samchain/econo-pairs-v1 huggingface dataset:
Figure 6 Gross fixed capital formation (annual change, percent) 60  60  40  40  20  20  0  0  -20  -20  -40  -40 09  10  Total investment  11  12  Construction & other works  13 Machinery & equipment  Source: Central Bank of Chile. BIS central bankers’ speeches  9  Table 1 International baseline scenario assumptions 2012  2013 (f)  GDP growth Trading partners' GDP World GDP at PPP  3.4 3.1  3.6 3.3  3.4 3.0  3.4 3.0  United States Eurozone Japa China India Rest of Asia (excl. Japan, China and India) Latin America (excl. Chile)  2.8 -0.6 1.9 7.7 5.1 3.8 2.7  1.9 -0.4 1.1 8.1 6.3 4.3 3.3  1.7 -0.4 1.8 7.6 4.1 3.8 2.6  1.9 -0.4 1.6 7.7 4.5 3.9 2.4  LME copper price $ Brent oil price $  361 112  350 108  332 109  332 109  Terms of trade  -4.1  -0.4  -3.9  -3.2  March'13 Report  Dec.'13 Report  March'14 Report  2014 (f) March'13 Report  Dec.'13 Report  IPoM Mar.

In the short term, the anticipated normalization of the monetary stimulus could lead to a worsening of financial conditions for the emerging world, inducing new episodes of volatility as in recent quarters. Going forward, the effect of increased external demand and higher commodity prices would prevail, with positive effects on economies like Chile that have solid fundamentals. Overall, the risk associated with the complex fiscal and financial situation in the Eurozone is still present and, moreover, heightening of geopolitical tensions in Ukraine could affect commodity prices, as well as confidence in Europe. At the local level, an important part of the economic slowdown of recent quarters is due to a drop in investment. The baseline scenario assumes that this phenomenon will not deepen and for some components it will even be reversed. But there are risks, particularly since the drop in investment in late 2013 was sharper than expected. For example, it is possible that, due to its natural inertia, investment may remain weak for longer than foreseen. Another risk is that a deterioration of the global economy may pull down the copper price below its longterm level, deferring new projects and slowing economic growth. Still locally, inflation of recent months, like the projections included in the baseline scenario, show limited pass-through of the peso depreciation to prices, in line with economic fundamentals.
The Riksbank has deliberately altered its balance sheet in recent years, but there are also changes in our environment that have affected the balance sheet, leading to its current composition. The way the balance sheet looks, combined with the developments in interest rates and yields on the Riksbank’s assets and liabilities also have decisive significance for the Riksbank’s capacity to make a profit. We need to understand the Riksbank’s balance sheet to be able to understand the connections. How has the balance sheet developed over time? And what do we think will happen to it in the future? How does our current balance sheet affect the Riksbank’s possibilities to make a profit? In conclusion, I intend to comment on the current situation with very low international interest rates, and what will happen if (or rather when) interest rates begin to rise. What will this entail for the Riksbank’s possibilities of making a profit? BIS central bankers’ speeches  1  The Riksbank’s measures are reflected in the balance sheet The Riksbank thus does not have the aim to make a profit, but the bank’s possibilities to make profits are nevertheless very important. They are connected to the Riksbank being able to conduct its monetary policy independent of the government and parliament. The Riksbank needs to be financially independent to do this in a credible manner.

The role of the Riksbank in this situation is, when necessary, to be able to provide liquidity assistance at short notice. With today’s Swedish banking system, it may also be necessary to provide such assistance in foreign currencies. We therefore asked the National Debt Office on two occasions to borrow foreign currency on our behalf to strengthen the currency reserve. All in all, we borrowed foreign currency to a value equivalent to SEK 200 billion. However, the foreign currency reserve has grown by SEK 325 billion, while the strengthening by means of the National Debt Office loans amounted to SEK 200 billion. The difference is partly due to the krona being weak during 2014 and the value of the foreign currency reserve, measured in krona, therefore having increased. The krona depreciation is also visible in the fact that the value of the foreign currency loans, which a year ago was SEK 193 billion, now amounts to SEK 228 billion. But the foreign currency reserve has also grown as a result of the return on the bonds in the foreign currency reserve being reinvested in new bonds instead of used to pay dividends to the government. As a result of this, the Riksbank has instead had to borrow from the banks that are its monetary policy counterparties to pay the dividends.
Earnings are obviously following the same trend as in 2007 and reflect the persistent effects of the risks associated with the subprime crisis, with valuation losses on assets and higher risk-related costs. A compound indicator, such as ROE shows a decline in profitability, but it still stands at an average of 14 per cent, compared to 18.9 per cent for the three largest banking groups in the first quarter of 2007. On this point, I would like to put this decline into context. It follows several years of exceptional profits, which raised questions about their sustainability. Despite declining income, the French banking system is still financially sound: the Tier 1 solvency ratio based on original own funds stood at an average of 7.1 per cent for the three largest banking groups at the end of 2007, much higher than the minimum ratio of 4 per cent set under Pillar 1 of the Basel II Accord. Banks increased their solvency ratios in the first quarter of 2008 and the Commission Bancaire attaches a great deal of importance to this effort. The benefits of business diversification, the effectiveness of the measures taken to limit risk exposures and the satisfactory capital levels have also enabled the major banking groups to remain highly rated by the leading international agencies. 2  BIS Review 82/2008  2. The current economic situation calls for vigilance nonetheless, since banks must be ready to cope with new risks that may occur at any time.

European countries, by contrast, had a full range of workable  BIS Review 53/1999  2  options and chose the euro only after a long and thorough process of analysis, deliberation and preparation. If adopting a fixed rate was going to succeed anywhere, Hong Kong was certainly a prime candidate, because of the proven flexibility of the economy - not least the labour market, in terms of both inter-sectoral mobility and wage-cost flexibility. What has been surprising to many outside observers about the road to the euro is that, while it has all along been acknowledged that greater internal flexibility within the member economies would be required as a substitute for adjustment of relative price levels via the exchange rate, progress in that direction has been extremely slow. Indeed, in the period since the euro proposal first acquired real momentum it is probably true to say that some of the internal adjustment mechanisms in participant countries have become more rigid rather than less so. It is perhaps not surprising, therefore, to hear of worries about possible tensions in policy-making which the persisting disparities of economic performance across Euroland may cause. I have even read - but from sources which are probably more gossip than anything else - of the possibility of Maastricht budget deficit criteria in parts of Euroland being breached in order to sustain or stimulate growth. Of course, you may argue that this - budgetary relaxation - is precisely what we are doing in Hong Kong.
And in closing, I wish to say this: We have a tendency to give little thought to our important economic and societal infrastructure until it gives way. This is true of electricity and heat utilities, water and sewage systems, and matters such as payment intermediation. But fortunately, we have specialised groups of people who monitor such systems, and within the Central Bank and its subsidiary, Greiðsluveitan, is just such a group specialising in payment intermediation. The banking crisis put domestic payment intermediation to the test. The system passed that test, although banknote inventories were very slim at one point. Since then, significant work has been done to enhance payment intermediation security and to learn from the weaknesses that came to the fore during the crash. In 2011, changes were implemented in the banks’, savings banks’ and Central Bank’s decades-long joint ownership and operation of payment intermediation infrastructure, which is now solely in the hands of the Central Bank. In addition to improvements in security, emphasis has been placed on enhancing transparency and disseminating information on payment intermediation. In part for this purpose, the Bank has issued two reports on payment card transactions: a report on credit card transactions, issued in 2011, and a recent report on debit card transactions. We hope that both of these reports will increase all stakeholders’ knowledge and understanding of the payment card market and will highlight the items in need of improvement.

The way you will monitor and communicate information to the public is very important. In this context, I would like to underline that the Bank of Albania shall be very open to assist. To this aim, we have recently made the Bank communication office functional, thereby meeting one of short-term FSAP recommendations. I avail myself to this occasion to stress that our immediate plans are to provide a more contemporary communication approach, in particular in the context of preparing and launching educational and training packages, targeting different interest groups. From the moment we were acknowledged to FSAP recommendations, our institution started listing them by priority and by institutional right. As also monitored by you, we broadly discussed in the Forum organized in the first days of December the issue of establishing a Monetary Policy Committee. With regard to banking market developments, the Bank of Albania sticks to its engagements to augmenting the opportunities of commercial banks in the securities market. In more concrete terms, starting from September the Bank of Albania charged a fee for the operations carried out in its windows, and in early December the two-level securities register was placed into function. Pursuant to FSAP recommendation and with a view to enhancing daily liquidity management, the intra-credit regulatory basis was amended. The new bill “On Banks in the Republic of Albania” is complete and ready to be presented to banks for discussion.
And they also signal that liquidity will keep expanding, which supports a flattening of the term structure and further supports the easing of real interest rates and the exchange rate. The effectiveness of these signalling effects is predicated on the implementation of our programme in full, as we have communicated – that is, we will maintain the pace and volume of our intervention until we see a sustained return of inflation towards a level below, but close to, 2 % over the medium-term. In all these ways, our asset purchase programme therefore represents a continuation and extension of our existing measures – it reinforces our credit easing and more generally the bank lending channel. In this sense, I share the view that “quantitative easing” is something of a misnomer. To be sure, the quantity dimension of large-scale asset purchases matters, but only insofar as it affects prices and hence credit conditions. At the same time, we have to clearly distinguish instruments and objectives. In extraordinary circumstances we may need new instruments to meet our traditional objective. But what anchors trust in the central bank is that our objective and strategy stay, constant – and this is even more important when monetary policy becomes more unconventional. For this reason, innovative ideas to change our strategy, such as targeting a price level, would in fact be counterproductive in the current environment. Out goes also the misguided idea to increase our definition of price stability.

In normal times my preference would naturally have been to look through such a development provided that it did not feed into medium-term expectations. Indeed, we had seen inflation fall into negative territory driven by oil prices in 2009, and we had not reacted because we were confident that it would be transitory. The conditions we faced in January this year, however, gave us no such comfort. Our analysis showed that the persistence of low inflation across a range of statistical metrics was higher than in 2009. Measures of core inflation were also less sticky. But for me what was decisive was the loosening in the anchoring of inflation expectations we were witnessing, even at maturities and at horizons that we would normally expect to be more resilient to short-term inflation dynamics. This was in stark contrast to 2009 where inflation expectations hardly moved, even at the short end. The public sector purchase programme It was in this context that we launched the third part of our response, the ultima ratio decision to purchase assets, including public ones, as a tool of monetary policy. It was absolutely crucial that we lifted and re-anchored inflation expectations and warded off these potential second round effects. This is not only because stable inflation expectations are vital for medium-term price stability. It is also because, with interest rates at the effective lower bound, any fall in inflation expectations implies a rise in real interest rates, counteracting the credit easing we were trying to engineer.
–  Or should it be deposited in a bank or lent through another channel? Even before discovering oil, the state had long been a substantial direct owner of Norwegian companies. The value of state investment in Norwegian companies is more than NOK 600 billion. 15 The state owns more shares in Norway than in the US where the oil fund has its largest investments. 16 But will substantial investment in one’s own business – or one’s own nation – guarantee growth and prosperity? Many OPEC countries received enormous income after the oil price shocks in the 1970s. They later not only experienced low growth, but negative growth. 17 Professor Ragnar Torvik writes that one of the main reasons behind the decline was that such a large portion of the additional income was invested domestically. Politicians invested in projects that may have brought political gains – but resulted in economic loss. 18 We can also draw on Norway’s historical experience. In the post-war period, the Norwegian economy was to be reconstructed through a large-scale investment programme. 15  Report no. 13 to the Storting (2010–2011) Aktivt eierskap – norsk statlig eierskap i en global økonomi [Active ownership – Norwegian state ownership in a global economy], Ministry of Trade and Industry (in Norwegian only): http://www.regjeringen.no/pages/16193771/PDFS/STM201020110013000DDDPDFS.pdf) and the annual reports of the Government Pension Fund Norway and the Government Pension Fund Global.

Along with the initiatives being developed to modernise and harmonise insolvency procedures and to tackle the vulnerability arising from the scale of the nonperforming loans still on bank balance sheets, the euro area economies must reinstate a reform agenda geared to enhancing productivity and to improving both the flexibility of product and factor markets and the business environment. Over recent years the monetary union and the European integration project have overcome the difficulties that called into question its existence. At present, there is some consensus on how to proceed in order to strengthen the project and to enable the ensuing benefits to be clearly perceived by all European citizens. European governments and institutions have a clear responsibility to heed the lessons learnt and to provide the appropriate economic policy responses. Thank you for your attention. 7/7
Moreover, households’ interest rates may rise without the Riksbank raising the repo rate – if problems arise in the banking sector that mean the banks’ financing costs rise. If the global tendencies that have pushed down the real interest rate are reversed, this would most probably push up interest rates in Sweden too. And one should remember that it is easy to increase the debt when the interest rate is low, but more difficult to reduce it when the interest rate is high. Figure 4: Indebtedness as a percentage of GDP  Note. Per cent of GDP. Source: Statistics Sweden  Almost all major financial crises have been preceded by a large increase in credit volumes. 7 There is no consensus on why this is the case, but I believe that increased leverage means increased risks. Moreover, if short market financing becomes more common when credit grows rapidly, the risks linked to banks’ short-term liquidity management increase. The global financial crisis concludes the Great Moderation The dream of a world where fine-tuning monetary policy eliminates cyclical fluctuations and leads to an entirely stable economic development was definitely  7 See, for instance, Jorda et al. (2013). 7 [25]  burst by the financial crisis 2008-2009. In the United States, the foundation for the crisis was created when borrowers with weak debt-servicing ability were given the opportunity to take large loans with their homes as collateral.

This suggests that the industry is ripe for transformation to a new growth trajectory. The industry in essence has not delivered the required results. Jumping the “S-curve”: The need for positive feedback loops Successfully jumping the cusp of the “S-curve” is the only way to realise the aspiration of a deeper and more diverse insurance market. This calls for transformational change, driven and reinforced by positive drivers that will revitalise the industry. In the context of financial services today, these drivers focus on three “T”s – talent, technology and trust. These three factors can be harnessed to catapult the industry onto a path of new and stronger growth, or they can precipitate its decline over time. The industry must secure the former for its future expansion or else it will continue plateauing. Let me speak briefly on these three factors. Firstly, we must grow the talent we need to bring our insurance and takaful sector to the next level. As our economic structure evolves, we will need a deep pool of insurance and takaful professionals who can develop and support new solutions for managing risks. Unfortunately, talent shortage has been a persistent issue which, if not resolved, will not only hold back the industry from gaining new ground; it could lead to a further retrenchment of business growth. The industry needs to make further efforts to attract and nurture new talents.
The main changes in the State and Social Security Budget for 2016 are, on the revenue side, the application of the second phase of the tax reform designed in 2014 and, on the expenditure side, still in the context of observing the spending ceiling, certain expansionary measures such as the approval of a wage increase of 1% for public employees, payment of the second part of the salary payment eliminated in 2012, and the general increase in the average staff replacement rate to 50%. The 2016 Budget Plan presents an estimate of the impact of these measures on regional and local governments, which are the levels of government that manage the most labour-intensive public services. Noteworthy in the area of Social Security is the revaluation of pensions by 0.25%, in accordance with the application of the new revaluation index. In light of the macroeconomic developments envisaged and the above-mentioned measures, the 2016 Budget Plan anticipates growth of around 4.5% in overall general government revenue, which is slightly higher than projected nominal GDP. This would take the public revenue/GDP ratio to 38% in 2016, compared with 37.8% estimated for 2015. On the expenditure side, the State spending ceiling, the improvement in the economic situation and the application of the above-mentioned measures to overall general government would – according to the estimations of the 2016 Budget Plan – give rise to a decrease of 1.4 pp in the public expenditure/GDP ratio.

Thomas Jordan: Challenges for Switzerland as a financial centre Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the NZZ (Neue Zürcher Zeitung) Capital Market Forum, Zurich, 3 September 2012. *  *  *  I would like to thank Raphael A. Auer for his support in writing this speech. I would also like to thank Daniel Heller, Rita Kobel and Peter Kuster for their insightful comments. Introduction “If you see a Swiss banker jumping out of a window, follow him, there is sure to be a profit in it.” This famous saying, attributed to the French writer and philosopher Voltaire, has been in circulation for more than two centuries. In recent years, however, the reputation that Swiss bankers have for turning a profit under all circumstances has been somewhat tarnished. Pressure on the Swiss financial centre has been intensifying, due mainly – but not exclusively – to the financial crisis. For banks domiciled in Switzerland, doing business and making money has become more difficult. But this is not the first time that Switzerland as a financial centre has faced stiff headwinds. Throughout our history, Swiss bankers have managed to draw the appropriate conclusions, and change course in time. Allow me, therefore, right at the outset, to say this: I am convinced that the Swiss financial centre will be successful in overcoming the many challenges ahead, and that it will remain an important pillar with regards to the wealth of our nation.