samchain/econo-pairs-v1 huggingface dataset:
Moreover, the opportunities for households and companies to borrow money have been restricted because access to credit has declined. The difficulties for banks and other lending institutions to find funding became acute when the financial crisis also hit Sweden with full force. They were forced to accept funding at shorter and shorter terms as these were the  BIS Review 2/2008  5  only markets that continued to function. In this situation the Riksbank intervened by, for instance, offering the banks loans at 3 to 6 months, that is, at much longer maturities than the daily and overnight loans normally offered. We took these measures to improve the functioning of the markets and to make it easier for the banks to continue to provide loans to households and companies. We will continue to offer this form of liquidity support as long as is necessary. The extraordinary measures taken by the Riksbank thus aim to ease the supply of credit and improve the functioning of the market. Although the measures primarily concern safeguarding financial stability, they will also improve the ability of monetary policy to stabilise inflation and the real economy. Substantial interest rate cut in December On 3 December we made the individually largest change in the repo rate since the inflation target officially began to apply in 1995.

The assessment of the Executive Board members was that cutting the repo rate from 3.75 to 2 per cent was necessary both to dampen the fall in production and employment and to attain the inflation target of 2 per cent. The situation in the financial markets both in Sweden and abroad had not improved appreciably, despite central banks and governments around the world implementing forceful measures. The markets for medium and long-term borrowing were functioning poorly, and sometimes not at all, and liquidity premiums were still high. The financial crisis had severely hampered access to credit and we could see clearly how this was reinforcing the downturn in the development of the economy. GDP had begun to fall in important parts of the world around us, economic indicators were at historically low levels and share prices had fallen drastically in recent months. Energy and food prices had fallen substantially since the peak in the middle of the year and this brought some relief for households. The downturn also contributed to a fall in inflation and in this way there was greater scope to counteract the negative developments by cutting policy rates, both in Sweden and abroad. Our earlier forecast was that the Swedish economy would be tangibly affected by the financial crisis and that there would be a sharp downturn in international economic activity.
The establishment of a national platform for processing card payments - would to provide a direct impact on reducing high costs and improving the current card processing practices, due to the extended cycles and involvement of more actors in the process. Such a platform would also support innovative services, such as mobile payments and e-wallet. The Bank of Albania is analysing the possibility to develop instant payment in our market as well. The implementation of such a project is deemed to have a direct impact on financial inclusion and on providing services at low cost. I invite you to actively participate in  discussions, in order to benefit as much as possible by the experience of other countries, and to analyse the possibilities presented by service providers that are invited to discuss on these topic in the afternoon session. Furthermore, regarding financial inclusion, the strategy pays special attention to the establishment of the concept of “basic” bank accounts with low costs, for the financial inclusion of all levels of population, irrespective of their economic situation. Last but not least, innovation in public services. The initiatives that digitalise and automate public services need coordination and access to various data electronic platforms, such as data of: citizens; addresses; and payments for these services. Any development should be accompanied with financial education of the population, as a precondition for success.

He suggested the design of a body that “would exert direct responsibilities” in a number of domains, including “the rigorous surveillance of both fiscal policies and competitiveness policies with the capacity, in exceptional cases, to take decisions immediately applicable in a particular economy that puts the euro area financial stability in danger”.3 Where does Malta’s fiscal situation and more generally the broader Maltese economy, fit into all this? Malta’s fiscal deficit ratio followed a generally downward path during the last decade, though the decline was interrupted during two particular years – 2003 and 2008 – each explained by particular events. More recently, the budget deficit ratio has fallen each year since the high of 4.6% that was recorded in 2008. A large outlay was incurred during that year for the restructuring of a government-owned enterprise. This outlay however brought to an end the provision to the same enterprise of further government subsidies, which would otherwise have added to future deficits. The ratio eased to 3.7% and 3.6% in 2009 and 2010, while the latest government projections, as indicated in the Pre-Budget Document, refer to a deficit of 2.8% in 2011 and 2.2% in 2012. Since 2009 the deficit ratio for Malta has been below the euro area’s average, but it has to be pointed out that this average is heavily affected by the high deficit levels of the Member States facing difficulties (Chart 2).
And it will be most relevant to look at such an adjusted index when we wish to evaluate the success of monetary policy. The guidelines for monetary policy may be formulated as follows: If it appears that inflation will be higher than 2½ per cent with unchanged interest rates, the interest rate will be increased. If it appears that inflation will be lower than 2½ per cent with unchanged interest rates, the interest rate will be reduced. There is symmetry here, so for us, it is just as important to avoid an inflation rate that is lower than 2½ per cent as it is to avoid an inflation rate that is higher than 2½ per cent. BIS Review 7/2002  1  A number of factors influence the interest rate’s effect on demand and inflation. These include debt and assets in the private sector, capacity utilisation rate in the economy, the situation in the foreign exchange market, the expected duration of a change in interest rates and the formation of expectations. 1  We have analysed the effect of a change in the interest rate in the light of different scenarios. The chart summarises these analyses and shows the range of outcomes for the effects of an interest rate increase on inflation. An interest rate increase of one percentage point over two years is estimated to curb inflation by 0.20-0.35 percentage point after two years, and by 0.30-0.40 percentage point after three years. GDP growth will be reduced by 0.25 percentage point the first two years.

Immediately after the meeting, the Bank issues a press release and holds a press conference. The press conference is transmitted live on the Internet. The introduction to the press conference is also published on the Internet. Newspaper articles and speeches are published in both Norwegian and English on our web site. Once a year, Norges Bank evaluates the projections made in the Inflation Report. The results are published in an article in Economic Bulletin. The Annual Report contains an assessment of the monetary policy that has been conducted. If actual price inflation deviates significantly from the target, the Bank will account for this in the Annual Report. Norges Bank’s interest rate decisions are a consequence of the response pattern that has been communicated, our analyses and our assessments of the effects of monetary policy. If we have succeeded in communicating our response pattern and thus laid the foundation for a credible monetary policy, the market should not in general be surprised by the Executive Board’s interest rate decisions. A measure of market surprise may be the change in money market rates from the day before to the day after a monetary policy meeting. A small change will indicate that the decision was in line with market expectations. On the other hand, a large change indicates that the market had expected another decision. 6  BIS Review 7/2002  This chart shows the change in deposit rates (red bar) and in three-month money market rates (blue bar) in connection with monetary policy meetings since 1999.
For example, the actual default of a major bank may seriously affect depositors’ savings (though reimbursement up to the insured level of retail deposits is to be provided by deposit insurance schemes) and the financing of otherwise profitable investment projects. But even in case of no actual default, SIFIs may pose serious challenges. Because of the potentially high damage to the financial system and the real economy in case of default, there is the expectation that governments and supervisors would not let a SIFI fail. This implicit support may provide an incentive to the institution to engage in profitable but risky activities, giving rise to “moral hazard”. It also means that a SIFI can finance itself at a lower cost compared to other similar institutions, which are not deemed to be systemically important. In short, incentives are misaligned and the playing field is distorted. These problems have probably increased in the wake of the financial crisis following some of the voluntary, and less-voluntary, marriages among institutions that have created even bigger and more complex financial groups. Reflecting these concerns, at the G20 summit of April last year in London, it was decided that SIFIs should be subject to an appropriate degree of regulation and oversight. At the same time, the G20 entrusted the FSB with the task of overseeing concrete regulatory steps and monitoring their implementation. The FSB is now considering various policy options to address the concerns I mentioned.

I turn now to a very important response in Europe to the crisis, which is of particular interest for the ECB: the establishment of the European Systemic Risk Board or ESRB. This new body will be responsible for macro-prudential supervision in the whole EU. In contrast to micro-prudential supervision, which focuses on the financial soundness of individual institutions, macro-prudential supervision looks at the financial system as a whole. Up to the late 1990s, the predominant view of policy makers was that if individual institutions were financially sound, the financial system as a whole would also be fine. Unfortunately, this is not always the case. Through various channels, institutions can be inter-linked so that problems emerging from one or some of them may spill over to the rest of the financial sector, setting in motion an adverse dynamic that affects all of them. A macro-prudential perspective, looking beyond the conditions of each institution in isolation, should help to detect and prevent such system-wide potential problems. Of course, there were already in place mechanisms for the monitoring and assessment of financial stability well before the financial crisis erupted, as evidenced by the financial stability reports published by the various central banks. But the financial crisis also demonstrated fundamental weaknesses in practices:  BIS Review 87/2010  3    First, while various central banks engaged in their own financial stability analysis there was not really a comprehensive analysis covering the whole EU and all elements of the financial system.
Mr. Heikenstein discusses the advent of the euro and EMU in relation to Sweden Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikenstein, at World Trade Day ’98 held at the Stockholm Chamber of Commerce on 25/8/98. I should like to begin by thanking our hosts for the invitation to World Trade Day ’98. The introduction of a new currency is due in our vicinity in little more than four months’ time. This is the first instance in modern times of a large group of sovereign states establishing a monetary union with a single currency. Along with the collapse of the Iron Curtain, the creation of the European Monetary Union is probably the most significant European event since World War Two. Today I shall be focusing on what the birth of the euro may mean for developments in the currency market. I shall not, however, be attempting to predict the euro’s future strength or weakness. Instead, I shall begin by discussing factors that could affect the single currency in the course of the changeover and the somewhat longer term. Then I shall consider how the euro is likely to affect the position of Sweden’s currency, the krona. I can say right now that, basically, I do not believe that the euro will fundamentally alter either the role of the krona in Sweden’s economy or, for that matter, the value of the krona in the long run.

We at the Bank of Thailand believe in the pursuit of 1  United Nations. “Our Common Future: World Commission on Environment and Development.” 1987. 1/6  sustainability, that it can be achieved if we maintain our focus on long-term goals. The past year we have seen many welcoming developments in our financial sector. These include, First, a number of measures were introduced to improve financial institutions’ responsibility, such as regulations on credit cards and personal loans to address the issue of household debt, new regulatory framework on market conduct, regulations to enhance financial institution’s corporate governance, and a new code of conduct for banks developed by the banking community; Second, the debt clinic was set up to facilitate multi-creditor debt settlement for indebted individuals so that they can exit from the state of perpetual debt distress; and Third, a number of key financial infrastructures were established to help promote financial inclusion and transition the Thai economy towards the digital era. One in particular is the introduction of PromptPay, which provides efficient access to electronic payment at no cost and has served as a catalyst leading to complete elimination of electronic fund transfer fee by banks. These developments have contributed to efficiency improvement in the financial system; wider access and affordability of financial services, especially to those underserved; and mitigation of the impacts of several long-term issues. Essentially, they help ensure that our financial system can sustainably serve the well-being of the Thai people.
Banks have more capital, they have more liquidity and are more resilient. The bigger concern is profitability, which was already low. European banks are solvent but I am aware that this crisis will have further impact on their profitability. In the medium term, banks will need to continue to take steps to eliminate excess capacity and consolidation could be a sensible way of dealing with profitability. From a solvency angle, this is 2/3  BIS central bankers' speeches  not a banking crisis. This time banks can be part of the solution, rather than the problem. If the recession is worse than expected, is there a risk that some banks will lose money on loans which they are currently granting? All governments, Portugal included, have approved State guarantees. When there is this level of uncertainty and a drop in GDP, these guarantees are very important and useful if a credit crunch is to be avoided. A number of economists have expressed the view that the euro area’s response to the crisis has been weak compared to the United States or the United Kingdom, where central banks will even finance the State directly. How would you respond to these criticisms? Looking at the whole package of ECB measures, it is impressive. Then we have fiscal policy, involving the various programmes of the national governments, and lastly there is the decision of the Eurogroup. Europe’s response is comparable to that of other world economies.

Am I to conclude from your comments that the ECB is prepared to strengthen the programme or take other measures in order to respond to any tensions that may arise? We have a programme that we are implementing. The ECB’s Governing Council has not made any decisions regarding further programmes. We are keeping an open mind in terms of how to respond to further developments and tensions within the markets. Because we are completely committed to maintaining stability in the financial markets and to avoiding the fragmentation that could prevent the functioning of the monetary policy transmission mechanisms. In countries such as Portugal, Spain and Italy, people are concerned that we could see another crisis, like the sovereign debt crisis in 2010–11. Can the ECB confirm that it will do all that is needed to avoid such a scenario? We have shown our commitment, with liquidity, by making capital requirements for banks more flexible and with the asset purchase programme. We are extremely committed. The current crisis is quite different to the one we saw in 2010–11. It did not originate in budgetary issues or the banking system. It was a massive exogenous shock. This is a health emergency which has become an economic problem. Our current efforts are focused on preventing it becoming a debt crisis. Are banks in Europe better equipped to deal with this crisis than in 2008? Or can we expect to see banks fail in various countries? Things are very different to ten years ago.
The main goal of monetary policy is to maintain price stability. This is of course not an end in itself, but a means to an end. A non-inflationary climate facilitates the free play of market forces and keeps socially damaging developments at bay. Fiscal policy must, basically, aim in the longer term to balance the public budgets. As with monetary policy, it is a question of steady, ongoing efforts. This should be no surprise, considering that the whole spectrum of public sector activities is reflected in the public budgets. This in turn raises the question of what services the state should perform, who should pay for them and how public-services can most efficiently be provided. Where competition policy is concerned, the aim is to create conditions conducive to the free play of market forces. In recent decades, it has unfortunately not always been possible to gain consensus support for the idea of free competition, which is still regarded with scepticism and suspicion by many people. Provided that free competition is able to develop in a stable environment, there can be little doubt that it is the best means to assure optimal use of available resources. When things go wrong, it is generally due not to the principle of free competition itself but to the lack of a stable environment. I would like to stress once again that the task of creating a stable economic framework is a never-ending one: it is a question of constantly working towards - but never actually reaching - the intended goal.

As we consider the possibilities for the offshore RMB market, it is instructive to review the development of the Eurodollar market. What are the key underlying elements that have driven the growth of the Eurodollar market and how do they feature in the current offshore RMB market environment? The Eurodollar market as a comparison A close examination of the differences and similarities between the two markets can help shed light on how offshore RMB market activities might evolve as well as how its further development can be fostered. Let’s compare the two markets using four sets of characteristics. Economic weight and trade centrality The first set of characteristics involves economic weight and trade centrality. The Eurodollar market is an offshore market for the currency of a country that has both. Similarly, the offshore RMB market is supported by China’s rapidly expanding economy and its substantial trade links with other parts of the world, given its status as the world’s second largest economy and largest trading nation. Indeed, these are two important macro trends that are driving offshore RMB market activities now and in the future. In roughly three years since the relevant policies were liberalised, currently some 10% of Mainland China’s total trade, about 12% of foreign direct investment into China and about 4% of outward direct investment from China are settled in RMB. 1  Mr Tony Shale, Chief Executive Officer, Euromoney Institutional Investor, Asia. 2  Mr Richard Morrow, Editor, Asiamoney.
This amount has to be repaid within five years (extendable to seven years) and earns the market rate of interest (at least 7.75%). The figure is not final because four processes have yet to be authorised. In addition, Cajasur will receive the aid finally resulting from the competitive procedure. BIS Review 92/2010  5  Furthermore, the savings bank DGF, which is financed by contributions from savings banks, undertook to provide € billion to Caja Castilla-La Mancha. These amounts, while substantial, are small compared with those provided by the taxpayers of other countries. Therefore, it is fitting at this point to recall that Spain is now enjoying the benefit of the decision in 1999 to oblige banks to record a general provision: since January 2008 our banks have used some € billion of this provision to cushion the impact of the crisis on their income statements. As can be seen, this amount is more than the sum of the funds used or to be used by the FROB and the savings bank DGF in the operations described above. Thus the main decisions have already been taken on the required restructuring and downsizing of the savings bank sector. One task remains in connection with these credit institutions: a legal reform to enable them to issue instruments eligible as top-quality own funds and to provide formulas conducive to improved governance and professionalisation of savings bank management.

Evidently, one fundamental challenge we face is the need to correct the strong deterioration of the budgetary position and ensure a rapid return to stability; otherwise, the expansionary momentum of public finances would become an obstacle to recovery. The challenge is an exceptional one since the budget deficit stood at 11.2% of GDP in 2009, up more than 13 pp of GDP in only two years, and there was a substantial increase in the public debt/GDP ratio, which stood at 53.2% in 2009, a level nevertheless below the European average. This marked fiscal deterioration is partly due to the functioning of the automatic stabilisers, the discretionary measures adopted, the strong inertia of public spending and, above all, the decline in revenue linked to the end of the real estate boom, which will be difficult to turn around in the future. This means that much of the fiscal imbalance is structural, and it must be checked urgently with highly ambitious consolidation measures that manage to reverse the trend of spending and build revenue back up. In other circumstances it would probably have been feasible to reduce the budget deficit more gradually. But at present it is impossible to pursue such a strategy, in a setting in which investors are demanding a speedier return to a credible path of budgetary stability.