samchain/econo-pairs-v1 huggingface dataset:
They then resorted to a further type of measure, known as 8 See Billi and Vredin (2018) for a discussion. 9 [25]  ‘quantitative easing’, which means pushing down long-term market rates on various markets through direct purchases of financial assets. A further measure introduced by both the Bank of England and the ECB was ‘funding-for-lending’ programmes. The idea behind these is that the banks can borrow money at a low cost for the explicit purpose of increasing lending to households and companies. These measures were introduced when a credit crunch threatened to hamper growth. Sweden, as a small open economy, was hit hard via trade with other countries, despite the financial problems in our country being much milder than in many other countries, although there was initial unease over the Swedish banks’ exposures in Estonia, Latvia and Lithuania. The repo rate was cut by more than four percentage points to alleviate the effects on the Swedish economy. In addition, several measures were implemented with the purpose of supporting the Swedish financial system. The Riksbank lent SEK 400 billion to Swedish banks and also lent the equivalent of almost SEK 200 billion in foreign currencies to help the Swedish banks with short-term liquidity problems. During 2010, the Swedish economy grew strongly and the Riksbank and many other analysts forecast a global economic upturn and a rapid recovery in the Swedish economy.

The National Accounts for the fourth quarter of last year were slightly weaker than expected, but at the same time, the outcome for previous quarters was revised up, so that GDP growth for the year 2005 as a whole was as expected. Inflation was slightly lower than expected in January, but in February inflation was slightly higher than expected. The moving three-month averages in the Labour Force Surveys in February showed largely the same picture of labour market developments as that on which our interest rate decision was based. 6  BIS Review 21/2006  Conclusion In conclusion, I would like to return to my theme for this talk, namely that things are better now. Of course there are problems now, and of course one can discuss whether monetary policy should provide a little more or less stimulation. However, with the long-term perspective I have tried to provide here today, I believe that Sweden has a much better economic situation now than during the problem years between the mid-1970s and the mid-1990s. We have a regulatory framework for exchange rate and monetary policy, as for fiscal policy, which promotes macroeconomic stability and good economic growth. It is important that we safeguard these regulations. BIS Review 21/2006  7
Monetary policy is not a zero-sum game. Flexible inflation targeting still best-practice monetary policy My starting point is that the objectives of a good monetary-policy framework are twofold: to stabilise inflation around a low level and resource utilisation around the highest sustainable level. Such a framework is fully consistent with the dual mandate of maximum employment and stable prices of the Federal Reserve, with its mandate-consistent inflation rate, and the flexible inflation targeting of the Riksbank, with its inflation target (Bernanke 2011a, Svensson 2011a). There is no fundamental difference between the monetary-policy  2  BIS central bankers’ speeches  frameworks of the Federal Reserve and the Riksbank, although the communications strategies of the two institutions are somewhat different.1 The dual mandate and flexible inflation targeting boil down to “forecast targeting” (Woodford 2007, Svensson 2011b), that is, choosing a policy-rate path such that the corresponding forecasts for inflation and resource utilisation “look good” in the sense that they best stabilise inflation around the mandate-consistent/target inflation rate and resource utilisation around its highest sustainable level. Thus, “looking good” implies an efficient trade-off between the stability of inflation and the stability of resource utilisation.2 Is the financial crisis a reason to modify this framework of flexible inflation targeting? That depends on the causes of the crisis. As I see it, the financial crisis was caused by factors that had very little to do with monetary policy.

We also noted that the United States needed to reduce the large deficits in its federal budget, which would entail fiscal policy tightening over the coming years. GDP growth in the euro area was expected to be around 2 per cent a year during the forecast period. But there were substantial differences between countries. Germany, which is the largest economy in the euro area, showed relatively rapid growth, driven by exports and the upswing in world trade. At the same time, developments in southern Europe were  BIS central bankers’ speeches  1  hampered by the sovereign debt problems. We also noted that inflation was still high in the euro area and above the ECB’s inflation target, partly because energy and food prices had risen (see Figure 4). Strong but declining growth and rising inflation in Sweden GDP growth in Sweden was expected to be high this year, around 4.5 per cent, but then to slow down to more normal rates of increase of around 2.5 per cent a year in the coming years (see Figure 5). All components of demand contributed to the positive development. Household consumption was expected to increase by between 2 and 2.5 per cent a year over the coming years. Exports benefitted from the upswing in world trade, but we assessed that export growth would slow down in the coming period and approach more normal levels. A strong economic situation, combined with historically-low investment levels, meant that investments in Sweden were expected to increase substantially over the coming years.
It is only by removing all of the old layers that the painter and decorator can achieve a robust finish. Removing these one by one will simply reveal old cracks, open up old loopholes. Tax reform has been successful when it has recognised that fact and has started simple and afresh. Regulatory reform is no different. For financial regulation, that means asking some big questions. Is risk-weighting of bank assets worth the costs? Are bank’s internal risk models more regulatory trouble than they are worth? Does complexity unduly advantage large incumbents over small new entrants? Are armies of supervisors and compliance officers a sign of success or failure? These questions should form the new regulatory battleground. This could transform the regulatory framework, for the simpler, for the better. It could do the same for taxation. Some will argue that we face a Canute-like task in turning this tide – and, like Canute, that it will be in vain. But, unlike the seas, this complex tide is ours to turn. With the economy struggling for breath, the time has never been better. References David, P (1985), “Clio and the Economics of QWERTY.” American Economic Review, 77(2): 332–337. Gigerenzer, G (2007), “Gut Feelings: Short cuts to Better Decision Making”, Allen Lane. Government Accountability Office (2005), “Summary of Estimates of the Costs of the Federal Tax System”, available online at http://www.gao.gov/new.items/d05878.pdf. Haldane, A and Madouros, V (2012), “The Dog and the Frisbee”, paper presented at the Federal Reserve Bank of Kansas City’s 36th economic policy symposium.

There are more such deals in the pipeline, and I urge Chinese companies issuing green and sustainability bonds or taking green loans to seriously consider doing so in Singapore. I look forward to our continued cooperation with Chongqing. I am confident that our initiatives under the CCI will help build a more resilient, digital and sustainable future for our two countries. 3/3  BIS central bankers' speeches
From the policy perspective, competitiveness issues have been identified as one of the root causes of the economic crisis in Europe and have therefore been explicitly included in the surveillance processes established at EU/euro area and G20 level. To further advance research in this area, the Eurosystem established the Competitiveness Research Network (CompNet) at the end of 2011. The network’s objective is to develop a more consistent analytical framework for assessing competitiveness, one which allows for a better correspondence between determinants and outcomes. To do so, the network functions as a unique forum in which different approaches and measures of competitiveness can be discussed, researched and developed, and eventually reconciled. Developing a framework which includes a complementary use of micro and macro data can lead to improved analyses of competitiveness issues.8 I am confident that Nicholas Bloom will continue making extraordinary contributions to this and other research areas in the coming years. I herewith extend my sincerest congratulations to you – Nicholas – for winning the 2012 Bernácer Prize. 6  See Nicholas Bloom and John Van Reenen, 2007, “Measuring and explaining management practices across firms and countries”, Quarterly Journal of Economics, 122(4), pp. 1341–1408; and Nicholas Bloom and John Van Reenen, 2010, “Why do management practices differ across firms and countries?” Journal of Economic Perspectives, 24(1), pp. 203–224.

They carried out a large research project which used a new survey approach to measure management practices in a systematic way in more than 4,000 manufacturing firms across Europe, the US and Asia. The aspects of management practices their approach focuses on are systematic performance monitoring, setting appropriate targets, and providing incentives for good performance. They showed that firms with better management practices are larger, more productive, grow faster, and have higher survival rates. A conservative estimate indicates that differences in management practices  2  See Nicholas Bloom, 2011, “The uncertainty shock from the debt disaster will cause a double-dip recession”, VoxEU.org, 22 August; and Scott Baker, Nicholas Bloom and Steven J. Davis, 2012, “The Rocky Balboa recovery”, VoxEU.org, 20 June. 3  There is a vast body of literature that builds on Nicholas Bloom’s uncertainty research. I will only name a few papers which involved ECB researchers. Using German data, Popescu and Smets find that uncertainty shocks are less important drivers of business cycles compared to financial risk aversion shocks; see Adina Popescu and Frank Smets, 2009, “Uncertainty, risk-taking and the business cycle in Germany”, CESifo Economic Studies 56(4), 596–626. Bekaert et al. document that a lax monetary policy in the US decreases both risk aversion and uncertainty, with the former effect being stronger; see Geert Bekaert, Marie Hoerova and Marco Lo Duca, 2013, “Risk, Uncertainty and Monetary Policy”, Journal of Monetary Economics, 60(7).
Your own Chairman, Prof. A D V de Indraratne, chairs such Committee and we have benefited immensely from the insights and advice rendered by such Committee. In a similar manner, I am certain that the research findings that will be presented by you at the conclusion of this very timely conference, together with the professional views expressed at the technical sessions would help policymakers immensely to reshape their policy focus appropriately. In conclusion, let me emphasize our deep commitment to your theme by referring to our own Mission at the Central Bank. The Vision of the Central Bank is that of being a credible and dynamic Central Bank contributing to the prosperity of Sri Lanka. As set out in our Strategic Plan, the term prosperity has a wider connotation: i.e., the enhancement of the quality of life of people through sustainable wealth creation and inclusion of all segments of the society in enjoying the benefits of development. The Central Bank expects to facilitate this process by ensuring price stability and financial system stability while providing prudential and pro-active policy recommendations, as the Advisor to the Government on Economic Affairs. We have, so far, taken a pro-active stance in the delivery of prosperity and we are encouraging the key stakeholders in our country also, to implement the necessary strategies towards such end. We see the Sri Lanka Economic Association as being a key partner in the delivery of prosperity in our country and we commend you for your commitment and dedication.

Caleb M Fundanga: Broadening access to mortgage financing in Zambia Opening speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the re-launch of the Pan African Building Society (PABS), Lusaka, 24 July 2007. *  *  *  • The Shareholders of PABS; • The Board of Directors of PABS; • Senior Government Officials present; • The Deputy Governor-Operations and Registrar of Banks and Financial Institutions; • The General Manager of PABS; • Distinguished Ladies and Gentlemen. It gives me great pleasure and gratitude for having been invited to speak on this occasion of the re-launch of the Pan African Building Society. Ladies and Gentlemen: Today marks an important day in the calendar of Pan African Building Society which brings on board new shareholders. The Bank of Zambia is happy to note that this development has turned around the financial condition of Pan African Building Society. Ladies and Gentlemen, as you are aware, there is shortage of housing in Zambia and therefore the demand for housing finance is increasing. It follows therefore, that the primary challenge of housing finance institutions in Zambia is the broadening of access to mortgage finance particularly to many people in urban areas. Due to the prevailing macro-economic stability that the country is experiencing, we have seen substantial growth in the housing finance industry in recent years. For instance, in the last four (4) years to December 2006, the mortgage portfolio of the building society industry has grown five fold.
What will that entail? Controlling the excesses of finance cannot be achieved only with monetary policy interest rates. We need to expand the concept of leverage to other segments of the financial system, particularly synthetic leverage. I mean leverage which is not easily seen in the balance sheet, because it’s built up with derivatives. It’s not seen but it’s very relevant for banks and for the economy, as we saw during the crisis. 5/8  BIS central bankers' speeches  The obstacles to regulating markets, and not just banks, are not so much technical; the obstacles are more political or ideological. It requires more regulation and supervision by not only central banks, but also in some cases governments. It is politicians that often need to enforce macroprudential measures, and in some countries some governments do not want to use them. Another aspect that is different now is that we have in our economies too much finance. There is a strand of literature showing that after certain limits there are diminishing returns in the expansion of finance. And to tame these imbalances we will also need macroprudential measures. You have talked about the need to reform economics too. What do you have in mind? Big changes are happening, we are going in the right direction, but in my view we are not there yet.

Most importantly, many governments entered the crisis with high levels of public debt and, with the crisis already putting pressure on their budgets, they were reluctant to spend yet more. So even after having exhausted their conventional policy tools, central banks found that they were the only ones left to support weak recoveries. With many of them mandated to react to below-potential output, they turned to unconventional policies. 5 While their motives were somewhat different, all the major central banks resorted to either one or both of two measures: quantitative easing – the large-scale purchase of long-term securities, and forward guidance – the commitment to keep short-term interest rates low for a  2  Eichengreen and O’Rourke (2010). 3  Liquidity provision to distressed financial institutions typically occurred in the context of state intervention and state capital injections to ensure the solvency of these institutions. In Switzerland, the SNB acted as lender of last resort by providing liquidity assistance to UBS in October 2008, once the bank’s solvency was guaranteed by a capital injection from the Swiss government. 4  Friedman and Schwartz (1963) argue convincingly that it was the reduction in the money supply that caused the large drops in output and prices between 1929 and 1933, and that this drop in the money supply was amplified by the large-scale bank failures in that period, which the Fed did not prevent through lender of last resort action.
5 The reason for this is partly that the hedge funds have not to any great extent been exposed to the subprime sector and partly that they were flexible and could rapidly close positions where they lost money. In addition, the hedge funds generally seem to have had a stabilising role in the financial markets. In some cases hedge funds have had considerable liquidity, seen the large fall in prices as an opportunity, and taken advantage of this to go in as a buyer. In this way they have contributed to, rather than consumed liquidity. It does not appear as though the hedge funds have played a specifically negative role during the turmoil we have seen to date. Nor have the hedge funds triggered it. 4  For instance, see Khandani and Lo (November 2007) “What happened to the Quants in August 2007?”, http://ssrn.com/abstract=1015987. 5  The two indices of hedge funds’ return, the HFRX Global Index and the HFRI Composite, showed an upswing of 4.2 per cent and 10.4 per cent respectively in 2007. For example, this can be compared with the S&P 500 index which rose by 3.5 per cent. BIS Review 11/2008  3  Some reflections on events There are always experiences to reflect upon when unrest arises in the financial markets. It is already possible in this crisis to point at certain weaknesses that have come into focus. Firstly, we have had a clear reminder as to how events can turn suddenly and unpredictably.

Output and demand are posting moderate annual growth rates, but still with some improvement over the second half of last year. This is good news. However, marginal data show some loss of strength which, combined with low confidence indicators for firms and households, leads us to estimate that the recovery foreseen for the second half of this year will proceed at a slower pace. Accordingly, we have adjusted our growth forecast for this year downward, by one fourth of a point. Inflation has moderated but is still high and thus it is our main worry. In our baseline scenario, we have it around 4 percent for some months to later descend toward our 3 percent target. About the risks facing financial stability, the Report shows no big changes either. Corporate borrowing continued to rise in the past few quarters. Although there are obvious factors behind this trend, such as increased external borrowing-a logical development given the good credit conditions-and the depreciation of the peso, we must not relent in our efforts to closely monitor these tendencies. Anyway, figures also show that the households’ and firms’ financial burden has not increased, largely because interest rates are low, in line with our clearly expansionary monetary policy. The external scenario has also behaved as we outlined in March. The recovery of developed economies looks more balanced across countries, boosting confidence in consolidated growth of the developed world. Emerging markets continue to show some further weakening, especially in our region.
But to set the stage, let me say very briefly that all the usual suspects were present: very strong capital inflows fuelling a credit and asset price boom that subsequently turned into a bubble at the same time as the economy overheated and an unsustainable external position developed, as could be seen in a double-digit current account deficit. And macroeconomic and prudential policies were not up to the task. Quite the contrary: there was a policy conflict between monetary policy and the demand levers pulled by the Government, and the risks inherent in capital flows, FX balance sheets, and credit and asset price booms were left under-regulated and insufficiently supervised. But as so often before in this country, we dealt more effectively with the crisis than the buildup. There were two key elements to this. The first was crisis management vis-à-vis the failing banks, as embodied in the Emergency Act submitted by Prime Minister Geir Haarde to Parliament shortly before the banks failed. The second was the economic programme developed by the Icelandic authorities in co-operation with the IMF. The programme had three key goals: stabilisation of the exchange rate, fiscal sustainability, and reconstruction of the financial sector.

However, there was no safety net of the type that we have in a national setting to back it up. This turned out to be the fatal flaw in the whole setup, although we now know that these banks were also undercapitalised, which might have done them in at a later stage. But so were also several European banks that were considered solid at the time! In the panic that gripped global financial markets after the collapse of Lehman Brothers, Iceland’s big banks were faced with a wholesale run on their foreign currency liabilities and were therefore heading towards a default on those liabilities in the absence of LOLR assistance in foreign currency. However, given their size, it was impossible for the Icelandic authorities to provide such assistance on their own. Liquidity risk was generally underestimated in the build-up to the crisis, both by the financial industry and by supervisors. This applied even more to FX liquidity risk, which can be more lethal due the lack of backstops and safety nets. For example, before the crisis, European banks had built up huge USD-denominated balance sheets that were balanced to a large extent – except, of course, in terms of maturity. This became a major problem when there was a run on such dollar-denominated bank liabilities post-Lehman, and many big European banking names might not be with us today had it not been for the USD swap lines granted to the European Central Bank, the Bank of England, and the Swiss National Bank.