samchain/econo-pairs-v1 huggingface dataset:
13  All speeches are available online at www.bankofengland.co.uk/speeches  13  The post crisis international reforms established machinery to enable all relevant authorities to agree and track the implementation of the resolution plans of systemic banks. Public reporting and assessment of resolvability should act to strengthen further confidence of other jurisdictions in the resolution plans of banks that operate in their jurisdictions. Confidence that an effective resolution of a clearing member can be effected will support a CCP and its supervisor ‘staying’ the default of that member, in line with the international guidelines. The Lehman episode with which I started is also an example of what can happen without such cooperation and confidence and when there is no resolution option available. The effectiveness with which Lehman’s default was managed by clearing houses was perhaps the only bright spot in a very sorry tale. I hope I have been able to set out today why the reforms we have put in place on clearing and the progress we have made on resolution learn the lessons of that tale and make the financial system today a substantially more resilient place. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14

The purpose of bank supervision is to ensure that supervised firms are resilient to all of these risks.1 Banks are becoming increasingly attuned to the heightened financial risks from a changing climate. These risks can manifest in a number of ways: the impairment of collateral due to severe weather events; mark-to-market losses from the devaluation of companies with stranded assets; stress to contractual cash flows as regional shocks are realized; or the reduced provision of financial services as business strategies adapt. All of these are salient concerns for financial firms and their supervisors. Financial firms are now incorporating these risks into existing risks management frameworks. Many firms view climate change as a cross-cutting risk driver that spans familiar risk categories, broadly affecting risk management approaches. Moreover, some firms are considering governance issues, the use of scenarios analysis, disclosure options, and thinking about the strategic implications of a transition to a more sustainable economy. Understanding the impact of climate change, however, comes with significant challenges including the long time horizon, data gaps, the need for new model development, inherent complexity and fundamental uncertainty. All of this suggests that there is much work ahead of us. Taskforce on Climate-Related Financial Risks Just as banks are building awareness of climate-related risks, the supervisory community is similarly developing capacity in this area. I will now turn my attention to the specific work of the 2 The Committee Basel Committee’s Task Force on Climate-Related Financial Risks (TFCR).
This was the mechanism that made it impossible for us to keep the fixed exchange rate regime in 1992. At the time of the deregulation, Sweden had a history of high inflation and other imbalances. Doubts  BIS Review 9/2002  1  regarding the stability of the Swedish economy led to capital outflows, rising interest rates and a shrinking foreign currency reserve. Despite massive supporting purchases of the Swedish krona and a drastic defence involving a 500 per cent daily lending rate for banks borrowing from the Riksbank, the defence of the exchange rate failed. This meant that the general public had to live for a period with a 25 per cent interest rate for long-term mortgages! Lottery with a good chance of winning Financial capital is very transient, if not "restless". It is difficult to obtain good statistics on capital flows, but I have managed to find the following observations. Cross-border trade in shares and bonds in the USA more than doubled as a percentage of the US GDP between 1970 and 1993. During the same period, the corresponding volume rose from almost zero to 10 times GDP in the UK. A fixed exchange rate offers speculation at no risk, if there are signs that the currency is over-valued. This was the situation in Sweden in the early 1990s. The fixed exchange rate regimes signalled to speculators that the exchange rate could only weaken.

The mediation of payments is perhaps the most difficult to understand function of the financial market. But bear in mind that less than 10 per cent of all payments in Sweden are made with banknotes and coins. The remainder are through giro payments in various systems for small, mass transactions and large payments between banks and companies. If we were forced to use banknotes and coins, it would require a huge transport apparatus and considerable productive time to implement payments. New technology in this field is being developed all the time. Just consider charge cards and e-money, where payments is through book-keeping in different accounts, without any physical money being in circulation. Millions of transactions of this type are made every day within Sweden and across our borders. Globalisation, the freedom to make financial transactions across national borders, creates conditions enabling the financial systems to become more efficient in all of their functions. The possibility to find high yield investments increases, the possibility to spread risks increases and a large market also increases liquidity. When the financing costs become lower, there will be more investors all around the world, while savers will be able to obtain greater return for a given risk. It is for these reasons that the PPM (Premium Pension Authority) and the AP funds (National Pension Funds) invest a large part of our pension money abroad. Because the Swedish institutions managing pension funds are now able to invest money in foreign shares and bonds, there is less risk for our future pensions.
Only a year ago, the level of unemployment was approximately 5 per cent (see Figure 4). For several years, development in the Baltic states could be described as a fantastic success story with high economic growth. In the period 2005 to 2007, for example, economic growth in Estonia and Latvia was approximately 10 per cent per year, while development in Lithuania was more moderate. At the same time, however, major domestic imbalances developed which laid the foundations for the crisis we are witnessing today. When the Baltic states moved from being regulated economies to market economies, optimism about the future was high and both household consumption and private sector investment increased dramatically. However, the investments went to the service and property sectors instead of to developing production capacity in the industrial sector. Export development was thus weak while imports increased rapidly as a result of strong domestic demand. Consequently, the current account deficits of the Baltic states increased (see Figure 4). The deficits were largely funded by taking loans in euro, mainly from Swedish and other foreign banks. The high level of economic growth led to the overheating of the labour market and wages and inflation increased (see Figure 6). In Latvia, for example, nominal wages in  3  Swedbank's market shares in the second quarter of thiss year amounted to 43 per cent in Estonia, 25 per cent in Latvia and 22 per cent in Lithuania.

The Riksbank's assessment in the main scenario of the latest Financial Stability Report is that loan losses are expected to amount to just over 2 per cent of the banks' lending in 2009 and 2010. In a stress scenario that assumes a much worse situation in Sweden and in the Baltic states, the loan losses could amount to 4.3 per cent of lending during these two years. Almost 40 per cent of these losses in both the main scenario and the stress scenario can also be related to the banks' lending to the Baltic states and the rest of Eastern Europe. These are significant losses, even though they are not as large as those suffered during the Swedish bank crisis in the period 19911994 when losses amounted to 13 per cent of lending. The banks' losses will certainly be largely related, in this crisis as in all others, to the situation on the property market. This is because most of the banks' collateral volume consists of property. However, the problems usually relate primarily to commercial properties, not to housing. The households service their interest and amortisation payments in most cases, even though they may sometimes have to negotiate a respite with the bank. Neither in Sweden nor in the Baltic states can households, as they can in the USA, give up the property they have provided as collateral and thus get rid of their debts. Not even during the crisis of the 1990s did the households account for a significant part of the banks' losses.
UK CCPs were able to provide clearing services without disruption. However, the episode highlighted a feature of the reformed system: in periods of stress, losses are realised faster. Market participants are forced to post sufficient collateral that reflects the market volatility promptly. This is key to addressing the build-up of counterparty credit risk that had been at the root of the devastating global financial crisis. But it also meant that some market participants faced a liquidity crunch and a different type of panic as investors scrambled to get their hands on cash (and particularly U.S. dollars). Margin calls in aggregate were large over the stress period. Initial and variation margin increased significantly, with the increase in initial margin (IM) at major global CCPs totalling around $ in March 2020 and the increase in variation margin (VM) flows peaking at $ during the height of the stress in mid-March. [4] Central banks had to step in to restore market stability in a big way. Over the course of 2020, G10 central bank balance sheets rose by $ trillion. [5] Had central banks not acted, the financial stability consequences could have been severe. Russia-Ukraine The first quarter of 2022 saw another episode of unprecedented volatility across financial markets as Russia invaded its neighbour. Once again, we saw shocks, this time in some commodity and energy markets. Again, we saw big margin calls at CCPs. Losses (and corresponding gains) on derivative positions spiked across February and March 2022, primarily in markets experiencing the largest shocks.

But I also feel there is reason to ask how fundamental, in the sense of how natural and sustainable, the low level of housing construction actually is. After all, it seems rather remarkable that the rising prices in the housing market have not stimulated supply more. If construction had reacted in what might seem a more natural way and followed prices and demand better, the increase in prices would have been less dramatic. Part of the explanation is probably that we had some excess production of housing during the economic boom, that led to the crisis in the early 1990s. But this is not enough to explain why so little has been built in the past fifteen years. There appears to be some form of obstacle or sluggishness that has held back construction. It is important that we analyse what this is and, if possible, try to remedy it. I would like to point out that I do not believe that the solution is to try to stimulate massive housing construction. One problem in many countries was that there was a boom in the housing market, not just with regard to demand for housing, but also supply, where excessive resources were attracted to the housing sector. The large supply – the overcapacity that was built up – probably meant that the fall was much greater once demand declined and housing prices began to fall. But here in Sweden developments have rather been the opposite.
Nonetheless, as my colleague Governor Tarullo noted in a recent speech, 1 more will need to be done to increase the stability of the unregulated sector, and developments in this area will need to be scrutinized carefully in the years ahead. Before closing, let me reiterate the importance to achieve harmonized global standards. As noted earlier, this is important for competitive equity reasons. But more importantly, it is necessary to ensure that banks and other financial firms cannot move their activities to evade regulation. If that were to occur, we would just have a race to the bottom and a less transparent and even more complex financial system. In this respect, it is important that we regulate the U.S. operations of foreign banks in a way that is consistent with how U.S. banks are treated. It is also important that we work for the same type of national treatment abroad, and when there are differences in regulatory regimes, that we find ways of reducing or eliminating the substantive differences over time. Finally, it is important that we clarify the responsibilities of the home and host countries and work to better share information across the regulatory community. This can help ensure that regulatory decisions are made and applied in a consistent and fair manner.

On behalf of Bank Negara Malaysia, let me take this opportunity to express our thanks to the OECD and INFE, and the moderators, speakers and discussants in making this event a success. I would also like to thank all delegates for your active participation throughout this symposium. I hope you have gained valuable insights for charting your own national strategies for financial education. Enjoy the rest of your stay in Malaysia, and we look to the opportunity to welcome you back in the future. 2  BIS central bankers’ speeches
Most important will be to ensure the continued economic flexibility of the region to adjust to the rapidly changing global and regional conditions, the strengthening of the connectivity among the emerging economies in general and within the Asian region, and to boost further the resilience of the region to withstand any destabilising developments. The ASEAN economies have a distinct advantage. In terms of their economic flexibility, their size and stage of development provides the prospects of having greater agility to adjust to the rapidly changing conditions. In terms of the connectivity, the ASEAN region is a highly cohesive region. Historically, it goes a long way back to the 1950s. Cooperation and collaboration are evident in most areas of economic activity and in the financial sector, in both the public and private sectors. Policy-makers participate in several regional agreements and arrangements. The large economies have the opportunity to leverage on the potential synergies from a greater interface with the ASEAN grouping. To realise the Asian potential, continuing the transformative momentum and enhancing the cohesiveness of the region would not be complete without ensuring that the benefits of development is widely shared. Experience has shown, even in the advanced economies, that when inequality is high and significant, instability follows. Greater inclusiveness within economies and across the region is important to ensure the sustainability of our growth and development. An important part of this transformative momentum and greater inclusion will be the transformation involving education, health care and the social security system.

Karolina Ekholm: Some lessons from the financial crisis for monetary policy Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, at a meeting, Stockholm, 4 December 2009. *  *  *  One question that has been much debated over the past year is to what extent monetary policy has contributed to the financial crisis, which we have not quite seen the end of yet. Another – partly related – question is to what extent the policy conducted by central banks in the future should try to counteract potential bubbles 1 building up so that we can ultimately avoid a new dramatic financial crisis with substantial consequences for the real economy. These are the questions I intend to focus on today. One conclusion that can be drawn in the light of the deepest recession in the world economy since the Second World War is that it is important to try to counteract, in various ways, bubbles building up that will then risk causing substantial problems in the real economy when they burst. How this should be done, and who should bear the main responsibility for this task, are difficult questions to which there are at present no exact answers. The responsibility for a balanced development of the economy does not rest solely with the central banks; it also lies with the financial supervisory authorities and the legislators.
When a country has received a timetable for EU entry, investors know that, despite political and economic upheaval, there is a certain fundamental security in its institutions. They know the rules that apply to membership in the shape of democracy, a market economy and the EU's  BIS Review 51/2004  3  acquis - all the regulations agreed so far that each new member state adopts. This has very much been the case with the eight new member states that became free from communism. Between 1993 and 2003 more than EUR 130 billion (SEK 1150 billion or almost half of Sweden’s current GDP) was invested in the eight countries, of which large parts were capital from old EU countries. The investment was mainly channelled into capital in industry and into infrastructure such as energy and telecommunications. A significant Swedish example is the large-scale investment undertaken by Swedbank and SEB in the Baltic banking system. From 1998 both of these Swedish banks have each acquired a part of the Baltic banking system, comprising a total ownership of almost 90 per cent. The Baltic banking system, which previously has been hit by several banking crises, has since then grown very fast, with an annual credit growth of 20-30 per cent, giving increased opportunities for both large and small firms, but also mortgages for individuals. A number of new services, including Internet banking, have been introduced and become widespread.

Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the more short-term objective of stability in the real economy. Low inflation in recent years is both the result of monetary policy assessments and unforeseen disturbances to the economy. Towards the end of 2002, Norges Bank shifted its monetary stance in an accommodative direction as new information indicated that developments in output and unemployment might be weaker than projected and inflation might be lower than target. The key rate was reduced markedly in 2003 and 2004. The low interest rate level has contributed to a considerable increase in demand for goods and services. Increased petroleum investment and favourable prices in markets for our export products have also made a contribution. So far in this cyclical upturn the mainland economy has expanded by an average of close to 4 per cent. Wage developments reflect and influence the business cycle. Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years has been accompanied by a strong cyclical upturn. It appears that wage growth will be somewhat higher in 2006 than in 2005, but not higher than expected. Employment growth was lower over a long period compared with the cyclical upturns in the 1980s and 1990s.
Share of global exports Per cent 16  16 US  12  12 Germany  8  8 Japan  4  4  China  0  0 1983  1987  1991  1995  1999  2003  Sources: IMF, EcoWin and Norges Bank  In recent years, China has become an important player in international trade, and the country is now the world’s fourth largest trade nation. The Asian economies and the rest of the world have become more integrated. Technological advances and a sharp fall in prices in the IT and telecommunications sectors have exposed a number of services that were previously sheltered to competition from low-cost countries. Indian companies service three million customer telephones for companies in the US and the UK daily. European airlines are transferring ticket settlement to India. US companies are outsourcing accounting services to India. Analytical activity in investment banks and development divisions in ITC companies are also being moved to India. Norwegian engineering companies are buying cheap engineering services in India and China. EU enlargement this spring, with ten new members, is also influencing the division of labour in Europe. BIS Review 11/2004  3  Chart 4.

Thus, it is possible that the level of output that is consistent with stable inflation will increase. Credit developments are giving ambiguous signals to our interest-rate setting. The interest rate can be used to reduce credit demand. At present - with low interest rates abroad and a close link between domestic interest rates and the krone - a tighter monetary policy will restrain credit demand primarily because job security would be reduced. When inflation gradually moves up from a very low level, we can begin to move towards a more normal short-term interest rate level in Norway. This may counter the emergence of excessive pressures on domestic resources in the medium term. Interest rate developments in other countries may also have a considerable impact on the krone and hence on interest rates in Norway. When inflation is low - and as low as it is now - it is appropriate to place considerable emphasis on pushing up inflation. Therefore, we are particularly vigilant with regard to consumer price developments. BIS Review 11/2004  19