samchain/econo-pairs-v1 huggingface dataset:
As large portions of the revenues from oil activities accrue to the state, fluctuations in oil prices and oil revenues will primarily result in changes in allocations to the Petroleum Fund. Since all of the capital in the Petroleum Fund is invested abroad, such changes will in principle not influence the level of activity in the economy. This makes the Norwegian economy more robust to fluctuations in oil prices and thus less dependent on oil, even in the short run. Nevertheless, the mainland economy is not completely protected from fluctuations in the oil price. A fall in oil prices will influence petroleum investment and may thereby have a direct impact on employment in some industries. Household and business income expectations may also be affected. A shift in international developments may also have a direct effect on the Norwegian economy via financial markets. An international turnaround with a decline in equity prices could influence enterprises' possibilities for financing investment. Household wealth may also decrease. Norwegian households' direct ownership in enterprises is still smaller than in many other countries, which suggests that the effect on domestic demand via equity prices will be limited. Perhaps the most important transmission channel is the foreign exchange market. The experience of recent years shows that international financial market developments can have a short-term impact on the krone exchange rate. Heightened uncertainty and unrest in foreign exchange markets can lead to higher risk premia on small countries' currencies.

The projections presented in this Report foresee that this year the economy will grow again, and that output gaps will narrow further until closed in 2011. Monetary policy will remain very expansive in the coming quarters, which will decisively support the reconstruction process. At the same time, however, it will adjust in order to ensure that the process will take place within a context of stability and consistency with the inflation target. We should bear in mind that history, especially the last couple of years, has taught us the importance of price stability and how painful inflation is for the less privileged segments of our society. In addition, history has taught us that with volatile inflation comes a more volatile business cycle, which is very costly in terms of employment and output. Because of this, it is essential that the monetary stimulus complies with its role of backing the reconstruction efforts within a context of stable prices. Nothing will be gained by fostering a reconstruction that at the end will only translate into higher inflation with no benefits on the productive side and with negative implications for key relative prices such as the real exchange rate and real interest rates. That could become the prelude to costlier adjustments in the future. Our monetary policy has already given proof of its high capacity to adapt to drastic changes in macroeconomic conditions and this latest shock will not be the exception. Thank you very much.
We have launched a tough and comprehensive AQR and subsequent stress tests that should be completed by the end of this year. For the first time, these exercises will be conducted in a fully integrated way – under the aegis of the SSM –with full accountability of the results. Completion should mark a turning point where there will  BIS central bankers’ speeches  1  be no more doubts about the sustainability of our banks and credit should resume at a normal pace. 3. In the longer run, a major policy challenge for the euro area is to “reinvent” a new and robust financial integration model. We need sound cross-border capital flows, because we do not want the Eurosystem to intermediate permanently between borrowers and lenders from different countries. Developing a safe securitisation process should be a priority, despite the major technical difficulties. II. Is Europe facing the prospect of a lost decade? Questions about long-term growth are not limited to Europe. What we hear about our continent reflects a more general concern: the possibility of “secular stagnation” in advanced economies. Secular stagnation rests on the assumption that the natural interest rate is negative. This may happen for two reasons:   In the short run, we may have a downward shock on demand and an increase in savings resulting from the deleveraging process.

I see at least two reasons for not going down that road. The first is that the technologies that allow these changes in scale carry progress. Technological revolutions, from the early stages of the internet to the boom in blockchain protocols to artificial intelligence, have given rise to, and can still continue to do so, new services, many daily improvements for consumers, in particular financial services including, and we are extremely attentive to that, better financial inclusion. Second, there is no reason to assume that the current framework for regulating financial  services is intangible and cannot be adjusted to respond to changes, including in scale, brought about by technological innovation to ensure that potential risks are properly managed. A simple example: the customer experience for opening a remote account in France, compared to other European countries, wasn’t sufficiently fluid. The players that we have met often mentioned as a potential impediment the French transposition of the 4th European antimoney laundering directive, which would not make it possible to fully capitalise on the advantages of technology. We have taken note of the problem and set up a working group, led by the ACPR Fintech – Innovation unit within the framework of the ACPR-AMF Fintech Forum, bringing together technology providers, financial institutions and public authorities. The aim was to co-construct proposals based on an objective assessment of regulations and technological state of the art, while ensuring the efficiency of AML/CFT frameworks.
From all this it is clear that the economy will be characterised by vigorous expansion this year and into 2006. BIS Review 22/2005  3  According to the inflation forecast also published in Monetary Bulletin, the outlook for inflation has improved since the previous forecast in December but will remain above target two years ahead. The higher policy rate and a substantial appreciation of the króna will subdue domestic demand and dampen rises in import prices, especially in the short term. Inflation will therefore be somewhat lower over the forecast horizon than was forecast in December. The Central Bank forecasts an inflation rate around the 2½% target one year ahead, which is lower than forecast in December. Two years ahead, inflation is forecast at just over 3%, which is also somewhat lower than the rate forecast in December, although still above target. It is important to remember that an unchanged monetary policy stance and unchanged strong exchange rate are assumed over the forecast horizon. The forecast describes the way that the Bank considers developments are most likely to unfold if it takes no further measures than it had already taken. Obviously, uncertainty increases over the horizon of the forecast. A particular uncertainty is the exchange rate, which is at a historical high at present as I have discussed, posing a higher probability that it will give way over this period and inflation will increase.

The euro exchange rate remains high by historical standards (6% in real terms above its average over the past decade). Finally, interconnectedness, which creates contagion inside Europe, also works well beyond the euro area. Banking and market pressures have been transmitted globally. Asia may be 6,000 miles away from Europe, but, for the financial markets the distance is less than 30 seconds. Origins and causes How could the crisis have been allowed to develop? There have been lags in the decisionmaking process. Fiscal discipline has not been respected in the past. European rules have not been implemented. Also, some policy decisions have produced unintended consequences. One example is private sector involvement (the so-called PSI) in sovereign debt resolution. On the face of it, it sounds totally appropriate. Economists like saying that, once debt has become unsustainable, it is better to reduce it immediately. Beyond simple economics, PSI is seen as necessary for eliminating moral hazard and ensuring market discipline. When investors have taken excessive risks, they should normally pay a price. Finally, PSI has a strong, and legitimate, political appeal: tax payers cannot be called to bear the consequences of the reckless behavior of borrowers and lenders. 2  BIS central bankers’ speeches  However compelling, this line of reasoning misses an important point. The sovereign bond market is more than a means of financing governments. It is the pillar on which all financial systems ultimately rest.
But the role of capital is primarily to reduce the risk of a bank failing at all. When the bank suffers losses it should have a capital buffer to meet them and thereby be able to continue its operations. What this means for the banks in the end, as for the rest of us, is that they must try to earn more money than they spend and have sufficient reserves to cope with the periods when they don’t. The banks manage this by constantly assessing the risk that a borrower will experience difficulties in meeting interest payments or paying off the loan. If this risk increases, the bank leaves a good margin for it by adjusting its lending or allocating reserves for potential losses. But as borrowers are affected by so many factors that are difficult to judge – for instance, economic recessions have very different impacts on different sectors and geographical areas – it is easy for the bank’s losses to become larger than expected. The minimum capital required by the regulations should act as a buffer against such unexpected losses. It is necessary for everyone to be convinced the bank will survive in order for it to survive. If the bank is perceived as unsteady, the supply of money will be cut off. A lack of sufficient capital buffers can easily shake confidence in the bank. And this was exactly what happened when the crisis loomed large. People were uncertain how badly off the banks were.

From my point of view as a central banker responsible for ensuring that our payment system functions properly, it is difficult to answer these questions on the role of banks with anything other than caution yet confidence for two main reasons, on which I would like to focus my introductory remarks at this point: first, the stability of our payment system does not rest solely on our ability to make our central bank money available in digital form, and second, the effective introduction of such a digital currency raises complex problems that cannot be solved to the detriment of commercial banks in order to produce the expected effects. 1.The stability of our payment system does not rest solely on our ability to provide a CBDC Changes in payment expectations and habits resulting from the digitalisation of our economies, the implementation of new technologies such as distributed ledgers, the emergence of new players such as Fintechs and BigTechs, and the development of the use of new settlement assets such as crypto-assets are likely to profoundly alter our euro payments ecosystem. These innovations have the significant potential to improve the functioning of our payment system, in particular by making payment means simpler, easier and cheaper to use, and faster if not instantaneous. However, these innovations also carry risks for the smooth functioning of our payment system.
Conflicts of interest with regard to investments in mid and large cap banks can come about because, according to its mandate, the SNB is also required to contribute to the stability of the financial system. Under certain circumstances, this can mean that the SNB has an information edge over the market with respect to the financial situation of individual banks. In order to avoid any suspicion that the SNB might make use of this information edge in its position as an investor, we completely exclude all investments in equities of such banks. Moreover, by doing so, we prevent market participants from attributing any signal effects to our transactions. On the question of conflicts of interest, I would also like to stress that, as a matter of principle, the SNB does not own equities in any Swiss companies for investment purposes. Should equities of individual companies be excluded from the investment universe on the basis of ethical criteria? We have been discussing this question for a considerable time and last year we made a fundamental decision. We do not invest in companies that blatantly infringe certain ethical principles. This decision was already implemented in the fourth quarter of 2013. To be specific, we do not hold equities in companies which produce internationally banned weapons, seriously violate fundamental human rights or systematically cause severe environmental damage. We believe that it is in the best interests of monetary policy if the SNB achieves sound investment returns through the widest possible diversification.

In the initial stages the risk and returns structure of the portfolio improves. The expected return increases and the expected risk decreases. However, once a given equity share is exceeded, at point B, a trade-off between risk and return begins. At this stage, each further increase in potential return has to be ‘bought’ at the cost of increased risk. In the extreme case, we reach the situation of a portfolio consisting solely of equities (point C). The equity share we are aiming for is obtained by weighing up additional risk against higher potential return. After potential return and risk have been weighed up in this way at the SNB, what does the final result look like? Fundamentally, our efficient frontier presents less attractive risk/return combinations than in the case of many other investors. That means our efficient frontier tends to look more like the right-hand curve in slide 7. In addition, the point at which a further  1  According to a survey published in early 2013, only eight of 60 central banks worldwide held equities as part of their currency reserves at that time. A further six central banks stated that they intended to diversify into equities in the future (cf. Pringle, Robert and Nick Carver, eds. 2013, RBS Reserve Management Trends 2013, London, Central Banking Publications). 4  BIS central bankers’ speeches  increase in the equity share means a rise in total risk (point B’) is reached earlier than in the left-hand curve. I have already talked about the reasons for this.
Michael C Bonello: The banking environment in Malta Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the Raiffeisen Economic Forum, St Julians, 21 May 2004. *  *  *  The history of banking in Malta goes back at least to the earliest decades of the nineteenth century, when the island’s strategic importance as a centre for entrepot trade encouraged the establishment of banking institutions. Among the better known foreign names before World War II was that of Barclays Bank DCO. This was a time when Malta was a British colony and part of the sterling area. Barclays remained in Malta after independence and the subsequent break with sterling in 1972, and contributed to the development of a cadre of bankers trained in the British banking tradition. It left only when the larger banks were nationalised during the 1970s. This coincided with the adoption of a policy of economic autarchy. The major banks were publicly owned and lending rates were set by the Minister of Finance, while the Central Bank controlled deposit rates. Nominal interest rates were kept artificially low, often resulting in negative real rates. Strict exchange controls were imposed to sustain the value of the Maltese lira. In the absence of money and capital markets, the banking sector dominated the financial system. In the circumstances, however, the sector did not operate efficiently.

And finally, I will take a brief look at digital central bank money for the general public, a subject currently generating a lot of debate, and will outline why there is no need for it if the system for cashless retail payments is efficient and innovative. The potential of DLT for the FMI So let me begin with the potential that DLT has to offer for the FMI. The FMI is the bedrock of our financial system, facilitating the reliable transfer of securities and money between buyers and sellers. The slide 2 shows a simplified FMI process chain for the settlement of a securities transaction. Transactions are first made via a trading platform, for instance a security is bought on the Swiss Exchange. This purchase is then cleared and settled. Security and money are simultaneously transferred between buyer and seller. In Switzerland, this takes place via the securities settlement system SECOM and the payment system Swiss Interbank Clearing, or SIC for short. It is entirely possible that distributed ledger technology could take hold in various fields. I would like to look here at two possible areas of application: securities settlement and crossborder payments. Page 3/8  One of DLT’s key characteristics is that it makes verified information available to a large number of parties simultaneously. It is therefore particularly appealing in the case of complex processes where coordination is required across a whole range of participants.
In the public sector, there are no absolute requirements as to profitability and efficiency. Public enterprises do not go bankrupt, and in many cases the authorities cannot allow a public enterprise to discontinue operations. This is a demanding starting point for a shift to more locally determined wages. The possibility of granting local pay increases might, however, increase efficiency if there are binding nominal budget limits for these entities and clear production requirements. When a higher share of wages is determined at the local level and coordination is reduced, it will be even more important to promote flexibility in the labour market and the labour supply. Otherwise, an increasing number of workers may be excluded from working life and unemployment may rise on a permanent basis, while the foundation for production is weakened. Effective labour market programmes, supported by a sound system for education and infrastructure, can facilitate these adjustments. It is also important to assess working environment and labour market legislation with a view to fostering greater flexibility. Hiring costs may be reduced and flexibility enhanced through greater scope for temporary employment and labour contracting. The throughput in universities and colleges can be improved. The financial incentives and entitlement thresholds in our social security system are also of substantial importance to employment. Pensions  In Norway, the employment rate is among the highest in the OECD area. This reflects both high labour force participation and low unemployment.

The future size of the Petroleum Fund depends on oil price developments. The guideline ensures that we only use the return on wealth that has already been accumulated. This makes policy robust to changes in oil prices and ensures that petroleum wealth will be of benefit both today and in the future. The guideline provides a framework that contributes to making the central government budget an appropriate tool for setting political priorities. It sets a limit on the share of petroleum revenues that the government can use each year and does not distinguish between domestic and foreign spending. This eliminates the waste of resources that two separate budgets would necessarily entail. The government invests petroleum wealth in foreign securities through the Petroleum Fund. Government wealth is thereby more diversified. These investments have no impact on the Norwegian capital market. Both mainland private saving and business fixed investment have been high in recent years. In Norway, credit and capital markets nevertheless feature some weaknesses, with thin securities markets and a narrow investor and ownership base compared with other countries. The reasons, and hence the solutions, can probably be found in the structure of the taxation of dwellings, property and financial assets, in a high level of state ownership of enterprises and in the organisation of pension saving in Norway. Investing even more government capital in Norway would reduce the return on investments in the Norwegian business sector and prompt other investors to invest elsewhere.
Banks that were directly involved, or had committed credit lines to other operators involved, were faced with growing uncertainty with respect to their liquidity needs and their own and other operators’ potential losses. It may be difficult for banks to manage their own balance sheets because of uncertainty as to the size of the loans they will be left holding on their books that would otherwise have been financed in the bond market. As a result, they became very reluctant to lend money to one another. Money market rates increased markedly, also in Norway. The contagion to the Norwegian money market reflects Norwegian banks’ heavy reliance on foreign funding. The eurodollar market has been a frequently used source of financing for Norwegian banks. This is both because banks provide substantial lending in US dollars, and because this market is used to procure liquidity in NOK. In the latter case, banks borrow in USD and then swap USD for NOK. BIS Review 141/2007  3  The turbulence in financial markets and uncertainty related to developments in the US housing market have led to a decline in market expectations concerning economic growth, and central bank key rates have fallen, in both the short and the long term. There is considerable uncertainty as to how long market unrest will last, and the impact it will have on the real economy.

Taken together, these factors should underpin the growth of private consumption and investment, and thus that of domestic demand. The positive outlook for the euro area is also supported by external developments. The outlook for growth of the world economy, and thus for growth of euro area exports, has remained favourable. Forecasts of world growth have consistently been revised upwards over the past few months. Expectations of a period of sustained economic growth in the euro area can also be found in euro area bond markets. Overall, longer-term bond yields in the euro area have shown a very high level of stability in the course of this year, with fluctuations being contained within a relatively narrow range. The annual rate of increase in the Harmonised Index of Consumer Prices (HICP) was 2.4% in July 2000. Recent consumer price developments in the euro area have been very much influenced by the strong rise in oil prices and the depreciation of the exchange rate of the euro. 1  BIS Review 74/2000  While monetary policy cannot address short-term developments in prices, it is imperative for monetary policy that medium-term upward pressure on prices be contained. The risk that the current pressure on the HICP might spill over onto costs and prices determined in the domestic economy must be taken seriously. This holds true in particular in the context of the favourable prospects for economic growth. The Governing Council reacted to this picture by raising the main ECB interest rates at its meeting on 31 August 2000.