samchain/econo-pairs-v1 huggingface dataset:
8  BIS central bankers’ speeches  anyone who has ever tried to estimate equilibrium unemployment will agree with me that it is not much easier than estimating normal resource utilisation or the long-run sustainable GDP trend. Unemployment data is perhaps not revised as often and as much as GDP data, but this is not the only reason why estimates of equilibrium unemployment are extremely uncertain and difficult to use as a basis for economic policy decisions.18 ... as does the fact that more than one person makes the decisions However, the gap between theory and practice is not only about measurement and estimation problems. Problems of this type would be difficult enough to handle even if the monetary policy decisions were made by a single decision-maker. But in reality we are six individuals who decide on the repo rate. And as these issues are ultimately a question of judgement it is up to each member of the Executive Board to make his or her best estimate of which measure or measures of the development of the real economy he or she believes monetary policy should focus on to, as it says in the preparatory works of the Sveriges Riksbank Act, “support the objectives of general economic policy for the purpose of attaining sustainable growth and a high level of employment”. She or he may also make the assessment that factors other than the forecast for inflation and various measures of resource utilisation should in some situations be taken into account in the monetary policy decisions.

Sound and safe cross-border consolidations would make banks better able to diversify their risks across the euro area, and channel savings more effectively towards investments across borders; this would foster the Financing Union I talked about. From a supervisory point of view, it involves supporting an approach on a consolidated basis by granting more waivers on liquidity and capital so as to allow more flexible capital allocation and limit ring-fencing. Swift execution of cross-border transactions is also essential: the implementation of a fast-track process by the SSM would address this issue. From a resolution point of view, internal MREL requirements could be a tool to facilitate the resolution of institutions, but they would become meaningless if calculated on a national basis. Indeed, having internal MREL in all countries could be an obstacle to the single market and European banking crossborder mergers. Finally, we should address business and legal impediments to cross-border mergers: information asymmetry, non-performing loans (NPL) or anti-takeover legal structures in different countries. As a first concrete step, I suggest that the EBA publish a comprehensive stock-taking of all the regulatory and supervisory obstacles to cross-border activities and mergers. The aim is crystal clear: within a Monetary and Banking Union, a cross-border merger must not be more difficult and cumbersome than a “domestic” merger. The logic of the banking union is that it should be considered for banking purposes as a unique jurisdiction. I would like to conclude by quoting one of the founding fathers of Europe.
Alongside reinforcement of the capital base, liquidity also needs to be strengthened to increase the resilience of banks. Consequently, a comprehensive revision of the liquidity regulations for big banks is currently underway. Nonetheless, better capital and liquidity requirements do not rule out the possibility that banks will again face existential difficulties in  2  BIS Review 77/2009  the future. The SNB therefore considers all of the efforts that are going into facilitating orderly wind-downs of large international institutions in future to be just as important. The lack of any clearly defined and internationally coordinated wind-down procedure contributes to a de facto obligation on the part of the state to provide assistance to these institutions. Any rescue of a large financial institution brings more than just high costs. The “too big to fail” issue also has a tendency to harbour incentives for banks to enter into excessive risks. In Switzerland, the “too big to fail” question is particularly relevant and, in many respects, unique, given the importance of the big banks for the country’s banking sector and its economy. A clearly defined and internationally coordinated wind-down procedure would help to ease this problem. The interplay between national jurisdictions is, however, extremely complex, and finding a solution for a predefined and internationally coordinated procedure of this kind is correspondingly challenging and time-consuming. The SNB therefore believes that careful consideration must also be given to alternative approaches. These include rules governing the organisational structure of large financial institutions.

BIS Review 3/2007  1  Flexible approach by CBSL In the process of adopting Basel II, CBSL will endeavour to adhere to the Basel criteria as far as possible and to retain the spirit of the Accord. However, certain modifications have been made and will also be made in the future to suit local conditions. Since Basel II provides a menu of approaches for the measurement of risk to suit the level of sophistication of the banks, it is suggested that the banks in Sri Lanka adopt the simplest approaches, initially. Credit risk For the measurement of credit risk under pillar I, we have requested banks to adopt the Standardised Approach, which is very similar to the existing framework or Basel I and requires very little modifications to the existing risk management systems by banks. The key to the success of this Approach is the rating of counterparts. The banks should, as far as possible, encourage developing a culture of credit ratings. CBSL will consider the representations made with regard to reducing the risk weight applicable to below BB-rated entities initially in order to inculcate the rating culture, but this should not be taken as the norm as we expect higher ratings to be considered for the purpose. The Basel II Framework provides a preferential risk weight of 75% for claims that fall within the regulatory retail portfolio. The qualifying criteria for retail and SME loans that would fall within this portfolio have been modified to suit the local conditions and agreed with the banks.
But we are interested in growth and employment that is sustained into the medium and long term. And permanently low inflation is a necessary condition for achieving that. But, even if we agree on the objective, that still of course, leaves plenty of room for us to disagree about what that means for the actual policy stance - the level of interest rates - at any particular time. In fact, as you may have noticed, because we are wholly open about it, even the individual members of the MPC have been known to disagree about that - at the margin. Outside the MPC, a lot of people say to me - “OK I agree we don’t want to return to boom and bust, but you are still overdoing it. From where I sit, or from what I’m told,” they say, “we’re headed for recession just hours away”. Sometimes they imply by that that we are also going to undershoot the inflation target - sometimes they don’t much seem to care about inflation. Now there are always plenty of people who claim to know what’s going to happen to the economy, to know that interest rates are “clearly far too high” or “clearly far too low”, and the present time is no exception. It’s been difficult recently to hear yourself think above the deafening noise of opinions on the state of the economy, which, understandably, often reflect the situation in their particular neck of the whole economy wood.

The implication is that you see a trade-off between inflation and the rate of economic growth, so that if only we’d let up a bit on controlling inflation then this country could enjoy higher activity and lower unemployment, which are the really good things in life - or at least we could avoid some of the worst damage that is currently being inflicted upon the whole of the agriculture, large parts of manufacturing industry and even some services sectors. And that might even be true for a time. The trouble is that, in anything other than the short term, it would be likely to mean more rather than less economic damage, and lower rather than higher growth and employment. Often in the past in this country we behaved as if we thought that promoting higher growth and employment - which of course is what we all want to see - was largely a matter of pumping up demand. We paid too little attention to the structural, supply-side, constraints. All too often we tried to buy faster growth and higher employment even at the expense of a bit more inflation. In effect we tried to squeeze a quart out of a pint pot. And you all know the result - rising inflation and a worsening balance of payments, which eventually could only be brought back under control by pushing up interest rates dramatically and forcing the economy into recession.
One explanation of the relatively low level of overall investment in Sweden, which is one of the factors behind the current account surplus, is in fact the low level of investment in housing (see Figure 10). There are thus no signs that the credit growth we have experienced has financed a building boom or that it is associated with a low level of domestic saving. In recent years, the number of new-builds in the housing sector in Sweden has been around 20 000 per year, which a low figure in historical terms.13 The low level of new housing construction is thus an important factor behind rising house prices.14  12  When all of these three factors deviated significantly from their normal patterns at the same time, there was a 56 per cent probability of a substantial fall in housing prices. See IMF (2009), World Economic Outlook, October. 13  This is a level that over the last 50 years has only been lower for a few years during the 1990s (Statistics Sweden, 2012 “Housing construction low for a long time”, SCB Economic Indicator, no. 2012:92). 14  Peter Englund, among others, points to the low level of housing construction in Sweden as one of the reasons for the sharp increase in prices; see Englund, Peter (2011), “Swedish house prices in an international perspective”, Chapter I.1 in The Riksbank’s inquiry into risks in the Swedish housing market. BIS central bankers’ speeches  11  Figure 10.

Inflation expectations themselves have been remarkably stable, including during the recent period when oil prices jumped to levels no one could have expected only a year ago. This, by itself, illustrates the credibility achieved by the Eurosystem of Central Banks, after eight years of existence. Second, European households and companies are reaping the benefits of that credibility. Long term interest rates stand at a low level, 40 to 50 basis points below the level in the United States. So, even after the recent increases in short term rates, monetary and financial conditions remain extremely favourable for investment and growth. And indeed, we might be witnessing in Europe a period of sustained and stable growth, at least if current projections and surveys are proven to be right in the coming months. A third benefit of the Euro is the boost it gives to financial integration in Europe. In many segments, European financial markets have reached the depth and liquidity which, up to now, were the preserve of dollar markets. This stimulates productive investment, helps in restructuring (as witnessed by the current wave of M&As) and, more generally, allows a better allocation of savings and sharing of risks. As a consequence, the euro is becoming extremely attractive, as a vehicle, a transaction, an investment and a reserve currency. As you may know, as central bankers, we remain neutral as far as the internationalisation of the euro is concerned. We are neither encouraging, nor discouraging the process.
The effects of the interest rate decline on demand, output and employment have been pronounced. It has taken time for inflation to pick up. This partly reflects low external interest rates and high oil prices, which have moderated the impact on the krone exchange rate. Higher imports from low-cost countries, competition and improved efficiency in Norwegian production have also kept inflation at a low level. Initially, it was the fall in prices for imported consumer goods that pushed down underlying inflation. After a period, the rise in prices for domestically produced goods and services also slowed. This was due in particular to increased competition in some goods and service markets. At the same time, wage growth eased as a result of lower capacity utilisation in the economy. A more subdued rise in house rents also contributed. Inflation measured by the CPI-ATE reached its lowest level in the first months of 2004. Inflation remained at below ½ per cent until the end of summer and then picked up through the autumn. Inflation moved up primarily as a result of a slower decline in prices for imported consumer goods. The depreciation of the krone since the beginning of 2003 has contributed to these developments. In addition, the rise in prices for domestically produced goods and services stabilised, and towards the end of 2004 there was a tendency towards a higher rise in prices for these goods and services. At the beginning of 2005, inflation measured by the CPI-ATE was lower than expected.

It’s also crucial that these efforts are coordinated at the global level, given the global dimension of the risks and the potential spillovers that can arise through interconnections between the real and financial sectors. In this regard, at the Basel Committee on Banking Supervision (BCBS), we are conducting a “gap analysis” to identify areas in the current Basel Framework where climate-related financial risks may not be adequately addressed or are not captured. This gap analysis will be comprehensive in nature, and will cover regulatory, supervisory and disclosure elements. Building on the analysis, we plan to explore practical solutions to address any identified gaps. In addition to a set of principles or guidelines on effective supervisory practices for assessing climate-related financial risks, the Committee will explore whether any policy measures under the regulatory framework should be taken, and how the Basel Committee could support international efforts related to the development of globally consistently sustainability reporting requirements. Importantly, any changes proposed by the Basel Committee to its regulatory framework would be in pursuit of its mandate to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. As to monetary policy, central banks should definitely be a part of this optimal policy mix as well. Here, it is useful to distinguish between central banks' monetary policy operations and those other operations not related to our monetary policy mandates. I will start with the latter, if only because it is easier to draw some conclusions in this case.
Indirect data suggest that aggregate demand has carried forward positive growth rates, but growth remains significantly below the potential of the Albanian economy. Macroeconomic factors determining private consumption and investments, and a prudent fiscal policy sustain the assessment for contained growth of the domestic demand in the first quarter of the year. Moreover, in the absence of complete data and in real terms on developments in the external sector of the economy, assessments suggest that the contribution of foreign demand to economic growth will be lower than in the past year. Fiscal policy was subject to a consolidation nature over the first quarter of 2012, in line with its objectives to keep budget deficit and public debt in check. The contained fiscal approach has been reflected in minimum public expenditure in the first quarter of the year, with an annualised rate of 0.7%. Furthermore, low growth rates of fiscal revenues continued their trend, settling at 1.2% in this quarter. The budget deficit was ALL 11.5 billion, or about 2.5% down compared with the first quarter of a year earlier. Developments in foreign trade over the first two-month period of the year point to contracted trade exchange in annual terms. Value of exports in these two months dipped by 20.5% against the corresponding period of a year earlier, reflecting the moderation of foreign demand and price developments in global markets. On the imports side, their growth rates were significantly decelerated, reaching a nominal annual growth of 1.8% during this period.

According to recent data from INSTAT, the Albanian economy accelerated the growth rate in the fourth quarter of the previous year, posting 3.8% annual growth. The economic activity upturn was driven mainly by output increase in the services sector. Value added of this sector surged 7.5% in annual terms, with a higher contribution by the branch of trade, transport and other services. Similarly, the construction and agriculture sectors posted  BIS central bankers’ speeches  1  positive but low annual growth rates, 1.2% and 1.9%, respectively. Positive contribution to economic growth was also provided by the branches of extractive industry and the processing industry, but they did not manage to balance the significant contraction in the branch of “Electrical energy, water and gas”, which has resulted in negative contribution by the industry sector to the domestic product growth. From the perspective of aggregate demand components, economic growth in Albania continued to be driven by foreign demand also in the last quarter of the past year. Notwithstanding unfavourable developments in the global economy, net exports in real terms have shown higher growth rates in this period. In addition to foreign demand, the public sector demand provided a high contribution, in the fourth quarter of the past year, in the form of increased capital expenditure. In turn, private consumption and investments, while showing signals of recovery, were assessed as slow during the fourth quarter of 2011. Statistics on the real economy for the first quarter of 2012 are only partially available.
Lars E O Svensson: Some problems with Swedish monetary policy and possible solutions Speech by Mr Lars E O Svensson, Deputy Governor of the Sveriges Riksbank, at the Fastighetsvärlden’s conference, Stockholm, 24 November 2010. *  *  *  The opinions expressed here are my own and are not necessarily shared by other members of the Riksbank’s Executive Board or staff. I would like to thank Claes Berg, Karolina Ekholm, Stefan Gerlach, Jesper Hansson, Per Jansson, Pernilla Meyersson, Ulf Söderström and Staffan Viotti for our discussions and their comments. Johanna Jeansson, Lina Majtorp and Magnus Åhl have contributed to this speech. At the most recent monetary policy meeting in October, I entered a reservation against the majority decision. I, like my colleague Karolina Ekholm, instead advocated holding the repo rate unchanged and having a much lower repo rate path that rises steadily to a level of 2.7 per cent at the end of the forecast period. My reason for entering a reservation on this occasion and at earlier monetary policy meetings is because I see several problems with our current monetary policy. In this speech I shall present the problems I currently see in Swedish monetary policy, discuss these problems and describe the motives for my reservation, as well as proposing possible solutions to the problems.

Sweden has suffered a pure demand shock through exports, but the Swedish economy has no comparable structural problems in the financial sector or elsewhere in the economy. One might then claim that the level of potential production and perhaps also its growth may have fallen more in the other countries than in Sweden. In that case, the output gap is more negative in Sweden than in the other countries, with the possible exception of the United Kingdom. Using the output gap as a measure of resource utilisation, the situation in Sweden does not look too good. Unemployment has increased in Sweden, the eurozone, the United States and the United Kingdom (see Figure 4). Since the first quarter of 2008, unemployment has risen most in the United States and around the same amount in Sweden, the eurozone and the United Kingdom (see Figure 5). The unemployment gap, which is the difference between unemployment and equilibrium unemployment, is shown in Figure 6. For Sweden I am assuming that equilibrium unemployment is 5.5 per cent, and for the other economies I have used common conventional estimates. We see that the unemployment gap is biggest in the United States, next biggest in Sweden and lowest in the United Kingdom and the eurozone. If we assume that equilibrium unemployment in Sweden is 6 per cent instead of 5.5 per cent, we have the same ranking for the unemployment gap.
The Riksbank’s independence  Legislation  Public authority under the Riksdag, not the Government  EU legislation Sveriges Riksbank Act and ban on instructions  Goal independence  The Riksbank’s goal  Instrument Independence  The Riksbank’s tools  Personal independence How members are appointed and dismissed  Financial independence The Riksbanks financing/budget  Figure 2. Clearer independence in Sveriges Riksbank Act 1999  Swedish Riksdag Riksdag Committee on Finance General Council of the Riksbank  Executive Board of the Riksbank 1  15 [20]  Figure 3. Lower inflation since the inflation target was introduced CPI, annual percentage change 16  CPIF  1981-1992 Means: 7.4 Std. dev. : 2.9  12  12  8  8 1995-2021 (Apr) Means: 1.5 Std. dev. : 0.7  4  4  0  -4  16  0  80  84  88  92  96  00  04  08  12  16  20  -4  Source: Statistics Sweden  Figure 4. Falling real interest rates Per cent 6  6  4  4  2  2  0  0 Sweden Euro area  -2  -2  United States United Kingdom  -4  96  00  04  08  12  16  20  -4  Sources: National central banks and the Riksbank  16 [20]  Figure 5. Policy rates Per cent  Sources: National central banks, Reuters and the Riksbank  Figure 6.

The new act was also needed to adapt the Riksbank’s activities to the requirements ensuing from Sweden’s membership of the EU. 8 How was the increased independence felt by the Riksbank? When one talks about central bank independence, one usually distinguishes between goal independence and instrument independence. This may sound cryptic, but goal independence means that the central bank determines its own operational target, which is to be attained to meet the legislator’s intention of price stability, for instance an inflation rate of 2 per cent. Instrument independence means 3 See Jonung et al. (2003). As early as in 1931-1937, the Riksbank was the first central bank in the world to have a price stability objective. After that, however, followed a period of 50 years with various fixed exchange-rate regimes. 5 See, for instance, the classical articles by Kydland and Prescott (1977), Barro and Gordon (1983) and Rogoff (1985). For more descriptive and explanatory reviews, see Apel and Viotti (1998) and Heikensten (2005). 6 A classical article on this subject is the one by Alesina and Summers (1993). 7 See, for instance, Fischer (2015) and Bernanke (2017). 8 The requirement for independent central banks follows on from Article 130 of the Treaty on the Functioning of the European Union and applies to all EU member states. The motives behind the EU legislation were in turn based on academic research and the experiences of ‘The Great Inflation’, the period when inflation rose in many parts of the world during the 1970s.