samchain/econo-pairs-v1 huggingface dataset:
For example, housing prices rose rapidly in many other countries, and also in countries where central banks did not purchase mortgage  14 [30]  bonds (see Figure 10).25 A more important explanation for the price increase was probably that demand for housing increased during the pandemic, when many began planning for a future where they could work from home to a greater extent.26  Asset purchases should have been concluded earlier However, whatever measures were behind this development, I believe that we could have responded to this information in autumn 2020. I am thinking in particular of our monetary policy meeting in November 2020, when we decided to extend and prolong the asset purchase programme. The main elements of the change were that the framework for the total purchases of assets under the programme was extended from SEK 500 billion to SEK 700 billion and that purchases would continue until the end of 2021 instead of the end of the first half of 2021. At this time, it was still very uncertain how the pandemic would develop and how it would in turn affect the economy. Although the economy had begun to recover after the closures during the start of the pandemic, the spread of infection had gained new momentum in the run-up to the monetary policy meeting and uncertainty in the financial markets increased again.

If I were going through what many of you are now going through in your individual businesses, I think I would find the prospect of exchange rate certainty overwhelmingly attractive - given of course a reasonable starting point. The potential downside, from a macro-economic standpoint, is that just as now directing monetary policy to lowering the exchange rate would mean losing control over domestic demand, so too, as a member of the euro area we might find that the single euro interest rate was not necessarily appropriate to our domestic situation. We would certainly be facing a build-up of excess BIS Review 3/1998  -4-  demand, and inflationary pressure, now, for example, if we were constrained to German-level interest rates. At other times interest rates that were appropriate in Europe as a whole could impose unnecessary stagnation and rising unemployment in this country. Serious divergence of this kind between the domestic monetary policy needs within the euro-area is not, of course, inevitable. But, if it is to be avoided it is important that the economies of the euro-member countries should have shown at least a minimum degree of sustainable convergence - before the project goes ahead. That was recognised very clearly in the famous convergence criteria written into the Maastricht Treaty. Assessing the extent to which sustainable convergence has in fact been achieved is the unenviable task facing the European Finance Ministers and Heads of Government at their historic meeting at the beginning of May.
I also believe that the monetary policy discussion gains by the Riksbank publishing its own forecast for the interest rate. It will enrich the debate, which will concern more the future development of the interest rate and not merely its current level. This has been clear over the past week. Our current decision to raise the interest rate by a further 0.25 percentage points came under the shadow of a discussion on the level of the repo rate in the longer term. Since the long-term development of the repo rate is much more important to most households and companies than an individual interest rate adjustment, this is a positive sign. One thing it is important to emphasise is that we are talking about a forecast for the repo rate. This is the repo rate development that currently appears most likely given the information available. We are not making any promises. The fact that the Riksbank is presenting its own interest rate path does not mean that we are laying down a policy that we will commit ourselves to following. Previously, we did not commit ourselves to following the interest rate path based on market expectations. The reason is  BIS Review 17/2007  1  that the conditions are constantly changing. Various shocks occur that mean we have to regularly reconsider what would be an appropriate monetary policy.

It has clearly emerged from the discussion today that post-trade harmonisation is gaining momentum and achieving concrete results. The example we heard about in more detail is the progress made on the T2S harmonisation agenda. The T2S Community and the post-trade industry have engaged in the implementation of harmonised standards and market practice in areas such as cut-off times, ISO messages, corporate actions processing, account numbering and settlement finality. As Jean-Michel Godeffroy illustrated earlier today, there is an ambitious plan in place for the coming months and a sound record of achievement so far. I noted that the audience expressed moderate optimism that the “priority one harmonisation topics” would be achieved by the launch of T2S. However, there is still a lot of work to be done in order to complete all these projects. It was very interesting in this regard to hear about the experience of Professor Giovannini, whose very name is closely associated with harmonisation and market integration. In particular, he analysed the problems faced by the Giovannini Group in the early 2000s. These reflections are very important for us now to learn from past experiences and to be able to achieve concrete results going forward. The large participation at this conference today, with distinguished speakers and almost 250 participants from all over Europe, is testimony to the joint willingness of both the European and national institutions and market players to achieve post-trade harmonisation, and thus contribute to financial integration in Europe.
Making Cross-border Payments and Settlements Cheaper and Faster: Project Ubin Next, we must re-imagine a more efficient and secure way to conduct cross-border interbank payments and settlements. Cross-border payments today rely on a correspondent banking network. Banks hold balances with one another, and settlement occurs by adjusting these balances. There is counterparty risk, liquidity is split, and reconciliation is a major pain point. Cross-border transactions often take days to settle, and at high cost to customers. This is the problem that Project Ubin seeks to solve, using distributed ledger technology to enable entities across different jurisdictions to make payments directly with one another: without intermediaries; with much greater speed and efficiency, and at lower cost and risk. It is not an easy problem to solve, but we have made some progress. Last year, Phase 1 demonstrated that banks could conduct inter-bank payments without going through MAS, using a blockchain-based digital representation of the Singapore Dollar. Phase 2, just recently concluded, successfully produced three software prototypes that 7/9  BIS central bankers' speeches  achieved decentralised netting of payments, in a manner that preserved transactional privacy. MAS has received keen interest on Project Ubin from many parties, including academia and other central banks. We are committed to share what we have learnt, to encourage others to take a crack at solving this problem. We have just published the report on Phase 2. More significantly, MAS will release publicly, free-of-charge, the source codes for all three successful prototypes from Project Ubin Phase 2.

A reference value for the annual increase in the monetary aggregate has been set, currently amounting to 4.5 per cent. In general, however, the interest rate adjustments implemented by the ECB have not been justified on the basis of developments in the monetary aggregate. This has been clear on several occasions in recent years, when the refi rate has been lowered in spite of the fact that the rate of increase in the monetary aggregate clearly exceeded the reference value. The evaluation of the strategy in May also resulted in measures of the monetary aggregate being given a role primarily as indicators of future inflation. Naturally, the Riksbank also follows monetary aggregate and credit variables, even if we have not assigned them special significance when assessing inflation. Therefore, the formulation of policy nowadays is also quite similar in this respect as well. Finally, allow me to point out that despite the similarities in the formulation of policy, it can not be ruled out that price and wage increases in Sweden may sometimes be both too high and too low. The main reason is that the ECB’s policy is targeted at average price increases in the euro area as a whole. Partly as a result of this, there is reason to discuss both the role of fiscal policy and the functioning of the labour market in the event of an introduction of the euro in Sweden.
2 And we have taken further steps in this direction over the past two years in particular. But what are the reasons behind this development towards greater openness? I think there are two reasons – democracy and efficiency. The first concerns our role as an independent authority. The second is linked to the fact that our communication with the financial markets and the general public is essential for monetary policy and the financial system to function efficiently. 1  Page 38 in Blinder, A. S., (2006), “Monetary Policy Today: Sixteen Questions and About Twelve Answers”. I Fernandez de Lis, S. and F. Restoy (ed. ), Central Banks in the 21st Century, Banco de España. 2  See, for instance, Eijffinger, S. and P. Geerats, (2006), “How Transparent are Central Banks?” European Journal of Political Economy, vol. 22, 1-21. BIS Review 106/2007  1  Our independence requires openness The Riksdag and ultimately therefore the Swedish people have given the Riksbank considerable independence. But this is a “freedom with responsibility” that goes hand in hand with the requirements for insight and accountability. This is how things should be in a democracy. Openness is also something that traditionally imbues the Swedish public administration system in general. One of the corner-stones is the principle of public access, which means that the authorities’ activities should as far as possible be carried out in an open way. And this also applies to the Riksbank, of course.

…and here at home Sweden has also been affected by the turbulence in the financial markets, albeit to a much lesser extent than, for instance, the United Kingdom, Germany and the United States. The fact that Sweden has been affected despite not being, as it were, involved in the problems that started the unrest is not so remarkable. We are a part of the global financial system and not an isolated northern outpost. The Riksbank governs the short-term rate that applies for one day, the so-called overnight rate, and this has remained stable around the repo rate. In brief, the Riksbank’s method of steering interest rates has worked well. But the interbank rates with slightly longer durations have risen, although not as much as in some parts of the world. This is primarily a question of different effects from the uncertainty in the financial markets, such as rising risk premiums. On the whole, the Swedish financial system and the interbank market have nevertheless functioned well. 6  BIS Review 106/2007  What is the role of the Riksbank? What does the Riksbank do when there is unrest in the money market? One of the most important tasks is to continue to ensure that the economy develops in a stable manner. We have to conduct our monetary policy so that we attain the inflation target of 2 per cent. Where possible, when the price stability objective allows scope for this, we should also ensure that production and employment develop in a balanced manner.
Let me comment briefly on these two points. As regards the lack of structural reforms, I hope that my previous remarks have underlined that the euro countries have clearly embarked on major structural reforms - triggered by the single market and the single currency - that will bear lasting effects on the functioning of their economies. The central banks of Europe call for the pursuit and reinforcement of these reforms. At the same time, in order to serve these economies in the most efficient way, the euro financial markets are experiencing the deep and rapid integration process that I described previously. On the second point, one has to keep in mind that the American and European economies are not positioned identically in the economic cycle, as the latter are probably at the beginning of a more robust phase of expansion. According to IMF forecasts, growth should reach 3% in the euro area in 2001, compared with 3.2% in the US. From a central banking perspective, the present situation is clearly characterized by a misalignment of the euro if one refers to the euro area fundamentals: robust domestic growth, inflation under control, strong domestic savings, healthy external accounts. We are, to a certain extent, in a situation symmetric to that which prevailed in 1995 when the weakness of the dollar was clearly out of line with the fundamentals of the US economy. At that time, it took a few months before a correction appeared that aligned the dollar with its economic underlying fundamentals.

Employment in this sector rose by more than 40% in France and Germany. Besides the improvement in the job situation in the euro area, which results from better economic prospects, it should be mentioned that over the past few years the European Union has embarked on determined efforts to promote structural reforms aimed at improving the functioning of labor markets. European countries increased flexibility in the labor market, in particular by developing part-time and temporary contracts. Let me quote some figures to illustrate this point: –  From 1995 to 1999, part-time employment rose from 14% to 17% of total employment in the euro area. This proportion is more important than in the United States, where it amounts to around 13% of total employment. More than half of overall net job creation was due to part-time employment. –  In conjunction with this development, temporary employment in the euro area rose to 15% of total employees in 1999. It is also worth mentioning an emerging trend towards more cross-border mobility of human resources, especially among young people. More and more university degrees include a stay in one or two foreign universities, thus helping to overcome linguistic and cultural barriers in Europe. Last but not least, a key feature which has fostered job creation in the euro area in recent years is wage moderation, together with reductions in the social charges imposed on employers.
In addition, the ECB has clarified the scope of this prohibition in its Convergence Reports and in the opinions issued in response to consultations on draft legislative provisions submitted to the ECB by the Member States in accordance with Articles 127(4) and 282(5) of the TFEU (Convergence Report 2020). 6  firmly entrenched, fiscal consolidation policies will have to be resumed in accordance with the SGP rules. 4 Possible ways to strengthen and enhance the Banco de España’s independence Now I wish to concentrate on a number of possible ways to enhance our independence. These may ultimately also be applicable, in some cases, to other economic supervisors. I will start by referring to the personal independence of the institution’s senior officials. Our current system, whereby it is the Prime Minister who appoints the Governor, is a practice followed in a very high proportion of countries.7 In our case, however, I believe it would be appropriate to grant Parliament a bigger role in the appointment of the Governor, the Deputy Governor and the elected members of the Governing Council, provided in all cases that the process is rapid and that posts are not left vacant. Parliament’s role could be instrumented through appearances in Parliament prior to the appointment, or through confirmation of the appointment or of the suitability and technical and professional sufficiency of the proposed candidates. Involving Parliament in the appointment process would, in my view, raise the public’s perception of the independence and legitimacy of the senior officials.

In the case of solvent institutions, we have known theoretically since Thornton (1802), and probably over a century, as a practical policy, how to deal with that vulnerability in a domestic setting: with central bank LOLR operations, later complemented by deposit insurance. In the current setting, it is far from guaranteed that this process can be replicated at the international level. Of course, in normal times and with developed capital markets, banks can use foreign exchange swap markets to convert domestic liquidity into foreign exchange liquidity speedily and relatively cheaply. However, this process broke down almost completely during the global run on cross-border non-US bank liabilities in the immediate aftermath of the Lehman collapse. In a situation like this, the home central bank’s ability to assist banks to acquire the foreign liquidity denied them on the market and thus avoid a failure of banks to deliver on their foreign currency payments is limited by the size of its reserves or the willingness of the central bank issuing the international currency in question to help. Although the provision of foreign currency liquidity through reserves was clearly important during the crisis, most studies seem to support the conclusion that the dollar swap lines made the crucial difference, especially when they were uncapped vis-à-vis some key central banks. To a significant degree, this was the domestic LOLR process replicated at the international level. Does this mean that we have the solution? At the conceptual level, yes, but at the practical level, maybe not.
(2010) stated that “it was tempting for macroeconomists and policymakers alike to take much of the credit for the steady decrease in cyclical fluctuations from the early 1980s on and to conclude that we knew how to conduct macroeconomic policy. We did not resist temptation. The crisis clearly forces us to question our earlier assessment”. Since we participate today in a seminar dedicated to banking and financial history, please allow me to put things into perspective. In the 1970s, inflation was high and there was a divorce between theoreticians and practitioners concerning the monetary policy effectiveness on real variables. In line with Sargent and Wallace’s Policy Ineffectiveness Proposition (1976), towards the end of the 1970s many were thinking of monetary policy as being powerless also in the short term, not only in the long term, as Friedman (1968), Phelps (1968) and Lucas (1972) had already stated. However, practitioners were aware that their monetary policy decisions were effective in the short run with respect to both inflation and activity. This divorce lasted for a while, until the New Keynesian economists, starting with Fischer (1977) and up to Taylor (1980) and Calvo (1983), found solutions to incorporate nominal rigidities into their models with a view to putting them in line with practice. The economists belonging to the Real Business Cycle mainstream opted for exploring the lack of rigidities to the maximum and created general equilibrium models.

The latest study by the FSI on the application of Basel II, published in September 2006 and conducted among 115 countries, shows that 82 Non-Basel Committee Member Countries intend to implement the new framework, in most cases as of 2008 or 2009, and in some cases at a later date. Fully aware of the practical aspects of implementing a more modern, complete and risk-sensitive prudential framework, the Basel Committee published, in July 2004, i.e. directly in the wake of the New Capital Accord, a document entitled “Implementation of Basel II: practical considerations”. Recognising that the adoption and application of Basel II may not be a short-term priority for a certain number of supervisory authorities of non-G10 Countries, the Committee encouraged the latter to develop their own approaches and implementation timetables. Given that the necessary legislative and regulatory changes and human resource requirements have to be identified, the application of Basel II will necessarily be a gradual process throughout the world. This is especially the case since technical decisions often have to be taken on the exact choice regarding the scope of application of Basel II or the possibility of a staggered implementation of the three pillars. In this respect, I welcome the choice made by Algeria to adopt and implement Basel II in the near future. This choice should not be seen by banks as a regulatory constraint but rather as a great opportunity to converge towards best international practices.
Dozens of banks were affected in this manner. Even more alarming is how long it takes to detect successful cyber penetrations. According to a study8, the median time it takes to discover a cyber attack is 146 days. This means that of all the cyber attacks in the world happening this week (in April), more than half of them will not be detected until after Labour Day in September. It is not inconceivable that a future financial crisis could be precipitated by a cyber attack. The regulatory and supervisory framework for cyber risk management is still evolving. Two areas are likely to figure prominently. First, we need some common risk management standards in cyber defence. Given how inter-connected systems across the global financial industry are, common standards for the swift recovery of critical functions disrupted by a cyber attack will help reduce systemic vulnerabilities. Given how often cyber incidents stem from compromised user IDs and passwords, a global minimum standard for robust authentication for online financial services is worth considering. Second, we need to encourage sharing of cyber intelligence within the financial industry. This will heighten the industry’s collective situational awareness, so that it can respond more quickly and more effectively to impending cyber threats. Regulators can help to establish common infrastructure, processes and protocols to facilitate this. 7/9  BIS central bankers' speeches  A good example is the US Financial Services – Information Sharing & Analysis Centre (FS-ISAC).

And with support from MAS, FS-ISAC is in the process of setting up in Singapore its Asia-Pacific cyber intelligence centre. Third, we need to encourage sharing of cyber intelligence among financial regulators. Cyber threats do not respect sovereign boundaries. Cyber attacks in one country can have serious spill-over effects on other countries. Regulators need mechanisms to share cyber intelligence efficiently in real-time. There are already informal, bilateral arrangements for such information-sharing. But more can be done. We need to identify and reduce the barriers inhibiting cyber threat information sharing, such as legal, confidentiality, and operational constraints. I believe that cyber risk management is likely to emerge as the new frontier for global regulatory harmonisation and supervisory co-operation. Conclusion Let me conclude. We have accomplished much – regulators and industry together – to make the global financial system safer. But we are not done yet. We must ensure that implementation of regulatory reforms is consistent across jurisdictions. We must evaluate the effectiveness as well as effects of the reforms. We must be prepared to adjust and fine-tune regulations where necessary – but we must do so in a way that does not undermine the gains in financial stability that have been painstakingly achieved. We need to look ahead to a world of technological change. FinTech – if smartly harnessed and safely managed – offers hope and dynamism for an industry facing the triple headwinds of slower growth, tighter regulation, and growing competition.