samchain/econo-pairs-v1 huggingface dataset:
And as it is difficult to pass negative interest rates onto retail customers and as the introduction of fees provides only limited remedy, some of the banks will have to adapt their business models. Also, consolidation will continue to be necessary to increase efficiency in the long term. We are now already seeing that concerns about the future profitability of banks are affecting their share prices. The euro area bank index fell by around 40% between August 2015 and August 2016. This decline was driven by, among other things, a worsening outlook for the global economy and growing concern about the effects of the low interest rate environment and nonperforming loans. When banks’ share prices fall, their cost of equity increases, which could then reduce the net return on lending. This may cause banks to become more conservative in their lending in future and to raise the cost of lending. Internal calculations have shown that a decline of around 10% in a bank’s share price reduces corporate lending by around 0.5 percentage point. Allow me, however, to comment on the sometimes severe criticism, especially from Germany, that we face: the German banking sector is one of the largest in the euro area but at the same time it’s the least efficient. German banks have a cost-income ratio of 73%, which is much higher than that of the rest of the euro area.

I hope that we could learn a great deal from one another in this traditional session, particularly on how we should prepare ourselves for those potential risks in order to maintain internal as well as regional economic stability. In addition, I believe that the Meeting of SEACEN Board of Governors, tomorrow, will continue to play an important role in providing guidelines for future works and activities of  BIS Review 88/2007  1  SEACEN for the years to come. Our guidelines will be important for the SEACEN Centre to pursue its mission and become “a premier regional training centre for central banks in the Asia-Pacific region” according to its vision. Ladies and Gentlemen, This year is a very auspicious year for SEACEN over its 40 year-history as it marks the 25th year of the establishment of the SEACEN Centre. We are, therefore, very honored and privileged to host the Celebration of the Silver Anniversary of the SEACEN Centre, here again in Bangkok, where the Agreement to establish the Centre was signed back in 25 years ago. Over these past two decades, the SEACEN Centre has become increasingly important in promoting better understanding of the financial, monetary, banking and economic development matters. Its role does not benefit only the sixteen member central banks but also extends to several other countries throughout Asia and Pacific region. I would like to take this opportunity, therefore, to congratulate the SEACEN Centre for its work in helping bind together our community of central banks in the region.
Although this trend is impressive, much more needs to be done in order for the sector to meaningfully contribute to the growth of the country’s economy. Provision of finance to the SMEs can be a leading conduit for transforming our economy by opening up business opportunities as well as channelling resources more efficiently and effectively to the sectors that require it the most. BIS central bankers’ speeches  1  Distinguished Guests, To see a commercial bank bring its services to the heart of the informal sector is an encouraging sign not only to the Bank of Zambia but to the entrepreneurs of Soweto Market as it demonstrates the confidence that the Bank has entrusted in the SME sector. It is also our hope that the perception of banks being intimidating to the informal sector will be a thing of the past thus alleviating the challenges faced by SMEs in accessing finance. Furthermore, by partnering with the local entrepreneurs in Soweto Market which is the biggest market in Zambia, Stanbic Bank is encouraging a culture of banking for a myriad of Micro small and medium entrepreneurs. Because of the key role that SME sector plays in the economy, the Bank of Zambia will ensure that financial institutions are fully responsive to the unique characteristics of this sector. The Bank of Zambia attaches great importance to initiatives that seek to enhance the provision of financial services to the underserved sectors of the economy. The opening of this Branch today is a demonstration of this important objective.

I am also pleased that Stanbic fulfilled the new capital requirements well ahead of the time set for the exercise. Before the end of May 2012 Stanbic had fully met the capital increase requirement well ahead of the deadline of 31st December 2012. We are confident that the measures taken collectively by the Bank of Zambia and commercial banks will provide enhanced scope for more financing at lower cost thereby facilitating further growth of the economy and the SME sector in particular. Ladies and Gentlemen, Let me take this opportunity to appeal to all SMEs and individuals that obtain financing from financial institutions to be responsible borrowers by ensuring that these loans are paid back as the failure to settle obligations destabilises the banking sector and leads to increased cost of borrowing. As you all are aware, banks play a crucial role in financial intermediation and this is enhanced by branch network expansion programs. Thus, there is need for all financial sector players including MSMEs to play their role in augmenting savings mobilization which will in-turn provide the necessary financing to the productive sectors in the economy. In concluding, I would like to encourage banks to seek various ways of supporting the SMEs not only in Soweto Market but in other underserved places throughout the country. For instance Buseko Market in Lusaka and Chisokone Market in Kitwe would offer huge opportunities for banks and other financial players.
I would first like to accentuate the widespread and laborious work carried out for many years, on both a national and international basis, to promote stability and prevent crises from arising, but without impairing the functioning of the markets. Experience shows that a necessary condition for avoiding crises is to pursue a fiscal and monetary policy that is aimed at creating stability and that inspires confidence. The common denominator for countries that have experienced financial crises is that the problems were based on mistakes in economic policy and deficiencies in regulatory frameworks. The financial market is often merely the messenger illustrating the fundamental problems. It is important that the choice of exchange rate regime is in line with the economic policy pursued and with the capacity of the economy to adapt. Countries that have experienced currency crises during the 1990s have had fixed, but adjustable, exchange rates. Today, therefore, an increasing number of countries choose to have either floating exchange rates with inflation targets, or completely fixed exchange rate regimes, such as currency boards. Experience also shows that it is necessary to have a general regulatory framework that is applied properly, and that contains norms and institutions, in order for both national and international financial markets to function well. Countries therefore cooperate in international organisations, such as the BIS, the central banks' organisation in Basel, to work together on producing norms for suitable regulations and norms in various fields important to financial stability.

A Swedish export company with income in dollars, but paying out wages and taxes in kronor, must exchange dollar income for kronor. The company transfers the foreign exchange risk to the bank, by selling dollars for kronor. This can be done in two ways: either the company sells the dollars when it receives them, on the spot market, or it sells its future dollar income as soon as it receives an order, on the forward market. In both cases the bank buys dollars and thus takes over the foreign exchange risk. The bank also makes a charge for doing this. Today the margins in foreign exchange trading are 0.02 per cent. The bank's foreign exchange risk thus increases, unless another client happens to make an equally large foreign exchange transaction in the opposite direction at exactly the same time, ensuring that the bank's holdings of various currencies remains unchanged. This is, of course, very unlikely. The export company's foreign exchange transaction therefore gives rise to several transactions between banks, with the aim of distributing the foreign exchange risk throughout the banking system. This means that the clients' purchases and sales of various currencies and in various banks are matched against one another, to avoid an increase in the total risk in the banking system. The first foreign exchange transaction will therefore lead to many new transactions before all of the banks have once again achieved a healthy level of risk taking.
With a predictable monetary policy, market participants can react to new information in a way that contributes to stabilising developments in output and inflation. Norges Bank’s interest rate forecast satisfies two main criteria. First, the interest rate is set with a view to stabilising inflation close to the target in the medium term. The horizon will depend on disturbances to which the economy is exposed and the effects on the path for inflation and the real economy ahead. Second, the interest rate path provides a reasonable balance between the path for inflation and the path for capacity utilisation. In the assessment, it is taken into account that asset prices, such as property prices, equity prices and the krone exchange rate, can also influence the prospects for output, employment and inflation. The results of this trade-off are presented in the Monetary Policy Report in the form of a chart that presents central projections for the interest rate, inflation and capacity utilisation in the economy. Even though Norges Bank publishes an interest rate forecast, this does not mean that the interest rate will follow this precise path throughout the projection period. Forecasts of inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Data revisions imply that the current economic situation is not fully known. Our ambition must be to reduce uncertainty with regard to our own response pattern.

In the second quarter, sickness absence stood at 6.5 per cent of contractual person-days, although there are substantial occupational and geographical variations. In Rogaland, sickness absence is 1.4 percentage points lower than the national average. If sickness absence in the rest of the country falls as low as in Rogaland, nearly 30 000 additional person-years would be available for productive activity. Reduced sickness absence and reduced outflows into social security schemes – particularly among young people – would result in substantial economic gains. Economic developments The Norwegian economy is in a period of strong expansion after a marked upturn since summer 2003. The upturn followed a period of slow growth since 1998 and a mild slowdown in 2002 and into 2003. Growth in the mainland economy has been high since then, and higher than expected. When the key policy rate was reduced in 2003, demand and output picked up quickly. The upturn was supported by strong productivity growth, reflected in exports, petroleum investment and, after a period, public demand. So far in the cyclical upturn, the mainland economy has grown by an average of just over 4 per cent annually. The upturn is now in a mature phase. Even though output increased rapidly, it took a long time for employment to edge up. The increase in employment was for a long period slower than in the upturns in the 1980s and 1990s. Employment only began to pick up towards the end of 2005, and has since risen sharply.
This is the  4  BIS central bankers’ speeches  timeframe set by the Royal Decree-Law on the reinforcement of the financial system, although an exceptional three-month extension for operational reasons and a further three months in the event of an IPO would be possible. In recent years our banking system has made a very intense balance-sheet write-down drive (equivalent to 9% of GDP in the three years from 2008 to 2010), it has evidenced unprecedented transparency in respect of its most problematic exposures, and it has recapitalised drawing on private funds and also with relatively limited public aid when compared with other countries. In turn, Spanish legislation has risen to the challenges posed by the crisis with a raft of measures. These include most notably, due to their intended durability, the establishment of new solvency requirements, the modernisation of the legal regime governing savings banks and the creation of more flexible and efficient banking crisisresolution instruments. We trust we will move into autumn with all our homework completed. Thank you very much. BIS central bankers’ speeches  5

Apart from ensuring that our regulatory framework is progressive and our infrastructure is world class, MAS is also taking an active approach to promoting industry best practices in risk management. The guidelines that we have introduced are steps in this direction. This Risk Conference is another such initiative. The objective of organising such a conference is to highlight emerging fields in risk management by bringing together risk practitioners and academics, to share their experiences and exchange ideas. Such a forum will help the industry and regulators keep abreast of the latest developments in financial risk management I hope you will find this first Risk Conference that MAS has organised useful and fruitful. Thank you. BIS Review 7/2002  3
Dear colleagues, •  Before proceeding with the presentations and discussions today, let me share a few words on the experience of the BNB which provides examples, relevant for the topic of today’s conference. •  We have seen that the compatibility of monetary, micro- and macro-prudential policies is possible in reality, and not only in theory. The BNB has successfully implemented such a policy mix for many years, during all stages of the economic cycles, before and during the recent global crisis. •  We have also seen that it may take years and perhaps at least one serious financial or banking crisis, to design and then enforce central banking policies which are optimal for a country. In Bulgaria the policymakers, legislators and the public at large came to the consensus of introducing the currency board regime and the very strict banking supervision and regulations. This happened only after our own deep financial and banking crisis which took place in the mid-1990s. Our experience has convinced us that there are no universally superior or “one-size-fits-all” frameworks. Neither in the areas of monetary policy and banking supervision, nor in the design of regulatory structures or the governance of central banks. Alongside the processes of financial integration and global regulations and practices, which are inevitable, we believe that countries should be allowed to retain sufficient levels of flexibility to apply countryspecific solutions.

The mandates of central banks are changing, as they are strengthening their macro-prudential powers and embracing more explicitly the objective of financial stability. Some major central banks have for the first time assumed the direct supervision of credit institutions. Thus, this period of changes is going to be a landmark in the history of central banking. The current overhaul of banking regulations globally is also fundamental by nature. The scale of reforms in the regulatory framework for the banking industry, after the collapse of Lehman Brothers and the outbreak of the euro area sovereign debt crisis, could be compared only with the major reforms undertaken in the aftermath of the Great Depression in the 1930s. The sheer magnitude of this changeover, however, does not guarantee the elimination, once and for all, of the regulatory gaps and loopholes for the risk taking activities of banks. Moreover, while the wide-ranging changes in banking regulation certainly improve banks’ capital, liquidity, operations and governance, they are sometimes feared to have a discouraging effect on banks’ lending and other services in the public interest. What caused the recent wave of banking reforms, what issues regulators still need to consider, and how are banks expected to respond on a global or national level?
A risky policy dominates a tight policy, even when no other banks set risky policies ( ), when where  A tight policy dominates a risky policy, even when other banks set risky policies ( when  ),  where  In the intermediate range , there are multiple equilibria, with risky (tight) credit policies optimal when others adopt risky (tight) policies too. 7  is defined analogously to  BIS Review 168/2010  , but is conditioned on tight rather than risky policies. 5  2.2  The model in a “global game”  Next, we apply the technology of Morris and Shin (2003) to define a unique equilibrium from this game. Assume that banks observe fundamentals with some small amount of noise, with bank receiving signal  where the noise terms are distributed in the population with continuous density with support on the real line. Our model satisfies the conditions set out in Morris and Shin (2003) for there to exist a unique equilibrium in this game. In particular, each bank’s strategy when in receipt of a low signal falling short conditional on its signal satisfies when in receipt of a high signal of some critical level , and adopting strategy exceeding some critical level . The condition determining this threshold is (see Appendix)  (1) Condition (1) allows us to perform comparative statics on the unique coordination equilibrium.

Data is incomplete, theory patchy, policy experience negligible. Monetary policy then was conducted by trial and error. The same will be true of macroprudential policy now. Mistakes will be made. But as experience with the other arms of macroeconomic policy has taught us, the biggest mistake would be not to try. BIS Review 168/2010  25  Annex 1: Model proofs  Reputational probabilities: Here we motivate the conditions that . Suppose the market has prior that a banker’s ability is high. If a banker is of low ability, she achieves positive returns on loans with probability when the macro state is good, while high ability bankers achieve positive returns on loans with probability 1 when the macro state is good. When the macro state is bad, all bankers achieve zero returns. Let be the probability that the macro state is good. Let the market conjecture that under a risky policy and a bad state of the world, earnings are positive with probability , while under a risky policy and a good state of the world, earnings are positive with probability . Conditional on risky policies and observing positive earnings, the probability of being of high ability is  which is increasing in  . Similarly, under tight policies,  which is decreasing in effects. . The conditions in the text that  capture these  Equilibrium: Our model satisfies following conditions, set out in Morris and Shin (2003), viz. : Condition 1: Action Monotonicity:  is non-decreasing in .
If you buy today, you will always be able to sell at a better price tomorrow. Where the housing market is concerned, however, there is reason to question whether a bubble is possible at all. This is because most people do not purchase a home primarily as an investment but rather as a place to live. Consequently, a house buyer neither thinks nor behaves as an investor speculating on a quick and persistent rise in prices. There can hardly be many people who buy a home solely because they expect to gain financially through a rise in house prices! So assuming that speculation on future price increases doesn't exist, a bubble should quite simply not be able to occur. Some of you might now be thinking that this is just a convenient academic approach to the issue. After all, we have witnessed rapid price increases and even faster declines in the housing market, for example for tenant-owned apartments in metropolitan areas during the crisis at the beginning of the 1990s. In principle, I would be prepared to agree, if it proved impossible to explain the price rises with fundamental factors. In order to see if there are fundamental factors that could explain the recent price increases, it makes sense to look at the driving forces that could have been important for house prices, i.e. interest rates, primarily the post-tax real interest rate, household disposable income, the supply of housing and the demand that results from people moving to metropolitan areas in particular.

So to round off: Norway and Sweden have followed one another through the centuries, in war and peace, through crises and growth. And we can be thankful that we have succeeded in moving from poverty to wealth and becoming two of the world’s wealthiest nations. Often the central banks have been able to contribute to higher welfare, but sometimes monetary policy has unfortunately been destabilizing. Our joint history is continuing, we have common challenges to face going for-ward. Higher capital and labour mobility throughout the world opens new possibilities to raise welfare even further, but globalisation also require that we try to find common strategies across countries. We can also enjoy our similarities and continue teasing one another when we meet on the sports field. As Sweden now follows its team in Euro 2016, we can’t help but ask, oh where’s Norway? But on the other hand we can expect a lot of teasing from you in the next world cup ski event! BIS central bankers’ speeches  3