samchain/econo-pairs-v1 huggingface dataset:
However, more complex systems and the potential of new participants increase the need for the public sector to take on partial responsibility. This is the background to the proposal for a new act on payment systems, which is under deliberation in the Storting. According to the bill, Norges Bank is to be granted responsibility for licensing and supervision of interbank systems in Norway. We wish to exercise this responsibility together with the industry and its participants. In the following, I will take a closer look at this interaction, how it may be developed and what our respective roles and responsibilities should be. I will also briefly touch on 11 12 13  CLS: Continuous Linked Settlement. Based on combined average daily turnover of about NOK 175bn in NBO and total collateral of NOK 37bn. VPS: the Norwegian Central Securities Depository. BIS Review 7/2000  10  our preparations for the new role as licensing authority, and provide a few opinions on which requirements must be placed on the interbank systems. 4.1. The importance of self-regulation  Norges Bank’s new licensing and supervisory responsibility will be a supplement to present-day self-regulation. Up to the present, participants have cooperated on standards, rules and routines for security and transaction exchange within the payment system. Agreements on obligations and responsibilities between the participants have assured coordination between banks. Self-regulation has primarily taken place through and between the two banking associations.

There are large sums of money arising from savings or other cash balances which must be (re-)invested somewhere. Returns from the safest sovereign assets have been driven to very low yields. And even some risky assets – like bank debt – are getting scarcer as a result of policy actions, directly or indirectly. Where are asset managers putting the money? BIS central bankers’ speeches  3  Chart 4 Financial market volatility(a)(b) Interest rates (RHS) CDS premia (RHS) Equities (LHS) Foreign exchange (LHS)  Per cent  100  Basis points  300 250  80  200 60 150 40 100 20  50  0  0 07  08  09  10  11  12  Sources: Bloomberg, Chicago Mercantile Exchange, NYSE Euronext, JPMorgan Chase & Co. and Bank calculations. (a) Three-month option-implied volatilities. (b) Average of FTSE 100, S&P 500 and Euro Stoxx 50 for equities. Average of three-month short sterling, euro-dollar and Euribor for interest rates. Average of five-year on-therun iTraxx Europe main and CDX North America investment-grade for CDS premia. Average of three month € $ $ Yen per $ and € for foreign exchange. There has been a renewed search for investible assets going on. Not the old, indiscriminate, invest-in-anything-with-a-high-return-and-ask-no-questions “search-for-yield”. It has so far been a much more calculated hunt. Not so much for return on capital but return of capital. Credit and liquidity risks are now being much more thoroughly appraised. In particular, investment firms have been avoiding the least liquid products.
The forecasts in our main scenario are always based on a combination of model analyses and judgements that take into account factors which the models either cannot capture at all or are unable to capture in a way we consider reasonable. These “hands-on” adjustments become particularly important when the historical correlations on which the models are based appear to have changed. The judgements may be of different types and opinion may be divided as to which factors are most important to take into consideration at any given meeting. My view is that the judgements should as far as possible be reflected in the forecast figures for inflation, the real economy and the repo rate that a monetary policy decision is based on. But I believe that we must learn to live with the fact that it is impossible to quantify all of the factors we monetary policy decision-makers consider should be taken into account in the monetary policy decisions. As I see it, there is no point in trying to produce, at any cost, a quantified adjustment of the forecast just to make a judgement one considers relevant fit into the monetary policy discussion. There must be scope to put forward arguments that appear reasonable, without necessarily having to translate them into exact probabilities or quantifying their effects on inflation and the real economy. As I see it, there is nothing wrong with having “misgivings” about a particular development and allowing this to affect the decision, without being able to exactly quantify the risks it entails.

4  BIS Review 134/2010  Reflections on judgements and monetary policy decision-making This leads me on to a slightly broader question regarding judgements and how they fit into the monetary policy deliberations. Let me therefore conclude with a few words on my views on this and how I approach a repo rate decision. It is sometimes claimed in the economic debate that we at the Riksbank rely too heavily on economic models and that this can lead us to make the wrong decision regarding the repo rate. My opinion is that economic models are important and absolutely necessary aids. They organise ideas and ensure that we have consistency in our analysis of inflation, production, interest rates, employment and so on. The models also help to identify weaknesses in one’s reasoning. The Riksbank has sophisticated models that provide good forecasts in themselves, but that also allow us to “experiment” with different repo rate paths and examine potential scenarios. Without these possibilities the preparation process would not function as smoothly as it does now. But of course this does not mean that we merely push a button, lean back and buy exactly what the models come up with. This is not how monetary policy decisions are made. And I don’t believe anyone would claim this was a good way of making these decisions. However good and sophisticated the models are, they are nevertheless simplifications of reality. They must therefore always be supplemented with judgements.
These incentives are offered in the context of the so-called "international headquartering" policy. According to the latest Central Bank of Cyprus forecasts of December 2022, the growth of the Cypriot economy is expected at 2,5% this year which compares well to the euro area average of 0,5%. Inflation is expected to decelerate in 2023, levelling at 3.3%, from 8.1% in 2022. Foreign investment in Cyprus, as I mentioned before, constitutes a significant driver for development. In recent years, major multinational firms in the Information, Communication and Technology industry (ICT), have relocated or expanded their activities in Cyprus, supporting Cypriot GDP and reinforcing the vision to transform Cyprus into an emerging technology hub in the Mediterranean. Cyprus' importance as a foreign investment hub is also reflected in the Greenfield FDI Performance Index1, created by FDI Intelligence, according to which in 2021, Cyprus was ranked in 18th place out of 84 countries included in this index (climbing by 50 places compared to 2020). Undoubtedly, the shipping sector is another important pillar of Cyprus' economic success. Limassol, Cyprus' maritime capital, is the home of influential names in the shipping industry, which boosted the country to the top ranks of the sector. Indicatively, Cyprus is the largest third-party ship management centre in the European Union, one of the largest in the world2 and is primed for further growth.

Constantinos Herodotou: Economic trends and outlook for euro area, impact of ECB monetary policy and outlook for Cyprus economy Keynote address by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the Annual Cyprus Maritime Forum, Limassol, 7 March 2023. *** I would like to thank Capital Link for organizing the Annual Cyprus Maritime Forum and for offering me the opportunity to talk about current economic issues. I will discuss inflation developments by contrasting the euro area with the US, in order to give a clearer focus on the dynamics and differences of the economic trends and inflation. I will also talk about the Cyprus economy, focusing on the reasons that kept our economy strong and the factors that will help safeguard its future path. Overview of international and euro area economic developments Let me start with contrasting economic and inflation developments in the US and the euro area. Even though both economies were hit by rising inflation, the factors behind it have been different. In the United States, demand factors have been the main determinants of the upward inflation trend, while in the euro area, price increases were, initially, mostly driven by the supply shock caused by the energy crisis. The post-covid demand recovery in the US was faster and stronger than in the euro area. As a result, the Federal Reserve moved earlier with actions to curb the accelerating inflationary pressures and in particular it started raising interest rates in March 2022.
I must hasten to mention, however, that in striving to meet these demands, banks must always comply with the regulations as stipulated in the Banking & Financial Services Act of 1994 as amended in 2000, to ensure the safety of customers’ deposits and stability in the financial sector. Any activities by banks, which do not meet the minimum standards provided for in the law, will invite close scrutiny and possible sanctions from the Bank of Zambia to bring the banks in line with the legal framework. Mr Chairman, following implementation of sound macroeconomic policies, the economy is relatively stable as shown by various indicators: •  Inflation is under control;  •  The Kwacha is stable; and  •  Interest rates are going down, although not yet as low as we would like them to be. The cost of borrowing has remained high in spite of the progress that has been made in the monetary and fiscal management of our economy. This high cost has, in turn, stifled the growth of the productive private sector, in particular the Small and Medium Enterprises (SME) sector, which should be the engine of economic growth of our country.

Caleb M Fundanga: Brief summary of economic and financial developments in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of Standard Chartered Bank Crossroads Branch, Lusaka, 25 September 2007. *  *  *  The Chairman of Standard Chartered Bank Zambia, Mr George Sokota Members of the Board of Directors of Standard Chartered Bank Zambia The Managing Director of Standard Chartered Bank Zambia, Mr. Tom Aaker Distinguished Guests Members of the Press And may I simply say Ladies and Gentlemen I am very pleased to be here today to officially open the new Crossroads Branch of Standard Chartered Bank Zambia. Mr. Chairman, as I have stated at various fora before, it is important for banks in Zambia to take the lead in implementing actions, which contribute to the development of the financial infrastructure and support the development of our economy. As you may be aware, Ladies and Gentlemen, we would like banks to: •  Open new branches, such as this one, to enhance convenience for our people to access banking services, thereby improving financial service delivery and empowering our citizens;  •  Provide loans to the productive sector to support economic activity, such as Mr. Sokota just described; and  •  Invest in latest state of the art technology, such as Standard Chartered’s new electronic Branch Banking platform.
Subsequent events in London changed that, however, including the FSA´s action against the Kaupthing subsidiary. The three leading commercial banks, representing about 85% of total banking assets, all collapsed. The Icelandic Financial Supervisory Authority took over their operations on the basis of newly adopted legislation, and they were divided into two entities, the new banks and the old. I will not expound on that process here, except to say that top priority was given to the maintenance of smooth payment intermediation and uninterrupted banking operations, and that efforts in that regard were successful in spite of measures such as the “freezing order” imposed on Landsbanki by the British authorities under the Anti-Terrorism, Crime and Security Act – a freezing order that originally extended as well to the Icelandic government, Central Bank, and Financial Supervisory Authority, among others. In fact, in the circumstances, the relative ease with which banking operations and payment intermediation continued to function bordered on the miraculous. The International Monetary Fund conducted an FSAP appraisal of the Icelandic financial system during the summer of 2008. The resulting staff report can be found on the Fund’s website. Another report, which was submitted to the Fund’s Executive Board in connection with the Icelandic government’s November 2008 request for a Stand-By Arrangement, includes the following statement:  BIS Review 22/2009  5  “Iceland’s overstretched, over-leveraged banking system was ill-positioned to cope with the global financial turmoil.

Global market conditions continued to deteriorate throughout 2007: share prices plummeted, access to credit became much more limited, and interbank business transactions more complicated at best. CDS spreads widened, including those of all the Icelandic banks. Many clung to the hope that conditions would improve in early 2008. That hope proved fruitless. Market conditions continued to deteriorate, and the supply of credit became tighter than ever. The Icelandic banks’ CDS spreads rose to very high levels. As I have mentioned, the banks began to increase their deposit business after the experience of early 2006 by offering favourable premiums. Retail deposits in branches and subsidiaries abroad grew quickly and soon became an important source of funding for two of the banks, particularly in 2007 and early 2008. But the bond markets remained virtually closed to them as the year 2008 progressed. At the beginning of May 2008, the Central Bank published its annual Financial Stability report, which included a detailed analysis of the state of and prospects for the financial system. The report pointed out vulnerabilities but also identified elements that tended to strengthen the system. The title of the Central Bank’s analysis was: “Current conditions test the banks’ resilience.” The report stated that the system was considered broadly sound but that contingency measures were needed. The chief risk factors were a vulnerable foreign exchange market and limited access to capital, which represented a short-term risk.
After reaching record highs in late August, it now more than doubles the average prices observed at the start of the year. In the absence of an integrated energy market, the economic consequences of this energy dispute are affecting European countries unevenly, depending on their different levels of dependence on Russian gas. For example, around 18% of mined energy products (gas and coal) and 9% of oil derivatives consumed in the EU are imported from Russia, compared with 3% and 2.5%, respectively, of those consumed in Spain. However, given the surge in energy prices and European economic integration, economies, like Spain, that depend relatively little on Russian imports, will also be affected. Indeed, according to the Harmonised Index of Consumer Prices (HICP), gas consumption accounts for some 2% of households’ consumption basket in the euro area, and for 1.5% in Spain. Yet beyond the direct impact on inflation of higher gas prices, inflationary pressures are also fuelled by firms’ higher production costs, as natural gas is the main source of energy for the industrial and services sectors (except for transport-related sectors),1 and by the impact of gas prices on electricity price formation in the European markets.2 In addition, the slowdown in economic activity in the hardest hit countries will pass through, via trade flows, to the other economies in the form of lower external demand.

Thus, the TPI will ensure that our monetary policy stance is transmitted smoothly and effectively across all euro area countries, a precondition for the ECB to be able to deliver on its price stability mandate. Purchases under the TPI would be conducted such that they cause no persistent impact on the overall Eurosystem balance sheet and hence on the monetary policy stance.7  5  This forward guidance made the first interest rate rise subject to: (i) expected inflation standing at 2% over an 18-month horizon; (ii) it holding at 2% in the medium term; and (iii) the course of underlying inflation being compatible with inflation stabilising at 2% in the medium term. The APP decisions were also linked to these conditions, with the guidance stating that interest rates will only rise some time after net purchases have ended. 6  At an ad hoc meeting held in June, we decided to activate the flexibility in reinvestment of redemptions coming due in the PEPP portfolio, as the first line of defence to counter the pandemic-related risks to the transmission mechanism being seen. 7  In any event, PEPP reinvestment flexibility will continue to be the first line of defence to counter pandemic-related risks to the transmission mechanism.
The rapid growth of recent years has brought the economy to full capacity, the unemployment rate has fallen below 1½%, resulting in substantial wage pressures in certain segments of the market. The sharp expansion has resulted in a rising rate of inflation. In the 12 months to the beginning of October, consumer prices rose by 5.3%. The Central Bank issues inflation forecasts every three months. The latest forecast was issued in July and it envisaged a 3% average rate of inflation in 1999 and a 4% inflation rate from the beginning to the end of the year. A new forecast will be issued in the beginning of next week. The deficit on the current account of the balance of payments has risen. In 1998 it equalled roughly 5½% of GDP. It is expected to be lower in 1999. During the upswing, the Central Bank of Iceland has followed a restrictive monetary policy as reflected among other things in the fact that at present the differential between Icelandic and trade weighted foreign money market rates is well in excess of 5%. The yield on 3-month treasury bills in the market is currently above 9%, and the so-called repo rate of the Central Bank of Iceland is 9%. That can be compared with the repo rate of the European Central Bank of 2.5%. Since September of last year, the Central Bank has raised its interest rates four times, by a total of 1.8 percentage points. In early 1999 it also levied a liquidity requirement on Icelandic credit institutions.

Recently, there have been negotiations between Canada and the EFTA countries on a free trade agreement and a similar agreement with Mexico has been discussed. If an agreement is reached the share of NAFTA countries in trade and investment could increase. Given Iceland’s membership in the European Economic Area and consequent tariff-free access to the European Union, Iceland offers a unique opportunity for foreign direct investment from non-European investors, including of course American ones. Concluding remarks To conclude, I would like to emphasise the importance which I attach to the liberalisation and opening up of the economy in recent years. The market is a strict master and provides strong discipline for economic policy. There is little doubt that Iceland is today reaping the benefits of general liberalisation. At present, we are also for the first time after the opening up of the capital account facing a challenge posed by the threat of overheating in the economy. Our policies and policy tools are being put to a test. 5  BIS Review 117/1999
What is often left out of the euro area storyline is the fact that the monetary union came on top of diverging trends in total factor productivity (TFP) as the catching-up process in the EU came to a stall during the early 1990s 9. A reversal in the catching-up process came regardless of high investments in some peripheral countries and high capital output ratios – rather than a sign of success, high investments were an indication of deeper-rooted problems. 10 Many peripheral countries did not need more investments per se to restart convergence – what they needed was a more efficient allocation of investments. The efficiency of investments fell victim to poor economic governance, rigid labour and product markets, low investments in information and communication technologies, defunct educational systems and the poor quality of corporate management. What the monetary union accomplished against such a background was to create an illusion of continuing convergence on the back of increasing foreign borrowing and investment in non-tradables, rather than to enact discipline in the economic governance of peripheral countries. The adoption of the single currency, followed by the consistent private sector interest spread, elimination of exchange rate risk and implied fiscal bail-out clause, cemented the duality in the quality of economic governance and boosted the suboptimal reallocation of resources in the periphery. So, we have observed financing low-productivity sectors (via real estate or government spending) with debt inflows, instead of capital flows fuelling further “catching-up”.

This is especially evident today in the environment of the anaemic growth and low inflation that require pursuing the expansionary stance of monetary policy, yet at a price of jeopardizing financial stability through the search for yield behaviour that might create new asset bubbles. To tame these risks, the tight stance of macroprudential policy is needed. Still, it remains to be seen how effective macroprudential policy can be in taming the risks that emanate from a long period of ultraloose monetary policy. The macroprudential ammunition at the disposal of central banks is another potential source of concern. The CRR/CRDIV has provided us with various tools: supply-side (such as capital and liquidity buffers) and demand-side instruments (such as LTV, LTI or DSTI ratios). However, one should be very careful not to err in calibration of those instrument, whether on the side that leaves insufficient coverage (effectively producing policy inaction) or on the side that creates too much of a burden (exceeding the net benefit of macroprudential policy in the medium term). Conclusion I hope this overview comes as a stimulus for further theoretical ad empirical research, regardless of the degree of agreement on the specific issues outlined in this speech. Therefore, I am looking forward to this conference. Hopefully, we will leave with answers to at least some of the questions raised and with a strengthened sense of obligation to continue with demanding work. Thank you. 8  BIS central bankers’ speeches