samchain/econo-pairs-v1 huggingface dataset:
When inflation increases from a very low level, this will provide a basis for gradually moving towards a more normal short-term interest rate level in Norway. This may counter excessive credit growth and excessive pressures on domestic resources in the medium term. Interest rate developments in other countries may also have a considerable impact on the krone and hence on Norwegian interest rates. Interest rates were left unchanged at Norges Bank’s Executive Board meeting on 21 April 2004. In reaching its decision, the Executive Board had weighed the objective of bringing inflation back to target and stabilising inflation expectations against the risk that output growth may eventually become too strong. Furthermore, according to Norges Bank’s assessment, with a sight deposit rate of 1.75 per cent at present, the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher. BIS Review 23/2004  7

Adopting a package of adjustment measures to come into force immediately, for a significant amount, in sufficient and specific detail, and affecting items as sensitive as public-sector wages, welfare benefits and public investment, gave credibility to the commitment to reduce the budget deficit. Also contributing to this was the bringing forward of the fiscal adjustment targets, whereby almost two-thirds of the adjustment envisaged by 2013 would be completed in 2011. Finally, having noted the failed negotiations between the trade unions and employers’ associations, the government approved a labour market reform on 16 June aimed at encouraging permanent hires and increasing internal flexibility at companies, two of our labour market’s most serious shortcomings. The adoption of these measures, along with the publication of the banking stress test results, saw the tensions on financial markets abate. There was a significant reduction in funding costs for the Treasury and a reopening of funding channels for credit institutions. Yet this does not mean that the period of instability is over, as the tensions still bearing down on other European countries show. Accordingly, following this initial response it is essential to maintain the credibility earned without losing sight of the fact that for a long time we will be subjected to very close scrutiny, and that episodes likely to spread suspicion and a lack of confidence may arise. This is the particular juncture we have reached and at which we are discussing this Budget.
In 1979, Compuserve opened up electronic mail to a rising community of personal computer users. In the same year, two graduate students at Duke University, Tom Truscott and Jim Ellis, developed Usenet, allowing users to post messages to (a precursor of) internet forums. By 1983, after more than a decade of evolutionary development, a universal Internet Protocol was agreed. This provided infrastructure and common technical standards for this evolving communications network. But the languages of the internet remained technical and diffuse. That meant it largely remained the domain of the nerds – libraries and universities. In March 1989, Tim Berners-Lee, a British software engineer working at CERN, the Geneva-based nuclear research lab, wrote a memo to his boss Mike Sendall.7 It was a suggestion for improving information management at CERN, replacing the silo-ed approach to information storage and search with a more interconnected approach. Sendall described the proposal as “vague but exciting”. A year on, Berners-Lee made his proposal less vague and more exciting. A paper with Robert Cailliau proposed the development of a World Wide Web, with links between and within documents creating a web-like information network.8 At the centre of this web was a  6  World Trade Organisation (2011). 7  Berners-Lee (1989). 8  Berners-Lee and Cailliau (1990). BIS central bankers’ speeches  3  common language – Hyper-Text Markup Language (HTML). This was a new lingua franca for computers, allowing them to communicate irrespective of their operating systems and underlying technologies.

More generally, all over the world, the best private sector involvement is foreign direct investments, privatisation and going back as soon as possible to spontaneous market financing. FTD: Is the ECB sticking to the line that any solution for Greece that leads to a credit event, a selective default or a default must be avoided? Trichet: The Governing Council has not changed its position. Again we are in a domain where Governments are responsible. Our duty is to say clearly what we judge appropriate in order to avoid the risk of adverse developments in the euro area and in Europe. As you know there has been several times in the past when our advice was not followed, such as when we advised solemnly against watering down the letter and the spirit of the Stability and Growth  BIS central bankers’ speeches  1  Pact. If this advice had been followed, we may have avoided some of the problems we are facing today. FTD: How is the ECB helping to battle the crisis? Trichet: The most important thing for the Governing Council of the ECB is, for the future as it did in the past, to stick to its mandate and ensure price stability for the euro. The fact that the euro is a stable and credible currency is a prerequisite, a necessary condition for mastering this difficult situation. The ECB is an anchor of stability and confidence which is particularly fundamental at a time when everything else seems to be moving and shifting.
In the first year or so of the crisis, in order to maintain the relatively scarce level of reserves necessary to maintain interest rate control, the Desk offset balance sheet growth associated with the Fed’s credit and liquidity facilities by reducing other assets on the Fed’s balance sheet, notably holdings of short-term U.S. Treasury securities. By September 2008, amid a deepening crisis and widening policy response, the Fed lacked a sufficient volume of unencumbered Treasury securities to sell. Some additional reserve-draining capacity came from the Supplementary Financing Program (SFP), used from September 2008 through July 2011, through which the U.S. Treasury issued bills (separate from its regular borrowing program) and maintained the proceeds in an account at the New York Fed. Even with this program, the Fed’s sterilization capacity was limited. 5 The FOMC’s September 2014 Policy Normalization Principles and Plans indicate that the Fed plans to use an  ON RRP facility only to the extent necessary and will phase it out when it is no longer needed to help control the federal funds rate. The FOMC’s current directive for open market operations instructs the New York Fed’s Open Market Trading Desk to undertake ON RRPs in amounts limited only by the value of Treasury securities held outright in the System Open Market Account (SOMA) that are available for such operations and by a percounterparty limit of $ billion per day.

There are still plenty of reasons to be cheerful: •  Growth is running at an annual rate of over 3%, above its historical trend and at the top of the G7 league table. Growth in the UK will probably exceed global growth this year, for the first time in over a decade. According to outside and MPC forecasts, UK growth is expected to remain at or above trend for the next few years. •  Recent revisions to GDP suggest that the UK experienced both a shallower recession, and a somewhat stronger recovery, than previously believed. As a result, the level of GDP reached its pre-crisis peak in the middle of last year, three quarters sooner than earlier estimates suggested. •  UK growth is reasonably well-balanced between consumption and investment, although net trade continues to disappoint. Business investment is growing at double-digit rates and has contributed fully a third to economy-wide growth since its trough. According to the MPC’s forecasts, investment will continue to grow at double-digit rates in the period ahead. •  Consumer price inflation, at 1.2%, has fallen below the Bank of England’s 2% inflation target, reducing the squeeze on households’ real disposable incomes. According to financial markets, inflation is expected to return and stay close to target over the medium term. •  Borrowing costs remain at exceptionally low levels. Secured borrowing costs for households and large companies are in the range 3%–6%, around 3 percentage points lower than in 2007. Measures of credit conditions have continued to ease.
In addition to surveys, international organizations have mobilized to develop a range of indicators to assess the different dimensions of financial inclusion. Since the Cannes Summit in 2011, the G20 has focused on developing financial inclusion indicators, including indicators on access to and use of financial services, financial literacy, and the quality of financial service provisioning and consumption, as part of a continuous reflection process integrating new international trends in this field, notably the development of new distribution models and the emergence of digital financial services. The AFI also published a set of basic indicators on access to and use of financial services in 2013 and on quality in 2016 with the aim of harmonizing data among its members by providing them with a common tool to ensure comparability and foster peer learning. Ladies and gentlemen, In Morocco, since 2007 both the Ministry of Finance and Bank AlMaghrib have considered financial inclusion as a major instrument to develop a comprehensive strategy of the financial sector by 2020 which aims to deepen the national banking market, develop capital markets and position our country as a regional financial hub. Through our commitment to the Maya Declaration in 2013, we announced our pledge to promote access to and use of quality financial services based on sound and solid foundations. That same pledge was 4  reaffirmed in 2016 as part of the roadmap of aligning the Moroccan financial sector to sustainable development goals at the COP 22 held last year in Marrakech.

As I have already noted, under the current circumstances, making any projection is a very challenging task. The key factors in play are the economic outlook and the rise in interest rates. The performance of the financial system in 2023 will be shaped by how these factors interact. On the one hand, the European banking system is currently in a strong position. We have also observed robust profitability in H1 2022, taking advantage of higher interest rates, especially in Q2, resulting in a 5% increase in net interest income, the highest quarterly increase in recent years. Spreads of non-financial corporations increased by 14 bp in H1 2022, compared to 4 bp for households, due to more issuances and faster repricing. Although profitability has increased,7 RoE remains heterogeneous across business models and countries. Investment banks and corporate/wholesale lenders lag behind other business models. The biggest improvements were recorded for diversified lenders. Moreover, although we have not yet observed any significant increase in deposit rates, it is clear that we will soon begin to see an increase in deposit remuneration. This will also have an impact on margins. 6  https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_survey/html/ecb.blssurvey2022q2~ce6d1a4597.en.html# toc5 7  Only one business model (small market lender) has seen a fall in profitability, although it remains the most profitable model. 5  Meanwhile, although impairment flows are still low, we expect this trend to change as the economy slows down and disposable household income falls due to inflation.
Today, Croatian banks are amongst the best capitalized in Europe, have fairly efficient operations and comfortable profitability, which adds to their ability to withstand even major economic and financial disturbances. However, this transformation was not quick or simple. Neither was the progress linear, as there were no textbook solutions to many problems that arose along the way. Nevertheless, every step forward and each single setback provided us with important lessons that are helping us navigate in the complex economic and financial environment. So, today, I thought of sharing with you some of the insights we got along this journey, and what we bring into the euro area and banking union in particular, what we have learnt along the way. A tale of two crisis First, I want to draw on the Croatian experience of two banking crises from the 1990s, the first at the beginning of the decade, and the second at its very end. Both crises had a strong macro dimension. However, the roots of the problem were always in the banking sector, although set in different corners of the system. In the first case, the background was economic collapse amid transition from socialism into market economy and market disruption caused by war in the former Yugoslavia. Banks operating in such an environment were underdeveloped, poorly capitalized, loosely managed and regulated, and their main function was to grant cheap loans to the state-owned companies, often without adequate risk assessment.

Sunil Mendis: Central bank governance and how such governance is related to strategic planning in central banks Opening remarks by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the 3rd SEACEN EXCO Seminar and Meeting, Colombo, 28-29 January 2005. *  *  *  Deputy Governors and Heads of Delegations of SEACEN member and observer countries, Mr Gavin Bingham, Head of International Liaison of BIS, Dr Subarjo Joyosumarto, Executive Director of the SEACEN Centre, distinguished invitees, ladies and gentlemen. It gives me great pleasure to inaugurate the 3rd SEACEN EXCO Meeting and Special Seminar to mark the Meeting. As a founder member of SEACEN, the Central Bank of Sri Lanka is honoured and delighted to host these two events in Colombo, Sri Lanka. On behalf of the Central Bank of Sri Lanka, I extend a warm welcome to all the delegates from the SEACEN member and observer countries, our special guests, and of course, the officials of the SEACEN Centre. The gathering of several distinguished Central Bankers today demonstrates the emphasis and importance placed by them on the need for co-operating with each other to resolve issues of mutual interest. We host these two events just a month after the deadly ‘Tsunami’ hit some of our countries causing unprecedented and unimaginable destructions to the life and property. We are still recovering from this severe blow. Tsunami, indeed, brought all of us even closer. Our thoughts and prayers are with those who lost their beloved ones, property and suffered injuries.
The Monetary Policy Toolbox in the UK Speech given by Dave Ramsden, Deputy Governor for Markets & Banking  Society of Professional Economists 21 October 2020  With thanks to Renée Horrell and Tom Smith for their assistance in preparing these remarks and to staff across Markets and BPI and elsewhere in the Bank for their many contributions, as well as to my colleagues on the MPC for their helpful comments and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  1. Introduction It’s a pleasure to be speaking once again at the Society of Professional Economists’ Annual Conference. When I last addressed this conference it was two years ago, in person, in the impressive surroundings of the Bloomberg building near to the Bank of England. Today we’re meeting in rather different circumstances, and for many of us at least in slightly less impressive surroundings! I'm delighted that we are able to meet virtually, and I'd like to thank Kevin Daly and all the SPE team for their work to make this event possible. The theme of today’s conference is “Policy Challenges for the Global Economy”. What I want to do as my contribution to that theme is to give you my perspective, in my role as Deputy Governor for Markets, Banking and Resolution at the Bank of England and member of the UK’s Monetary Policy Committee (the MPC), on one part of our response to the particular policy challenges of the Covid pandemic.

We are six different individuals on the Executive Board. We have different backgrounds and different perspectives. Sometimes this leads to our assessments differing, even if we work towards the same objective. It applies in particular to very uncertain situations like the present one. But the whole idea of having an Executive Board is that disagreement is permitted. Different approaches and opinions enrich the discussions and hopefully lead to better decisions. BIS Review 115/2008  5  My own assessment So how did I reason at the most recent meeting, when I voted for another increase of a quarter percentage point? Well, to begin with it is important to put an individual decision in the right perspective. Monetary policy acts with a time lag and what affects inflation a couple of years ahead is a series of interest rate decisions rather than an individual interest rate increase, or cut, for that matter. My decision in September was therefore closely connected to both the interest rate policy we have conducted over the past few years and the interest rate path I expected to see in the future. A new phase We have experienced a long period of low inflation and high growth from a global perspective, but we have now entered a new phase. In developed economies like the United States and the euro area growth is falling, while it remains high in emerging economies such as China, India and Brazil.
Providing a forecast for the policy rate by itself does not create any budget or reputational risk for the Federal Reserve, so I generally do not see the first form of forward guidance as posing much risk to central bank independence.2 The second form of forward guidance – pre-commitment to a policy rate path – could create more risk for the central bank. In particular, consider a scenario in which the central bank decided to increase monetary accommodation by committing to maintain a low short-term interest rate for a long time even if this commitment resulted in inflation overshooting the central bank’s objective in the future. I could see how this could create a potential threat to the central bank’s independence. That is because the commitment could force the central bank in the future to conduct monetary policy in a way that was inconsistent with the inflation portion of its mandate. Although this second form of forward guidance could create greater risk for the central bank with respect to its future independence, this is not a policy that has been adopted by the Federal Reserve. There are implementation challenges with this approach. In particular, it is difficult for a monetary policy committee today to institutionally bind future monetary policy committees to follow actions that could conflict with their objectives in the future. Without such a credible forward commitment, such policies would likely be ineffective in affecting expectations in the manner needed to provide additional monetary policy accommodation.

In contrast, I think there are greater potential risks to central bank independence from the Fed’s large-scale asset purchase programs and the Treasury maturity extension program. These programs do create some budget risk for the Federal Reserve. The issue here is not that the Fed is taking credit risk because the Fed’s purchases are restricted to Treasuries and agency MBS. Instead, the budgetary risks stem from the fact that these asset purchase and maturity extension programs expose the Federal Reserve to increased interest rate risk that could affect the level of net interest earnings and therefore the amount of the Fed’s remittances back to the U.S. Treasury. If the Federal Reserve needed to raise short-term rates to attain its objectives, it would do so by raising the interest paid on its reserves. As a result, net interest earnings would fall due to the increase in interest cost. If the rise in rates were sufficiently large, the Federal Reserve’s net interest margin could turn negative, resulting in losses for the Federal Reserve. The Fed’s earnings could also be adversely affected by asset sales. For example, if the Fed determined that it needed to reduce the aggregate level of reserves through asset sales, the Fed might incur losses by selling these assets at prices below their amortized costs. Although this risk is real, I believe it is not a big threat to the Federal Reserve’s independence for two reasons.
To counteract the risks to our price stability objective, we first recalibrated our policy stance last December and then unveiled another comprehensive set of measures at our last monetary policy meeting in March 2016. In discussing our recent monetary policy measures, it is essential to consider the global environment in which they were taken. This environment was characterised by subdued growth, historically weak trade developments and low inflationary pressures reflecting sharp falls in energy prices. The more recent developments have been affected in particular by the outlook for emerging markets contributing to global financial market volatility in the second half of 2015 and again in February this year. In this respect, these developments are analysed in the box in the Annual Report entitled “Financial stress in emerging market economies” in order to understand their impact on the euro area economy. This is against the background of the discussions carried out in international fora, most recently at the meeting of G20 ministers and central bank governors, as well as at the BIS meetings in February in Shanghai. Risks to the global outlook and global financial stability will feature prominently on the agendas of the various meetings in the context of the IMF and World Bank spring meetings next week.

The alternative, as I have discussed before, 11 is to raise a levy from surviving firms after the event. This would have to be linked to a systemic-crisis threshold being passed for the deployment of public funds. And the basis for deciding how much was recovered from individual firms would need to be both clear and principled. In particular, it would be important to try to incorporate features that enabled costs of failures somehow to fall to uninsured, wholesale creditors. Those who finance the system in the good times need to have incentives to price for risk. Summary This has been a fairly high-level survey of the instruments on the crisis management menu. They are, of course, interlinked. They also bear on the wider debates about the structure and regulation of the financial system. Perhaps most obviously, the feasibility of producing recovery and resolution plans will feed into international and domestic decisions on minimum capital requirements for banks in general and on the mooted add-ons for so-called systemically significant firms. The weaker a recovery plan and the greater the obstacles in the way of its effective resolution, the more capital (and liquidity) a bank is going to have to hold. This is why emerging interest in Contingent Capital instruments is so important. If CoCos could form a material part of recovery plans, the landscape might just be transformed. And that in turn goes to the big issue.