samchain/econo-pairs-v1 huggingface dataset:
Consumers may attach more importance instead to the inherent qualities of goods and services and to their price in relation to these qualities. That would more likely lead to stronger competition and increased downward pressure on prices and profit margins. The new technology would then turn out to benefit consumers rather than shareholders. Diagram 5:  Real return on equity 1900-98 1000 100 Trend 7% per year  10 1 0,1 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Sources: Frennberg & Hansson, Affärsvärlden and Riksbank calculations  BIS Review 90/2001  5  Returning to the comparison with the United States at the turn of the nineteenth century, we find that the profits of electricity producers were not higher than normal. The increased competition pushed prices and profit margins down. All this means that there are many reasons for supposing that even in the future the long-term real annual return on equity will probably continue to be in the vicinity of the historical trend of around 7 per cent, though it is liable to vary. That has been the case in Sweden throughout the twentieth century (Diagram 5) and in the United States for virtually two hundred years. Major technological breakthroughs occurred in this period. This long historical perspective shows that over considerable periods the real return on equity has been fairly constant. Conclusion In conclusion it can be said that my argument basically points to a positive finding.

Many of the issues we face are not unique to any one of us, but rather are shared across the region and the globe. Recent events, from the COVID-19 pandemic to the war in Ukraine, have only underscored the importance of active dialogue and transparency among central banks. Beyond the global economic impact of these events, it’s important to emphasize that the pandemic is first and foremost a public health crisis, and that the Russian invasion is inflicting tremendous hardship and suffering on the Ukrainian people. In terms of economic impacts, all of us in the Americas were affected by lockdowns and shutdowns at the start of the pandemic. All of us have faced supply-chain bottlenecks and imbalances, as people around the world shifted their spending habits—buying more goods and spending less on services. And many of us are now confronting a sharp rise in inflation, especially for food and energy, which is hardest on our most vulnerable populations. Of course, each country is facing its own set of circumstances, and each has its own domestic mandates. But it’s important to remember that the policies we implement can affect our neighbors, just as developments that take place outside our borders can impact our ability to achieve our domestic goals. The actions we take can also affect the flow of capital across countries. As central bankers, it is vitally important that we clearly communicate our policy strategies and reasoning for our actions as we carry out our mandates.
The task is to make the best forecast we can of how the economy and inflation pressures will evolve and to adjust policy to ensure the outcome is consistent with monetary stability. Financial stability by contrast is more about the tail of the probability distribution than the central probability – about what could happen rather than what is likely to happen. Our task is to ensure the financial system avoids very bad outcomes. Or, if they cannot be avoided, that the system can weather them without breaking down and without acting as an amplifier of stress. Though infrequent and unlikely, the events we lived through 10 years ago demonstrated that such breakdowns not only can happen but are also extremely costly when they do happen. So although it may appear gloomy, we are always looking for the downside risk, always asking what risks could the financial system generate, what risks could it withstand, what risks could it amplify? And, by extension, whether it is worth insuring against those risks crystallising. The past of course gives us some guide. We know many of the things that have caused financial crises in the past that we need to prevent causing problems in the future. But our job is not just about preventing the last war; it is also about anticipating and assessing new risks as the financial system grows and evolves. And, where justified, taking action to address them.

As I have noted, to the extent that these are sensible regulatory improvements in line with global norms intended to enable delegation and global business models to operate effectively and practically while managing risk, one would have little concern. To the extent, however, that they are motivated by Brexit and a desire to pull activity and risk back within jurisdictional boundaries,  22  contrary to current global practice, I do have a concern that they could act as the  harbinger of fragmentation to come. That would raise the cost and reduce the efficiency of market-based intermediation of savings in the EU and, if it led to wider effects, further afield. It would also slow, and perhaps frustrate, the development of market-based finance globally as a way of diversifying economic risks and benefits across jurisdictions and of dampening economic and financial shocks. And from a macroprudential perspective, for the reasons I have set out earlier this morning, that could be the biggest long-term loss. 22  The stated aims of the European Commission’s proposal are to ensure effectively supervision of outsourcing, delegation and risk transfer arrangements in third countries.
Purchases of private assets and assets other than government securities are primarily relevant when markets that are important to the financial system are threatened, and we risk an acute financial crisis, such as at the start of the pandemic. Under the new Sveriges Riksbank Act, the Riksbank can – under certain conditions – buy and sell Swedish securities issued by the government and private actors. Our monetary policy toolbox in this respect remains the same as before. However, the new act has a more restrictive view of when it may be relevant to purchase private securities. The Riksbank may only buy and sell such securities if there are exceptional reasons. This means in practice that, from a monetary policy perspective, we can only buy and sell private securities when we cannot achieve the desired effect on the economy by using other measures. The new act also gives the Riksbank a more explicit mandate than before to trade in securities, also within the scope of our task of contributing to a stable and efficient financial system. To counter serious disruptions in the financial system, the Riksbank may if there are exceptional reasons buy and sell financial instruments at predetermined prices to temporarily support the functioning of systemically important financial markets. An important task for the Riksbank is to be the lender of last resort for important credit institutions that have problems, but also, under certain conditions, to act to keep markets that are critical to the financial system going.

Perhaps the recent proposals of the European Commission could contribute.12 One aim is to make it easier for authorities to use the resolution tool for smaller banks as well. Among other things, the proposal means that the authorities should be able to actively use the funds in the deposit guarantee funds to facilitate the resolution. However, this proposal needs to be analysed in greater detail. The requirements on banks need to be strengthened The third question concerns the requirements we should impose on banks. There are several lessons here. Some may seem detailed, but they have a major impact on the banks' operations and the risks they take. Let me focus on three of these lessons. One lesson from the Silicon Valley Bank run is that deposits are not always as sticky as many people assumed. This is important for the liquidity rules banks must follow. After the 2008 financial crisis, the Basel Committee developed new global standards for this. As part of the Basel III agreement, countries were required to introduce two liquidity measures, the LCR and the NSFR. The LCR framework makes assumptions about how different types of liabilities flow out of a bank and how stable different forms of funding are. Deposits are normally assumed to be sticky. The question now arises whether the outflows assumed in the LCR framework are reasonable, given the outflows we saw in this case. I think we need to assume that deposits, especially unsecured deposits, are more unstable than we previously thought.
Since the onset of the financial crisis in 2007, the prolonged slump in global growth and valiant efforts by central banks have pushed interest rates even lower. As a small open economy, Switzerland cannot decouple itself from these global developments. On the contrary, exceptionally low interest rates around the globe have farreaching consequences for our economy. In the past, Switzerland has invariably had lower interest rates than its trading partners, namely the euro area countries, as shown in slide 3, where the blue shaded area depicts the difference between short-term interest rates in euros (yellow) and Swiss francs (red). This interest rate advantage primarily reflects the lower average inflation rate in Switzerland compared to other countries, although political stability, sustainable fiscal policy and credible monetary policy also play a role. Investors have therefore traditionally been willing to hold Swiss franc investments at lower yields. This interest rate advantage was for a long time the ‘natural’ state of things in Switzerland. However, in the wake of the financial crisis, this advantage came under mounting pressure. Monetary policy easing on the part of the European Central Bank resulted in a narrowing of the EUR/CHF interest rate differential. In 2014, yields on short-term government bonds in Switzerland were, at times, even higher than in Germany. This caused upward pressure on the Swiss franc to intensify. 2 From a monetary policy perspective, Swiss franc appreciation calls for monetary policy easing, since the exchange rate has a substantial influence on inflation and economic developments in Switzerland.

This – along with the SNB’s willingness to intervene in the foreign exchange market – has helped to relieve pressure on the Swiss franc. The effect of the negative interest rate on the exchange rate is currently playing a decisive role in enabling the SNB to fulfil its monetary policy mandate. It allows the SNB to counter the aforementioned consequences of the Swiss franc appreciation on economic developments and inflation. Without the negative interest rate, inflation and economic growth in Switzerland would be lower. 3  Low interest rates and Swiss banks’ profitability The negative interest rate thus remains indispensable from a monetary policy perspective, and has, as explained, achieved the desired effect. A monetary policy geared to price and economic stability is also a precondition for a profitable, stable financial system. An environment of decreasing prices and low growth would lead to reduced demand for banking business and increased credit defaults, losses and write-downs. At the same time, the exceptionally low interest rates are fraught with significant challenges. Above all, over time they can have economically undesirable consequences for financial stability. We have arrived at the main topic of my remarks today, namely, how does the SNB assess the effects of low interest rates on financial stability? The answer to this question largely depends on the extent to which low interest rates affect banks’ profitability.
Ravi Menon: Inauguration of Swiss National Bank’s Singapore branch Congratulatory remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the inauguration of Swiss National Bank’s Singapore branch, Singapore, 11 July 2013. *  *  *  Mr Thomas Jordan, Chairman of the Governing Board, Swiss National Bank Ambassador Thomas Kupfer Ladies and Gentlemen, Good afternoon. I am delighted to be here to celebrate the opening of Swiss National Bank’s first overseas branch office, right here in Singapore. The opening of SNB’s Singapore branch is significant. It reflects the growing importance of Asian markets in the portfolios of many long-term investors such as the SNB. Currently, there are over 500 players in the asset management industry operating in Singapore with total assets under management of around USD 1.1 trillion. If Asia is the heart of the global economy, then it is in Singapore that you feel the heartbeat. From Singapore, you will get a good feel of not just the well-established markets in Northeast Asia, but also the rapidly emerging ones in South and Southeast Asia. This new branch office will help SNB form closer and stronger ties with partners in this fast-growing part of the world. In particular, SNB will have the opportunity to exchange views with the vibrant asset management community in Singapore, including many Asia-focused managers and investment professionals. We are doubly pleased that SNB has chosen to come to Singapore, because our two countries are like kindred spirits.

Zeti Akhtar Aziz: The development of Islamic finance Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Royal Award for Islamic Finance gala dinner, Kuala Lumpur, 25 October 2010. *  *  *  It is my very great honour to welcome this distinguished audience to this special gala dinner organised by Bank Negara Malaysia and the Securities Commission to commemorate the presentation of the inaugural Royal Award for Islamic Finance. This gala dinner is also held in conjunction with the Global Islamic Finance Forum 2010 that is taking place this week, and which commenced this morning. Tonight, in commemorating this prestigious Royal Award for Islamic Finance, we are blessed and honoured to have Kebawah Duli Yang Maha Mulia Tuanku Haji Abdul Halim Mu’adzam Shah who will graciously confer the winner with the award. Bank Negara Malaysia and the Securities Commission are proud to jointly sponsor this award under the auspices of the Malaysia International Islamic Financial Centre initiative (MIFC). Allow me to take this opportunity, as Chairman of the MIFC Executive Council, to record our utmost gratitude to the Rulers’ Council of Malaysia for bestowing the Royal title to the award, giving it the highest distinction and recognition. Earlier this year, Malaysia launched a global search for the winner of this auspicious award which seeks to honour the exceptional individual who has made the most outstanding contribution to Islamic finance.
A second positive aspect of UK business performance through this recession has been the ability of companies to maintain their financial strength through the downturn. As Chart 4 shows, the retained profits of private companies in the UK fell only slightly during the downturn and have already begun to recover. In the first half of 2010, the financial balance of the private sector (excluding financial companies) was back above its average level over the last two decades, as reduced interest payments offset a squeeze on profits. Companies have also sustained profits by exploiting flexibility in their cost base – including measures to contain labour costs. They also conserved cash during the recession by aggressive destocking and holding back on investment. 6  BIS Review 158/2010  This more healthy financial position puts the corporate sector in a better position than it has been coming out of previous recessions to increase investment as they see demand recovering. The most recent reports from the Bank of England Agents around the country are relatively positive about the investment outlook and this is consistent with investment intentions indicated by other business surveys. 9 These indications of rising business investment also suggest that constraints in the banking sector – which are making it more difficult for many small and medium sized companies to obtain finance – are not acting as a serious obstacle to a recovery in business investment. The third positive development for the supply-side of the UK economy following the recession is the low level of company failures.

If I tell you to shoplift, then I am committing an unethical act - and so are you, if you follow my instruction. “I was only following orders” is not a legitimate defence. There is, if you like, a double-lock on unethical instructions within a wholly human environment - on the part of the instructor and the instructed. This is one reason why firms and regulators are so determined to promote ‘good’ cultures, including, for example, ‘speak up’ cultures, and robust whistle-blowing. But there is no such double-lock for AI/ML. You cannot tell a machine to “do the right thing” without somehow first telling it what “right” is - nor can a machine be a whistle-blower of its own learning algorithm. In a world of machines, the burden of correct corporate and ethical behaviour is shifted further in the direction of the board, but also potentially further towards more junior, technical staff. In the round this could mean less weight being placed on the judgements of front-office middle management. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  There have been some initial steps to promote the ethical use of big data and AI/ML in financial services. Notably, for example, in Singapore,7 and – more broadly – within the EU.8 In the UK, the Centre for Data Ethics and Innovation is looking at maximising the benefits of AI,9 and many consider them leaders in this field. Principles-based expectations have focused on areas such as fairness, ethics, accountability and transparency.
Chart 1: Annual GDP growth percentage changes on a year earlier 12 10 Average annual grow th since 1970  8 6 4 2 0 -2 -4 -6  1970  1975  BIS Review 5/2009  1980  1985  1990  1995  2000  2005  5  Chart 2: Property prices Indices: March 2003 = 100 150 Rat io of house prices t o earnings  140 130 120 110 100 90 80  Rat io of commercial property prices t o PNFCs profit s  70 60 50  98  99  00  01  02  03  04  05  06  07  Chart 3: Customer funding gap  Chart 4: Survey measures of activity £ billions  Ratio  Cust omer funding gap (RHS) Int erbank deposits from abroad (RHS) Household saving rat io(b)(LHS)  8 7  5  500  4  400  3  300  2  200  1  100 0 02  03  04  05  06  07  08  Expansion  Indices: 50 = output unchanged on a month ago 70  700 600  0  6  800  6  01  08  60  50  Construction Services  40 Contraction  Manufacturing  30  97 98 99 00 01 02 03 04 05 06 07 08  BIS Review 5/2009  Chart 5: Global output  Chart 6: Investment intentions 65  Global output balance  August 2008 60  Services Manufacturing  Balance reporting an upwards revision to 40  55  30  50  20  45  10 + 0 10  UK CIPS output 40 35  20  30 2006  2007  2008  30 88 90 92  94 96 98 00  02 04 06 08  Chart 7: Growth in secured lending 3m annualised growth rates (nsa)  Other lenders Major lenders  25  20  15  10  5  0  -5  -10 2003  BIS Review 5/2009  2004  2005  2006  2007  2008  7

The increasing integration of the Albanian economy and the financial system in particular caused the global crisis to be reflected early in our country. The main channels the Albanian economy was exposed to were:   2  Decline of exports;  BIS Review 78/2010    Decline of remittances and other foreign currency inflows;    Increased uncertainty in the financial institutions; and, in response to the latter    Review of almost all economic agents’ business plans. This impact was reflected in low growth rates and shaking of some macroeconomic balances in 2009. According to the Statistics Institute, GDP grew 3.1 percent in annual terms in 2009. The slowdown of GDP growth reflected the contraction of activity in industry and construction, while the services sector’s value added remained the key contributor to economic growth. Given the difficult circumstances in which economic activity took place and compared with other regional countries’ experiences, the preservation of the economic growth rate at positive levels is an encouraging development. However, its slowdown and the new macroeconomic balances need due attention by all economic agents in their projections for the future. Albania’s economic development outlook also requires greater support from the private sector, while the contribution of the public sector to economic growth is expected to decline. The data on aggregate demand show that the contraction of private consumption and the fall in investment were determining factors in the slower growth of demand at home.
Despite strong growth in the past several quarters, the weakness of the developed countries will eventually erode their dynamism, a situation that is already apparent in some countries. However, unlike the developed economies, the emerging world has more space to implement economic policies that help mitigate the effects of the worsened external scenario. Chile has this capacity too. Actually, according to several international assessments, Chile is among the best suited to confront such a scenario. Our country has made progress in recent decades to build an economic policy framework, which has already given proof of its capacity to properly deal with a difficult conjuncture. If necessity demands it, we have the capacity to adopt the necessary measures to mitigate the effects of the global crisis on our economy. The lessons learned from the experience of 2008–2009 give us a positive edge. The external impulse that our economy will be receiving in the coming quarters will be smaller than we thought just a few months back. However, we must not forget that still our relative position in the world is favorable. We have managed to diversify the destinations of our exports and China is now our main client. The copper price and the terms of trade, although not as good as some months ago, are still high from a historical perspective. Our country risk is low and, although our external financing cost has risen in recent weeks, it is still lower than it was in previous years ago.

Today we are again facing a scenario of external turbulence. Thus, we need to continue developing and adjusting our policy toolkit to the changes in the financial environment. Our experience of recent years has also taught us the importance of close and transparent communication of our assessments of the economy and its prospects, as it fosters a better understanding and effect of our decision. This is an area where we have made substantial progress in the past few years, but where there are always new challenges ahead. Among these challenges, we believe that improving the general public’s financial education is an important one. We will actively cooperate in initiatives in that sense. During these years the Central Bank has contributed to the country’s economic development by acting on inflation which, throughout history, has proven to be one of the greatest plagues a society can suffer, especially its most vulnerable segments. As the new Governor of the Central Bank of Chile, I want to confirm to this Commission our commitment to carry on the work done to this date, always ensuring high technical rigor in the analyses and decisions, as well as making every effort to take our Institution to the highest possible standards. Our responsibility is twofold. On one hand, keeping inflation low and stable, favoring sustainable growth. On the other, using our powers to identify and address the risks that could jeopardize the normal functioning of our financial system.