samchain/econo-pairs-v1 huggingface dataset:
These problems can be mitigated if there is a certain underlying inflation rate in the economy. Underestimating the significance of monetary policy and exchange rate developments One problem when criticizing monetary policy with reference to the current economic situation is that one does not take into account the fact that the current strong Swedish economy is of course to a large degree due to the monetary policy that has been conducted. It is a little like taking medicine in connection with an illness and when cured drawing the conclusion that it was unnecessary to take the medicine. On this point I feel that the events of spring 2015 are a good illustration. The ECB had announced in January that it intended to buy securities over slightly more than a year to come for the equivalent of SEK 10,000 billion (around 2.5 times the size of Swedish GDP). This is indeed a very substantial monetary policy intervention. Within the course of just a few weeks the krona exchange rate appreciated significantly against the euro, from almost 9.65 krona per euro to just over 9.10. This was in itself a large appreciation of almost 6 per cent, but the real danger lay in the fact that it could have been much worse. During 2014 and up to spring 2015 the US dollar and the British pound sterling had appreciated by between 15 and 25 per cent against the euro.

Without their support, it would have been very difficult to complete this phase of the Survey. Distinguished Guests, As you are aware, the Zambian economy has recorded significant positive developments in the recent past, owing to the wide-ranging economic reforms the Government has been implementing since 1992. The reforms, which are aimed at stabilising the economy and supporting economic recovery for the purpose of reducing poverty among our people, have facilitated increased investment in various sectors of the economy, such as, agriculture, tourism, construction and manufacturing. As you may also be aware, the mining sector has attracted unprecedented amounts of investment in the recent past. Government’s economic reforms since the early 1990s have contributed immensely to the boosting both local and foreign investors’ confidence in the Zambian economy, which is an important pre-requisite for attracting capital flows. The survey findings that we are disseminating today indicate that Foreign Private Capital flows to Zambia in 2007 rose to US $ million from the US $ million recorded in 2001. The 2007 inflows were largely in form of foreign direct investment, borrowing from nonaffiliates (Loans and Trade Credits) and portfolio investment. We believe that the introduction of economic reforms led to a substantial increase in private capital flows, which regrettably, we have not been able to capture on a regular basis due to budgetary constraints. Mr. Chairman, History has taught us that high volatility in private capital flows, if not properly monitored and managed, can induce financial and macro-economic instability in the domestic economy.
5 And in the next few years, these current account surpluses are likely to remain high and the build up of foreign assets by governments in oil exporting and Asian countries is likely to continue. According to the IMF’s forecasts, the combined current account surplus of China and oil-exporting countries will be around $ billion over the next 3 years. And the IMF estimates that sovereign wealth fund assets could grow to $ trillion within the next 5 years. The impact of SWFs on financial markets These are huge numbers and SWFs have become prominent and important players in many financial markets. But we should not exaggerate their impact on the global financial system. In aggregate, their assets under management are currently only less than one-twentieth of those held by private sector participants such as pension, insurance and mutual funds as well as hedge funds and private equity (Chart 4). And they account for about 2% of the total size of equity and bond markets globally. Even in five years time – and on some of the fastest growth projections – assets under management by sovereign wealth funds are projected to reach only about 6% of global financial assets. 6 Moreover, though they have more assets under management than hedge funds they have smaller investments since they are not leveraged. 7 It is not difficult to identify positive effects on the world’s capital markets. Sovereign wealth funds have long investment horizons and generally have no commercial liabilities.

Some increase in the transparency both of the strategy and objectives of the funds and of recipient countries’ approach to inward investment should help dispel concerns and ensure they are a force for greater global financial integration rather than a prompt for a new wave of financial protectionism. SWF’s recent investments in global financial institutions have been helpful in easing the current financial market turmoil. And the fact that they, and their central banks, are looking for higher returns and greater asset diversification should be beneficial both to the EMEs and to the recipient countries since it should improve the efficiency of global asset allocation. But that positive story should not conceal that the growth of SWFs is also a result of persistent global imbalances in trade. These imbalances have helped create vulnerabilities in financial markets and in the wider economy. Our current experience is one more illustration of how painful the unwinding of such imbalances can be.
However, the corporate sector faces major challenges down the road. Against a backdrop of lower expected cash flows and higher debt, the solvency position of some firms has worsened, especially in the case of those operating in sectors more adversely affected by the pandemic that are still facing some restrictions. Thus, with the crisis stretching out, concern has now shifted from liquidity risk to the deterioration of the solvency position of firms. Therefore, economic policies should now focus on supporting viable businesses whose solvency has worsened as a result of the COVID-19 shock, given that the potential liquidation of these firms would be a drag on economic recovery via different channels. First, due to the loss of employment and capital that follows the closure of any company. Second, firms’ solvency problems may end up affecting the health of lenders if these problems are significant and widespread within the corporate sector. And third, in extreme scenarios, the ability of of some banks to provide new lending could be affected, generating negative financial loops. We should take into account as well that a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the following years, lowering productivity and economic growth, as the experience from the global financial crisis indeed shows.

By the same token, let me stress the relevance of the Investment Survey conducted annually by the European Investment Bank since 2016, whose most recent results for Spain have been presented at this conference. This survey contributes to improving our knowledge of the dynamics of firms’ investment and investment finance. In particular, this source of information has proved very useful in identifying the main obstacles to investment. The high coverage of European firms in different countries allows for comparison of investment and investment finance developments across countries. In the context of the pandemic, the results of this survey are even more relevant since they allow us to better understand the implications of the COVID-19 shock for firms’ investment across Europe. To conclude, let me thank the European Investment Bank for partnering us in the organisation of this conference and, more in general, for their very good collaboration with us. I would also like to thank speakers and participants at the conference for such fruitful discussions. I’m convinced these debates are very useful for enriching our understanding of economic problems and for guiding policy makers as to the best possible design of economic policies to tackle them. Thank you. 2/2  BIS central bankers' speeches
The much more flexible monetary and fiscal policies of today have also avoided the intrusion of protectionist distorting measures that so prolonged the crisis of the 1930s, amplifying its costs and deeply hurting the later economic development in several regions of the world, including our country. Still, it is likely that returning to domestic demand levels like the ones we had before the crisis takes a while, especially in the United States. Active fiscal policy actions have taken up the room left by the shrinkage of private spending. However, it cannot be sustained for long. The natural, sustainable solution will come via net exports from the US and, to a lesser extent, from Europe. How it will happen is an open question, because it is also yet to be seen which economies will, as counterparts, have to reduce their own net exports to create the  2  BIS Review 93/2009  necessary space for such an adjustment. Furthermore, this may call for major parity adjustments in the main economic areas. Beyond this last point, currently floating foreign exchange regimes have played a stabilizing role, providing every degree of freedom needed by monetary policy and by liquidity provision measures to tackle the cycle and the financial stability objective. This element was nowhere to be seen in the 1930s, when the main central banks struggled hard, but ineffectively, to defend the gold standard, severely magnifying tensions in the banking systems.

An efficient, productive and resilient financial system supports and contributes to economic growth and the overall well-being of the people. In contrast, financial busts can have a destructive impact on the broader economy, impacting the livelihood of ordinary people. This is the painful lesson from the history of financial crises. Despite the huge amount of resources being invested in compliance, we still uncover many banking, market manipulation and rigging scandals. These cases illustrate again that rules, although necessary, are not sufficient to maintain the integrity of the financial system. These cases have damaged the confidence and trust of society in the system. One solution for this is a stronger focus on ethics and professional standards to take into account how actions impact the wider society. In other words, financial institutions must recognise and embrace their role as responsible corporate citizens. This means: Establishing a framework that promotes ethical behaviour and decisions; Going beyond what the letter of the law permits, to understanding and complying with its ‘spirit’; and Seeking opportunities to add value and contribute to the well-being of society. 2/4  BIS central bankers' speeches  Viewed from this perspective, the values of a responsible citizen are antithetical to money laundering, terrorism financing and illegal behavior. Anyone who is a responsible citizen will not engage in these activities and will actively seek to eradicate them.
The measures which should be taken are well known: they are in the field of competition, the liberalisation of markets, services and labour and above all the development of human capital, which constitutes the first basis of productivity and hence income. This is the path taken by those European countries which have experienced higher growth than others in the past months and years, while at the same time sharing the same currency, the euro. The data released today on real GDP growth in the first quarter of this year confirm that those countries which have followed the path of improvement, structural reform and cost discipline have shown a greater resilience and have managed to achieve growth even when faced with a negative external shock. This is the way to go if we want to move away from the current stalemate. 6  BIS Review 61/2008  Figure 1. Nominal short-term interest rate, Italy and West Germany, 1970-1986 Source: OECD. Figure 2. Real short-term interest rate, Italy and West Germany, 1970-1986 Source: OECD. BIS Review 61/2008  7  Figure 3. Inflation rates in Italy and West Germany, 1970-1986 Source: OECD. Figure 4. Competitiveness as measured by the relative unit labour cost, Italy vs. Germany (1970=1) Source: European Commission. 8  BIS Review 61/2008

The energy begins with having great clarity of the vision and a great sense of purpose on the objective that needs to be achieved and the results that needs to be delivered. It also involves mobilising energies of the organisation to be aligned to achieving these results. It is having the ability to generate and ride on the positive cycle of leadership energy. In the actions pursued towards achieving the outcome and in the achievement of the desired outcome, it generates a second round of energy burst from others in the group or in the organisation. This continuous positive energy loop provides continuous motivation and momentum that can drive the organisation. It is a mutual reinforcing phenomenon that I have experienced in the Bank time and again. Let me conclude my remarks. The demands on leadership going forward will be immense. It requires tremendous leadership energy that needs to be sustainable. This leadership energy summit will hear from successful individuals on the source of their energy in generating outcomes and results that have made a difference. We will also learn about other sources of energy from which we can tap on and strengthen. This is the challenge of the new generation of leaders if they will truly be able to make lasting and meaningful changes in their environment. On this note, let me wish you an enriching and highly energised Summit. 2  BIS central bankers’ speeches
Federal reserve provision of overnight money-like assets Even without expressly pursuing a financial stability objective, a central bank’s balance sheet can provide safe and money-like assets to a wide range of financial institutions in normal times.23 The October 2008 introduction of the Federal Reserve’s ability to pay interest on reserve balances and the 2013 development of an overnight reverse repo (ON RRP) facility provided critical tools that allow the Federal Reserve to maintain control of overnight interest rates regardless of the size of its balance sheet.24 This ability is important because, before the crisis, the Federal Reserve could not increase the supply of its money-like liabilities in normal times without compromising monetary policy objectives.25 Figure 5 shows the size of selected liabilities of the Federal Reserve before the crisis, in December 2017, and market participants’ estimates for average 2025 levels. 26 Before the crisis, the Federal Reserve’s provision of money-like liabilities other than currency was negligible to ensure control of overnight rates in the operating system used at that time. Reserves were kept scarce in the banking system, and other liabilities—such as the Treasury’s account at the Fed and overnight investments by foreign central banks—were kept very limited, with tight control 6 / 10  BIS central bankers' speeches  around their daily variation.

For example, during the money fund reform period, as money flowed from prime to government funds, prime funds used the facility to become more liquid in advance of redemptions and government funds used it to temporarily absorb new investments.31 Finally, the Treasury General Account (TGA) has grown substantially in recent years as the U.S. Treasury has decided to hold a precautionary buffer of cash generally sufficient to cover five business days of outflows, subject to a minimum balance of $ billion. Given the daily variability of TGA balances, this type of account would be also expensive for the private sector to offer under new regulations. Further, as the buffer has been funded mainly through increased bill issuance, it has increased the supply of money-like assets to the private sector. Conclusion Central banks are uniquely able to produce money-like assets that are viewed as safe during non-normal times. In more normal times, regulation and supervision are the best tools to mitigate risks from the private creation of money-like assets, but there is a role for the central bank to use 7 / 10  BIS central bankers' speeches  its balance sheet to smooth fluctuations in the supply and demand for money-like assets. 1  I would like to thank Marco Cipriani, Gabriele La Spada, Deborah Leonard, and Antoine Martin for their assistance in preparing these remarks.
The second key area of debate concerns the design of the institutional framework for financial stability. The main issues have tended to centre on the role of the central bank in  BIS Review 24/2010  3  financial stability and as to whether there should be a single or multiple supervisory authorities. Given that the central bank is the lender-of-last-resort in a crisis, the central bank is invariably in the frontline of action to restore stability. While there is no general agreement on the optimal structure for the supervision function, it is recognised that financial systems have become increasingly complex and interconnected and whether a country adopts an integrated model or a model that is organized along sectoral lines, effective coordination is critical to support assessments of the overall risk exposures in the financial system. Moreover, the potential for regulatory arbitrage should be avoided. A further case made for central banks to assume the banking supervision function is the informational efficiencies particularly for effective crisis management. The insights gained from the economic analysis and market operations performed by central banks for monetary policy objectives also contributes significantly towards more informed financial supervision. This includes providing a better understanding of the potential for macro-prudential measures as part of the supervisory responses. The chosen supervisory structure needs to credibly demonstrate that it is able to respond and adapt effectively to the fast-changing environment.

6 On the other hand, a more developed and efficient financial system can contribute to a more effective and smooth transmission of monetary policy. 7 At the root of the problems that led to the current financial turmoil is precisely this growing segment of the financial industry. As valuations of asset-backed securities and other assets declined rapidly, and, in fact, the whole securitisation model was shaken, the outstanding amount of structured products decreased significantly. Obviously, this affects bank credit: according to the latest bank lending survey conducted in the euro area, more than 80% of banks judged that difficulties in raising funds via securitisation have had a negative impact on bank lending. 8 Overall, the financial turmoil may have affected the efficient working of the banking sector and might have an impact on the supply of credit to the non-financial sector. In light of the fact that bank lending remains strong (the annual rate of growth of loans to non-financial corporations in August 2008 was a still robust 12.6 per cent), it is too early to quantify the extent to which the turmoil may influence the provision of loans. Needless to say, the Eurosystem, and undoubtedly other central banks, will continue to closely monitor the situation. 2  See Bernanke, B. and M. Gertler (1995): “Inside the black box: the credit channel of monetary policy transmission”, Journal of Economic Perspectives 9, pp. 27-48. For the euro area, see contributions collected in Angeloni, I., A. Kashyap and B. Mojon (eds.
The EU's institutions There was a discussion at the European Council meeting in Nice in December 2000 on the shaping of the EU's decision-making processes when the union is enlarged to include many more members than it has today. With regard to the ECB, the current regulations would lead to a situation where 34 persons would have the right to vote on monetary policy in the ECB Council, if all of the candidate countries were also to take part in the monetary union. The Council of Europe therefore decided to introduce a clause into the regulations enabling the rules in the ESCB charter for participation in the Governing Council to be changed without having to call an intergovernmental conference. However, a change would still require unanimous support from all member countries and ratification by each of them. A proposal for a change in the voting right could be put forward by the ECB or the European Commission. The new clause will come into force together with the Treaty of Nice when it is ratified by all of the current member countries. There is no given method of organising decision-making in a monetary union with many participants. An attempt to analyse the decision-making process in an enlarged ECB Governing Council has been made by the Centre for Economic Policy Research (CEPR) in a report published in October 2001.

The Riksbank is also involved when the candidate countries present their "Pre-accession Economic Programmes" (PEP) for the EU countries. These PEP programmes are exercises where the countries attempt to analyse and present their economic challenges in the way they will in future, as  BIS Review 9/2002  5  EU members, present stability and convergence programmes and consult on economic policy within the framework of the Broad Economic Policy Guidelines. Hopefully, the Riksbank will be able to contribute with analysis of economic activity and structural issues in these countries, not merely for our own forecasts but also in relation to the EU and ECB. What we can learn from the candidate countries Before I finish, I would like to go from speaking of what the candidate countries can learn from us to pointing out what we can learn from them. Several of the former planned economies are now in some areas better adapted to the EMU than today's EU countries. Several of them have, for instance, a flexible labour market and wage formation. This appears to have contributed to enabling the Baltic states to cope with the Russia crisis and the breakdown of the Russian market, without their reform efforts and growth coming to a standstill. This flexibility also makes them extremely well suited in this respect for a monetary union like the EMU. The preparedness to implement structural reforms also appears greater.
It took a certain boldness to stake a place in international finance, constant supervisory vigilance, and sound leadership of the local banks which have been the anchor in the financial system. We earned the respect of both markets and regulators internationally. •  As Mr Lee Kuan Yew put it, “We had to fight every inch of the way to establish confidence in our integrity, competence and judgement.”  BIS central bankers’ speeches  1  11. This evening, I will talk about two important initiatives for Singapore’s financial sector, that will buttress the foundations for its future progress: •  First, MAS will rationalise the regulatory framework that has distinguished the domestic and international banking operations, taking into account market developments over the years and global regulatory changes over the last half decade. •  Second, we will introduce several manpower and talent development initiatives to ensure a strong Singaporean core across the range of activities in the financial sector. Removing the DBU-ACU Divide 12. Let me start with the regulatory framework that has distinguished domestic from international banking in Singapore. 13. The creation of the Asian Dollar Market (ADM) in 1968 was a path-breaking step. It put Singapore on the map of international finance. It also enabled our financial sector to serve as a major source of funding for the investment, trading and risk-management needs of a growing region and beyond. 14.

I’m looking forward to his insights and I know they will be the catalyst for some rich discussion. Please join me in welcoming John Dugan. 1 The information in this speech on the history of the New York Fed’s headquarters building comes from About  the Building on the New York Fed’s website. 2 Citigroup, Third Quarter 2019 Results and Key Metrics, October 15, 2019. 2/2  BIS central bankers' speeches