samchain/econo-pairs-v1 huggingface dataset:
In 2002, the Central Bank put forward proposals for the development of the securities settlement system which is operated on the basis of an agreement between the Central Bank, Central Securities Depository and Iceland Stock Exchange. Proposals included clarification of rules for the system’s operations, introduction of risk management, and expediting of payment orders from the Depository to the Central Bank and netting of them, so that credit institutions can be notified of their securities trading positions in order to prepare settlements which are made the following morning. Following amendments made to the Public Limited Companies Act in 2002, requests were made for securities settlements to be allowed in foreign currencies. The Central Bank has participated in examining the possibilities of developing a settlement system for securities in foreign currencies, in collaboration with the Central Securities Depository, Iceland Stock Exchange and the commercial banks. Such a system would clearly pose new settlement risks. It would presumably be an option in this respect to establish a system which would be entirely operated by Icelandic commercial banks. In all the work described here, the Central Bank has had a very good collaboration with financial institutions and other parties involved, and I would like to express my thanks for the close cooperation and good understanding that has been achieved among all the parties to this work. A number of important changes have occurred since the Central Bank published its last macroeconomic forecast in February.

Birgir Ísleifur Gunnarsson: Review of economic development in Iceland during 2002 Address by Mr Birgir Ísleifur Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, at the Bank’s annual meeting, Reykjavík, 21 March 2003. *  *  *  On behalf of the Board of Governors of the Central Bank of Iceland I welcome you all to the Bank’s nd 42 annual meeting. The Bank’s financial statements for the year 2002 have been ratified today by the Prime Minister. The Bank’s annual report has also been published. It includes a survey of the Bank’s activities and performance, along with a detailed report on the Bank’s monetary policy and actions, the financial system, financial stability and the financial markets, and the main features of economic developments in the course of last year. The year 2002 was the first full year after new legislation on the Bank was passed and it moved onto an inflation target with a joint declaration by the Government and the Central Bank in 2001. The number of countries that have adopted an inflation target for their monetary policy implementation has increased sharply after New Zealand introduced such a policy in February 1990. In all, 21 countries have now moved onto a formal inflation target, including Canada, the UK, Norway, Sweden, Switzerland and Australia. The chief characteristic of this arrangement is that price stability is the main objective of monetary policy.
Therefore, the euro area is currently battling a fiscal crisis in some member countries, a competitiveness and current account crisis in the region as a whole, a deep banking crisis in some countries, and a fragile banking system in many others, which would be exacerbated if the sovereign debt crisis should end in default by any of the countries concerned. A currency crisis as such is not part of the problem, however, any more than it was in the US. As is discussed further in Chapters 16 and 25, a number of reforms have already been adopted in response to the shortcomings in the design of the euro area, but it is not certain that they will suffice to preserve the currency union in its current form. Forecasting near-term developments in the euro area crisis is beyond the scope of this report, however. The results of the reforms made to date have not yet been fully tested. If they prove inadequate, the crisis could be amplified and, in the worst-case scenario, could have severe repercussions for the future of the euro area in its current form. If they are successful, the reforms could strengthen the eurozone. The outcome has yet to be determined.

We collaborated successfully in several areas over the years, particularly in promoting the greater use of RMB in the region. PBoC’s decision in 2013, under Dr Zhou’s leadership, to appoint the Industrial and Commercial Bank of China as Singapore’s RMB clearing bank was a significant milestone and spurred the growth of Singapore as a key RMB offshore centre. In 2016, MAS announced that RMB assets would be included as part of our Official Foreign Reserves, three years ahead of the inclusion of Chinese bonds in key global bond indices. At the personal level, I have had the pleasure and privilege to interact with Xiaochuan at many international and bilateral meetings. I have always found his views insightful. At our bi-monthly meetings of central bank governors in Basel at the Bank for International Settlements, I would sometimes ask Xiaochuan some rather inconvenient questions – about risks related to shadow banking or industrial overcapacity in China. Xiaochuan would always answer these questions, as well as those from other governors, with a disarming candour and clarity, never avoiding the hard issues. This not only helped to build trust among his counterparts in the international community but also endeared Xiaochuan to many of us as someone we could count on for insights into the complexities of the Chinese economy and financial system. Today, Dr Zhou will speak on “The Rise of Technology in Finance – Opportunities and Challenges for Central Banking”. Many of us are familiar with Dr Zhou’s views on financial and economic reforms.
There are in short negative externalities. BIS Review 83/2007  1  As you all know, the impact of industry emissions on the environment is the classic example of what we economists call negative externalities. If the market is left without any intervention at all, the costs for the pollution will be borne by others than those who have actually been directly involved in the polluting business. The same reasoning can be applied to financial crises. A crisis that severely affects the functioning of the financial system will cause substantial costs to the entire economy, ultimately in the form of loss of output. These costs go far beyond what the financial firms can possibly take – or are willing to take – into account when conducting their day to day business activities. Both with regard to pollution and financial crises there are ways to manage the negative externalities. Public interventions can be used so that the negative externalities are internalised in a way acceptable to society as a whole. For industries polluting the environment, authorities can for example impose taxes or issue emission rights to compensate for the social cost of pollution. For banks and financial firms this is achieved by regulatory and supervisory measures, such as capital requirements and rules for the establishment and conduct of business as well as provisions giving central banks the right to grant emergency liquidity assistance. Many stakeholders, but no single authority If the negative externalities are limited to a national scale, sufficient public intervention may be possible.

There are a lot of uncertainties in the world and it is difficult to see what is likely to happen in the future. Nonetheless, I think there are two things, at least, that we can comfortably say that will characterize the post-COVID world. We are likely to see the post-COVID world being “greener” than before, and also “more digital” than before. With those two things in mind, we, at the Bank of Thailand, are making sure that, at least from our side and the financial sector side, Thailand is better positioned to taking advantage of these opportunities in a greener and more digital role. What kinds of things are we doing? First, on green, the Intergovernmental Panel on Climate Change (IPCC) report that came out last week was a wake-up call, which highlights the need for a much more effective and rapid action. That sense of urgency that we have been talking about for a long time needs to be translated into much more concrete actions. On the global front, I welcome a lot of encouraging initiatives that have happened on the global front. The Net Zero Asset Managers Initiative is a very good example of things that need to happen both in terms of the scale and the extent of the involvement. Unfortunately, Thailand has been lagging in our response in terms of the climate crisis and as a country that is likely to be hit very hard by the climate crisis.
It should be kept in mind that the persistence of certain global imbalances and protectionist pressures and the uncertainties over oil and other commodity prices represent risk factors for growth, which date from before the outbreak of the current bout of turbulence. Turning to prices, the behaviour of production seems to have been accompanied by a slight upturn in inflation to around 2% in the medium term, since the smaller contribution of indirect taxes (which has been especially marked in 2007) should be offset by the larger contribution of unit labour costs, in what is a buoyant labour market. Against this background, a possible increase in wage pressure associated with the aforementioned taking-up of slack in the labour market, or a widening of the margins in those sectors more sheltered from international competition, pose risk factors for price stability in the euro area. The current financial market turbulence has naturally heightened the downside risk to growth, and this has in some way mitigated inflationary risks, which nevertheless continue to rise. Above all, however, the turbulence has widened the range of uncertainty associated with the central scenario for the European economy that I have just described. In these conditions, the first ECB Governing Council meeting this month unanimously decided, as you know, to hold interest rates unchanged and gather more information on this episode of turbulence and study it in more detail before taking any new decisions.

However, it is still premature to assess the effect of these shocks on world economic growth. Significant data are not yet available on how economies have performed after the shock. In any event, the size of the possible effect will depend closely on how much the US economy is affected by the turbulence that has arisen there. The information available so far shows that the United States is more resilient to the residential investment crisis than originally envisaged, so the foreseeable effects seem limited. This diagnosis is consistent with the forecasts of international organisations which, while acknowledging a considerable heightening of uncertainty and downside risk, continue pointing to a scenario of ongoing world buoyancy. Realistically, however, if the United States went into recession, a significant  BIS Review 134/2007  1  change in the world economic scenario could take place, although the impact would in any event be cushioned by the continued buoyancy of the emerging economies, which have generally been little affected by the financial turbulence. The extent of the impact on global growth will also depend fundamentally on the force and duration of the shocks generated. In the past, in episodes such as that of 1998 sparked by the collapse of the Long Term Capital Management fund and by the Russian debt crisis, the financial turbulence barely influenced world economic buoyancy despite the dark predictions that accompanied it.
The restructuring and recapitalisation of the banking system has been accompanied by a significant drive to write down the balance sheets of Spanish deposit institutions which, since January 2008, have recognised and assumed asset impairment losses totalling € billion, equivalent to 9% of GDP. Lastly, I should like to stress the progress made in transparency and the significant role this tool has played. In particular, I should remind you that the Europe-wide coordinated stress tests conducted last year were subject in Spain to substantially higher coverage than in other countries. Indeed, the results of all savings banks and all listed commercial banks were published. Consequently, analysts and the public at large have all the information they need to evaluate and assess the situation of even the smallest Spanish institutions, something which cannot be done in other countries. Moreover, the Banco de España required all institutions to publish in detail their exposures to the most troubled assets, along with their volumes of wholesale funding and their liquidity situation. Lastly, another area in which the degree of transparency in Spain is comparatively greater is that relating to provisioning since, unlike standard practice in other countries, the methodologies for provision-measurement and provisioning requirements are public. Transparency is a most useful tool in financial system restructuring because it helps dispel doubts about the soundness of the Spanish banking sector, it enables public opinion to better understand the need to overhaul the savings banks sector, and it encourages managers and the attendant authorities to promptly undertake the necessary restructuring process.

Significantly, the recapitalisation process has been accompanied by the transformation of most savings banks into banks, a move that has gone outside and beyond the group of institutions that had to increase their capital to meet the new requirements. 4  BIS central bankers’ speeches  The Banco de España considers that the capital requirements laid down by Royal DecreeLaw 2/2011 are sufficient to ensure the soundness of the Spanish banking system, not only under the most likely macroeconomic scenario, but also under harsher scenarios that are most unlikely to occur. As is known, some analysts estimated that the capital needs of our banking system may be greater in the future, under assumptions of a strong deterioration in the Spanish economy. In this respect, the stress tests being conducted at the European level will show to what extent banks need more capital to withstand the extreme scenarios envisaged in these tests. If, as a result of these tests, certain Spanish banks were to evidence additional capital needs that could not be covered by the banks themselves through resort to the markets or to other means, the FROB would provide the funds required, as envisaged in the Royal Decree. In any event, even under highly pessimistic scenarios about the Spanish economy, the use of public funds to recapitalise institutions would entail only a relatively moderate increase in the outstanding balance of Spanish public debt.
Against that background the Bank is continuing to work constructively with the ECB though its membership of the General Council, while at the same time we are working with the Government and the financial sector to ensure that we are technically prepared for transition to the euro if and when that is what the Government, Parliament and the people of this country decide. The build-up to the euro roughly coincided with the accelerating advance of information and communications technology that is sweeping across the global economy. This development, too, can give rise to technical concerns - the Bank and FSA cooperated, for example, in helping to ensure that the financial sector was properly prepared to combat the Millennium bug. But its ramifications go very much wider. We are having to monitor very closely the potential impact of the “new economy” on productivity growth and what that may mean for monetary stability; and we are having to keep a very close eye on financial market volatility as investors struggle to assess its impact on relative stock values for its effect on financial stability. In the financial sector in particular the new technology is perhaps the main driver of innovation and change. It makes possible the introduction of new services and products, and is radically altering the way in which existing services are delivered - often at a fraction of the initial cost and, potentially, at lower risk.

I have no doubt at all that the City has the professional and technical capacity, and the self-confidence, to make a major contribution to this process. Let me touch, finally, Chairman, on financial globalisation more generally. As we have seen, the increasingly free flow of capital internationally has the capacity to contribute massively to the expansion of the world economy; but it can become distorted, with the risk of destructive volatility, which in turn can pose a significant threat to financial stability on a world-wide basis. Since the sudden onset of the Asia crisis some three years ago with its global repercussions there has been a 3  BIS Review 49/2000  huge international effort to reduce the risk of volatility. This has involved drawing up codes of best practice - covering everything from fiscal and monetary prudence, external balance sheet and liquidity management and greater transparency, to increased financial regulation as well as higher legal, accounting and corporate governance standards - which national governments particularly in capital importing countries, are being encouraged to apply. It has involved extensive and ongoing reviews of the financial infrastructure and regulatory practice also in creditor countries. And it has involved a continuing review of the role of the international financial institutions in preventing and managing international debt crises.
There is no doubt that these rate hikes were unavoidable, and it will probably be necessary to raise rates further so that we can bring inflation into line. The Central Bank is concerned for households’ wellbeing – it cannot allow inflation to become entrenched once again. The sooner and the more decisively we take action, the less costly it will be to maintain the stability that will benefit us all. In spite of all the powers the Central Bank has been granted, it cannot ensure stability unless others work towards the same goal – not least the labour market. Otherwise, we run the risk of being sucked back into the all-too-familiar maelstrom of spiralling wages and prices, to the detriment of all. It would be even worse if that spiral were reflected in demands that policy rate hikes be matched with pay rises. The fact is that the Central Bank is responsible for ensuring a stable price level, and for safeguarding the value of the wages negotiated in labour market agreements. Yes, comprehensive wage agreements are actually written on the back of the Central Bank Governor, because it is the Bank’s role to make sure that those wage agreements are economically viable. It is as clear as day that we Icelanders cannot expect to use wage rises as a response to imported inflation, which is inescapable, stemming as it does from pandemic and war, from disease prevention measures and economic sanctions, and from rising commodity prices and the disruption of multinational production chains.

While the pandemic was raging, it was said again and again that these were unprecedented times. This is true, in that even though plagues have occurred repeatedly throughout human history, there has never before been an attempt to halt the spread of a pandemic with public health measures so wide-ranging that they extinguished the economic and social lives of entire countries. The war in Ukraine, on the other hand, has scores of historical precedents stretching back centuries. And yes, with this conflict, Europe has been set back in time. The economic sanctions that have been imposed on the Russians, like the disease-prevention measures during the pandemic, will leave a trail of aftershocks in their wake and will have broad economic repercussions for Iceland no less than for other countries. Honoured guests: In Adam Smith’s The Wealth of Nations, the magic of free enterprise is considered to lie in the fact that people can communicate through price formation in the markets. In this way, the markets will connect one coast to another, enabling people to work together without knowing one another – or indeed, without necessarily liking one another. It was the exalted invisible hand that harnessed self-interest in the service of the public interest. After two wars in Europe, Western politics was dominated by the conviction that the invisible hand could guarantee peace. (Note Icelanders’ optimism in referring to the former war and the latter war – as though no other world wars are even possible.)
Øystein Olsen: The role of monetary policy revisited – welcome address Welcome address by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Norges Bank conference “The role of monetary policy revisited”, Oslo, 26 September 2013. *  *  *  It is a great honour and pleasure for me to welcome you all to this Norges Bank conference: The role of monetary policy revisited. In his famous 1967 presidential address before the American Economic Association, Milton Friedman set out to answer three interrelated questions. What should be the role of monetary policy? What can it contribute to achieving the major goals of economic policy? And how should it be conducted to contribute the most? Five years after the onset of the global financial crisis, these questions are yet again at the forefront of our minds. The crisis and subsequent recession have presented substantial challenges to monetary policy. Central banks have responded with great activism and have resorted to unconventional policies such as quantitative easing and an increasing use of forward guidance. And the crisis has led to a review of monetary policy frameworks. Successful as monetary policy has been in safeguarding low and stable inflation, many argue that it should take risks to financial stability into account. Moreover, a new set of macroprudential policy tools has been proposed to address systemic risks in financial markets directly. In Norway, inflation targeting was introduced in 2001.

It is merely moved between the banks’ different deposit accounts with the Riksbank. The Riksbank’s lending in kronor to the banks has thus been entirely funded through deposits from the banks (Figure 8). Figure 8 The Riksbank’s deposits and lending in kronor SEK billion 400  400  300  300  200  200  100  100  lending  0  0 -100  -100  funding  -200  -200 -300 -400 Jul-08  Loans in SEK Fine-tuning Riksbank Certificates  -300 -400  Oct-08  Jan-09  Apr-09  Jul-09  Oct-09  Source: The Riksbank. The interest rates on the banks’ borrowing from the Riksbank, like the previously-discussed interest rates on the Riksbank Certificates and fine-tuning transactions, are related to the repo rate. The banks pay an interest rate that corresponds to the repo rate with a certain premium. The banks thus pay a higher interest rate for their borrowing from the Riksbank than they receive in interest on their deposits with the Riksbank. At the most recent auction of loans in SEK, for instance, the interest rate was 0.40 per cent for both fixed-interest rate loans and variable-interest rate loans. As mentioned earlier, the banks currently receive interest of 0.25 per cent on Riksbank Certificates and for fine-tuning overnight deposits they receive 0.15 per cent. In this way the Riksbank steers market rates by setting the interest rates for the Riksbank’s deposits and lending.