete the puzzle. BIS Review 129/1999  4

This effect should have faded now, and it is therefore up to the labour force, technology and renewal to do the job of raising potential growth in the long term. There are two main methods of increasing growth: firstly, that more people work or more people work more, secondly that productivity is improved. When, for instance, new technology or new organisations are introduced, production can be rationalised and productivity increases. If the content of production changes through a renewal in the direction of products and services that demand a higher value on the global market, the value of production rises. When this occurs without a corresponding increase in the number of hours worked, it leads to higher productivity. During the 1970s and 1980s and a little way into the 1990s, Sweden lost considerable ground in terms of real growth compared with other countries in the OECD region. According to an SNS paper produced last year, if Sweden had a growth rate of one whole percentage point over the average among the richest countries, it would take 17 years for us to regain our place among the ten richest 2 countries in the world. If growth is going to increase through more people working, part of the large percentage of the adult population that is absent from working life for various reasons would have to work. Today 3 approximately 800,000 full-time workers disappear from working life as a result of ill health .
BIS central bankers’ speeches  3  The Nordic-Baltic constituency has pushed for the IMF, alongside its surveillance of individual countries, to also regularly conduct the regional surveillance of countries with closely interlinked economies and financial systems. This is of course particularly relevant for Sweden as our banks have such large commitments in the other Nordic countries and in the Baltic countries. Although, as I mentioned above, our countries have increased their cooperation in the field of financial stability, a recurring and comprehensive regional analysis and examination of these issues would be of great value. Important steps have been taken in this direction and we are looking forward to an even sharper regional focus in the Fund’s ongoing financial surveillance. Capital flows require more analysis… The question of whether capital flows should be deregulated or not was the subject of lively discussion in the 1990s before the outbreak of the Asian crisis. After the crisis, some countries believed that one of its causes was that certain countries were asked to liberalise capital flows too early. The issue has therefore been very sensitive since then. Today, however, most countries agree on the positive effects of free capital flows – that is that they contribute to increased economic growth by enabling resources to be used more efficiently. The issue of free capital flows has now appeared on the IMF’s agenda once again.

Second, regulation and crisis management were handled at the national level, despite the rapid internationalisation of the financial markets. Third, surveillance focused on individual institutions and if these were stable separately it was often concluded that the system as a whole was stable. An important reason for these shortcomings was that there was an unclear allocation of roles and no organisation with an explicit mandate to oversee, identify and analyse risks in the global financial system. The IMF was also criticised for its actions in the run-up to the financial crisis. The IMF’s own independent review body, the Independent Evaluation Office (IEO), has said that before the crisis the IMF, like many others, was convinced that the risk of serious crises was practically non-existent.2 This was apparent, for example, in the overconfidence in the health and resilience of the major financial institutions. Risks that are generally related to construction booms and financial innovations were toned down, as was the need for strong regulations to prevent such risks. It was not until the spring of 2008 that the IMF’s Global Financial Stability Report warned against emerging vulnerabilities among the major financial institutions, but by that time the crisis was already a fact. In response to the crisis, more distinct frameworks for the oversight and supervision of the financial system at the national and regional levels are now being developed.
25 (1973–74) to the Storting: “Petroleumsvirksomhetens plass i det norske samfunn” [The role of petroleum activity in Norwegian society]. 2  The Paradox of Plenty. Oil Booms and Petro-States by Terry Lynn Karl (1997) provides a good overview of oil nations’ problems. BIS Review 78/2010  1  From time to time, I meet representatives of the diplomatic corps in Norway. They seldom fail to mention the high cost level in Norway and their bewilderment over aspects of our way of life. A 17th century Moroccan ambassador was even more critical in his account of the wealthiest nation at that time: “…the Spanish nation today possesses the greatest wealth and the largest income of all Christians. But the love of luxury and the comforts of civilization have overcome them, and you will rarely find one of this nation who engages in trade or travels abroad for commerce as do the other Christian nations […]. Similarly, the handicrafts practiced by the lower classes and common people are despised by this nation, which regards itself as superior to other Christian nations. Most of those who practice these crafts in Spain are Frenchmen [who] flock to Spain to look for work … [and] in a short time make great fortunes.” See chart “Petroleum production” at the end of the speech. The oil age in Norway has now spanned about 40 years and there are prospects that it will continue for some time ahead.

Withdrawals from the fund at 4 per cent can therefore finance 15 per cent of public spending in 10 years’ time. This can continue on a permanent basis without reducing the capital in the fund. The fund will therefore lead to smaller cuts in government welfare spending than would have been the case without the fund as the costs related to the ageing of the population have an impact on government budgets. The actual building up of the fund may span a short generation. A fund with investment abroad enables Norway to separate the revenues generated by oil and gas production from petroleum revenue spending. An alternative could have been to regulate the production rate, keeping our wealth under the sea bed for a longer period, as was attempted in the 1970s when the production ceiling was set at 90 million standard cubic metres per year. Oil companies currently produce 240 million standard cubic metres per year. The fund acts as a buffer between widely fluctuating oil revenues and domestic expenditure. The annual spending decision can be made independently of the size of the revenues. Thus, the fluctuations in government oil revenues do not have an automatic impact on the Norwegian economy. The fund also has a stabilising effect on the krone exchange rate as capital outflows increase when Norway’s petroleum revenues rise. As a savings plan, the fund enables petroleum revenues to be used by not only the current generation but also future generations. The fiscal rule ensures that this is the case.
Through VBI, Islamic financial institutions adopt a highly structured framework to assess how they create value and impact, for example, from economic, social and environmental perspectives. VBI accords equal emphasis to economic value creation and upholding of ethical values, and strengthens Islamic finance as a “uniting force for good”. The VBI initiative is currently bringing together the banking groups through a pioneering Community of Practitioners (CoP) to advance the sustainability agenda in a collaborative, concerted and synergistic approach. This includes forming close engagement with organisations that share similar sustainability aspirations. Through VBI, Islamic banks are taking the lead in advancing finance for the good. While these banks are still at early stages in their journeys, there are already concrete examples of VBI being put into action today as we see progress in embedding its elements in their financial products, practices and operations. Though VBI has a far wider scope, these early applications capitalise on contemporary sustainability themes. These include preferential financing rates for hybrid vehicles and green buildings, specialised financing scheme for women entrepreneurs and issuance of the world’s first Sustainable Development Goals (SDG) sukuk. Where VBI goes beyond are in provision of non-financial services bundled in financial solutions such as advisory, business network and relevant infrastructures to groom small clients with business potentials such as SMEs and micro finance. Alongside this move towards responsible financing, the CoP members are actively reviewing their business portfolios, identifying and prioritising VBI issues within their institutions and building the required capacity.

In that respect, we need to look at what drove the demand for liquidity in the 2020 episode, whether there were unnecessary constraints in the supply of liquidity, and crucially whether there were amplification mechanisms that turned the flight for safety into the dash for cash. And to take action, where necessary, to avoid similar dynamics in future. This is the context in which to see the Financial Stability Board’s (FSB’s) programme of work on the March 2020 market turmoil. The first stage of this work, the ‘holistic review’ of the March market turmoil, was published in November 2020. The review analysed the dynamics at play in the non-bank financial intermediation (NBFI) sector and set in train further international work, on various vulnerabilities that were exposed. This work covers: money market funds, on which policy recommendations have been published; the liquidity demand on open-ended investment funds; the structure and drivers of liquidity in core bond markets during stress; USD cross-border funding and its interaction with emerging market economies; and the impact of margining practices, on which I will now focus. In order to assess the role played by margin, a group of senior representatives from central banks and market regulators was established, which I co-chair with Russ Behnam of the Commodity Futures Trading Commission (CFTC).
However, we assume that households will spread consumption over time so that the savings ratio will continue to fall in spite of an increase in interest rates. Growth in housing investment is expected to ease through 2005. However, the projection for housing starts is also very high for 2005. Such a high level of housing starts over several years probably means that more dwellings will be constructed than implied by underlying demand. As a result, housing investment is expected to decline after a period. Higher interest rates and weaker developments in the Norwegian economy may also lead to a fall in residential construction after a period. The upturn in mainland fixed investment is broadly based. Stronger profitability, higher capacity utilisation and solid export growth will contribute to continued investment growth in goods-producing industries. Demand for services is expected to continue to grow for a period ahead with an attendant  BIS Review 18/2005  5  increase in investment in service sectors. When growth in the economy gradually slows down, investment growth will probably slacken. Mainland exports of good and services from mainland Norway will also benefit from solid global growth this year. Later in the period, a continued loss of market shares as a result of high cost levels will dampen export growth. Unemployment is expected to decline this year and next. In subsequent years, growth in demand and output is expected to ease, and unemployment may edge up again when capacity utilisation approaches a more normal level.

With a somewhat tighter labour market in the years ahead and rising inflation, wage growth may pick up. Over the past year, low consumer price inflation has probably contributed to keeping nominal wage increases lower than implied by labour market tightness in isolation. Low inflation has resulted in high growth in household purchasing power, even with moderate pay increases. With a path for the interest rate and the krone exchange rate in line with the baseline scenario in Inflation Report 1/05, inflation may increase gradually from less that 1 per cent today to close to 2 per cent in mid-2006. Under these assumptions, inflation may stabilise at around 2½ per cent at the threeyear horizon. However, continued shifts in trade patterns, with higher imports from Asia and intensified competition in retail trade, may prolong the period of low inflation. Developments in the krone exchange rate are uncertain. The real krone exchange rate measured by relative labour costs is strong. Historically, the real krone exchange rate has tended to return to an average measured over a longer period. Should this occur in today’s situation, through a depreciation of the nominal krone exchange rate, inflation will pick up somewhat faster than projected. If the krone appreciates, on the other hand, there is a risk that inflation will not move up as quickly as projected. Developments in line with the projections imply that the output gap will increase to about 1¼ per cent in 2006.
Rosanna Costa: Macroprudential policy and the countercyclical buffer Opening remarks by Ms Rosanna Costa, Governor of the Central Bank of Chile, at the workshop "Macroprudential policy and the CCyB", Santiago de Chile, 16 December 2022. *** Good morning. I am pleased to welcome everyone to today's workshop on macroprudential policy and the countercyclical buffer. Thank you for being here, participating and lending your attention to this important topic. We have gathered a great lineup of speakers, who will address a range of timely and important issues on the matter. In the aftermath of the global financial crisis, banking regulators agreed on an updated set of banking regulations aimed at improving the resilience of the global financial system, highlighting among them the role of new buffers intended to help banks build sufficient resources in normal times so that in a period of stress they can absorb losses and avoid a disruptive reduction of lending. The buffers have two objectives (Basel Committee, 2020b): first, to ensure that banks absorb losses in times of stress without breaching their minimum requirements; and second, to keep credit flowing to the real economy in a downturn by lending to creditworthy businesses and households. In December 2010, the Basel Committee on Banking Supervision (BCBS) published the Basel III framework with the global regulatory standards on bank capital adequacy and liquidity, including a countercyclical capital buffer (CCyB). Its primary objective would be to protect the banking sector from periods of excessive aggregate credit growth, often associated with the accumulation of systemic risk.

Several potential reasons have been put forward for the reluctance of banks to use their buffers. Among them, the literature highlights: the stigma of the market, the uncertainty around possible future credit losses and the uncertainty around supervisory expectations regarding the restoration of any reserve provision (Hernandez de Cos, 2021b). In the case of Chile, this new macroprudential took was incorporated in the latest reform to the General Banking Law approved in 2018. Within the framework of the implementation of Basel III in Chile, the BCCh was empowered to determine the countercyclical capital requirement to banks. The General Banking Law gives the Central Bank of Chile the power to determine the activation or deactivation of the countercyclical capital requirement. Once the activation decision has been made, the Central Bank must set its level and deadline for compliance, after a favorable report from the Financial Market Commission. As recommended by the Basel Committee, this requirement can be established between 0 and 2.5% of risk-weighted assets and must be paid entirely with core capital (CET 1), above the minimum capital requirements established by the General Banking Law. In this context, in 2021 the Board of the Central Bank of Chile published a policy framework to implement this Capital Requirement as a macroprudential tool to preserve the stability of the financial system as a whole, rather than the solvency of a particular bank.
Therefore I welcome the creation of a G7 group dedicated to cross-border cyber exercises, and I confirm today that the Banque de France will coordinate the G7 test in 2019. Cybersecurity will indeed be one of the priorities of the forthcoming French presidency of the G7 next year. Besides cyber risks, we need to seriously deal with the emergence of crypto-assets. The underlying technology clearly promises sustainable innovation. The Banque de France was the first central bank to offer a service to the market based on blockchain and we intend to carry on experimenting with this technology. But support for blockchain doesn’t mean blind support for bitcoin and the like speculative assets. We were clear in the G20 last month, and let me be clear today. First, the frequent use of the term “digital or virtual currency” misleads the general public on what those assets really are: they are not currencies, with none of a currency’s key functions – store of value, medium of exchange, unit of account. Moreover, crypto-assets carry obvious risks in terms of consumer and investor protection, as well as money laundering and terrorist financing. Therefore they require internationally harmonised answers: the Financial Stability Board, in consultation with other standard-setting bodies and the Financial Action Task Force (FATF), should make recommendations by next July. In particular, we should work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy.

Financial stability is our common good, and we should also face a more subtle threat to it: debt complacency on a global level, in the context of accommodative monetary policies which will be less warranted in the near future. Global debt was already about 200% of world GDP before the crisis (2007), but is up to 220% today. Sound fiscal policies for public debt, responsible lending by financial actors for private debt and – if needed – macroprudential measures, should react against this debt complacency. 1/3  BIS central bankers' speeches  More broadly on multilateralism, we should continue to work together to preserve the world economic and trade order. We Europeans, shoulder-to-shoulder with Canada, Japan and others, must resolutely defend international economic relations based on commonly respected rules and multilateral institutions: we are all aware that an escalation of protectionist threats from the United States would dampen growth everywhere. The recent uncertainty is probably already having some negative effects on investment: you saw it in the British economy since the Brexit vote in 2016. And real tariffs would hurt more: according to most calculations including ours, a 10% increase in tariffs would diminish world trade by double digit figures, and decrease global GDP by more than 2%, starting in the United States. 2. The finance of tomorrow Let me now turn to my second point: the finance of tomorrow in an interconnected world.