samchain/econo-pairs-v1 huggingface dataset:
The challenge facing the UK economy in the years ahead is to ensure that the private sector can once again become an engine of job creation and growth as the public sector rebalances, repeating the positive experience of the 1990s recovery. 6  Public sector net borrowing was 7.7% of GDP in 1993/4, moving towards a surplus of 0.5% in 1998/9, a swing of 8.2% in the public sector financial balance as a share of GDP. The Budget plans show a 9 percentage point swing – from borrowing of 10.1% in the current financial year to 1.1% in 2015/6. 7  From Q3 1991 to Q4 1998, public sector employment fell by 827,000 – a fall of around 14% of the total. The Office for Budget Responsibility projects a fall in 600,000 over the present consolidation, a fall of around 10%. BIS Review 134/2010  7  There is, however, one important difference between the situation now and the mid-1990s in that the flow of finance to support the growth of private sector businesses has been affected by the impact of the financial crisis on the banking sector. For many businesses and individuals, the terms on which they can access lending are much less favourable than before the crisis. In one sense, this is very appropriate in that credit was too freely available in some parts of the financial system in the mid-2000s and this created the conditions for the global credit boom which preceded the financial crisis.

Indeed, the latest readings from the nonmanufacturing PMI last week showed a surprising pick-up in growth. The latest US data on retail sales and industrial production are also reasonably positive and help offset some of the more downbeat indicators from the housing market. In the US, just as in the UK, we have to recognise that the data may be somewhat variable at this stage of the cycle. We should therefore beware of interpreting this variability in the economic indicators as a sign that the recovery is seriously faltering in the United States, or anywhere else in the global economy. There is, however, a flip side to the strong rebound we have seen in the global economy since the middle of last year. While the growth of the global economy is helping to sustain the recovery in UK economic activity, it is also putting upward pressure on global energy and commodity prices, along with the impact of a number of weather-related events affecting the supply of commodities. And in a world affected by climate change, we may expect to experience these weather-driven upward price shocks more often. These upward shocks to UK inflation from import prices – amplified by the relative weakness of the pound – have contributed noticeably to the recent experience of above-target UK inflation.
When inflation fell back in the early 1990s it became apparent that the investments in real estate had been founded on unrealistic expectations that prices would continue to rise. The property market collapsed and credit institutions were hit by massive loan losses. The bank crisis accordingly accentuated the economic downturn in Sweden. BIS Review 68/1997  -2-  Inflation is also associated with an arbitrary redistribution of income and wealth, often contrary to the ambitions of distribution policy. Referring again to the 1980s, the chief losers from the inflationary economy at that time, with the resultant price fall, were probably not the property speculators but households whose bank savings were eroded by two-digit inflation and whose wages were only subsequently adjusted for inflation. Price stability is the Riksbank’s objective The reason why monetary policy is assigned the task of safeguarding the value of money is basically simple: by adopting an appropriate monetary stance the central bank can choose, or at least strongly influence, the rate of inflation. In the short run price increases are of course affected by many other factors such as the state of economic activity, the direction of fiscal policy, wage formation, etc. But in the long run inflation is a monetary phenomenon. By controlling the supply of money in a wide sense, in the long term the Riksbank can also govern movements in the value of money and in inflation. Interest rate management by the Riksbank cannot, on the other hand, generate economic growth and employment in the longer run.

Mr. Heikensten looks at the prospects for the Swedish economy against the background of the central bank’s monetary policy Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, given at the Centre Party’s Economic Seminar in Haparanda on 15/6/97. I should like to begin with a word of thanks for the invitation to talk to you here. In these introductory remarks I shall be discussing the economic situation. Sweden’s economy presents many positive aspects: the outlook for growth is good, the general government deficit is estimated to be eliminated next year and the low inflation policy is becoming more and more established. But there are also persistent economic problems to solve, not least in the labour market. Before considering the economic situation, however, I thought I would say something about monetary policy, the role of the Riksbank and the changes in the status of the Riksbank that recently gained the support of five of the political parties in Sweden’s parliament, including the Centre Party. 1. Monetary policy and the role of the Riksbank Why low inflation? In the past decade there has been a growing awareness of low inflation’s importance as a central condition for the proper workings of an economy. This has been the case not just in Sweden but virtually throughout the western world. The significance of price stability is clearly demonstrated by Sweden’s experience in earlier decades.
Larger and more efficient securities markets - both in equities and debt instruments - provide more financing alternatives for companies and investment alternatives for savers. Companies financed in the securities markets are continuously monitored through a transparent process. Well-functioning securities markets may thus increase the profitability of capital and hence economic growth, by making sure that capital is allocated to the best new investment projects and by facilitating the restructuring of existing companies. In other words: competition for capital contributes to creative destruction. In my opinion, larger and more efficient securities markets will also reduce the risk of financial instability. Let me give you a recent example. The Long Term Capital Management crisis in 1998 showed that banks and securities markets can complement one another in crisis situations. During the crisis, the market for securities with credit risk dried up for a short period. Banks then increased their lending, and thereby averted a more extensive shortage of credit. More frequently, financing through securities markets has been used as a substitute for bank loans in the event of banking problems. The goal of financial stability thus implies both well-functioning banks and securities markets. The optimal balance between the two is difficult to define, but in most countries - including the Nordic countries the financial system would be more robust with larger, more developed securities markets than is the case today. This could also enhance the growth prospects of the respective economies. 5.

Together, these forces are reducing the cost of providing traditional financial services and are paving the way for new ways to channel savings and manage risks. Structural developments in the financial sector can be important for monetary and financial stability. Central bankers thus follow developments with great interest. Today I will examine some aspects of the changes taking place and their potential consequences for monetary and financial stability. Let me run through the structure of my speech. First, I’d like to touch upon some characteristics of the Nordic economies as a background to the financial sector issues I will discuss later. Second, I will define the two stability terms that I have just introduced. Third, I will discuss the growing importance of securities markets. I will then reflect upon cross-border integration in the banking sector and consequences of the Internet. Finally, I will take a quick look at what challenges structural changes may pose to the authorities, and then conclude. 2. Some characteristics of the Nordic economies  The economies of the four largest Nordic countries have some well-known features that distinguish them from most other developed countries. 1  BIS Review 78/2000  For a start, they all have fairly large public sectors, as illustrated by the level of public sector employment. Compared with Anglo-Saxon countries, the differences are striking. The large public sectors are the result of a deliberate choice to ensure equal access to certain services like health care.
Here, the following elements are crucial: (i) setting appropriate credit standards, (ii) proper valuation of collaterals and (iii) development of sound credit risk models. As to credit standards, pricing policies are crucial as they should be oriented to cover, at least, the costs of financing, structure and credit risk inherent to each type of operation. Banks should calculate the cost of the credit risk for different homogeneous risk groups in a manner consistent with their history of recognition of defaults and associated losses and recoveries, as well as with expected economic developments. Data integrity, reliable documentation of losses and adequate modelling to project expected losses ahead all play a key role in this respect. The setting of global limits to credit as a means of controlling the volume of the risks incurred, their evolution over time, their maturity and the application of conservative conditions whenever refinanced credits are negotiated, are all integral elements of the general lending standards that banks should observe and keep up to date as part of their credit risk management policy. Moreover, rapid credit growth usually has a negative impact on lending standards which, down the road, translates into increased needs for provisions, as non-performing loans start to pop up. We saw this clearly, and on a large scale, during the lastest banking crisis in Spain1 and elsewhere, and it is our responsibility to remain vigilant to prevent this from recurring with the appropriate supervisory tools.

18.10.2018  Welcome Address Conference “The New Bank Provisioning Standards: Implementation Challenges and Financial Stability Implications”/ Banco de España, FSI and CEMFI Pablo Hernández de Cos Governor of the Banco de España  Good morning to everyone. It is my pleasure to welcome you all to the conference: “The new bank provisioning standards: implementation challenges and financial stability implications”, hosted by the Banco de España and co-organised with the BIS Financial Stability Institute and CEMFI. Let me first thank these two institutions for their participation and active involvement in the conference. The invaluable work and expertise of the FSI and the ever-necessary academic rigour provided by CEMFI combine perfectly with the Banco de España’s long-dated experience in banking supervision and create the sufficient conditions for this event to be a fruitful one. These three elements should be the ideal ingredients to ensure a promising and, hopefully, successful conference. Furthermore, the presence of leading international figures from academia, the banking industry and supervisory, accounting and auditing organisations as chairs and panelists, are an effective guarantee that a lively and enlightening debate over the next two days will arise and retain the interest of the audience and ultimately meet the organisers’ original aspirations for the conference. As a starting point, we should recall that credit risk is, by far, the most important type of risk universal banks face, as their customary activity is based on granting loans.
The question of whether or not to join the monetary union mainly has to do with long-term aspects of economic development and how we in Sweden view our future political role in Europe. In this perspective, today’s stronger Swedish economy is an argument in favour of adopting the euro now rather than for remaining outside. Some of the Calmfors report’s arguments against participation have been weakened. A decision to join – based on long-term, strategic considerations – is now associated with smaller short-term risks than it would have been some years ago. The report and the Riksbank on economic efficiency The next step of the analysis in the Calmfors report concerned the consequences of membership for resource utilisation, that is, how the long-term output trend might be affected by the impact of membership on, for example, investment, foreign trade and transaction costs. The report focused on the effects that are easiest to measure and assess. The decreased costs for currency exchange and covering foreign-exchange transactions were seen as definitely positive. The report was uncertain both about the magnitude of this effect and about the effects on foreign trade and investment but came to the overall conclusion that they were not particularly large. The Riksbank considered that the report underestimated participation’s effect on efficiency. One reason for this was the report’s assumption that firms could reduce the costs associated with exchange rate movements by covering them in financial markets.

Regulatory decisions and economic drivers will affect the status quo These examples give a sense of the level of integration between UK and continental financial markets, in particular for certain complex and sophisticated financial services linked to derivatives markets and investment banking activities. However, Brexit will change this status quo and a degree of decoupling is likely. It is difficult to make firm predictions about the extent to which our two financial systems may drift apart or remain integrated. The contours of the future EU-UK relationship in financial services are still uncertain, and the economic drivers and regulatory choices which could reshape this relationship will probably only be felt over time. The EU will need to balance the benefits of continued integration with the UK financial system against potential risks to financial stability, consumer and investor protection, the level playing field and the integrity of the Single Market. As I have said in the past, this path will not be easy for either side of the Channel, and the risks linked to regulatory divergence and a potential race to the bottom should not be taken lightly. Allow me to briefly discuss the regulatory dimension of this question. A possible scenario is that the United Kingdom will not seek to remain a member of the EU Single Market once it leaves the EU. This means moving away from a fully-integrated relationship underpinned by the EU’s single rulebook and single passport for financial services, and relying instead on the EU’s equivalence framework for third countries.
For the banks, this is a quite simple way of “creating” kronor, which, under certain circumstances, can be cheaper than borrowing on the Swedish market. The important point here is that, as long as the bank exchanges dollars into Swedish kronor at the same time as it agrees to exchange them back again when the transaction matures, no liquidity risk in dollars will arise. The bank knows, of course, that it can repay the dollar loan when it falls due.3 A third way for the bank to use the dollars it has borrowed is to lend them to its customers. A growing number of the Swedish banks’ corporate customers operate internationally and have cash flows in US dollars. As part of their liquidity management, these companies may occasionally need to borrow dollars for short durations. And the bank wishes to satisfy this need. For example, Swedish banks undertake significant lending in dollars to shipping companies. Dollars are also lent in countries in which lending is strongly dollar-based, such as Russia. This type of lending has obvious liquidity risks. If the customer is unable to repay its dollar loan when this falls due, the bank may have difficulties in paying its counterparty. During the crisis, this is exactly what happened in several parts of the world. Major export companies were not paid by their customers as planned – as the customers could not borrow from their banks as usual – and so they wanted to extend or increase their loans from their own banks.

One of the recommendations adopted was the need to modernise and harmonise financial sector legislation. This included the current Bank of Zambia Act. 2. Secondly under Southern African Development Community (SADC), the SADC Committee for Central Bank Governors (CCBG) was tasked to develop harmonised  BIS Review 128/2010  1  Encouraged by these two events, the Bank of Zambia embarked on a process of reforming and modernising its legislation. In doing so we relied heavily on the provisions of the Model Law but were mindful that these had to relate to our local circumstances. This exercise has resulted in a “home grown” draft Bank of Zambia Act which is the subject of this workshop. We are pleased to report that the draft has incorporated principles of international best practice.
If we want central bank control over leverage to be stronger in the future, shadow banks need to be part of what we consider “banks” tout court. In fact, by 2007 the size of the official and shadow banking systems, measured by the total amount of assets, had become essentially the same. 3 But there is also an issue of quality – or, if you prefer, of composition – of finance. Due to the increased risk aversion resulting from the financial crisis, collateralised lending is bound to increase in the future, even in markets where traditionally unsecured lending was the most important source of finance (e.g., the euro area interbank market). As a consequence, the demand for securitised assets – of the type that shadow banks have learned to create in the past – is set to increase further in the future, as institutions demand such types of debt to use as collateral. To put it in a nutshell, we will continue to need the functions, the financial products and the expertise that the shadow banks have been offering. But, we need to make sure that these activities are performed in a non-disruptive way. The new financial landscape can also reinforce the effectiveness of monetary policy. I already mentioned that most of the funding of financial institutions – whether banks, brokerdealers, hedge funds or shadow banks – is short-term. In other words, a key function of the financial system is maturity transformation.

I hope that Standard Chartered Bank will lead the way in establishing affordable products and services for our small scale farmers throughout our country. I encourage you Madam Managing Director in your capacity as the Deputy Chairperson of the Bankers Association of Zambia to expand your horizon and collectively join hands with all stakeholders in addressing this problem. I thank you for your attention. 2  BIS Review 34/2009
For reasons of credibility, central banks often feel they need to convey a strong sense of certainty about the impact of their words and actions. My own sense is that this needs to change. Experimentation and trialling, adaptation and learning are likely to be crucial when dealing with central banks’ new, wider audience: more diffuse than ever in their actions and reactions, increasingly silo-ed and self-reinforcing in their behaviours, shaped by social norms and popular narratives that propagate faster than ever. The response of this complex, adaptive social system to central bank interventions is likely, often, to be unknown. 74 75  For example, Halpern (2016). Consumers in the trial were presented with hypothetical choices. See Smart (2016) for details. 23  All speeches are available online at www.bankofengland.co.uk/speeches  23  Experimental trials, which solicit and respond to feedback, are one way of reducing somewhat that uncertainty through learning and adaptation. These are used extensively by companies when trialling new games, new films and new apps, among other things. Although the bar is higher, and the trial would need careful stage-management, there is no reason these experimental methods could not be used to trial new communications and policies by central banks. A more sophisticated, and dynamic, approach to eliciting feedback is by “gamifying” the policy problem. A number of central banks and government departments have already made steps in this direction. The San Francisco Fed has a game called “Chair the Fed”. This is not a campaign rally by John.

Caleb M Fundanga: Reading towards a sustainable economic future Opening address by Dr Caleb M Fundanga, Governor of the Bank of Zambia, as the guest of honour, at the Zambia Book Fair 2008, organized by the Book Publishers Association of Zambia, Lusaka, 29 May 2008. *  *  *  • The Master of Ceremonies • The Chairman, Book Publishers Association of Zambia • Book Sellers Association of Zambia • The Director, Lusaka Museum • Distinguished Invited Guest • Exhibitors • Ladies and Gentlemen It is a great pleasure and honour for me to have been invited to officially open the Zambia Book Fair 2008, which is the largest book event in the country. I am reliably informed that this year’s fair has attracted around 23 exhibitors, and I am proud to be able to say that the Bank of Zambia is also participating as an exhibitor. Mr. Chairman, The decision to accept the invitation from your Association to grace this occasion as the Guest of Honour was a very easy one to make. There are two important reasons for this: First of all, I love to read. This love for reading extends beyond academic and professional books to fiction, magazines, newspapers, research papers and generally any literature that stimulates me to think critically about the world around me and how I view and understand it.
Of course, this depends on supply elasticity. However, it may take time to develop new sources of supply that can keep up with demand. The increase in commodity prices weighs negatively on countries which consume more of these products – mainly the advanced economies – and on those with lower productivity growth. Another “negative-impact” channel is the Balassa-Samuelson effect, according to which prices of manufactures and services in EMEs increase more rapidly than in advanced economies. To the extent that these prices remain lower than those in advanced economies, any increase will worsen the latter’s terms of trade, especially if domestic production is limited or has been totally offshored. To sum up, there is a need for more analysis of how growth potential is affected by ongoing developments, such as globalisation. My impression is that there is too little work being done on this issue; I fear that we will exit from the crisis with the same old analytical instruments and assessment that we had prior to the crisis – the very same ones which were responsible for the insufficient surveillance of economic developments and policies. 3  L. Bini Smaghi (2009) “Towards the G8 – strategies for emerging from the crisis”, LUISS Guido Carli University, Rome 27 May 2009. BIS central bankers’ speeches  3  Inflation Inflation is the second way in which the strong, steady progress of the EMEs is affecting advanced economies (Chart 5).

For the euro area it is based on an update of the reaction function estimated in L. Christiano, R. Motto and M. Rostagno (2010), “Financial Factors in Economic Fluctuations”, ECB WP No. 1192. For the US leverage is computed as the year-on-year change in the leverage ratio of brokers and dealers. For the euro area it is computed as the year-on-year change in the leverage ratio of OFIs computed on the basis of asset transactions to make sure that movements in leverage are not dominated by revaluation of assets. Subject to data availability, the sample is 1997–2007. Source: ECB Staff calculations. BIS central bankers’ speeches  13