samchain/econo-pairs-v1 huggingface dataset:
For Sweden the Riksbank hopes that the changeover can be arranged in an appreciably shorter time than the allotted six months. It should be underscored, finally, that EMU is likely to bring about notable changes in the financial landscape. Some products will simply disappear: currencies, as well as forward and option instruments derived from them. With a single monetary policy and no exchange risk, interest rate differentials between national treasury papers will arise only from credit risk. The market for Swedish treasury paper will be more or less integrated in a market for treasury paper in euro. Provided the debt situation in the countries concerned is under control and reasonably similar, national T-bonds will become close substitutes. That will also do away with a number of national forward and option products. Certainly there will be new financial products; there has been no lack of creativity in this field in the past decade. There will clearly be increased competition between financial institutions as well as between financial markets in different locations. There is nothing new about the globalisation and integration of the world’s financial markets but it is reasonable to suppose that EMU will accelerate the process. BIS Review 14/1997  -7-  Summary and conclusions Today it looks for the most part as though economic and monetary union will start as planned on 1st January 1999. For Sweden the question is whether we are to participate from the start, wait a while or try to remain outside for ever.

If adequate measures have not been taken within ten months, the country will be required to deposit a no-interest fee with the EU Commission. If the deficit is still excessive after two years, the fee is transformed into a fine. At most the fine can amount to the equivalent of 0.5 per cent of GDP. If the deficit is due to exceptional circumstances, sanctions are not to be imposed. If GDP falls by 2 per cent, no sanctions are to be levied for an excessively large budget deficit. The Council can also decide not to impose sanctions if GDP falls by between 0.75 and 2 per cent and other “special circumstances” apply. While the point of a system for preventing the abuse of fiscal policy in EMU has always been clear, one cannot turn a blind eye to the risks inherent in rules such as those in the stability pact. It is thus a matter of striking a reasonable balance between different interests, which is why the discussion has been so protracted. The risks are mainly of two kinds: - One has to do with the need of adjustment mechanisms. With no possibility of using monetary and exchange rate policy at the national level, it may be important for the system to provide other “buffers”. Therefore the pact ought not to be so strict that it might in practice have a destabilising effect in a particular country with problems. - The other concerns credibility.
In particular, Spanish unit labour costs relative to the rest of the euro area fell by 14% from 2008 to 2018, thereby offsetting practically all the losses in competitiveness, measured by this indicator, built up during the previous expansion. This has been conducive both to across-the-board gains in share in international markets and to greater geographical diversification towards markets with high growth potential. As a result, goods exports rose from accounting, in real terms, for 19% of GDP in 2009 to 28% in 2018; exporting firms as a proportion of total Spanish companies grew sharply as from 2009; and the number of regular exporting firms has increased in the past five years by 31%, with a notable increase in destinations such as Asia and North America. Likewise of note is that this period of growth has been accompanied by significantly buoyant investment in equipment. Specifically, from 2013 to 2018, this aggregate increased in real terms by almost 34%, compared with the cumulative 14.4% increase in GDP over the same period. Hence, the weight of this component in GDP stood in 2018 above 10%, the highest figure for the past three decades. Further, this improvement in productive investment has been across the board in terms of productive branches, and notably sharper than that recorded in the euro area as a whole, a development closely linked to the competitive gains and to the intensification of Spanish firms’ export orientation in recent years to which I referred.

That requires measures in various areas. In addition to the above-mentioned labour market reforms, human and technological capital improvements must also be made. In this connection, it is essential to improve the quality of the education system, adapting it to the challenges posed by globalisation, technological progress and the automation of tasks. Moreover, the presence of high and persistent profit margins in some sectors advises lowering the potential barriers to competition in such sectors. It would also be worth mitigating the effects of those factors that prevent growth of the most productive firms (chiefly, the regulatory thresholds linked to size). Finally, despite the progress made in recent years, the banking sector continues to face farreaching challenges, largely shared with other European financial systems. Spanish banks must firstly speed up the sale of their non-earning assets. These weigh down not only their profitability, but also their capacity to allocate resources to those economic activities that most contribute to growth. In addition, the reduction in non-earning assets originated before the European single supervisory and resolution mechanisms were established may bring us closer to culminating a Banking Union. Such a Union would then 6/7  allow us to address the need to pool macrofinancial risks within the euro area and to strengthen its governance mechanisms. That would make the European financial system – and therefore the single currency – sounder and more resilient to future financial shocks.
Their website lists a variety of organisations that have well-established schemes ranging from the big supermarkets to local councils. 35 Within the private sector, around 70% of FTSE 100 companies already have some kind of employer-sponsored volunteering programme. 36 Perhaps unsurprisingly, that percentage is much lower for small and medium-sized businesses. This is a decent starting point. Yet my suspicion is that many companies are still not close to recognising fully the benefits from volunteering. And let me illustrate that with one startling fact courtesy of Lynne Berry, a PBE trustee and expert on the sector. Among those FTSE 100 companies, how many Board members are drawn explicitly from the voluntary sector? Precisely one. That is not consistent with volunteering having entered the corporate bloodstream. Nor is the fact that 30% of the UK’s largest companies still do not have a volunteering programme. My hunch is that, over time, more companies will need to recognise the benefits of volunteering, not just among Board members but among employees. Why? The two Rs – recruitment and retention. Generation Y, born from the 1980s onwards, place a much greater weight on a diverse career experience, with a strong social dimension, than their predecessors. And Generation Z, the Millennials, are unlikely to buck that trend. Where they lead, companies will surely need to follow. Shifting social norms Given the quasi-public good nature of volunteering, it is possible to conceive of more ambitious proposals still through which the state could encourage volunteering.

A greater understanding of these stands to benefit funders of charities in deciding where best to allocate funds; charities themselves when deciding where best to allocate their energies; and policymakers to the extent they wish to encourage the creation of these quasi-public goods. To give one example from the funding side, through joint research with Oxford Economics the homelessness charity CRISIS found that for every £ invested there was a saving to society of £ 31 On the back of this, CRISIS began offering “investment units” as a way of emphasizing the social return on a donation. A more formal way of linking funding to social returns is through Social Impact Bonds (SIBs). These allow socially-minded investors to fund the provision of a service delivered by a social enterprise or charity, with a return on their investment from government if the service delivers the results specified. In fact, last year’s Rybczynski prize, awarded by SBE, was on work looking at the use of payment by results in the criminal justice system. So far, 14 SIBs have been issued. But social impact measurement remains the exception, not the rule. And SIBs remain a fledgling asset class. Underlying this is not so much an information gap as a chasm. It is puzzling that a sector whose core contribution is to societal well-being does not do a better job of measuring that contribution. Charities like PBE are seeking, on a small scale, to bridge that chasm through our measurement work.
Exchange rates SEK per EUR and per USD respectively 12  12  SEK/ EUR SEK/ USD  11  11  10  10  9  9  8  8  7  7  6  6  5  5 04  05  06  07  08  09  Source: Reuters EcoWin  16  BIS Review 98/2009  19. Unit labour costs Annual percentage change 7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0 -1  -1 Unit labour costs Labour costs per hour Productivity  -2  -2 -3  -3 94  96  98  00  02  04  06  08  10  Sources: Statistics Sweden and the Riksbank  Note. Broken lines and columns represent the Riksbank’ s forecasts. 20. Inflation expectations Annual percentage change 4.0  4.0 5 years 2 years  3.5  3.5  3.0  3.0  2.5  2.5  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0  0.0 96  98  00  02  04  06  08  10  Sources: The NIER and Prospera Research AB  BIS Review 98/2009  17  21.

GDP in Sweden Annual percentage change 5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3  -3  -4  -4  -5  -5 -6  -6 00  01  02  03  04  05  Note. Broken columns represent the Riksbank’s forecasts. BIS Review 98/2009  06  07  08  09  10  11  Sources: Statistics Sweden and the Riksbank  13  13. Survey indicator Index 120  120  Survey indicator Meanvalue +/ - one standard deviation  115  115  110  110  105  105  100  100  95  95  90  90  85  85  80  80  75  75 70  70 00  01  02  03  04  05  06  07  08  09  10  Source: National Institute of Economic Research (NIER)  14.
The social partners can apply a low and stable rate of inflation when they negotiate the share of economic growth to be taken out as real wages and set their ambitions with regard to employment. The guidelines and the financial crisis The financial crisis in 2008 put the economic policy guidelines to a severe test. The interest rate cuts that followed from the inflation target led to a reduction in households’ annual interest expenses of around NOK 40 billion. The krone acted as a buffer. The burden on leveraged companies was eased and many investment projects became profitable in an environment of lower interest rates. Monetary policy made a substantial overall contribution to Norway’s resilience to the crisis. 3  Speech delivered at the Petroleum Seminar at the Norwegian Association of Economists on 2 November 1988. 4  BIS central bankers’ speeches  Chart 6: Real interest rate. Per cent. August 1987 – February 1990 and June 2008 – December 2010 Chart 7: Registered unemployment. Per cent. August 1987 – February 1990 and June 2008 – December 2010 Well anchored inflation expectations made monetary policy effective – the reduction in Norges Bank’s key policy rate was perceived as a decline in the real interest rate. Other central banks experienced that there was little scope for reducing the real interest rate to a sufficiently low level. This downturn contrasts sharply with the downturn in the 1980s when the interest rate had to be maintained at a high level to defend the krone exchange rate.

Developments over the past 40 years illustrate that the most important contribution monetary policy can make to sound economic developments in the long term is low and stable inflation. This provides the economy with a nominal anchor. Low and stable inflation makes it easier for economic agents to distinguish changes in relative prices from changes in the general price level. Prices become a more accurate information vehicle. Through the 1990s, inflation generally remained in the interval 1½ – 3½ per cent. When there is confidence in the inflation target, monetary policy can also contribute to stabilising output and employment. Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment in interest-rate setting. In order to make forecasts for inflation and output, we must also judge how interest rates will develop in the future. If inflation deviates substantially from the target for a period, the interest rate will be set with a view to returning it gradually to the target, so that we avoid substantial variations in output and employment. This chart illustrates the judgement as published in the latest Inflation Report. Past experience indicates that expectations as to future inflation remain stable even if inflation varies somewhat as long as the interest rate is used actively to curb the effects. Monetary policy cannot finetune economic developments, but it can prevent the largest effects from occurring when the economy is exposed to disturbances.
In addition to a set of principles or guidelines on effective supervisory practices for assessing climate-related financial risks, the Committee will explore whether any policy measures under the regulatory framework should be taken, and how the Basel Committee could support international efforts related to the development of globally consistently sustainability reporting requirements. Importantly, any changes proposed by the Basel Committee to its regulatory framework would be in pursuit of its mandate to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. Climate Change and the Conduct of Monetary Policy Let me now turn briefly to the second topic: the implications of climate change for monetary policy, an issue that is also being analysed in the ongoing review of the ECB’s monetary policy strategy. As you know, the EU Treaty sets price stability as the single primary objective for the ECB. At the same time, the treaties also establish that, without prejudice to the primary goal of price stability, the ECB shall support the general economic policies of the Union, among which the fight against climate change has become a priority. Indeed, it can be argued that given the long-reaching implications in so many economic and financial domains of climate change, in our pursuit of price stability, monetary-policy makers cannot ignore the transition and physical risks that I mentioned before.

And this, together with climate-related disclosure requirements, can decisively contribute to the correct pricing of climate-related risks by financial markets. Moreover, central banks can – and probably should – use their non-monetary policy portfolios, within the natural remit of their mandates, with a view to contributing towards the goal of addressing climate change. Actually, the Banco de España has led by example in recent years in adopting these considerations. Since 2019, we have applied sustainability and responsibility investment principles to our non-monetary policy portfolios, which has effectively led to an increase in the share of green bonds in these portfolios. More recently, the Eurosystem has agreed on a common stance on this issue, aimed at contributing to the transition to a low-carbon economy and to EU climate goals by increasing the awareness and understanding of climate risks while promoting climate-related disclosure. To conclude, we, central bankers and financial regulatory and supervisory authorities, within our mandates of guaranteeing price and/or financial stability, can and should actively contribute to global action to fight against climate change. Thank you. 3  The natural interest rate is the level of real interest rates consistent with aggregate output being at its potential level and inflation stable at its target. 3
In other words, monetary policy is always implemented under conditions of uncertainty – to varying degrees, of course. This is why we consider a large number of economic indicators and use several models. Furthermore, we do not put a single economist in front of a computer and assign that person the task of determining the monetary stance; instead, we have a committee that exchanges opinions and assesses the current situation and outlook at the time in question. The observations I have just made are general in nature and apply to large and small countries alike. But we know that monetary policy in small, open economies is accompanied by particular challenges – challenges that we must take into consideration when developing a monetary policy framework for Iceland. In this context, it should be noted, first of all, that smaller economies generally have a tendency to be more volatile than larger ones, owing both to less economic diversity and the greater relative weight of individual shocks. Second, the relative weight of the tradable sector is often greater than in larger economies. Because of this, economic developments are more dependent on the exchange rate, and pass-through from the exchange rate to inflation is generally stronger. Third, financial markets are shallower than in larger economies, other things being equal, and this contributes to greater volatility of financial prices. Fourth, in an environment of unrestricted capital flows and increasing international financial integration, the possibility for small economies to affect their own financial conditions through monetary policy diminishes.

At the same time, the exchange rate target took the form of a target zone, which was then widened over the course of the decade, in part because capital movements increased exchange rate volatility and it was considered risky to eliminate investors’ exchange rate risk entirely. When growing economic imbalances were added to increased movement of capital, exchange rate targeting became even more difficult, until the dam was about to burst right before the inflation target was adopted and the króna floated in March 2001. The monetary policy framework adopted in 2001 was based on foreign models that were in the ascendant at the time. But it also reflected the broader ideas about economic policy, prudential regulation, and supervision that had gained currency but have proven in retrospect to be flawed. To simplify, it can be said that these ideas were based on separation and independence of individual aspects of economic and prudential policies, but without sufficient attention to their interactions. Monetary policy was to focus primarily on the inflation outlook, and it was largely to be implemented through a single tool: interest rates. Intervention in the foreign exchange market was to be avoided. Supervision was supposed to ensure that individual financial institutions were sound. Fiscal policy was supposed to be neutral over the business cycle. And the markets would take care of the rest. This did not turn out to be the case. Apart from the question of interactions, insufficient attention was paid to risks in the financial system as a whole.
The problems have been manageable so far, but the larger share the Riksbank owns, the greater the problems are likely to be. It may also be the case that the expansionary effect of each further purchase gradually declines. Of course, the Riksbank will eventually taper its holdings, but probably at a slow pace. 17 The Riksbank will therefore most probably have a substantial holding of government bonds for a long time to come. All in all, this means that there are limits with regard to the opportunities to use purchases of government bonds as a monetary policy tool going forward. My assessment is that it will probably be possible to increase the purchases a little further but, as I said, there is a limit. Buying government securities is not a completely unnatural step for a central bank that normally tries to affect the economy by adjusting a short-term risk-free interest rate, the monetary policy rate. Buying government bonds means that one  14 The Federal Reserve and the Bank of England have on different occasions used conditional forward guidance. I myself applied this strategy a few years ago when I emphasised in the monetary policy discussion that I did not intend to vote in favour of raising the repo rate as long as CPIF inflation did not accelerate and exceed 1.5 per cent (see, for instance, Sveriges Riksbank, 2014). As is well known, this did not happen for some time.

The date refers to the day the forecast was published. Sources: Respective analysts  21 [24]  Figure 3. Development of the repo rate during inflation-targeting regime  Note. Per cent. Source: The Riksbank  Figure 4. Desired policy rate path and path with lower bound  Policy rate  Lower bound Preferred path Path with lower bound  Time  Note. Constructed example. Source: The Riksbank  22 [24]  Figure 5. Difficult to forecast the policy rate The Riksbank  The Market  6  6  6  4  4  4  4  2  2  2  2  0  0  0  0  -2  -2  6  -2  05  08  11  14  17  20  05  08  11  14  17  20  -2  Note. Per cent. The Riksbank's forecasts for the repo rate and market forward rates. Forward rates are a measure of the market agents’ expected repo rate according to different derivative contracts. They are estimated around the same time as the repo rate forecasts. Sources: Thomson Reuters and the Riksbank. Figure 6. Yield differential in relation to Germany  Note. Percentage points. Yield differentials refer to 10-year benchmark bonds. Source: Macrobond  23 [24]  Figure 7.