samchain/econo-pairs-v1 huggingface dataset:
When the Debt Office’s dealers make use of the repo facility and borrow bonds, it is done at an overnight interest rate that is 0.40 percentage points below the Riksbank’s repo rate. As the Riksbank’s holdings of government bonds have increased, the short-term market rates for government securities have therefore been pushed down towards –0.90 per cent, i.e. the repo rate minus the cost for the facility (see Figure 4). Via expectations, the low level of these short-term rates has then also pushed down yields on long-term government bonds. 12 In practice, there are hence two levels on the money market in Sweden, one around the repo rate and one around the cost for the National Debt Office's facility. My assessment is that an equally expansionary monetary policy could in principle have been achieved without quantitative easing but with a repo rate somewhere between these two interest rate levels. In recent years, setting a lower repo rate could have been problematic but in a future scenario with more normal interest rate levels, I see no need to try to affect short-term market rates with tools other than the repo rate. 5 [16]  And as regards the formation of expectations and the transmission from shortterm rates to rates on longer maturities, the Riksbank has a long tradition of using transparent communication to signal future monetary policy plans, for example by publishing forecasts of the repo rate’s development.

Indrajit Coomaraswamy: Inaugural speech Inaugural speech by Dr Indrajit Coomaraswamy, Governor of the Central Bank of Sri Lanka, Colombo, 4 July 2016. *  *  *  Deputy Governors, Mrs. Ramanathan, Senior Management, colleagues, it is a great privilege and honour to be here with you as the Governor of the Central Bank of Sri Lanka. The Central Bank of Sri Lanka is one of the great institutions in this country and I am acutely aware that a primary responsibility, arguably the primary responsibility of the Governor is to uphold its reputation and credibility. And I can assure you that I will do my utmost to do so at all times. Of course, I can’t do this on my own. I need the cooperation of each and every one of you to maintain this as one of the great institutions in the country. You know my parents went abroad when I was about eleven years old so I had much of my secondary and university education abroad. But as I was doing my degree and thinking of what I should do in the future – of course I had been abroad for many years, but I did come back every year for my summer holidays so I kept in touch with Sri Lanka – and there was no doubt in my mind as to what my career should be and that was to be as a staff member of the Central Bank of Sri Lanka. The Central Bank had such an awesome reputation.
But, given lower levels of leverage, it is unlikely that we will see, or want to see again, the returns on equity that we saw before the crisis. In the new world, paybills may well have further to adjust. A major element of the rethinking of business models in global banks has concerned their Fixed Income, Commodities and Currency business – charmingly known as FICC. A consequence of higher risk aversion and tougher capital and liquidity requirements have been a step reduction in FICC-related activity, especially proprietary trading and marketmaking. Inventory levels held in banks’ FICC areas have nearly halved since the boom years. A consequence has been falling income from FICC trading over the past five years. It is not yet clear how this very material element of banks’ business models will evolve. Many banks, reacting to both low profitability and regulatory pressure, are continuing to shrink these operations. And as the data suggest the average pay bill in banking is skewed very heavily towards the top earners, such as principal risk takers in investment banking and trading, this should both restore return-on-equity and reduce the pay bill. To sum up. The landscape has changed with key changes to the way the official sector approaches regulation and supervision. Those changes have generated changes in rules and in supervisory practice that have changed the world for banks. Banks are now wrestling with the changes they need to make to thrive both in the new economic environment and in this new landscape.

One driver of low return on assets for many banks has been the continued effect of low levels of long-term interest rates, which can drag on net interest margins. For this reason, when long-term yields fell on renewed fears about the strength of the global recovery last week, bank stocks fell disproportionately. The return to strong global economic growth that we all hope to see, and to more normal monetary policy settings should support banks’ earnings. There have also been, unfortunately, a series of “one-off” effects – the necessary redress of previous episodes of misconduct. These have reduced UK banks’ pre-tax profits from around  BIS central bankers’ speeches  5  £ billion, to less than £ billion during 2013. One hopes this will also be a temporary effect. But some of the effect of the new landscape will be more permanent. This is particularly true of leverage; it will not in future be possible to drive up shareholder returns by levering up on ever thinner capital cushions. For the large UK banks, average levels of leverage have broadly halved and seem unlikely to increase materially. And that is not all of the story. Another driver of low returns on assets and equity is the fact that banks’ paybill has not adjusted to the smaller returns banks are now earning. It was not just the shareholders who enjoyed high returns pre-crisis. Bank employees did too, or at least some of them did.
The future course of the world economy is also a cause for concern, in a context of global monetary policy tightening and significant geopolitical risks. Likewise, the growth outlook will crucially depend on the projected disinflation actually taking place. Greater persistence of high inflation would slow the recovery and, should it be seen in the euro area as a whole, would most likely lead to a further tightening of monetary policy and, thus, of financial conditions. More recently, these risks have been compounded by the doubts over the impact and persistence of the recent financial strains prompted by the episodes of banking turmoil in Switzerland and the United States. Against this background, allow me to outline the recent developments in the Spanish banking industry, before assessing its resilience and outlook. 1  The financing of the Spanish banking sector  - Banking sector financing has been affected, first and foremost, by the monetary policy tightening, which has reduced Eurosystem funding. This reduction has been partially offset by increased interbank funding and funding from other financial corporations, along with the issuance of debt instruments,1 but above all by growth in the deposits of non-financial corporations and households, albeit with a clear moderating trend that accentuated in the early months of 2023.2 - The average interest expense on bank liabilities increased by close to 60 basis points (bp) compared with the 2020-2021 average, to stand at 1.1%, still slightly below pre-pandemic levels.

The business loans segment accounted for most of the improvement in 2022, with an incipient increase in the households segment. In the sectors hardest hit by the pandemic, the share of Stage 2 loans fell very sharply (by 3.4 pp to 14.6%), albeit holding above the average for lending to non-financial business activities (9.8%). - Forborne exposures were down by 0.8 pp to 4.2% of total lending to the resident private sector, having declined by 16.5% since end-2021, when they reached pre-pandemic levels. - The proportion of ICO-backed credit classified as Stage 2 shrank by 0.8 pp to 19.6% of the total. However, non-performing assets increased by 78.8% in 2022, lifting the NPL ratio to 7.1% (up by 3.6 pp on 2021). The reduction in the size of this portfolio (11.3% in 2022) accounted for 0.8 pp of the increase in the NPL ratio. - Foreclosed assets decreased by 14.5% in 2022, to stand at € billion at December. Since the start of the pandemic, these assets have fallen by more than € billion (36%), on top of the declines recorded in the years leading up to the health crisis. Profitability  6  - Return on assets (ROA) fell by 2 bp in 2022, although this drop owed mainly to lower extraordinary income compared with 2021. Excluding these items, ROA increased by 8 bp. - This performance mainly reflects the improvement in net interest income, which increased by 17.1% year-on-year due to the uneven passthrough of higher interest rates to loans and deposits.
7  Gunhild Ecklund (2008): “Creating a new role for an old central bank: The Bank of Norway 1945–1954.” Series of Dissertations 2/2008, BI Norwegian School of Management. 8  There was one parliamentary representative on the board as late as 1983. 9  Ivo de Figueiredo (2007): Henrik Ibsen. Masken [Henrik Ibsen. The Mask], Aschehoug. 10  See Harald Haare (2007): “Clearing and settlement at Norges Bank – a historical review”, Economic Bulletin 4/2007. BIS Review 154/2010  3  Norges Bank’s obligation to convert banknotes into gold was suspended, and the central bank provided funding for increased government activities and other purposes. 11 The gold standard ideal of an independent central bank was abandoned during the war. There was strong credit growth. The discount rate was kept low and there was a surge in government spending, while prices for our exports soared and foreign inflows of gold were substantial. The combination resulted in a boom period followed by a stock market crash, a banking crisis and a fall in monetary value. Francis Sejersted wrote the following about the appointment of Nicolai Rygg as governor of Norges Bank in 1920: “When [Prime Minister] Gunnar Knudsen [in 1920] called Rygg to the position of chairman of Norges Bank’s board, his aim was to secure the services of a strong and knowledgeable man. Gunnar Knudsen suspected an economic storm was brewing, and he suspected something that to a great extent was his own responsibility, namely that monetary policy had been neglected during the war.

37 The Act was drafted in the light of Norges Bank’s role in the postwar government administration. Therefore, the new Executive Board, which replaced the board of directors under the 1892 Act, is now appointed by the Council of State. 35  Elster, Jon (1979): Ulysses and the Sirens. Studies in Rationality and Irrationality, University Press, Cambridge. 36  Stanley Fischer introduced the difference between goal and instrument independence. See Fischer (1995): “Modern approaches to central banking”, NBER Working Paper No. 5064. 37  The Norges Bank Act is discussed in Helge Syrstad (2003):” Sentralbankens uavhengighet” [Central bank independence], Fagbokforlaget. 10  BIS Review 154/2010  Under the Act, Norges Bank is an executive and advisory body for monetary, credit and foreign exchange policy and shall monitor developments in the money, credit and foreign exchange markets. The Act makes no reference to the objective of monetary policy. On the contrary, its formulations are completely open-ended. 38 The Bank shall conduct its operations in accordance with the economic policy guidelines drawn up by the government authorities. How this was to be interpreted was the subject of controversy in the first years. Today, in the light of both the text of the Act and of the preparatory works, the implications of this may also be unclear. This provision has not gained any further practical significance. Today, Norges Bank no longer looks for guidelines in public documents.
A minimum loan-to-valuation ratio was also introduced to stem the incipient growth of high-priced residential loans that, if left unchecked, could have led to speculative property bubbles and threat to financial and economic stability down the road. Maintaining financial stability is another all-important policy objective for us as the central bank. In fulfilling that objective, it is imperative that we remain vigilant on developments which might lead to financial imbalances – such as excessive household debt and asset price inflation – and take timely action, including prudential measures, to prevent them from becoming a threat to the financial system and the economy. Ladies and Gentlemen, Another dimension of our policy towards the retail banking business is to ensure that customers are treated fairly, that they are provided with clear and complete information about the product and price before and after the sale, and that they are given sound advice which takes into account their needs and circumstances. In this connection, we have put a ceiling on interest rates on personal and credit card loans. We also require transparency and disclosure of interest rate calculation and fees that banks charge their customers. We have provided guidance to banks regarding appropriate procedures to handle customer complaints as well as fair debt-collection practices. We have also been working to improve the information available to the general public on our new website that we hope would help to facilitate consumer education and raise the level of financial literacy.

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If the banking industry is also able to agree on an adequate loss-sharing agreement, we assume that the remaining danger of systemic risk in this part of the payment system. Gross settlements in NBO Turnover through gross settlements in NBO fluctuates between NOK 100bn and NOK 200bn per day, which is by far the largest portion of the settlement. Since it is a gross settlement, risk would be expected to be minimal or non-existent. Such is not the case, however. Liquidity problems can arise as a result of such factors as technical failure at one or several banks – i.e. operational risk. We have already experienced such situations and seen that they can quickly bring considerable liquidity strains upon other NBO participants. Norges Bank is actively analysing and improving routines associated with such situations in connection with preparations for the year 2000. This work will enable us to be well prepared if such unforeseen situations should arise after the turn of the century. Another risk-creating factor in connection with gross settlement is the extended use of early crediting. Relevant information is lacking, but is our impression that this practice is fairly widespread. The possibility of early crediting is, as is well known, connected to the information exchange model used in the Norwegian payment system (see my previous comments on so-called “T-copying”). This practice - which, by the way, is not in accordance with international recommendations - can result in the payee bank coming into a position of non-controlled exposure in relation to the payer bank.

Retail payments  Allow me to turn to a closer examination of the state of the Norwegian payment system. First looking at the retail side of the payment system - where so-called customer payments dominate - there are two factors I would like to bring to the fore: one is the (continuing) sharp increase in electronic services and the other is the stable use of cash. 3 4 5  BIS: Bank for International Settlements. TARGET: Trans-European Automated Real-time Gross settlement Express Transfer (system). NICS: Norwegian Interbank Clearing System. BIS Review 7/2000  4  3.1.1. Transition to electronic payment instruments  If we first look at electronic payment services, we see that the increase in the use of cards is what is most striking. Chart 3: Retail payment services (number of transactions) in 1990 and 1998  Retail payment services (no. of transactions) 1990  1998  444 million transactions  785 million tran sactions  22 %  12 %  25 %  25 % 63 % 53 %  Cards (both c redit a nd de bit card)  Electron ic giro services  Cheques an d other p aper-ba sed payment services  Source: Norges Bank, Annual Report on Payment Systems 1998  The use of payment cards in Norway now exceeds use in most other OECD countries6 and the rate of increase is higher than in many other countries with advanced payment systems - such as Finland and Denmark.
Is EMU membership important for Sweden to gain influence? Finally, I intend to discuss what I personally consider to be the most important aspect of the EMU issue - how Sweden's opportunity to take responsibility and exercise influence in an international economic policy context will be affected by the result of the referendum. Here I am speaking not primarily as Riksbank governor of six months but on the basis of my experiences over almost 20 years, as civil servant in the Ministry of Finance under three finance ministers and later as deputy governor of the Riksbank, representing Sweden in numerous international forums. My first reflection concerns Sweden's influence now, compared with before. As I see it, Sweden's influence has declined considerably, which is not always made clear in the general debate. The most important reason for this erosion of Sweden's position is that we, as I mentioned earlier, have declined in economic strength in relation to almost all of the other industrial nations. In addition, there is a more positive aspect here, namely that a number of former developing countries have made considerable economic progress and are now important players in the international economic policy game. The result is that we now sit at fewer decision-making tables than at any other point during the post-war period and we carry less weight at those tables where we have retained a place. One expression of this is that an ever-declining number of Swedes now hold central positions in economic policy and financial contexts.

Importing the stability-oriented policy that had long been conducted in the EMU's core countries helped to create better conditions for future growth. The policy model we now follow comes originally from Germany. During the entire post-war period they have endeavoured, to a great extent successfully, to maintain price stability. The task of achieving this has fallen to the German central bank - the Bundesbank - which has operated independently, at arm's length from party politics. The Bundesbank model is now copied by a number of industrial nations, which have given their central banks a large degree of independence and the task of aiming for price stability. This policy is also reflected in the Maastricht Treaty and in the Riksbank legislation. My colleagues in the major industrial nations also try - as long as they are sure that inflation is not about to deviate from the desired level to take account of economic activity and unemployment. There are thus considerable similarities and this applies not only in Europe, but also in a comparison with, for instance, the US, although the stipulated targets vary, sometimes for historical reasons. In this sense we are all the children of the Bundesbank! Within the central bank world the methods of working have also become more similar in recent years. Although not all industrial nations with a floating exchange rate say that they use inflation targeting, they actually do so in some form.
Such criteria might include: size – the volume and value of flows; type of flow – the extent to which interdependencies are generated with other systems or underlying financial markets; and substitutability – the potential for rerouting flows to other systems. 39 A changing market structure may also alter the nature of risks posed by the systems themselves. For instance, to the extent that we are entering a phase of competing provision of services at the national level, issues might arise around the potential fragmentation of system liquidity. Equally, we are also seeing pressures for greater consolidation of systems at an international level, where the challenges of lowering single point of failure risks remain at the top of the agenda. 40 Where new services are offered by commercial bank providers, central banks need to cooperate closely with banking supervisors to ensure that potential sources of financial stability risk in their infrastructure roles are embedded within regulatory assessments. Indeed, to the extent that new services are multicurrency in nature an international dialogue may be necessary. I am pleased that the Basel Committees on Banking Supervision (BCBS) and Payment and Settlement Systems (CPSS) have agreed to strengthen communication between the committees, for example by holding joint meetings of sub-groups, which will help to support this dialogue. 41 As recent events have underlined, regulation and public intervention can not only change market incentives for the better but can also have unintended side effects.

Nigel Jenkinson: New markets and new demands – challenges for central banks in the wholesale market infrastructure Speech by Mr Nigel Jenkinson, Executive Director, Financial Stability, Bank of England, at a joint Bank of England/European Central Bank Conference on “Payments and Monetary and Financial Stability”, Frankfurt am Main, 12 November 2007. I am very grateful to Mark Manning for his help in preparing this speech and to John Gieve, Victoria Cleland and Ben Norman for helpful comments. * 1. *  *  Introduction  1 Central banks sit at the heart of the monetary economy providing the ultimate settlement asset and typically operating the large-value payment systems that underpin financial activity. The modern central bank’s twin objectives of monetary and financial stability emerged from their early role in settling claims between banks. 2 But this traditional payments function is subject to the same forces for change that are transforming the rest of the economy. In particular, developments in technology, the financial innovation they allow, and the globalisation of finance are reshaping the landscape, exposing new sources of risk and posing fresh challenges for regulators and central banks. 3 As markets become more interconnected and international, national authorities have to work more closely together, cooperating in their oversight and operational activities and coordinating their risk assessments. As new products and players emerge in the commercial sector, they may also need to adapt the scope of their oversight and regulatory response.