samchain/econo-pairs-v1 huggingface dataset:
It will then rise slightly and be on target in 2011. Considerable uncertainty in the assessment I would like to add that the uncertainty in our assessment is unusually large on this occasion. As always, it is therefore important to remember that the path we present for the repo rate is a forecast and not a promise. It may be necessary to cut the rate more, or less, than we are assuming now. If the financial crisis worsens, or if the effects on production and employment are more powerful than we believe, a lower interest rate might be necessary. However, if the krona were to remain weak or if inflation were to become entrenched at a high level, a higher interest rate might be necessary. The interest rate decisions we will make in the future will depend quite simply on how new information affects the outlook for inflation and economic activity in Sweden. We are following developments closely and are prepared to take action when necessary. A concluding reflection Around 15 years ago I was appointed head of the Swedish Bank Support Authority. Sweden was in the midst of a deep economic crisis; a crisis which had largely been caused by problems on home ground. The situation was serious, not least for the bank system, where loan losses during the recession totalled record sums. The Bank Support Authority was established as one of the measures taken to prevent the collapse of the Swedish financial system, in particular the payment system.

10  BIS Review 138/2008  To ”promote a safe and efficient payment system” Preventive work and preparedness to take action   Regularly analyse threats and risks to financial stability    Preparedness and crisis exercises    Various tools when shocks occur, such as; Information and dialogue with the market  Supply liquidity on special terms     Contact and cooperation with other authorities, in Sweden and abroad  The Riksbank’s measures to ensure the financial system will function more normally   Loans in SEK and USD against collateral and at an interest rate    Special loan facility in SEK with new commercial paper as collateral    Changed collateral requirements    Liquidity assistance to;    Kaupthing Bank Sverige AB. Carnegie Investment Bank AB  Note: Carnegie is now owned by the Swedish National Debt Office and the Riksbank’s liquidity assistance has been repaid  BIS Review 138/2008  11  M easures taken by the state  Riksbank  SEK 390 billion   Swedish National  Debt Office  SEK 116 billion  Has taken over Carnegie Investment Bank AB  Guarantee programme (max total SEK 1500 billion)    Government  Finansinspektionen  (Swedish Financial Supervisory Authority)  M onetary policy and the international financial crisis  A small, export-dependent economy   Affected by international developments   Counteract the effects of the crisis!
McConnell, M. and G. Perez Quiros (2000), Output Fluctuations in the United States: What Has Changed Since the Early 1980s?, American Economic Review. Mian, A. and A. Sufi (2009), The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis, Quarterly Journal of Economics. Morgan, D. (2002), Rating Banks: Risk and Uncertainty in an Opaque Industry, American Economic Review. Rajan and Diamond (2009), The Credit Crisis: Conjectures about Causes and Remedies, American Economic Review. Rochet and Vives (2004), Coordination Failures and the Lender of Last Resort: Was Bagehot Right After All?, Journal of the European Economic Association. BIS central bankers’ speeches  5

Our analysis of the risks in the forecast did, however, include the possibility of the slowdown being broad and pronounced. But the information received during the summer has supported the assessment that last spring’s dip in international activity was transient. At the same time, the continued increase in oil prices has to be weighed into the general assessment. It is hard to be certain about what has caused the high oil prices but there are many indications that an important factor is demand. The price rise is probably due to a combination of increased demand for oil from rapidly expanding economies such as China and India and the fact that production capacity has not yet been adjusted sufficiently. In recent months, it seems that another contributory factor has been uncertainty about the consequences of hurricane Katrina. It is reasonable to suppose that the oil price may fall back from the current high level but predicting the future price we should allow for is genuinely difficult. As to the consequences of the high oil price, it seems that the price rise to date has not appreciably curbed global growth. This is probably because many industrialised countries have become less dependent on oil. In Sweden, for example, oil’s contribution to energy supply has decreased from around 70 per cent in 1970 to just over 30 per cent in 2004. There has probably also been a balancing effect in that the high price of oil seems to have been generated in part by strong demand in Asia in particular.
Not only is exchange rate volatility greater, but the adjustment of the exchange rate returns less than no benefit in the form of a more stable real economy.4  All four of these explanations probably have some validity, but there is good reason to examine the fourth of these more closely. Why is exchange rate adjustment not a shock absorber in small countries, as in the textbook example, but rather a source of shock? There could be a number of explanations for this. 1. The tendency of exchange rates to fluctuate in excess of what appears to be warranted by fundamentals could be a contributing factor. In a sense, the exchange rate of a currency is an asset price and, as such, is determined by expectations visà-vis an uncertain future. Expectations can swing from euphoria concerning the expected future stream of foreign currency revenue from investment that will support a currency to despair and, in extreme cases, serious lack of confidence over a protracted period. Exchange rate movements have a more profound effect on the economy than do other asset prices, however. In addition to storing value, a currency is a unit of account and a medium of exchange. Fluctuations in currency exchange rates induces volatility of relative prices throughout the economy, particularly in small, dollarised economies, and elevate the risk of doing business. 3  Increased aluminium production has also reduced the impact of commodity market volatility on the domestic employment level.

A comparison with European countries that fared poorly as a result of the financial crisis shows that Iceland’s exports have not grown more than those of euro area countries or those with fixed exchange rates. Actually, excluding seasonal effects, some of the fixed-rate countries have experienced greater export growth (Chart 2). 5. Actually, if exchange rate volatility is excessive and exporters are heavily leveraged in foreign currency, a large currency depreciation could conceivably have a negative impact on exports. Even though the depreciation has a positive effect on an exporter’s cash flow, the balance sheet effects could make the company technically insolvent. This complicates access to credit, which may be a prerequisite for the expansion of exports in a small economy with specialised export production. According to the above, my preliminary diagnosis is that the erosion of the value of the króna since its launch as an independent currency in 1920 can be traced to an inadequate monetary framework (particularly in the early years), general lack of discipline in economic policy-making, and the interaction of those problems with problems of running the world’s smallest independently floating currency. In order to maximise the chance of recovery, all of these underlying weaknesses must be treated simultaneously, including the instability of the  BIS central bankers’ speeches  3  currency, as some of the prescribed medications for long-term reduction of exchange rate volatility are difficult to administer unless exchange rate volatility is reduced first.
However, at present debt accumulation is high only in the household sector. There is little borrowing activity in the enterprise sector. House prices are rising, but non-residential property prices are stable. Prices for office premises are, however, stable. The analyses in the inflation reports indicate that inflation will remain low this year, picking up thereafter. The krone depreciation since January 2003 is expected to push up prices for imported consumer goods. Overall, mainland GDP growth is projected to pick up markedly this year and remain relatively high in 2005 and 2006. GDP growth is projected to reach 3¼ per cent in 2004 and 2005, followed by a slight decline to 2¾ per cent in 2006. With this path for total output, the output gap, as measured here, will shift to slightly positive in 2005 and 2006 from slightly negative this year. Projections are based on the technical assumption that the interest rate will move in line with forward rates. The assumption implies that the interest rate will be somewhat lower in the near term, but that it will rise gradually from the summer, largely in parallel with the increase in interest rates among our trading partners. The krone is assumed to follow the path of the forward exchange rate, which indicates expectations of a fairly stable exchange rate in the period ahead.

Svein Gjedrem: Monetary policy and the economic outlook Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at SR-banken, Stavanger, 19 March 2004. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 11 March, Inflation Report 1/04 and on previous speeches. The Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The target is symmetrical - it is just as important to avoid an inflation rate that is too low as an inflation rate that is too high. The inflation target provides economic agents with an anchor for inflation expectations. It therefore influences their decisions concerning saving, investment, budgets and wages. History shows that there is no long-term trade-off between lower unemployment or stronger economic growth and higher inflation. We witnessed this in the 1980s when growth was low and inflation high. The task of monetary policy is to provide a nominal anchor. Low and stable inflation is such an anchor. There are several reasons why it is an advantage for inflation to be higher than zero: •  The structure of the economy is in flux. Demand for labour with different qualifications is changing. This requires changes in relative wages. There are rigidities in nominal wage growth.
It is a great strength of the MPC that regional visits are a key part of the activities of all members of the Committee. And in the four and a half years I have spent as a member of the Committee, I estimate that I have visited around 140 individual businesses and talked to around 100 business groups – across England, Scotland, Wales and Northern Ireland.1 There are two reasons why I am particularly pleased to speak at today’s lunch. First of all, the East of England is my home region as I live in Essex and have done so for over a quarter of a century now. Second, I am always delighted to speak on a CBI platform as the seven and a half years that I spent as a CBI economist in the late 1980s and the early 1990s was a very important and formative period in my career. I have a great respect for the work of the CBI which remains the pre-eminent business organisation in the UK. That period I spent working in the CBI’s Economics Department about twenty years ago was also a period of major economic turbulence in the UK. I joined the CBI in September 1986, just as the “Lawson Boom” was getting underway. And I was the CBI’s Director of Economic Affairs from 1989 until the end of 1993 as boom turned to bust and the UK economy went through the last major recession before the global financial crisis of 2008/9.

As Chart 1 shows, UK GDP grew by 2.5% in the year following the trough of output in the third quarter of 2009, compared with 2.0% growth following the trough in the early 1980s and a rise of just 0.5% in GDP in 1991/92.3 Manufacturing industry has performed particularly strongly, benefiting from the global recovery and a competitive pound, and the recent annual growth of manufacturing output has been the strongest recorded since 1994. 2  Initial estimates of GDP growth made in the 1980s and 1990s were even more volatile, with quarterly GDP changes fluctuating from –1.8% to +2.3% in the first three years of the 1980s recovery and from –0.8% to +1.2% in the early phase of the 1990s recovery. 3  Growth was stronger in the first year of sustained recovery in the second half of 1992 and the first half of 1993, but this was later in the cycle (ie longer after the cyclical peak) than the other periods shown in Chart 1. 2  BIS central bankers’ speeches  Chart 1 – Early recoveries compared Annual percentage growth in the four quarters after cycle trough 5.0 1980s (81Q1-82Q1)  4.5  1990s (91Q3-92Q3) 4.0  Current (09Q3-10Q3)  3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 GDP  Manufacturing  Services  Source: ONS  However, confidence in the progress of the recovery has been affected by the most recent GDP release which showed a fall in output in the final quarter of last year.
This means that the financial sector is of considerable importance to the national economy and it is thus reasonable that the State should intervene in the workings of the financial system. In the wake of the crisis, one element of the discussion has been that regulation and supervision have to date focused too much on individual institutions and too little on the risks that were generated in other parts of the system. There is a lot of talk about the need to build structures that can prevent systemic risks, a so-called macroprudential framework. Exactly what a macroprudential framework contains is still unclear. It seems to mean somewhat different things to different people. I have therefore simply decided not to use this term today. Instead I intend to discuss the content of future efforts to prevent systemic risks without even mentioning the term macroprudential or its Swedish equivalent – a word that we have not yet invented. About the crisis: something old, something new and something borrowed Running a bank is about creating and maintaining confidence. When a bank makes losses – or it is feared that it will make losses – capital is required to cover these losses so that  confidence is not undermined. When the crisis became really serious, the banks did not have sufficient capital to retain confidence. This resulted in a liquidity crisis. The liquidity crisis became so severe because the banks had become increasingly dependent on short-term market funding.

The Malaysian Government has also focused its efforts towards strengthening its position as an international takaful and retakaful centre, with particular emphasis on widening and deepening the retakaful sector so as to effectively complement the growth and expansion of the takaful industry. In this regard, I wish to invite strong and qualified applicants to make Malaysia as their centre for retakaful activities. Foreign applicants with strong credentials are certainly welcome to conduct retakaful business in Malaysia. The changing global investment climate continues to pose challenges for life insurers in respect of their life fund investment. The recent sub-prime crisis in the US has induced greater fluctuations of the yield curve as well as higher volatility in the equity markets. Given the increased proliferation of innovative products with investment guarantees, insurers' remain very vulnerable to the movements of the capital markets. As for traditional noninvestment linked business, asset-liability management and duration mismatch continue to pose a challenge, and insurers must seek new long term investment avenues to minimize the risk of mismatches. The occurrence of global warming and climate change is of particular significance to the insurance industry which, has had to bear the brunt of severe losses arising from weatherrelated catastrophes. Between the 1960s and 1990s the number of natural catastrophes has doubled while insured losses increased nearly seven-fold, most of them weather-related.
After a few banking crises which hit the region in the late nineties, the lack of domestic private capital, combined with the fragile situation of the state budgets, made it compulsory to privatize the existing banks by selling them to foreign entities. I must confess that I also advocated the penetration of foreign capital into the Romanian banking sector. When my tenure as Prime Minister ended in late 2000, one piece of advice I gave to my successor was that the privatization of banks should continue as a means to promote restructuring of the loss-incurring SOEs and to stimulate convergence to the EU. I still believe that it was the right call, as foreign-owned banks had a favorable impact on economic growth and therefore played their part in the catching-up process, even if – ten years later – Nouriel Roubini sees the large share of foreign-owned banks in the Romanian banking system as a liability. The counterfactual argument “What would have been the performance of domestically-owned private banks?” does not withstand scrutiny: domestic private capital simply did not exist. However this intellectual exercise is worth doing, given some shortcomings of foreign-owned banks, which were revealed afterwards. One such shortcoming was the excessive euroization of some economies in the region (Romania, Hungary, Baltic states), given the reliance of foreign-owned banks on their parent banks for cheap financing.

A variety of fintech solutions are being offered, which can be broadly clustered in three groups: a) financial services, as business that offer internet based applications for instance for managing personal finance, trading securities, automating financial services (robotization); b) financing, via platforms that directly match investors and lenders, such as crowdfunding, or peer to peer lending; c) payments, via more innovative and customer tailored payment solutions. No doubts we have that fintech offers wide-ranging opportunities. It holds the promise of reducing costs and frictions, narrowing information asymmetry, enhancing efficiency and competition, and increasingly important, broadening access to wider set of financial services – especially in low-income countries and for underserved part of the population – although it may take time for the benefits of technological change to fully materialize. Against this background, ongoing innovations and technological advances can support stronger growth dynamics and higher inclusiveness of the growth, thus speeding up the real convergence process through a number of channels. For small economies, such as ours, fintech innovations can play important role in facilitating trade integration. More convenient and cheaper instruments for digital payments can set basis for easier cross-border trade, including e-commerce that currently plays a marginal role in the region. And there is a wide consensus that small country cannot become rich without accelerating its exports and deepening its integration into the international economy. Yet, national authorities should be mindful of the potential risks posed to the financial system and to its customers.
Other institutions, such as the International Monetary Fund (July 2018) and the Bank for International Settlements (Carstens, 2018), highlight the significance of indirect impacts, too. Page 4/9  Protectionism as a source of uncertainty for monetary policy The SNB’s monetary policy would also be affected by such a development – and this brings me to the main part of my speech. Over the short term, tariffs and other trade barriers have an inflationary impact and curb growth. We economists talk of a negative supply shock, or in other words an abrupt increase in production costs. The oil price shock of 1973 is a textbook example of this. Back then, a supply embargo imposed by the Arab members of the Organization of the Petroleum Exporting Countries (OPEC) saw the price of oil treble within a very short period of time. Given that oil was at that time an even more important raw material in the production of goods than it is today, this resulted in a sharp rise in consumer price inflation and a slump in GDP growth. Chart 4 illustrates this using the example of the US. A global rise in tariffs would have a similar effect. What the optimal monetary policy response for a central bank is in the case of a negative supply shock is not immediately obvious. This also applies to an abrupt and hefty rise in tariffs. Should a central bank raise interest rates in such a situation to combat inflation, or should it lower rates to stimulate economic activity?

Carney, Mark (2018), From protectionism to prosperity, speech given at the Northern Powerhouse Business Summit, Gateshead, 5 July. Carstens, Agustín (2018), Global market structures and the high price of protectionism, speech given at the Federal Reserve Bank of Kansas City’s 42nd Economic Policy Symposium, Jackson Hole, Wyoming, 25 August. Frankel, Jeffrey and David Romer (1999), Does trade cause growth?, American Economic Review, 89 (3), pp. 379–399. International Monetary Fund (2006), World Economic Outlook, April. International Monetary Fund (July 2018), G-20 Surveillance Note, G-20 Finance Ministers and Central Bank Governors’ Meetings, Buenos Aires, Argentina, 21/22 July. International Monetary Fund (October 2018), World Economic Outlook, October. OECD (2016), OECD Economic Outlook, Volume 2016, Issue 2. Ricardo, David (1817), On the principles of political economy and taxation, London: John Murray. Sachs, Jeffrey and Andrew Warner (1995), Economic reform and the process of global integration, Brookings Papers on Economic Activity, 1995 (1), pp. 1–118. World Trade Organization (2017), World Trade Report.