samchain/econo-pairs-v1 huggingface dataset:
The foreign loan that the Central Bank was authorised to take was its largest on behalf of the Treasury so far. It can only be said that this was a highly successful measure – in fact, a respected international financial journal ranked it one of the ten most successful international bond issues worldwide last year. The borrowing terms were very favourable and of course reflected the confidence enjoyed by the Republic of Iceland in the market. The Central Bank’s greatly enhanced capital position and stronger foreign reserves do not signal any shift in its policy, but represent a natural response to changes in the environment in which the Bank operates. At last year’s annual meeting we all had serious concerns about the peculiar discussion and sometimes unfounded speculation aired then about the Icelandic banks, their position and strength. There is no doubt that this debate and the ensuing events made conditions tighter for the banks for a while. The banks responded firmly to the uncomfortable position that had arisen. They made great efforts to explain the structure and organisation of the Icelandic banks. This was no half-hearted measure, but a steadfast and confident approach which produced results. The banks adjusted certain aspects of their operations and operating environment in response to relevant criticisms, and dismissed what was less relevant with explanations, reports and candid communication, at large meetings, small meetings and man-to-man, depending upon which was most productive.

In sum, the recurrence of financial crises, the emergence of market distortions and the new challenges facing supervisors have prompted some analysts to wonder whether there would exist a dilemma between efficiency and stability. Is instability the price to be paid for the improved efficiency resulting from financial deregulation? Allow me to present now the answers I think central banks and prudential authorities could give to these questions. 3. Monetary and prudential policies should promote an environment in which financial systems are both stable and efficient  First, monetary policy should act as a stabiliser Monetary policy alone cannot guarantee the stability of financial systems, which may be jeopardised by shocks from both the financial and the real economies. However, it does have a stabilising effect. In general, the objective of price stability lowers economic agents’ uncertainty regarding future price developments. In addition, by committing itself to a long-term objective, the central bank reduces market uncertainty, which can be a source of disruption to the financial economy. Interest rates are less volatile as a result, which is of benefit to the long-term growth of the economy. To achieve this, the central bank must send clear and consistent signals to agents and markets and maintain a constant exchange of information. Financial innovation and the liberalisation of capital movements have made such communication more sensitive. Central banks must now systematically explain discrepancies between actual and projected results if they are to preserve their credibility.
The date refers to the day the forecast was published. Sources: Respective analysts  21 [24]  Figure 3. Development of the repo rate during inflation-targeting regime  Note. Per cent. Source: The Riksbank  Figure 4. Desired policy rate path and path with lower bound  Policy rate  Lower bound Preferred path Path with lower bound  Time  Note. Constructed example. Source: The Riksbank  22 [24]  Figure 5. Difficult to forecast the policy rate The Riksbank  The Market  6  6  6  4  4  4  4  2  2  2  2  0  0  0  0  -2  -2  6  -2  05  08  11  14  17  20  05  08  11  14  17  20  -2  Note. Per cent. The Riksbank's forecasts for the repo rate and market forward rates. Forward rates are a measure of the market agents’ expected repo rate according to different derivative contracts. They are estimated around the same time as the repo rate forecasts. Sources: Thomson Reuters and the Riksbank. Figure 6. Yield differential in relation to Germany  Note. Percentage points. Yield differentials refer to 10-year benchmark bonds. Source: Macrobond  23 [24]  Figure 7.

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/effectiveness-and-impact-ofpost2008-uk-monetary-policy/written/48288.html Yellen, Janet L. (2015), “Inflation dynamics and monetary policy”, speech at The Philip Gamble Memorial Lecture University of Massachusetts, Amherst, 24 September. Yellen, Janet L. (2018), “Comments on monetary policy at the effective lower bound”, Brookings Papers on Economic Activity, 13-14 September. https://www.brookings.edu/wp-content/uploads/2018/09/ES_20180910_YellenELB.pdf  20 [24]  Figure 1. Downward trend in global interest rates 10  United Kingdom United States Germany Sweden  8  10  8  6  6  4  4  2  2  0  0  -2 1985  1990  1995  2000  2005  2010  -2  2015  Note. Per cent, annual data. Government bond yields with 10 year maturity, deflated by CPI. Sources: Macrobond, OECD, Statistics Sweden and the Riksbank  Figure 2. GDP forecasts by different analysts 3  2018  2019  3  2020  2.5  2.5  2  2  1.5  1.5  1  1  0.5  0.5  0  RB  FiD  KI  LO  Nordea  SEB  SHB  SN  Swed  24/10  15/11  10/10  27/11  5/9  13/11  7/11  13/11  8/11  0  Note. Annual percentage change, annual data. RB refers to the Riksbank, MF to the Ministry of Finance, NIER to the National Institute of Economic Research, LO to the Swedish trade union confederation SHB to Handelsbanken, CSE to the Confederation of Swedish enterprise and Swed to Swedbank.
(2017), “Hitting Stride - The 2nd Americas Alternative Finance Industry Report,” Cambridge Centre for Alternative Finance, June 2017. [SLIDE 19] This coexists with a rather large, diversified and deep market for conventional financial services. Under this framework firms can get financing from several sources including banks and bond market among others. In recent years, an increase of external financing is consistent with lower cost and the size of the operations of those sources. Firms used those external resources mainly for two purposes: (i) financing operations in the country or abroad and (ii) refinancing other 5  According to the Report “Breaking New Grounds” by the Cambridge Centre for Alternative Finance, Chile accounts for half of Latin America’s alternative financing industry. 15  Central Bank of Chile 29 June, 2017  debts. [SLIDE 20] Further, granular data confirm that currency risks are relative low from a historical perspective, which is possible due to availability of FX derivatives and flows from investments abroad. It should be noted that about a third of the total debt of the corporate sector is holding by firms which get financing only with local sources and do not report to local supervisor (SVS). Most of that local financing is provided by commercial banks which cover those loans with collaterals and provisions.

Having more firms would allow clients to be provided with more choices of financial services and an overall increased competition. However, scale is important in the financial sector, and having too many firms providing the same service may not be efficient. In this sense, incumbents may have an edge over FinTech innovations, as they also have because of the prior knowledge of their clients. Striking the right balance between competition and efficiency is up the market to decide; but from a regulator perspective ensuring a levelled playing field is important and how decentralization unfolds, if at all, should be followed closely. ▪  Personal credit assessment and privacy. Financial information is very sensitive by its very nature, and ownership or access to it may be controversial. It is true that having access to that information could allow for a better and more targeted supply of financial products, and having a record of sound financial behavior can improve credit scoring, which can bring benefits for consumers. However, spreading that information raises concerns. Unrestricted access for FinTech companies to financial information is not an appealing option, whereas a full ban in practical terms may choke them. A middle ground can be to allow for some sort of access and use of financial information by FinTech companies, with strict sanctions for misuse or leakages.
But what Lorie and I wanted to highlight was that, while Covid itself may have been truly exceptional, the financial market propagation mechanisms that turned that shock into a nascent systemic liquidity crisis reflected more structural trends: an increasing reliance by the real economy on core capital markets rather than banks; constraints on market intermediation capacity; and a range of unresolved vulnerabilities in non-bank firms that played an ever-growing role in those markets. In short, even if nothing as awful as Covid ever happened again, market dysfunction at a scale capable of threatening systemic stability could recur – and in all likelihood, would do so. And central banks needed to be ready to play their part. Our working group did not seek to provide a single definitive ‘playbook’ for such events – the range of potential shocks, and different national market and institutional structures, made that impossible. But it did set out a framework of principles and possible tool choices. [2] And that framework proved invaluable at the Bank of England when, late last year, vulnerabilities in Liability Driven Investment (LDI) funds amplified the impact of an abrupt change in fiscal stance into a selfreinforcing spiral in government bond prices. Long maturity nominal gilt yields rose by 130 basis points in a matter of days – three times the size of any comparable historical move – and we were  Page 3  required to intervene to safeguard financial stability.

But I do believe that a continuation of strong demand growth, with all else equal, requires the members of the Riksbank’s Executive Board to consider how we can best ensure that economic growth in Sweden remains stable. How soon and with what safety margin shall demand be brought back to the rate that is sustainable in the long run? Do we need to take out the insurance provided by an early, small adjustment of the interest rate? Or can we wait? That is something about which opinions can differ slightly. In my opinion, there is no reason as yet to reduce the expansionary effect on the Swedish economy that monetary policy is currently exerting. A monetary policy adjustment will indeed be called for at some time in the economic upswing but I still see its timing as an open question. My colleagues and I on the Executive Board, as well as all those who analyse us, must follow the incoming statistics closely. New knowledge and new insights must be continuously woven into the analysis. Maintaining price stability, as the law prescribes, accordingly means that the Riksbank delivers its contribution to making growth in the Swedish economy sustainable. 5  BIS Review 92/1999
- In business in Spain, the rise in the 12-month EURIBOR has only marginally passed through to deposit costs and far less than in previous monetary tightening cycles. Certain particularities of the current hiking cycle, such as deposit rates starting out from zero or banks’ comfortable liquidity position, help to explain this. - The 2 percentage point (pp) drop in the cost of equity also tempered the rise in the cost of bank funding, which climbed to 6.6% in December 2022. The cost of equity rose during February and March 2023, mainly due to the  1  Senior debt issuances grew in 2022, in particular those of secured senior debt. However, there was a sharp drop in the volume of subordinated debt issuances (Tier 2 and CoCos), as Spanish institutions had already secured the volumes required under prudential regulations. In 2023, the Spanish banking industry plans to issue € billion in MREL-eligible instruments, somewhat less than the volume issued in 2022. 2  Households’ deposits were again the main source of retail funding, accounting for 70.6% of all private non-financial sector deposits (38.1% of total consolidated assets). 2  higher equity market risk premium, although the increases have been moderate. - As for liquidity, the Spanish banking sector has solid metrics. At March 2023, the liquidity coverage ratio (LCR) stood at 166%, much higher than the required minimum threshold and likewise above pre-pandemic levels. Meanwhile, the net stable funding ratio (NSFR) stood at 130% at December 2022, again above the minimum requirement of 100%.

In the European comparison, the main Spanish banks stood out for their strong net interest income (above the 75th percentile in the country distribution) and for fee and commission income and operating expenses in line with the European median. - Impairment losses rose considerably in 2022, driven by higher provisions in banks’ business abroad. In Spain, impairment loses continued along the downward path of recent years, decreasing by 20.7% in 2022. As a result, the ratio of impairment losses to operating income in Spain stood at one of its lowest levels in recent years. - Return on equity (ROE) excluding extraordinary items was 10.2% in 2022, 140 bp higher than in 2021 and up almost 300 bp on its 2019 level (and therefore higher than the cost of equity). - Ordinary profit from business abroad rose significantly, driven by the strength of the business in Latin America. Thus, the ordinary profit obtained by the Spanish institutions with the most international activity exceeded prepandemic levels. - Revenue from the windfall tax on banking sector profits in 2023 is expected to amount to 5% of the 2022 net consolidated profit. - Dividend payments exceeded € billion in 2022, with a payout ratio of 40%, similar to before the pandemic. The rise in the profit ratio per share and the sharp increase in share buy-backs made by some banks also stand out, the aim being to subsequently cancel the repurchased shares and reduce share capital, thus providing additional remuneration for shareholders.
He was, after all, the chief minister for over a decade of the Gujarat, the most probusiness state in India. And almost every U.S. business leader I know has heard of Ratan Tata’s experience when he looked to Gujarat for an alternative to the frustration of his attempt to build a new car factory in West Bengal. As I understand it, Mr. Tata went to see Minister Modi, had a handshake deal in 30 minutes, and in 14 months the new factory was up and running. That almost makes Texas look like California by comparison! BIS central bankers’ speeches  1  So Mr. Ambassador, we are all watching for this first prime minister born since Independence to work his probusiness, nonbureaucratic, can-do spirit upon the whole of India. It is in America’s interest for India to thrive. We wish Prime Minister Modi, the government you represent with such distinction, and the Indian nation the very best of luck. The Texas Jagannatha Tonight, you and I are surrounded by the smart, probusiness people of Indian heritage who have chosen to invest and operate within the most probusiness state in the United States. I am going to throw up a few slides to quickly summarize the environment in which they operate. Texas is a job-creating juggernaut. I pick that word deliberately, knowing it derives from the Hindi Jagannatha and is, according to the Oxford English Dictionary, a title of Krishna.

He noted that President Harry Truman “wanted a one-armed economist, not the usual sort that analyzes every problem with ‘on the one hand, this, and on the other, that.’” Gross claimed that Fed Chair (Janet) Yellen, in her speech given recently at the Fed’s Jackson Hole, Wyo., conference, introduced so many qualifications about the status of the labor market that “instead of the proverbial two-handed economist, she more resembled a Hindu goddess with a half-dozen or more appendages.”2 Whether you analyze the labor markets with one arm or two, or six or 19, the issue is how quickly we are approaching capacity utilization, so as to gauge price pressures. After all, a central bank is first and foremost charged with maintaining the purchasing power of its country’s currency. Like most central banks around the world, we view a 2 percent inflation rate as a decent intermediate-term target. Of late, the various inflation indexes have been beating around this mark. Just this last Friday, the personal consumption expenditure (PCE) index for July was released, and it clocked in at a 1 percent annualized rate, a pace less than the run rate of April through June. Does this mean we are experiencing an inflation rate that is less than acceptable? I wonder. At the Dallas Fed, we calculate a trimmed mean inflation rate for personal consumption expenditures to get what we think is the best sense of the underlying inflation rate for the normal consumer.
Thomas Jordan: The Swiss economy and global economic outlook Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 14 June 2012. *  *  *  The Swiss National Bank (SNB) will maintain the minimum exchange rate of CHF 1.20 per euro and will enforce it with the utmost determination. It remains prepared to buy foreign currency in unlimited quantities for this purpose. Even at the current rate, the Swiss franc is still high. Another appreciation would have a serious impact on both prices and the economy in Switzerland. The SNB will not tolerate this. If necessary, it stands ready to take further measures at any time. The target range for the three-month Libor remains at 0.00–0.25%. Essentially, the SNB’s conditional inflation forecast is unchanged from its March forecast. It is based on a threemonth Libor of 0.0% and continues to assume that the Swiss franc will weaken over the forecast horizon. For 2012, the forecast shows an inflation rate of –0.5%. For 2013, the SNB is expecting inflation of 0.3% and for 2014, of 0.6%. Consequently, in the foreseeable future, there is no risk of inflation in Switzerland. The SNB expects that the global economy will only recover slowly. While the emerging economies make a major contribution to global growth, momentum in the advanced economies will remain subdued.

Now that I am already way out on a limb, I should emphasize that my remarks reflect my own views and not necessarily those of the Federal Open Market Committee or anyone else in the Federal Reserve System. As a starting point, it’s useful to travel back in time to the 1980s and 1990s, when inflation targeting was introduced. The problem at the time was high and variable inflation that contributed to macroeconomic instability and unmoored inflation expectations, which in turn fueled high and variable inflation. To break this vicious cycle, numerous central banks instituted inflation targeting, or variants thereof, with a focus on bringing inflation down to a low level and fostering the establishment of stable, well-anchored inflation expectations. This strategy worked extraordinarily well in the decade preceding the global financial crisis, as central banks were able to achieve remarkably low and stable inflation, leading to a positive feedback loop between low inflation and well-anchored inflation expectations. Today, we face an altogether different set of problems stemming from a very low neutral interest rate—that is, the short-term real interest rate consistent with an economy operating at its potential alongside low and stable inflation. Ironically, the problem we need to solve these days is the risk of inflation that is persistently too low, rather than too high. Today’s low neutral interest rates reflect the culmination of trends extending back 25 years.
There were reports of defaults on mortgage loans, but it was generally believed that the loans at risk were confined to a small segment of the US market. The first warning of more severe problems came in early 2007. And in the course of last summer, it became clear that the losses had spread. Other banks, funds and financial establishments in Europe, Asia and the US felt the turbulence. BIS Review 37/2008  1  The turmoil spread to money and credit markets in August last year. Few knew who was exposed to losses. Banks, funds and financial establishments started to question counterparties’ financial situation, and held on to their money. This resulted in a surge in banks’ premiums on short-term interbank rates. Moreover, banks had to bring back on their books loans from companies they had established. This further reduced their capacity and willingness to provide new loans. When the interbank market seized up, many central banks injected extra liquidity. In periods, Norges Bank has also provided additional loans to banks. Liquidity injections have reduced swings and eased risk premiums in money markets. Nevertheless, the risk premiums are still high, especially for maturities from three months and longer. 2  BIS Review 37/2008  As can be seen from this chart, credit risk surged towards the end of February, and is still markedly higher than in the latter part of 2007. Norwegian companies and financial institutions have also been affected by the turmoil.

Since summer 2005, the key policy rate has gradually – and ahead of the rise in inflation – been raised by 3.5 percentage points to 5.25 per cent. This will contribute to more stable developments in inflation and in output and employment. The real interest rate has increased. The various factors that influence interest rate prospects are pointing in different directions. On the one hand, inflation has picked up markedly over the past few months. Growth has remained firm, capacity utilisation is high, the labour market is tight, and wage growth is picking up. In order to guard against inflation rising further and becoming too high, it may thus be appropriate to continue raising the interest rate. On the other hand, in order to guard against an economic setback in Norway as a result of weaker external growth, it may be appropriate to leave the key policy rate unchanged for a period or lower the key rate. Weaker growth in the world economy may influence activity and profitability in the Norwegian business sectors. As a result of the financial market turbulence, we have also seen an increase in the financing costs for Norwegian banks and companies. Furthermore, the turmoil and the setback in the US may increase uncertainty among Norwegian households and businesses. BIS Review 37/2008  11  If there are prospects that the interest rate in Norway will be held considerably higher than the interest rate level among our trading partners, the krone may appreciate.