samchain/econo-pairs-v1 huggingface dataset:
The Swedish economy’s future path  Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Association of Swedish Chambers of Commerce & Industry, Stockholm, on 8 November 2000. *  *  *  First of all, a word of thanks for the invitation to discuss the economic situation in Sweden with you. As I see it, there are a number of dimensions to our economy’s favourable development at present. Today I will be considering some of them, as well as the challenges facing the Riksbank. Globalisation has created a new economic environment Conditions in general for the Swedish economy, and for the environment in which Swedish companies operate, have changed in major respects. I am referring, of course, to the globalisation that has swept over the world in recent decades, leading to more international trade, increased competitive pressure and growing cross-border capital flows. Today people can travel and work all over the world. With the removal of barriers, countries have become increasingly interdependent. These developments have benefited the international economy and raised living standards for many people throughout the world. In the course of two decades, the global level of per capita purchasing power has more than doubled. The improvement has occurred in developing countries as well as in the industrialised world.

To some extent there have been a number of signs of more subdued growth in the rest of the world, above all in the United States. Moreover, new statistics suggest that Swedish households are not quite as optimistic as before. Somewhat weaker car sales may be an indication of more subdued demand for durables. Asset prices also seem to be in a calmer phase. All of this may point to some slowdown in the development of demand. But is it enough? It is still a matter of forward indicators and we have not yet seen any clear outcome in the statistics. Neither does there seem to be any notable fall-off in labour demand. The number of new job vacancies continues to be comparatively high, at least to date. In the absence of a sufficient slowdown in demand, an adjustment to the long-term growth path will need to be achieved with interest rate increases by the Riksbank. It seems to me that it is deliberations of this type that the Riksbank will face at the coming monetary policy meetings. Consideration will also have to be paid, of course, to the inflation risks associated with the high price of oil and the high dollar rate. These were some of the risks we highlighted in the October Inflation Report. This type of discussion about the direction of stabilisation policy basically deals with how, after some favourable years in the late 1990s, we should act so that growth and employment in the Swedish economy can be sustainably high and stable.
A gradual approach would work best, reduce risk and enable incorporation of known future trends and customer requirements. A customer-centric approach would help to reduce transaction costs to them through pooled or shared platforms. To avoid inordinate fears of using common platforms it is desirable to have a set of self-regulations and ethical practices agreed upon by all stakeholders. Banks also need to coordinate with the telecommunication service providers to link bank IT systems with those of the telecommunication services. The Telecommunication has been a popular mode of accessing financial services. Banking through SMS has made virtual money transactions popular in recent times. Some banks have already started link ups with telecommunications and others need to follow suit. 10. Conclusion  10.1 IT development has undoubtedly brought-in enormous benefits to banks, particularly in terms of productivity increases, cost reduction through labour saving and increased profitability. Consequently, IT development in banks has become more product centric and retail and wholesale IT products have positively influenced productivity and profitability. IT use has increased outputs and reduced costs as both IT capital investments and IT human resources have a positive relationship to productivity. Banks should stay ahead of the game and sustain growth by taking bold decisions to survive and beat competition. The time has come to move towards a customer-centric approach, as customers should be given an opportunity to enjoy their share of benefits stemming from IT development.

For institutions that are legally or contractually obliged to attain specific returns it is difficult to comply with these requirements at the moment. The current low interest rate environment is a temporary phenomenon attributable to the severe economic turmoil resulting from the financial crisis. We expect that the economy will continue to recover, and that interest rates worldwide will increase again. The first signs of this are evident in the US. However, looking at the international situation, it is also clear that the interest rate in Switzerland cannot be higher than in the rest of the world, because otherwise we would be threatened with major inflows into the Swiss franc. Some claim that negative interest goes against human nature and deprives the economy of an important yardstick. However, that is not the case. The interest rate is the reward for forgoing consumption. The resources saved in this manner are basically available for investment. Investment, in turn, must generate a return that allows the interest to be paid. When uncertainty is high, savings increase, on the one hand. On the other hand, however, the increased uncertainty or the lower potential for returns causes businesses to postpone investment. Under these conditions, therefore, the interest rate falls; in extreme circumstances, it may even move into negative territory. Low or negative interest rates are an expression of the fact that, in the current situation, there is a very high supply of savings capital worldwide and a relatively low demand for investment.
We should now, when the economic and financial situation in the world is relatively calm, take the opportunity to simplify and clarify the rules further, particularly as regards their application. When the next financial crisis occurs it may be too late. Another aspect of the Fund's function in crisis management is its role when countries are forced to suspend payments. It is possible to further strengthen the instruments available today – Collective Action Clauses as well as Principles for Stable Capital Flows and Fair Debt Restructuring – in order to ensure a transparent and predictable debt restructuring process for borrowers and lenders. These instruments lay the main responsibility for agreeing on debt renegotiation terms on the borrower countries and creditors. The Fund’s most important function in such circumstances is to provide the parties with the best possible information about the economic situation so as to facilitate agreement. The Fund should also try to contribute to ensuring that economic policies in the debtor country make it possible in the longer run to restore balance and to reduce the country’s debt to a level that is sustainable in the long term. The Fund itself may have to provide some financing to achieve this, but when it comes to countries in highly vulnerable positions Fund financing can only play a limited role. It will not always be possible to bring about a sustainable debt level in this way without drawn-out negotiations and considerable economic costs.

The IMFC Deputies group could also be strengthened by convening also in between the annual and the spring meetings. It is important that all  4  BIS Review 43/2005  countries participate at a high level (today, many countries participate with their Executive Directors). One likely reason that the BIS functions more smoothly, a part from the fact the issues discussed are of a less political nature, is that those who take the decisions on the domestic front are the same people that meet in Basel. 6. Overhaul the IMF's internal organisation. As multilateral surveillance becomes more important, the country departments should work (even) closer with the departments that possess knowledge of institutions and institution building. It is also reasonable that the IMF’s current resource base, which primarily consists of economists, be broadened with people that have a financial background and practical experience of policy work and institution building in their own countries. Concluding remarks To sum up: •  The IMF’s overall objective is still valid;  •  The IMF’s instruments for reaching this objective – surveillance, lending and technical assistance – are, in general, functional and effective, in theory;  •  In practice, however, many of the IMF’s member countries do not allow the Fund to play the role that it could have. The IMF has untapped potential, not least in the area of surveillance;  •  The untapped potential is closely related to political issues.
But in recent months, at least relative to the pre-pandemic curve, the former has clearly outstripped the latter (Chart 15). The labour market looks to be having a harder time clearing – ensuring matches between available workers and available jobs – than it used to. What’s causing all this? As far as the decline in unemployment is concerned, one possibility is that a disproportionate number of those who’ve lost jobs (or failed to find one in the first place) have quit the labour 11  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  11  market altogether. We know that inactivity rose significantly last year. But participation in the labour market is typically cyclical – Chart 16 plots annual changes against those in employment – and I don’t see anything that unusual here. Participation has been returning alongside the recovery in the labour market. Chart 15. High vacancies suggest labour market is having more trouble than usual in clearing  Chart 16. Behaviour of participation rate doesn’t look out of the ordinary Percentage points  Per cent 4.5  1.0  3.5 0.5  2.5 1.5  0.0  0.5 -0.5  -0.5  -1.5 -2.5  -1.0  Employment growth (lhs) Participation change (rhs)  -3.5 -4.5 1986 Vacancy rate calculated as number of vacancies / active workforce. 2021 Q4 estimate based on October vacancy data and the Q4 unemployment rate projected in the November MPR. Sources: ONS and Bank calculations.

The figure set in month t, and for the following six months (t till (t+5) inclusive), is based on the forward price for the following year (t – (t+11)) observed between three and nine months earlier. The dotted line indicates prices relevant for the cap based on current futures contracts. Sources: Ofgem, Bloomberg Finance L.P. and Bank calculations. -1 -2  2016  2017  2018  2019  2020  2021  2022  Contributions to annual CPI inflation. Figures in parentheses are basket weights in 2021 and do not sum to 100 due to rounding. The chart was shown in the November MPR and does not include the latest data, for October 2021. Sources: Bloomberg Finance L.P., Department for Business, Energy and Industrial Strategy, ONS and Bank calculations. It would be wrong to say this inflation is only about energy. It’s broader than that. What we can say, however, is that most of it – thus far, at least – has been concentrated in tradable goods in general (non-energy as well as energy), much less of it in the non-traded parts of the economy. One indication of that is Chart 2, which plots the arithmetic contribution of various broad components to the change in the aggregate CPI in the UK. Just about the entire overshoot in overall inflation, relative to the MPC’s 2% target, reflects unusually rapid inflation in prices of (largely tradable) goods.
ERM2 provides considerable scope for targeting monetary policy at price stability. This applies of course for the normal band widths of ±15 per cent, but would also apply for the narrower bands of ±2.25 per cent, which the European Commission has used in its evaluations. Just like today, there is therefore reason to continue publishing inflation reports and to hold regular monetary policy meetings. Swedish experiences from recent decades of fixed exchange-rate regimes have, as we all know, not been entirely positive. The events of 1992 are still fresh in our memories. But a lot has happened over the past ten years. Our economic policy has become credible and successful. In recent years, it has followed the same principles as those in the euro area and has been characterised by efforts to achieve price stability and sound public finances. Participation in ERM2 would not change the stance or objective of policy of course. Tensions stemming from a lack of competitiveness in the Swedish economy are also unlikely; the rate is set partly to ensure a reasonable level of competitiveness, while inflation over the coming years can be expected to be more or less in line with that of the euro area. Moreover, the process for other countries’ entry into monetary union was smooth in spite of the fact that the circumstances in many cases were less favourable at the time than in Sweden today. For instance, the uncertainty surrounding the implementation of the third stage and the introduction of the euro is now gone.

The EPG will be tasked to come up with bold and practical ideas on how to revitalise and strengthen ASEAN. Singapore's prospects are bright 9. Given the favourable external environment, the outlook for Singapore is good. In the first nine months of this year, we have generated more than 78,000 jobs, almost 7,000 more than the whole of last year. Inflation has stayed low. This year, we expect GDP growth to be around 5%. Next year, growth should be between 3% and 5%. BIS Review 83/2005  1  10. Singapore's financial sector has grown strongly, averaging 5.4% over the first three quarters of the year, slightly higher than the overall expansion in the economy. This was supported by robust contributions from fund management and continued growth in the Asian Dollar Market. 11. Relations with our neighbours have strengthened considerably. Economic cooperation has further deepened. Singapore is the fourth largest investor in Indonesia. In February, we signed the IndonesiaSingapore Investment Guarantee Agreement (IGA), which serves to establish a framework for investors to operate in stability and confidence. 12. Political ties between Singapore and Malaysia have improved. Trade and investments across the Causeway continue to grow strongly. Malaysia is Singapore's biggest trading partner and Singapore was the second largest group of foreign investors in Malaysia last year. Temasek Holdings acquired 5% of Telekom Malaysia. In turn, Khazanah Nasional teamed up with Telekom Malaysia to take a 30% stake in M1. Such cross-border investments will further intermesh our two economies. 13.
These principles on corporate governance are largely part of those adopted in 1999 and subsequently revised by the OECD in 2004. They include equal rights and a level-playing field for shareholders, the role of stakeholders, disclosure and transparency, and board accountability. Corporate governance has direct implications on the behaviour of the organisation towards its employees, shareholders, customers, partners, banks included. Poor governance reduces the potential and, worse though, can lead to financial distress and even fraud, while well-governed companies will usually be more competitive than their rivals and will be able to bring in investors who will invest their money in the companies’ future growth. I will also add that no matter how relevant formal rules are to the proper functioning of an economy, it is essential to trust in business partners’ word given and their honesty. Whenever this is missing, not only dealings in goods and services, but also financial transactions are hit hard. Given that integrity, confidence and reputation weigh heavily on the economy, everyone pins his hopes on the business sector. Future wealth depends now more than ever on how this issue is dealt with. This is why we can assert that, in extenso, good corporate governance underpins the integrity and efficiency of financial markets. Moreover, for the banking field, in light of recent developments, I truly believe that increased ethics is to be welcomed. Thus, good practices in corporate governance are an essential ingredient of wealth and sustainable growth.

And also recall the words of ECB chief economist, Mr Otmar Issing. When he departed the institution, in front of 400 strong audience Mr. Issing reminding us that “Euro is an unfinished project”, stressing that it relied on the monetary pillar, while enhanced fiscal policies and economic cooperation were still needed. Therefore, as the recent developments also show, a more effective economic governance in the EU and the euro area is within reach through fiscal discipline, broader economic oversight, closer coordination, a more robust framework for crisis management, stronger institutions and a decision-making based on clear and strict rules. In the particular case of the interdependent economies across the EU, enhanced governance will boost economic growth and job creation. At the same time, developing a culture of values and professional conduct and ethics can make a very important contribution to the smooth functioning of markets and this is a prerogative of the corporate sector, the private sector in general. I’m confident Europe will find the right way to move forward, given the common cultural values, with measures and policies that should avoid both asymmetric and side effects. We all know how harmful sudden and large capital swings are. Europe’s governance raises also the issue at a more global level. In fact, international affairs and corporate governance are an integral part of this picture.
BIS central bankers’ speeches  5  Concluding observations In conclusion I would note that the financial crisis highlighted that financial institutions did not have the quality or quantity of capital they needed. In particular, the broader measures of capital were largely ignored during the crisis by many investors as they worried about the “core” capital immediately available to absorb losses. Thus the emphasis in Basel III on improving the quality and quantity of capital is an important regulatory response to the financial crisis. Clearly we need to focus on the narrow definitions of capital – that which can readily absorb losses. The United States has also improved its supervision framework based on lessons learned during the crisis. One of the major additions to the supervisory “toolkit” was the use of stress tests – in the SCAP and then as an important component of the broader CCAR exercise. The supervisory and regulatory responses have provided strong encouragement for U.S. financial institutions to improve their capital ratios, particularly those ratios most appropriate for absorbing losses during stressful economic periods. Through retention of earnings, asset sales, and new equity issuances, U.S. banks have substantially improved their capital ratios since the crisis period. The severe disruptions and economic dislocations that occurred during the financial crisis – affecting not just institutions, but individuals throughout the national and global economy – highlight the critical need to maintain a well-capitalized and resilient financial sector.

The more narrow definitions of capital – Tier 1 common and tangible common equity – were both declining fairly substantially. In retrospect, the quality and quantity of capital was not sufficient for the kind of financial shocks experienced in the United States in the crisis. Under the Basel III proposals there is much more attention being given to the quality and quantity of capital. My own view is that this heightened focus is appropriate, and that the particular capital that truly serves as a cushion against losses during periods of stress should be regulators’ primary focus. 4  Four measures of capital are referenced in this speech, total risk-based capital, Tier 1 risk-based capital, Tier 1 common capital, and tangible common equity: Total risk-based capital includes core capital elements (Tier 1 capital) plus supplementary capital elements (Tier 2 capital). Tier 1 risk-based capital is defined in the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measures (12 CFR part 225, Appendix A) as the sum of core capital elements less any amounts of goodwill, other intangible assets, interest-only strips receivables, deferred tax assets, nonfinancial equity investments, and other items that are required to be deducted in accordance with section II.B. of this appendix. Tier 1 capital must represent at least 50 percent of qualifying total capital.” The specific elements included in Tier 1 capital and their various limits, restrictions, and deductions are discussed in detail in 12 CFR part 225, Appendix A.
Indeed, the increase in annual consumer price inflation in the euro area from 2.0% in December 2001 to 2.7% in January 2002 has unfortunately been associated, in many people’s minds, with the cash changeover. In reality, other factors contributed to this increase, such as the rise in vegetable prices related to adverse weather conditions and higher tobacco taxes in several euro area countries. But it has to be recognised that, in particular in some sectors with a low level of competition, some upward price adjustments might have occurred in connection with the cash changeover. However, there were also price reductions in the euro area associated with the cash changeover and statistical evidence has so far confirmed that the effect on the overall price level has been contained. Turning now to the current economic situation, over the past few months the economic conditions have gradually changed. The impact of the terrorist attacks on economic confidence has gradually faded away and economic activity has stabilised. While the strength of the ongoing recovery is still subject to uncertainty, the most likely scenario is for economic activity to gradually accelerate and reach levels in line with trend potential growth later this year. Regarding monetary developments, we saw a high demand for liquid and safe assets in the autumn of last year, particularly associated with financial market uncertainty following the terrorist attacks. We saw some moderation in early 2002 but recent data indicate a new increase in the demand for liquid assets.

Willem F Duisenberg: Presentation of the ECB’s Annual Report 2001 to the European Parliament Introductory statement by Dr Willem F Duisenberg, President of the European Central Bank, to the European Parliament, Strasbourg, 2 July 2002 *  *  *  Six months ago we witnessed a milestone in European history: the launch of “the euro, our money”, in its visible form. European citizens are now able to perceive - and benefit from - the tangible reality of the euro, and the rapid substitution of legacy currencies at the beginning of this year bears witness to the successful launch of the euro banknotes and coins. The year 2001 provided a particularly challenging environment for the monetary policy of the ECB. The worsening economic outlook was accompanied by short-term upward pressures on prices from various sources, which complicated the conduct of monetary policy. This task was made more difficult by the extreme uncertainty which followed the terrorist attacks in the United States on 11 September. As usual, the monetary policy response of the ECB to such a situation had to look beyond short-term developments, focusing on the risks to price stability over the medium term. From this perspective, we could see that medium-term inflationary pressures were in fact receding. The ECB took account of this by reducing interest rates four times in 2001, by a total of 150 basis points.