samchain/econo-pairs-v1 huggingface dataset:
Let me share with you my views on how the globalisation of financial markets and the concomitant emergence of a new monetary order have changed the playing field for international business, and on what roles you, the private sector, and we, the central banks, are now called to play. What is the new international monetary order? The globalisation of finance has led to important changes in the ways monetary authorities implement their policies. Over the last decades we have witnessed the reorganisation of the world monetary order, with choices polarised around two extremes: at one extreme the flexible exchange rate regimes such as the ones in the USA, the UK and in Switzerland, and at the other extreme very fixed regimes, such as the monetary union chosen by the countries belonging to the euro area. Pegs still exist, especially in Asia, but they are less numerous than in the past. Let me talk first about how different national monetary choices meet the challenges of financial globalisation. We have left behind us a time where international monetary relationships, based on the Bretton Woods system of fixed exchange rates, gave us a nice feeling of order and security. The keepers of that order were central banks, and their main job was to maintain the exchange rates for their currencies within a narrow band. International businesses, for their part, were free to plan ahead, unaware of nasty surprises emanating from sudden currency exchange disorders. And yet this world of apparent security collapsed.

I think that for the Asia-9 economies, increased trade-linkages and cross-border investment have resulted in a “symbiotic” relationship, with China as the driver of growth for the rest of Asia, AND vice-versa. Together, this relationship has helped raise the profile of Asia-9 as an important pillar for regional and international trade. Factors underlying Asia-9’s growth in trade What have been the driving forces behind this synergy in the evolution of trade among the Asia-9 economies? When one speaks of the remarkable growth in Asia, the general perception is that growth has been dominated by China. While it is true that growth has been driven by China, the traditionally strong trade and investment ties between the remaining Asia-8 have been just as important in allowing the high rates of growth to be sustained in the region. In terms of intra-regional trade among the Asia-9 economies in 2005, 13% of trade flows are with China, while 28.4% of trade goes on among the other 8 economies. Why has this intra-regional trade grown so substantially? One explanation is that East Asia has adopted an outward oriented policy of internationalization of production process which has allowed the benefits to be derived from the linkages and alliances among the players in the region, both at firm level and at the level of the macro economy.
And I consider that monetary policy should, in principle, take into account financial imbalances and risks that may arise as a result of the monetary policy conducted. In what way is this compatible with the Riksbank’s mandate? According to the Sveriges Riksbank Act, the objective of the Riksbank’s activities is to maintain price stability. Moreover, the Riksbank shall promote a safe and efficient payment system. In addition, the preliminary works to the Act state that the Riksbank, without prejudice to the price stability target, should support the goals of general economic policy with a view to maintaining a sustainable level of growth and high rate of employment. At the Riksbank we consider the task of promoting a safe and efficient payment system to have a broad meaning and that it is, in practice, a matter of taking responsibility for promoting the stability of the financial system.2 But it is not actually this task that justifies monetary policy taking into account a rapid expansion in household borrowing.

A lower repo rate now and faster increases in the coming period seems to me a better monetary policy, when weighing the risks against the opportunity to return to the inflation target sooner and to have a more balanced resource utilisation (see Figure 7).10 The assessments and calculations I refer to here are based on the general framework presented in our Monetary Policy Report published in July.11 It is not entirely clear how this reasoning should be translated into recommendations for practical monetary policy. We are working on this issue within the bank. It scarcely needs to be said that the assessments and calculations I have implied today are uncertain, and that they will remain uncertain even when work on these issues has progressed further.12 Further measures are needed to strengthen financial stability In conclusion, I would like to discuss how the new framework for macroprudential policy affects my view of how monetary policy should be conducted. It is good that one single authority, Finansinspektionen (the Swedish Financial Supervisory Authority), is given a clear responsibility for decisions on supervisory measures. In this way, we avoid the problem that different authorities may try to put responsibility on others, which could have arisen if the responsibility was shared between several authorities. At the same time, it is positive that several authorities, including the Riksbank, are given a role to play in the work on macroprudential policy through the new financial stability council.
They have launched a number of major, extremely technical projects which, ultimately, will reinforce monetary integration and governance within the European Union. Much progress has been made over the past five years to strengthen Europe and clarify the rules on which no one really wanted to make headway. Markets would like to have everything settled within five minutes. But there are 17 democracies in the euro area and 27 democracies in the European Union. The time perspective of the markets is not that of democracies. Like Jean Monnet, I believe that Europe will be forged in crises. The only question that markets are asking is straightforward: are euro area countries prepared to support each other financially? They want a yes or a no ... It’s more complex than that. Markets lend money to governments and want to know whether they will be reimbursed. They want to be able to count, if necessary, on the intervention of the European Stability Mechanism (ESM) [programme intended to provide financial assistance to governments in difficulty, editor’s note]. As creditors, they especially want to ascertain the credibility of the entity to which they are lending money. Hence the need for consolidation efforts in most countries. Besides, solidarity itself implies that everyone make as much effort as possible, because should this aid not be reimbursed, additional taxes would have to be raised in all countries. After all, the credibility of the ECB is intact ... Why not use the instruments at your disposal to appease the markets’ doubts?

Is Germany imposing its conditions on the rest of Europe? The ECB has a range of tools to ensure price stability and the proper functioning of the market. It can remedy market disruptions. It has done so several times in recent years to avoid a “credit crunch” by greatly increasing its provision of liquidity to the banking system and by lengthening the maturity of refinancing operations. Still within our mandate, we are able to take quite significant non-standard measures and we have done this on several occasions. The mandate of the ECB is also to ensure the solidity of the euro. But the ECB cannot replace governments, nor spare them from making the necessary efforts to control their debt and restore the competitiveness of their economy. The credibility of  BIS central bankers’ speeches  1  governments cannot rest on the central bank. And yet, the former must demonstrate their determination to improve their fiscal position. But under Germany’s pressure, the ECB is not using all the instruments at its disposal. How is this justifiable when huge efforts are required of Spain and Italy? The ECB is being unfairly accused. No central bank in the world – neither the Fed nor the Bank of England – directly funds governments or purchases sovereign debt on the primary market to finance their deficits. However, it is possible on the secondary market. We have done so in the past. There are no differences of opinion between the French, the Germans and the European Commission.
Most empirical studies indicate that countries with floating exchange rates have greater possibilities to dampen the effect on their own economies of global financial and monetary forces than countries with fixed exchange rates do. 5 In this sense, the trilemma still stands. 3  See Rey (2013). 4  See Rey (2013). 5  See, for example, Aizenman et al. (2015) and Obstfeld (2015). For a current review of empirical research, see Anaya and Hachula (2016). 4  BIS central bankers’ speeches  There may also be reason to reflect over what is actually meant by monetary policy autonomy. A high degree of covariation in countries’ interest rates may be an indication that small countries must follow the monetary policy of larger countries. But it could also mean that all central banks, large and small, react to synchronised economic conditions – that the covariation is largely due to fundamental factors that all are exposed to. In the latter case, it would be misleading to suggest that monetary policy in small countries is not autonomous – it does react to circumstances in the home country, even if these greatly coincide with international developments. A more relevant definition of restricted autonomy would be a situation in which monetary policy in large countries forces small countries to respond in a way that is not compatible with their own economic development.

A forum, such as this, is one good example of how as a community, we recognise companies that have done well in their CG disclosures and practices. Companies with good CG are characterised by a sense of mission to hold themselves to high standards of accountability, transparency and sustainability, which are in turn critical to a thriving capital market. Good CG in companies stands for doing right and doing good so as to do well over the long run. Conversely, companies that fall short in their CG practices will hurt investor confidence. Failings in larger institutions can also undermine system-wide financial stability. There have been recent public commentaries on companies flagged for corporate transgressions. Some reports are accompanied by calls for more forceful regulatory actions, or further tightening of CG standards. So allow me to briefly describe the regulatory framework for CG in Singapore. The MAS, as the statutory regulator, is responsible for a sound framework within which market discipline and enterprise can thrive. In regulating and developing the capital markets, we seek to be balanced. On the one hand, to allow for growth and appropriate risk-taking and on the other hand, to curb potential abuses and wrongful acts. The Singapore Exchange (SGX), as the frontline market regulator, administers the SGX Listing Rules. The SGX is responsible for ensuring that the market operates in a fair, orderly and transparent manner.
Therefore, the state of the financial system should have implications on the conduct of monetary policy of economies following a FIT regime since it affects the transmission channels and the business cycle. Another issue is whether macroprudential tools may be used to complement monetary policy. For example, adjusting capital requirements over the cycle or introducing dynamic provisioning may have effects on the output gap, inflation and interest rates. This is similar to the case of automatic stabilizers of fiscal policy, which of course have implications on monetary policy. Therefore, there should not be conflicts between financial stability and price stability tools, as long as financial regulation reduces the procyclicality of the banking system. From the point of view of the inflation target, this is just part of the environment in which decisions have to be made. Perhaps a more controversial issue is the use of macroprudential tools as a substitute for monetary policy. A recent case in some emerging markets has been the use of banks’ reserve requirements to tighten credit by reducing the need to increase the interest rate, and collateral effects on asset prices, especially the exchange rate. The advantage of using the interest rate for monetary policy is that we have relatively good knowledge of the transmission channels. Changes in monetary policy interest rates affect the cost of financing, asset prices and the availability of credit. The macroeconomic consequences of changing regulation are less well understood. Tightening restrictions on banks may create disintermediation and move credit to unregulated segments of the market.

Let me end these remarks by underlying some of these remaining challenges on the economic front. The monetary union is one of the milestones of the European project: a single currency, the euro; and a single monetary policy, with its own institution, the European Central Bank. This is the epitome of cooperation among countries: a supranational agency that takes into account the well-being of the whole area instead of nations exercising their powers in a disorderly fashion. As a reward, the contribution of monetary policy to the economic stability of the union has been decisive, particularly during the sovereign debt crisis and, crucially, in the current health crisis. In addition to monetary policy, during this crisis, there has also been a genuine, common fiscal European response to the pandemic, notably including the creation of the Next Generation EU (NGEU) recovery fund. This fund adds key elements to ensure the burden of the economic recovery effort is shared. Some are unprecedented, such as the large-scale issue of supranational European public debt to finance reforms and investment in those Member States most affected by the pandemic. However, NGEU cannot and should not be seen as the cyclical stabilisation mechanism the euro area needs to complement our single monetary policy. A true macroeconomic stabilisation mechanism should be a multilateral institution in itself, of a permanent nature and with sufficient size, taxation power and borrowing ability.
This is because the two Inflation Reports in the autumn have come too close together to have sufficient new material to justify publishing two separate reports. The reason for this is that the first autumn report is published in connection with the Riksbank Governor’s hearing in the Riksdag  BIS Review 25/2006  3  Committee on Finance, which is usually held in October, after the Riksdag has opened for the autumn session. Let me emphasise that this does not reduce our openness. Openness and transparency involve ensuring that the information provided is clear and relevant, so that those monitoring us can understand what we do and why we do it. Publishing Inflation Reports that contain little new information does not seem very important in this context. Now we can instead obtain a more even spread of the reports across the year and thereby use our forecasting resources more efficiently. In addition to the Inflation Report, a press release is published after each monetary policy meeting, with an account of the motives behind the decision made. Press conferences are organised when an Inflation Report is published or when an adjustment has been made to the repo rate. The Executive Board’s monetary policy discussions are reported in separate minutes that are published approximately two weeks after the meeting where the decision on the interest rate was made. The minutes also show whether a member has expressed a reservation against the forecasts or the decision, and if so, on what grounds they base this reservation.

I do not think it is coincidence that arguably the two most significant monetary policy decisions taken over the past year – the decision to reduce Bank Rate by 1.5 percentage points in November and the announcement in February that the Committee had sought approval to use the Asset Purchase Facility to conduct large scale asset purchases – occurred in months when the Inflation Report was published. The quarterly forecast round provides an opportunity for the Committee to reassess thoroughly its view of the economic outlook. This view is then explained and communicated via the Inflation Report and in particular through the projections for GDP growth and inflation contained in the Report. In both November and February, the judgement of the Committee was that, without further substantial easing in monetary policy, there was a significant risk of a large and persistent undershoot of the inflation target. Given the transparency of these judgements and the clarity of the target, it would have been courageous not to have taken the decisions we did. The inflation target is symmetric. Likewise, the discipline it imposes on the MPC is symmetric. The inflation target has been instrumental in ensuring that monetary policy has responded boldly and decisively to the events that have unfolded since the autumn. And, when the time comes, the clarity and transparency of the inflation targeting framework will ensure that the Committee takes the right decisions on the way back up, however courageous or unpopular those decisions might appear.
The preferences of both consumers and investors are changing globally and the "appetite" for the so-called green technologies and business models is growing. Amid such fundamental, global structural changes, our competitiveness as an economy will also depend on the ability for rapid transition to infrastructure that will provide "green stamp" products. On the contrary, the possibility to be competitive in both the product markets and in the access to financing will be small, and the costs high. The financial support from the banking system can significantly accelerate this transition and help in increasing the competitiveness of the domestic economy. Probably faster than expected, the world found itself at crossroads when it should accelerate the structural changes, accelerate the transition to a digital and green economy, enable sustainable, post-pandemic global recovery. The role of the financial sector in this respect is great, since the capacity of the entire economy to deal with the new challenges will largely depend on its stability and readiness for financial support. Finally, on behalf of the National Bank, allow me to congratulate the Savings Day, and to send special congratulations to this year's plaque winners - recognitions for achieved special results in the performance of the work tasks. Thank you! 3/3  BIS - Central bankers' speeches

For example, transactions conducted through the internet can also raise questions regarding jurisdictional authority over those transactions. Cross border activities raise a number of concerns to supervisors on how to supervise banking businesses with no physical presence in the country, and also how to effectively manage risks involved in cross-border transactions. 4. Reputational risk  Reputational risk arises whenever technology-based banking products, services, delivery channels, or processes generate adverse public opinion. For example, breaches of security and disruptions to the system's availability can damage financial institutions' reputation. Also, system disruptions or doubts about the integrity of the system or data could result in a loss of confidence in electronic delivery channels as a whole, and can potentially affect other e-banking providers. IT risk-based supervision focuses on strategic and operational risks. Strategic risk Supervisory objective In strategic risk supervision, supervisors have to ensure that Financial institutions have efficiently managed their IT resources and are prepared for the future development of core businesses. Supervisory areas Therefore, to achieve such objective, supervisors will assess risks that may arise in the following areas. Policy perspectives Since enterprise activities require information from IT to meet business objectives, effective IT strategic planning is mandatory. The strategic plan refers to how to utilize IT in an organization. IT must be aligned with and enable the enterprise to take full advantage of its information, thereby maximizing benefits, capitalizing on opportunities and gaining a competitive advantage. As such, IT policy, plan and procedure are the concentrated areas for supervisors to examine.
Nor can it mean that we set interest rates simply by reference to those prevailing elsewhere. It is naïve to complain that our interest rates are twice those in Europe without recognising that we are operating closer to capacity than is the case in the Eurozone as a whole – or that unemployment there is running at twice the rate in this country even if – and I agree – much of that difference is to be explained by structural, supply-side, rigidities rather than simply cyclical divergence. No-one, Mr Chairman, is more conscious of the limits to what we can hope to achieve through monetary policy than I am. But operating within those limits, we have been able to achieve greater macro-economic stability, reflected in the rate of inflation, than we have seen for a generation. And that stability, together with the improved supply-side flexibility of the economy, has delivered a rate of unemployment in the economy as a whole that, despite the recent modest upturn, is still close to the lowest rate we have seen in almost 20 years. And what is true for the UK as a whole is true for most of the individual regions of the economy. That includes the West Midlands, where, on a claimant count basis, unemployment at 4.8% is actually only marginally above the national average and still just about the lowest it has been since 1980. Macro-economic stability cannot solve all our problems.

At the Trades Union Congress in Blackpool last September I had emphasised that our inflation objective was symmetrical, and promised that if overall demand threatened to fall significantly below the supply capacity of the economy, with the risk that we would fall short of the inflation target, then we would be just as vigorous in reducing interest rates to stimulate demand as we had been in raising them when the risks to inflation were on the upside. So, in the new situation, the Monetary Policy Committee promptly reversed engines to pump up demand, cutting rates by 2¼% over the next few months to as low as they have been since 1971. (This relatively aggressive response was not incidentally – as is sometimes suggested – a sudden conversion to a more activist philosophy, simply a reflection of the rapid decline in the economic prospect which required a strong response.) Since last autumn the world financial and economic situation has certainly stabilised under the impact of the continuing strength of domestic demand in the US economy and of the beginnings of export-led recovery in a number of emerging markets, particularly in Asia. And world commodity prices, notably the price of oil, have shown signs of strengthening. But global imbalance seems likely to persist for some time, with domestic demand growth still relatively sluggish in Japan, and in the Eurozone taken as a whole. This imbalance, in turn, is a significant influence on the international pattern of interest and exchange rates.