samchain/econo-pairs-v1 huggingface dataset:
Irma Rosenberg: Why is Swedish inflation so low? Speech by Ms Irma Rosenberg, Deputy Governor of the Sveriges Riksbank, at the shareholders’ meeting of SBAB - Sveriges Bostadsfinansieringsaktiebolag, Stockholm, 13 April 2005. *  *  *  Introduction Thank you for your invitation to come here today. Inflation today is low and has fallen short of our inflation target since the middle of 2003. There are several explanations for this. One obvious reason is that our own interest rate cuts affect an important component in the consumer price index (CPI), namely homeowners’ interest costs, which decrease as a result. Another is the developments in electricity prices, although we had largely foreseen the effects of these. The principal factors, however, seem to have been the recent years’ high productivity growth in the Swedish economy and the drop in import prices. Current inflation is not the decisive factor behind the interest rate decisions that we make today. That is because it takes 1-2 years before rate adjustments have their full impact on inflation. Consequently, our interest rate decisions are based on an assessment of inflation prospects in the coming years. The current inflation rate is the starting point for this assessment, however, and it is therefore important to understand the underlying reasons for why inflation is so low today. Another reason is that it may be warranted in some situations to allow inflation to deviate from target for a period that extends beyond the normal forecast horizon, which is something I will be coming back to.

We understand that good ideas alone would not come to fruition without either one of the following: funding support and a conducive environment that allows mistakes and failures. In fact, numerous success stories in history prove that trial and error is necessary for innovation. To encourage banks to try more, in turn stimulating innovation in the banking industry, we are going to channel our focus on two areas: funding and policies. 38. Today, I am excited to announce that the HKMA is doing preparation work to further upgrade 4/5  BIS central bankers' speeches  our Fintech Supervisory Sandbox. To begin with, we are exploring the possibility of providing funding support to qualified fintech projects. Our discussion with the Innovation and Technology Commission has just started, and I hope to share more details with you in due course. We hope the enhanced Sandbox could speed up the launch of innovative financial products and solutions, ultimately reducing their Time to Market and facilitate banks in making commercial gains while serving the public. 39. To ensure that no banks, regardless of their size, will be left behind in the cascading wave of innovation, the HKMA will join forces with our strategic partners, including the Hong Kong Science and Technology Parks (HKSTP) and Cyberport, to introduce utilities and necessary support to banks to speed up their technology adoption. 40. Through supportive measures, we want to foster an encouraging environment, in which all stakeholders, be they banks, non-banks, or the academia, can trust and flourish. Closing 41.
For most of the first half of my own working life - through the 1960s and much of the 1970s - the essential emphasis of economic management in the UK was on short-term aggregate demand management, with too little regard to the structural, supply-side capacity of the economy to meet that demand. Monetary and fiscal policy were used in combination to try to maintain an appropriate balance between what were seen as conflicting objectives of growth and full employment on the one hand and price stability and balance of payments equilibrium on the other. Slow growth and high unemployment were typically met with monetary and fiscal stimulus. As the symptoms of imbalance inevitably emerged - in the form of external deficits or accelerating inflation - attempts were made initially to suppress those symptoms through various forms of direct control (for example, foreign exchange controls or credit ceilings or prices and income policies) but as demand pressures built up macroeconomic policies had eventually to be thrown sharply into reverse. This was the go-stop policy cycle that resulted in the exaggerated boom-bust economic cycle, which was for a long time a pronounced characteristic of British economic performance. Such macroeconomic instability was disruptive in itself, but it also had the effect of encouraging short-term attitudes to both financial and non-financial investment, with a corrosive effect on our longer-term, supply-side capacity.

Its members, individually and collectively, are publicly accountable for the way in which that responsibility is exercised. The supply-side agenda, under successive governments has inevitably been more diverse. It has included a strong commitment to free markets and competition as the motive forces for productive efficiency, and as the essential means of allocating financial and real resources. It includes an equally strong parallel commitment - both regionally within the European Union but also more broadly - to international free trade in goods and services and to the global free flow of capital. The supply-side agenda has included an extensive program of “privatisation”, bringing market disciplines to bear on commercial activities previously undertaken within the public sector, but often involving new forms of regulation in areas of activity that might otherwise be dominated by natural monopolies. It has included extensive deregulation - for example in relation to financial services, including banks and building societies, though this has been accompanied by improvements in the financial infrastructure and by enhanced prudential supervision. It has included measures of labour market deregulation and Trade Union reform. And it has included increased emphasis on education and training; measures to encourage business enterprise - especially among smaller businesses; and reforms to the welfare system to improve incentives to work. The list could go on.
Williams (1987) reports various experiments testing how market participants form price forecasts, rejecting both rational expectations and extrapolative expectations models. 16 See for example Lovell (1986) 17 University of Chicago (1995) 18 Sovereign defaults are a fascinating example throughout history of the complexity of expectation formation – on the one hand, there are many examples of investors having long memories. Louis XI faced a very high cost of borrowing because of repeated defaults and similar pressure encouraged William III to the creation of the Bank of England. On the other hand, there are many instances of investors lending repeatedly to sovereigns that have defaulted repeatedly. 14  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Pedro Bordalo, Nicola Gennaioli and Andrei Shleifer have recently posited a model of expectations that acknowledges our tendency to extrapolate from the past, but also allows for the use of forward-looking information.19 It endeavours to integrate insights from behavioural economics into a rigorous economic model. They have embedded the work of behavioural psychologists that shows that while we do use news to form expectations of the future, we have a tendency to over-weight certain types of news. And that the way we remember can lead to certain risks being neglected or undervalued when we project the future. They use this model to explain the development of expectations in the run-up to the great financial crisis 10 years ago, expectations which they demonstrate were clearly not rational in the light of available information.

I might equally have talked about cyber risk or the impact of a credit correction in China. It is of course the job of policymakers like me to assess and address potential vulnerabilities like these, and we report on them regularly. But to me the bigger point is that at some point, in some way a correction will be triggered when the future, for whatever reason, does not match up to expectations of those who have lent and borrowed and bought assets. Our fundamental task is to ensure that when that happens, the correction can be absorbed and does not lead to a ‘great crisis’, as it did 10 years ago, with all the social and economic loss that entails. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  References Aikman, D, Nelson, B, and Tanaka, M (2015), ‘Reputation, risk-taking, and macroprudential policy’, Journal of Banking and Finance, Vol. 50. https://doi.org/10.1016/j.jbankfin.2014.06.014 Aliber, R and Kindleberger, C (2005), ‘Manias, Panics, and Crashes’, Wiley Bank of England (2014), Financial Stability Report June 2014 Bank of England (2016), The Financial Policy Committee’s approach to setting the countercyclical capital buffer: a policy statement Bank of England (2017), Financial Stability Report November 2017 Bank of England (2019), Stress testing the UK banking system: key elements of the 2019 annual cyclical scenario Bernanke, B (1983), ‘Nonmonetary effects of the financial crisis in the propagation of the Great Depression’, American Economic Review, Vol. 73, No.
All these initiatives cannot be done by the HKMA alone but require the collaborative effort of the industry, universities, and training institutes alike. So, the third direction is to provide platforms to better “connect” the key stakeholders together to enhance collaboration on talent development. The recently set-up Fintech Cross-Agency Coordination Group and the Centre for Green and Sustainable Finance are the cases in point. (Closing) 36. I would like to close, by stating my firm belief that human capital is the most valuable asset of any institution. Banks can no longer simply rely on poaching talent. Instead, we should all dedicate more resources and investment to grooming, upskilling and retaining talent to support the future development of the industry. 37. I, therefore, would like to offer my hearty congratulations to those banks that have received the Talent Development Excellence Awards. You are all worthy winners, who have showcased exemplary achievements and a long-term commitment to talent development. Well done! 38. I am sure you all agree that promoting financial inclusion and talent development should be the very DNA of every institution when gearing towards a smarter and greener financial system. And I look forward to working closely with all of you in this journey. 39. With that, I hope my remarks have provided some food for thought for today’s Conference. And I wish the event every success. Thank you very much. 4/4  BIS central bankers' speeches

Developments in international equity markets and the risk of higher oil prices also contributed to strengthening the krone. Activity in the world economy picked up in autumn 2003 from a very low level. After expanding sharply for several quarters, the US economy showed slower growth in the second quarter of this year. Economic growth has picked up from a low level in the euro area. Economic growth has also gained momentum in Sweden and the UK. Strong growth in the US and China exerted upward pressure on commodity prices in 2003 and the beginning of 2004. Oil prices have risen considerably during the summer. Several central banks have raised interest rates. Interest rate increases are expected in a number of countries. Inflation is low Consumer price inflation in Norway declined sharply through 2003. A number of factors appear to have contributed to the decline. The appreciation of the krone through 2002 pushed down import price inflation. At the same time, a change in trade patterns and external economic conditions have resulted in an unexpectedly sharp fall in import prices, even when measured in terms of what Norwegian  BIS Review 53/2004  3  importers pay in foreign currency. The change in trade patterns has made a considerable contribution to the sharp decline in prices for clothing, footwear and audiovisual equipment. Rapid technological advances have also pushed down prices for audiovisual equipment. In Norway, competition has probably increased in retail trade and other service sectors in recent years.
As a baby step, later this year I am starting a series of “Townhall” meetings around the UK, partnering with organisations such as the Muslim Council of Britain, Age UK, Citizens UK and the Royal National Institute of Blind People (RNIB). Their purpose is to listen and learn, as much as talk and teach, to local communities about the issues that matter for them. These public events, like public language itself, need to be localised and personalised if they are to land. 71  An excellent recent example of this is contained in Carol Graham’s new book on the well-being of different cohorts of American society (Graham, 2017). 72 Federal Reserve Bank of Atlanta Decision Maker Survey (2017). 73 Nyman et al (2016). 22  All speeches are available online at www.bankofengland.co.uk/speeches  22  (d) Nudging and Gaming  There are new techniques and technologies becoming available that may help central banks to improve the potency and reach of their messages and the quality and quantity of the feedback they receive on them. These techniques allow a much wider reach at a much lower cost. They also enable a dynamic process of two-way learning between central banks and the general public to take place. Semantic analysis has been a blossoming area of research over recent years, including on central bank text. But, at least insofar as research on central banks is concerned, this analysis has largely been positive and descriptive – what have central banks been communicating?

Naturally, we may well ask what happens under this scenario to those economies that have witnessed a loss in competitiveness compared with those countries that have implemented reforms, for example those affecting the labour market and those which have provided, along with other factors, for the so-called internal devaluation. In this case, the relative loss of competitiveness has been offset by the monetary policy stimulus and its impact on national demand and on the external sector. The depreciation of the euro accompanying this policy which has, no doubt, partly been one of its consequences, has improved the competitiveness of the area as a whole, stimulating exports and overall activity. Here we should recall that the euro area as a whole runs a most significant surplus on its transactions with non-euro countries. Both excessive deficits and large surpluses entail risks and costs. Accordingly, we believe there is justification behind the calls from several international institutions for those euro area countries that have the leeway to do so to implement policies conducive to the expansion of their domestic demand. I shall sum up with two ideas. First, that the de-anchoring of medium-term inflation expectations entails serious risks to financial stability and growth, risks that may be exacerbated in countries that have to follow a process of macroeconomic adjustment and deleveraging. Second, that monetary policy and structural reforms, when simultaneously applied, may lead to highly positive synergies. And now a few words to make way for the address by my much-respected and dear friend Vitor Constancio.
Importantly, some members of our constituency have been able to utilize the fiscal space arising from past reforms, which is a contributing factor behind the stronger demand in these countries. Nonetheless, the concurrent challenge is to keep inflationary pressures under control while ensuring that strong domestic demand does not lead to a build-up of imbalances. 4. Notwithstanding the baseline scenario, it is clear to us that the Fund is correct in identifying the financial turmoil as the single greatest risk to growth. In the US, given the loss of confidence, the immediate priority for the authorities was to limit the financial contagion and counter the downside risks to growth. Following that, the first line of defense was monetary policy and monetary operations to inject liquidity. The second line was fiscal stimulus. We view these actions as steps in the right direction, although one should also recognize the limitations of such policies at a time of impaired balance sheets and ebbing sentiments. The third line of defense was using public money to safeguard the stability of the financial system. In view of the systemic nature of the crisis and the potential for spillovers we appreciate the need for decisive policy actions and the drastic unorthodox measures. BIS Review 51/2008  1  Indeed, our own experience during the Asian crisis was that adherence to a market-centric philosophy in an environment where markets have seized up is simply not tenable.

First, macroeconomic policies need to be adjusted pragmatically and where appropriate, swiftly. We do not simply mean that policy must be loosened but rather authorities ought to consider carefully their full range of options, giving due regard to the circumstances they find themselves in. For instance, in an environment where credit markets have ceased to function, monetary policy alone cannot do the heavy lifting needed to stabilize economic conditions. Second, swift action to clean up the balance sheets of financial institutions is very important to allow the financial system to resume its key intermediation role. Third, reforms, be they structural, legal, regulatory or accounting, should be an important part of the medium-term agenda, as they would serve affected countries well going forward. Not only should regulators be alert and vigilant in systemically important markets, they also need to keep up with the rapid pace of innovation. Finally, there needs to be a multilateral effort to improve transparency, standards and the quality of regulation. We welcome the work being undertaken by all parties in the Financial Stability Forum, of which the Fund is a key member, and expect the results will prove illuminating. 7. In drawing these conclusions, we must remember that we cannot entirely exempt ourselves from the booms and busts in credit markets, but instead recognize that sound regulations and prudent capital market practices can play a role in alleviating these cycles.
The award of the Nobel Peace Prize to the European Union in 2012 for having “over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe” attested to the success in achieving this original goal. I believe that the goals of ensuring peace and promoting integration and economic development are in fact related. As the World Trade Organization rightly reminded us, the trade war unleashed during the Great Depression contributed to the outbreak of the Second World War. In this respect, one very positive consequence of trade between nations is that it contributes to transforming “rival” nations into partners, who share interests instead of having conflicting interests. Undoubtedly, since the foundation of the European Coal and Steel Community in 1952, economic and political integration in the EU has attained a most notable level. However, the process has been neither linear nor gradual. Over almost 7 decades of history, the European project has witnessed long periods of calm – where little or nothing remarkable happened – punctuated by “transformative periods” that have contributed decisively to its development and to shaping its current form. Normally, these deep transformations have stemmed from processes involving reflection and negotiations, conducted in a more or less orderly fashion. 3/10  Introduction of the single market and the euro For example, the start-up of the single market was the outcome of lengthy negotiations that began officially in 1985.

Jean-Pierre Roth: The financial crisis is receding – what will the future bring? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Centro di Studi Bancari, Vezia, 15 December 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  After the financial crisis, the global economy will enter a phase of weak economic growth. Unemployment levels in the industrialised countries will be comparatively high. Public finances in these countries have been heavily depleted, both by the crisis and by the needs arising from the ageing of their populations, and will need to be consolidated. In monetary terms, inflation will remain under control, at least in those countries whose central banks enjoy a strong level of independence. Switzerland is comparatively well equipped to meet these challenges. Its public finances are in a healthy state and it is sufficiently open to the world to participate in its most dynamic markets. With its tradition of high quality and cutting-edge technology, Switzerland is well positioned to react to specific market requirements. Moreover, it can draw on considerable financial resources and, thanks to the openness of its labour market, also has easy access to labour resources, without which growth would not be possible.
For instance, if the repo interest rate is set as 16.25 percent, then the CBT borrowing rate will be 15.00 percent, while the CBT lending rate will be 17.50 percent. 13  (iii)  b. Late Liquidity Window (LON) Interest Rates: Within the scope of the Late Liquidity Window, CBT overnight borrowing and lending rates will be 4 points below and above the interest rates on repo auctions, respectively. For instance, if the interest rate on repo auctions is set as 16.25 percent, then the CBT LON borrowing rate will be 12.25 percent, while CBT LON lending rate will be 20.25 percent. c.  The interest rates on overnight and one-week maturity borrowing facilities provided for primary dealer banks via repo transactions within the framework of open market transactions will be 0.75 points above the interest rates on repo auctions. For instance, if the interest rate on repo auctions is set as 16.25 percent, then the interest rate on borrowing facilities provided for primary dealer banks will be 17 percent. The method of one-week maturity repo auctions will be modified. Accordingly; a. One-week maturity repo auctions will not be held via the traditional method; but the quantity auction method. In other words, the interest rate on the repo auction will be set by the Committee. Additionally, banks and intermediaries will only quote quantities for the repo auctions with a oneweek maturity.

Taking into consideration of this, the Central Bank, when deemed necessary, will always continue to take additional measures within its means prudently in order to ensure the smooth functioning of the FX market and to support FX liquidity. In this framework, in the event of further intensifying of the financial turmoil in global markets that might have negative impacts on the Turkish economy; (i)  Under the basic principles of the floating exchange rate regime, if unhealthy fluctuations are witnessed in the foreign exchange market due to a decrease in the depth of the market foreign exchange selling auctions will be held  BIS Review 3/2009  9  (ii)  Transaction limits for banks in the Foreign Exchange and Banknotes Markets will be raised,  (iii)  The FX required reserve ratio might be further reduced to a limited extent. The Central Bank will continue to closely monitor exchange rate developments in 2009 and will directly intervene in the market in case of any unhealthy fluctuations in the exchange rates due to speculative behavior stemming from a decrease in the market depth. Moreover, the purchase/sale transactions of “foreign exchange against foreign exchange,” “foreign exchange against foreign banknotes” and “foreign banknotes against foreign banknotes” conducted between the Central Bank and institutions authorized to operate in the Foreign Exchange and Banknotes Markets will continue in 2009.