samchain/econo-pairs-v1 huggingface dataset:
The National Accounts for the first quarter of this year show that GDP growth was 2.2 per cent, which was 0.6 percentage points less than we had forecast in April. In principle, we are now facing the same type of problems in our deliberations, that is,  BIS Review 77/2008  7  rising inflationary pressure and weaker economic activity. The way we Executive Board members finally decide to balance these factors and all of the other new information we will receive is something we will return to at our monetary policy meeting on 2 July. We are six Board members and it is during the coming weeks that each person will finally form his or her opinion of how the economy will develop in the future and what monetary policy is required to attain the inflation target at the same time as avoiding excessive fluctuations in the real economy. Material reworked into a Monetary Policy Report After the second large monetary policy group meeting the Monetary Policy Department continues its work and compiles the first draft of the Monetary Policy Report. The Department now has close contacts with the Executive Board. A formal Executive Board meeting is held the week after the second meeting with the focus being on the forecasts. The editorial work on the Monetary Policy Report continues and is regularly checked with the members of the Executive Board.

Our forecasts of inflation and other components, like the interest rate decisions, are based on a forecast of the future repo rate path. These forecasts change as new information is received, but we report our current views of the future every time we publish a monetary policy decision. The Riksbank is governed by an Executive Board The year 1999 is a natural starting point when describing the process for monetary policy decision-making. This was when the price stability target was prescribed by law and the Riksbank was given a more independent position with regard to our principal, Sveriges Riksdag (the Swedish parliament). This entailed a major change with regard to our decisionmaking and the way we work in relation to the General Council of the Riksbank. As you already know, the work at the Riksbank has been headed since 1999 by an Executive Board consisting of six members, one of whom is Governor of the Riksbank and Chairman of the Executive Board. The members are appointed for a period of six years at a time. Normally the periods of office for the different members overlap to create continuity in the work of the Bank. Previously it was the Governing Council of the Riksbank, whose members are appointed by the Riksdag, who governed the Bank together with the Governor. Today the General Council has more of a controller function. They appoint the members of the Executive Board, but do not have any influence over, for instance, the decisions on the repo rate.
For that reason, I believe our rule making must incorporate a dynamic digital regulatory agenda that maintains safety without stifling innovation. We published a discussion paper about financial firms’ application of artificial intelligence last year – you can expect to see more from us about this. [12] We will also be proposing rules about issuing and  Page 5  holding digital assets. [13]  We will act to maintain trust As my colleague Phil Evans recently argued, no global financial centre can thrive in the long term unless it has a trusted regulatory regime. [14] One way of achieving that is by aligning with international standards when they are appropriate for the UK. Being seen a role model for good implementation of international standards helps us maintain the trust of investors, of firms, and of regulators in other countries. I think it’s worth stressing how advantageous that last point is for the UK. Regulators in other countries are the people who regulate foreign firms that want to do business in the UK, and who supervise the overseas operations of UK firms. I also believe that it is normally easier for internationally active firms to follow one global rulebook instead of having to meet the expense of adapting to a patchwork of local standards. That is why we engage with multilateral institutions to play a leading role shaping international standards.

In general, we will always listen to arguments when people disagree with us, and we will always take into account new evidence. This includes tailoring rules that are already in place in response to our own evaluations or to evidence from industry, broader civil society and other stakeholders. Page 6  This is what we did when we implemented an earlier Basel regulatory package known as CRR2. In that case, we implemented a new standard for banks’ long term funding after tailoring it to be more risk sensitive for activities that are important for the UK. That was a change we made in response to evidence-based arguments we received during the consultation. We are now taking the same approach to work on Solvency II rules for insurers. Debates between us and the Government have got a lot of public attention. But there are many areas where we fully agree about the benefits from simplifying the regime to better reflect the needs of the UK. And with the high-level policy decisions now clear, we are focused on implementation and on delivering detailed proposals for consultation. My colleague Sam Woods recently set out what we are committed to doing. [18] All of this will be on top of what we are already doing to remove unnecessary rules we inherited from our time in the EU. We have so far deleted 13 guidelines issued by EU regulators, five superseded Supervisory Statements and 26 technical standards onshored from the EU. This work will continue.
Also, the Bank of Albania reviewed its regulation on the required reserves of banks, raising their flexibility in the manner of holding it and creating more opportunities in increasing the banking sector’s exposure to the economy. *** Another important aspect of the central bank’s functions is the banking system supervision and regulation, which contributed significantly to strengthening of the financial stability. In the following, I will focus on performance of some key indicators and banking system risks, as well as on the most important developments in supervision, licensing, legal and regulatory framework. 2. Banking supervision and financial stability  Banking sector assets to GDP accounted for 87.9% at end-2012, up by 3.1% on a year earlier. Profit improved, leading to improved indicators of Return on Average Assets (RoAA) and Return on Average Equity (RoAE). At end-2012, the banking system capital adequacy ratio was 16.2%, increased on a year earlier. At system level and for each individual bank, this indicator remained above the 12% minimum requirement. Supervision has aimed at assessing and monitoring the risks posed to the banking system. Special attention has been paid to monitoring the loan portfolio quality and the systemic risks stemming from lending, as well as to their actual or potential effects on the degree of banking system capitalisation. The banking system exposure to credit risk increased in 2012. The ratio of non-performing loans to total loans was 22.5% at year-end, from 18.8% a year earlier.

The pall of misconduct in Fixed Income Currency and Commodity markets The shadow of the worst financial crisis in living memory has been significantly lengthened by a series of appalling cases of misconduct in Fixed Income, Currency, Commodity and other markets. Details of these began to emerge relatively late in the crisis, but they have proved surprisingly prevalent and persistent. And they have further eroded the trust of the general public in financial markets. Public outrage is based on the view that the rewards in finance are disproportionate and that the system is rigged. When people read of malpractice in financial markets, of trading profits being claimed through manipulation, collusion or dishonesty, they naturally wonder if they are one of the people who have been wronged. In fixed income, employees in firms around the world attempted to manipulate Libor, Euribor and other similar measures of short-term borrowing costs in order to benefit themselves or some other part of their firm’s business. In the United States and elsewhere, firms structured the mortgages or other assets used to back securitised assets, or misrepresented the nature of those underlying assets, in ways inconsistent with the interests of end investors. Regulators identified systematic attempts to mis-value and otherwise engage in market misconduct in relation to large scale positions in credit default swaps. In commodities markets, traders were found trying to manipulate physical or derivative prices, including those of gold, oil, lead, platinum, palladium and coffee.
This greater ability has been partly due to increased transparency in the emerging countries themselves, as a result of reforms in recent years including the application of statistical codes and standards of good practice. It is also partly attributable to improved risk management by investors on international financial markets. 2  BIS Review 38/2002  In sum, behind the greater resilience of the world economy in facing adversities, it appears there are positive factors which have tended to increase economies' capacity for spontaneous adjustment, the responsiveness of macroeconomic policies and the discipline exerted by international financial markets. Hence the importance of persevering in the coming years along these lines, especially bearing in mind the growing economic and financial interdependence of different countries and regions and their exposure to global shocks. Euro area and monetary policy The euro area fell prone to the slowdown affecting the world economy in 2001, although the impact on the euro zone differed from that on other areas. The initial idea that the euro area could sustain growth on its own has not held up in reality. Indeed, some particular features of the area (such as the notable falling off of residential investment in Germany) exacerbated the slowdown in activity in 2001. Nonetheless, the euro area does appear to be emerging from this slump relatively satisfactorily, helped by the absence of significant imbalances and by an economic policy response which have contributed to shortening the recessionary bout and tempering its impact on employment.

The investment in new technologies in recent years has already had a positive influence on Spanish productivity, although its overall effects have been blurred by the less dynamic behaviour of other types of investment. Looking ahead, a step-up in investment in technological capital will require the complementary promotion of investment in human capital and in capital goods to help spread innovation across the economy as a whole. As regards policies aimed at promoting market flexibility and efficiency, the liberalising momentum of the reforms undertaken must be carried further. The Annual Report underscores the advisability of land market reform, given its consequences for the formation of real estate prices and costs and its influence on labour mobility. It further stresses the need to pursue liberalisation and competition policies in the network industries (telecommunications, electricity, transport and distribution, etc. ), as the benefits of better workings here will spread to all productive activities. In the labour market, the persistently high ratio of temporary to permanent employees alongside a high unemployment level (especially among certain groups), with labour shortages in certain industries and regions, highlights the need to press ahead with reform. In particular, the incentives for effective participation in the labour market must be further improved, as must the decentralisation of collective bargaining, so that it is better suited to the conditions firms face and to workers' characteristics.
We would like to stress at this juncture that the RST was created to help members finance long-term structural changes to build resilience to different shocks, with climate change being the main one but not the only one. Finally, at the risk of repeating what I said in the previous session, I would like to underscore the GPA’s increased emphasis on climate change, recognizing and addressing the existing inequity in burden sharing between small and large emitters. It is also important to recognize that there are different paths leading to the same objective of saving the planet that we all share. I end it with that. And thank you Chair.

As stated on previous occasions, the provision of liquidity and the allotment modes for refinancing operations will be adjusted when appropriate, taking into account the fact that all the non-standard measures taken during the period of acute financial market tensions are, by construction, temporary in nature. Let me now explain our assessment in greater detail, starting with the economic analysis. In the first quarter of 2011, the euro area recorded strong real GDP growth of 0.8% quarteron-quarter, following the 0.3% increase of the fourth quarter of 2010. Recent statistical releases and survey-based indicators point towards a continued expansion of economic activity in the euro area in the second quarter of this year, albeit at a slower pace. This easing reflects the fact that the strong growth in the first quarter was partly due to special factors, which will cease to play a role in the second quarter. Hence, it is appropriate to look through such short-term volatility and to emphasise the positive underlying momentum of economic activity in the euro area. Looking ahead, euro area exports should be supported by the ongoing expansion in the world economy. At the same time, taking into account the  BIS central bankers’ speeches  1  favourable level of business confidence in the euro area, private sector domestic demand should contribute increasingly to economic growth, benefiting from the still accommodative monetary policy stance and the measures adopted to improve the functioning of the financial system.
One of the challenges involved in replacing the Libor with an overnight rate such as SARON is how to determine forward rates that would, for example, allow the calculation of quarterly payments on contracts. At the moment, the derivatives market is not liquid enough to provide a prospective forward rate (i.e. one that is known in advance). This is why the working group, at its meeting last week, opted for a backward-looking calculation method based on the average of daily SARON rates over the period concerned. As co-chair of the NWG, the SNB is supporting the process by providing coordination at national level and encouraging dialogue at international level. Ultimately, though, only the market participants themselves can ensure a successful transition. It is thus critical that they become involved, keep themselves informed about the working group’s recommendations, and put them into practice. Participation in the working group is open to all those operating in  Page 8/9  the market. I should add that an information session on the working group’s latest activities and on future challenges will be taking place tomorrow in Geneva. 7 Before finishing, I would like to emphasise that the SNB retains its ability to steer interest rates even without the Libor. For instance, it is currently doing so by means of the negative interest rate on the sight deposits which the banks hold at the SNB. The disappearance of the Libor or the transition to another interest rate would change nothing in that respect.

Following table illustrates the importance of the banking sector in three major accession countries [Czech Republic, Hungary and Poland]:  2  BIS Review 53/2003  Structure of Financial Sector 100%  90%  80%  70%  Credit Unions Other Pension funds IC&IF Insurance comp. Banks  60%  50%  40%  30%  20%  10%  0%  CR  HUN  POL  6  It is evident that the financial sector in Central European countries relies heavily on the banking sector, which represents approximately 80% of total assets of the whole financial sector. It could be also seen that despite the dominance of banks in all mentioned countries, the structure of other financial institutions differs significantly. This is the result of varying approaches to building these institutions. For instance, in the Czech Republic, we can see the smaller size of the investment business as a result of the quality of the capital markets, the lax regulation at the beginning of the transformation, and the subsequent and rather frequent occurrence of frauds in the past. The delayed start of pension reform has also contributed to this situation. The largest banking sector in the new member states is the Polish one, followed by the Czech and the Hungarian sectors. These three biggest countries account for more than 3/4 of the total new member states banking assets. The banking sector of all new member states is nevertheless very small in comparison with the EU market.
4  BIS central bankers’ speeches  From principle to practice The question is then how the principle of consideration of financial risks and imbalances should be put into practice in monetary policy. How should the balance between the different tasks be managed? When determining this we must consider whether other tools than monetary policy are more suitable for managing financial risks, whether our concerns regarding household debt are justified and what effects monetary policy has on the imbalances and risks that concern us. I do not intend to conduct any deep discussion of the links between monetary policy and other tools today. As expressed by the Riksbank (2010), I note that it is not primarily monetary policy, but an efficient regulatory framework and supervision that is important to prevent financial imbalances. The way in which monetary policy should take into account financial risks may therefore depend on the formulation of the regulatory framework and the supervision. I shall return to this question when I discuss the new framework for macroprudential policy. Household indebtedness is worryingly high Also, I do not wish to get into a detailed discussion now as to whether the concern over rising house prices and household debt in recent decades is justified.5 It is clear to me that we do not fully understand what the underlying factors are. We therefore do not know whether the upturn is largely explained by fundamental factors or whether it reflects imbalances that have built up in the economy.

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8, 9 All else equal, the powerful strengthening of global linkages through steadily increasing trade has affected inflation dynamics in two ways (Chart 6). First, imports have become much more important components of costs. Unlike commodity shocks, changing cost pressures of intermediate goods take time to work through the supply chains into final goods prices. 10 This means that domestic monetary policy cannot focus exclusively on domestic marginal costs, since inflation at policy-relevant horizons is increasingly influenced by imported cost pressures. Second, there is the possibility that increased competition from overseas might have changed mark ups over costs and how they vary over the cycle. In other words, the slope of the Phillips Curve may have changed. The direction is unclear. Stronger competitive pressures might reduce the pricing power of domestic firms, limiting their ability to change prices over the cycle and so flatten the domestic Phillips Curve. Working in the other direction however, greater competition should raise firms’ willingness to re-set their prices, raising the slope. The balance of these effects is an open question. 11 Some prominent studies point to a flattening of Phillips curves across advanced economies. 12 For the UK, however, the evidence is less clear cut. When costs are measured  6  The average inflation expectations of professional forecasters at the two to three-year horizon is consistent with its historical average. And measures derived from financial market prices, such as from swaps, also remain close to historical averages.

While on the surface the response to the major shocks of the past decade has been a common rates cycle (Chart 3 – bottom panel), the reality has been an unprecedented broadening of monetary policy instruments and increased policy divergence. With the end of additional QE, policy in the US and UK has stopped easing and there is the prospect – when conditions warrant – of tightening. The start of normalisation is set against determined easing of policy in the euro area and Japan as well as now across many Emerging Market Economies including China. III. Common linkages  Global inflation dynamics are driven by common global linkages through commodities, trade and finance. Commodities The combination of the oil shock and the absence of credible monetary policy frameworks led to high and sustained correlations of headline inflation in the 1970s. And even though the oil intensity of production has since fallen, commodity price shocks remain an important determinant of the global inflation landscape today. 4 Energy and food prices contributed around three percentage points to the global inflation spike at the onset of the crisis and are currently weighing on global inflation by around ½ percentage point (Chart 4). 5 However, in terms of policy credibility, the contrast with the 1970s is stark. As noted, correlations between core inflation rates today remain low; and with credible monetary regimes anchoring inflation expectations, policymakers can look through the one-off price level effects of oil shocks.