samchain/econo-pairs-v1 huggingface dataset:
But in view of persistently low external interest rates, such a policy would likely have resulted in a sharp appreciation of the Norwegian krone, and inflation and activity in the Norwegian economy would have fallen to too low a level. The weak external environment is thereby also contributing to keeping Norwegian interest rates low. With firmly anchored inflation expectations, Norges Bank can today give weight to stabilising economic developments when setting the interest rate. Inflation targeting has become more flexible. We have chosen to take a long-term approach to bringing inflation back up. But we will not lose sight of the inflation target. Should the outlook for inflation or growth weaken considerably, there will still be room for manoeuvre to counteract such developments through monetary policy. Monetary policy in the light of new banking sector regulation The financial crisis taught us some important lessons. First, the crisis illustrated that low and stable inflation is not sufficient to ensure financial stability. Second, the crisis clearly revealed shortcomings in the regulatory framework for banks. As a result, banking and financial regulation is now undergoing change worldwide. Regulation and supervision are the authorities’ most important instruments to prevent financial instability. In March, the Government presented a legislative proposal on new capital adequacy requirements for banks. The proposal is in line with the EU’s new regulatory framework. A key element in the new framework is capital buffers that banks will be required to hold in addition to the minimum requirement. This will increase banks’ loss-absorbing capacity.

A countercyclical capital buffer will come on top as a capital requirement that can be increased in good times and removed in bad times. The countercyclical buffer is to consist of Common Equity Tier 1 capital and will normally be set between 0 and 2.5 percent of a bank’s riskweighted assets. The countercyclical buffer is intended to counteract the procyclical effects of substantial changes in credit and asset prices. The buffer will help contain the risk of deleveraging in bad times. But an increase in the buffer can also dampen rapid credit growth in good times. The effect will depend on banks’ reaction when the buffer is increased. Norges Bank will have primary responsibility for elaborating the basis for decisions on the countercyclical capital buffer. In drawing up the basis, the Bank will collaborate and exchange relevant information with Finanstilsynet (Financial Supervisory Authority of Norway). The buffer will be set by the Ministry of Finance. Once the regulation is in place, most likely in late summer, Norges Bank will issue concrete advice to the Ministry of Finance on the level of the buffer. Thereafter, the Bank will issue  BIS central bankers’ speeches  3  advice on the buffer four times a year. The criteria on which the Bank’s advice is based were presented in the March Monetary Policy Report. Norges Bank will present analyses and issue advice on the size of the countercyclical capital buffer in conjunction with the decision basis for monetary policy.
  Are capital flow restrictions better conceived as a temporary or permanent measure? On the one hand, temporary measures might better reflect the need to respond with exceptional measures only in exceptional circumstances. On the other, nesting capital restrictions within a pre-agreed framework could improve the credibility and predictability of these measures among international investors.   Should differing rules of the game apply to different sources of capital inflow (foreign direct investment versus portfolio flows versus banking flows)? And should different rules apply to flows of different maturity (short versus long–term)? Different sources and types of capital are believed to behave very differently during capital upswings and downturns (IMF (2011)). It would be odd for public policy to ignore those behavioural differences. 8  BIS central bankers’ speeches    What are the respective roles of capital restrictions and macro-prudential policy? At present, the two are viewed rather differently, with views on capital restrictions mixed, while macro-prudential policies are increasingly the consensus. Yet these two sets of tool may differ more in detail than in principle. Macro-prudential policies may also have a role to play in moderating credit growth in the source of capital surges – the advanced economies.   What are the respective roles of capital restrictions and financial market deepening as responses to the BFSP problem? One policy option for emerging economies is to strengthen and deepen their domestic capital market infrastructure, so that it is better able to absorb and intermediate incoming foreign capital.

22 Within cities, there is evidence from the US and Europe of diverse, multicultural cities being a spur to economic development and growth. 23 Richard Florida argues that what defines a thriving city these days is the three “t”s – talent, technology and tolerance – with the third a key enabler of the first two. 24 At the macro level, the evidence is more mixed but in general suggests a positive relationship between diversity and economic growth. The historical experience of creatively-fertile empires, cities or epochs – from ancient Greece to Medieval Florence, from Elizabethan London to postrevolutionary Paris – is suggestive. Each of these social systems was notable for its cosmopolitan culture, with a rich mix of religions, ideas and disciplines. Conversely, the cultural isolation of China for several centuries is held by some scholars to be responsible for its extended period of stifled innovation and growth. 25 More recent empirical evidence, looking across a range of countries, has added empirical support to this historical experience. Among advanced economies, measures of (genetic and birthplace) diversity have been found to support economic growth and development under the right conditions. 26 And the effects can be large: increasing the diversity of skilled immigrants by 1 percentage point raises long-run output by around 2%. 27 On this evidence, diversity of peoples has been an important ingredient behind organisations, cities and economies growing over time.
In 2017, Shanghai-Singapore trade amounted to $ 17.5 billion1, an increase of 33.8% from 2016. On the investment front, Singapore has been China’s largest foreign investor for five consecutive years. Shanghai was Singapore’s second largest investment destination in China while Singapore was also Shanghai’s second largest foreign investor in 2017. With growing affluence of Shanghai’s resident population, Shanghai continues to be an attractive investment destination for Singapore companies. b. Similarly, Shanghai companies view Singapore as an important Asian commercial and financial hub as they expand internationally. As of end 2017, there were close to 110 Shanghai companies in Singapore, with more than $ 6 billion in investments2. c. Notably, Singapore Minister for Trade and Industry Chan Chun Sing visited Shanghai  from 4 to 6 November 2018 for the inaugural China International Import Expo (“CIIE”), which allowed Singapore companies to take part in business matching sessions and explore collaborations with Chinese partners to enter and expand into China. d . During Premier Li’s recent visit to Singapore, both sides welcomed the discussion  between Singapore and Shanghai to establish a comprehensive mechanism for cooperation. The new platform will focus on Belt and Road Initiative (“BRI”), modern and financial services, urbanisation and sustainable development, technology and innovation, and people-to-people exchange. This new strategic, progressive and comprehensive platform will expand and deepen China-Singapore engagements.

12 As key financial centres globally, each with their respective strengths, there are  tremendous opportunities for Shanghai and Singapore to complement each other, including in the BRI, capital market connectivity, RMB internationalisation, and FinTech innovation. This would pave the way for broader and deeper collaboration, progressing Shanghai-Singapore financial cooperation to greater heights. mandarin: 让上海与新加坡的金融合作蓬勃发展,再创新高峰! 4/5  Expressing this aspiration in  BIS central bankers' speeches  13 These are some ideas for everyone to consider. I am sure our strong panel of speakers will provide even greater insights during the discussions later. I wish you a fruitful day ahead at the forum. Thank you. 1 Source: Shanghai Municipal Commission of Commerce (SMCC) 2 Source: Shanghai Municipal Commission of Commerce (SMCC) 3 The Bond Indices, designed by CFETS and BOC, track the movements of the Chinese bond market and can be  used by investors to benchmark their Chinese bond portfolio performance. 5/5  BIS central bankers' speeches
The principal reward for forward-looking policy is that changes in policy, and associated stresses they engender, are generally smaller and more easily assimilated by markets. The effectiveness of monetary policy naturally brings us to the question of monetary and exchange rate regimes. A great deal has been said in various forums about the choice of monetary and exchange rate regimes. I believe it is crucial that there be consistency between a country’s choice of currency regime and its other policies. There is no “right” regime that applies to all cases and all points in time. Experience has shown that no currency arrangement can compensate indefinitely for imperfections elsewhere in an economy, such as weaknesses in financial supervision, an excessively loose fiscal stance or inflexible wages and prices. Furthermore, no exchange rate regime can offer full insulation from cross-market spillovers, particularly where the free movement of capital is allowed. Nevertheless, certain policy combinations can make things far more dangerous. Fixed, but adjustable, regimes look to be particularly fraught with perils when combined with shortcomings elsewhere, not the least of which are the severe after-effects that always seem to follow their forced abandonment. Official reserves can, at times, play a helpful role in the equilibrating process under either fixed or managed floating rates, but considerable caution is needed here. Clearly, large-scale sterilized intervention has a poor track record as a crisis avoidance tool.

Such a system needs to ensure that failure of a large bank does not have serious negative consequences for the provision of financial services to the real economy. There are several possible routes to achieve this goal. We need to examine all the available options with an open mind. The optimal policy is likely to combine different elements. As I explained in the introduction to this speech, here in Switzerland the problem of “too big to fail” is particularly pronounced. Accordingly, the FINMA and the SNB are jointly evaluating different avenues. The two big banks are now closely involved in this work. We welcome their active engagement. At the international level, the FSB and its member bodies are also addressing this problem at the request of the G20 leaders. Ladies and Gentlemen, it is imperative that a real solution to this problem be found. At the forefront of our efforts to mitigate the “too big to fail” problem must be an internationally agreed and orderly process to allow for the wind down of large, systemically important financial institutions in the event of a severe crisis. Obviously, there are many technical and legal problems that have impeded any meaningful progress in reaching international coordination in this matter. But what has been missing is a bold and international political commitment to put in place a framework for the orderly resolution of large cross-border financial institutions. Provided we have such an unequivocal commitment, solutions will eventually emerge.
In the long term, there are of course more factors than expected monetary policy which are significant for interest rates. Although we have as yet only had time to present one repo rate forecast, there has been no sign that the market has become “passive”. On the contrary, it has become clear that we and other market agents have had slightly differing views as to what would be a reasonable future development for the repo rate. In a way, this is a good sign. It is in the nature of things that forecasters make different forecasts, particularly in the slightly longer term. That it how it is when one works with economic forecasting. Our assessment is therefore that any difficulties arising from the new assumption are manageable. But different types of interest rate assumption also make different demands on our communication. One important aspect of what the publication of our own interest rate path means is our method of signalling. Signalling Let me therefore go on to talk about the Riksbank’s signalling. By this I mean, quite simply, how we communicate our monetary policy intentions. In brief, the Riksbank’s practice can be described as follows. Between the monetary policy meetings the individual members of the Executive Board have often held speeches on the theme of "the current situation" or similar. In these speeches we have given our views on economic developments and sometimes also indicated, with varying degrees of explicitness, how we consider the interest rate should be set at the next meeting.

One example is when the Japanese central bank committed itself during a deflation crisis to keeping the policy rate at a low level during a certain period. For another example, see the press release from the Federal Reserve Board of Governors on 12 August 2003. 4  BIS Review 40/2007  levels we foresee two years ahead. And the focus should be on not only current interest rates, but also expectations of future interest rate changes 6 . …to market expectations… We left most of these problems behind us when we changed over in October 2005 to making forecasts based on market expectations of the future development of the policy rate. Compared with the assumption of an unchanged repo rate, market expectations normally provide a much more realistic forecast. This was one thing that made it easier to evaluate us. However, an assumption that the policy rate will develop in accordance with expectations in the financial markets has its disadvantages. This perhaps applies above all to the difficulties in communicating the interest rate path when market agents’ assessments differ substantially from those of the Riksbank. Another problem that could lead to a lack of clarity in communication is how market expectations of the development of the policy rate should actually be measured. It may be difficult to estimate and adjust for different premiums – the compensation for differences between securities with regard to the maturity, credit risk and degree of liquidity required by an investor. There are also different ways of doing it.
They put the emphasis on self-insurance, or firms having adequate liquid resources and the internal infrastructure to identify needs and mobilise collateral, to be able to see them through the resolution process. But they also describe a potential role for credible public backstops to instil confidence and manage the perception that the firm cannot self-insure. A backstop for funding in resolution is likely to be separate from ordinary central bank facilities. But that should not necessarily mean that the bank in resolution is cut off at the central bank. To some extent the same principle that we want to apply to other market participants in dealing with a bank in resolution should apply also to central banks – that is, if the bank remains authorised and continues to perform, it should have continuity. As long as a bank in resolution continues to meet the eligibility criteria applied to other banks, it should not, as a general rule, be excluded from central bank operations. The adequacy of a G-SIB’s liquid resources through resolution is part of the resolution planning discussion in CMGs. In a cross-border setting, coordination around resources and availability of backstops will depend on the resolution strategy – in an MPE strategy responsibilities will sit locally with the authorities of each resolution entity; in an SPE strategy the home authority will need to play a stronger coordinating role. But this discussion will stand on the firm foundation provided by TLAC.

For example how should internal TLAC be subordinated, should it always be issued directly to the resolution entity, what maturity should instruments have and how should they adjust as the risk profile of the material sub-group changes? And perhaps most importantly how should the joint contractual trigger that allows internal TLAC to be written down outside of resolution work in practice? The FSB is working on these issues and a consultation paper will be issued later in the year. Implementation of internal TLAC may also prompt the questions as to how internal TLAC relates to existing capital requirements – is there trapped capital, located in a subsidiary or holding company but which cannot be moved to the subsidiary that needs it? If so, in a world of internal TLAC, can it be released? Where should buffers be located in groups? Host regulators will still want subsidiaries to hold adequate capital and potentially additional buffers if these entities are systemically important to the domestic economy. But they may for example become more comfortable about a higher share of capital being held at group level. CMGs and supervisory colleges will provide the setting to think these issues through. Finally, now we have TLAC, we need to complete the work on how we will use it. That is, how in practice we will execute a bail-in. Part of this is ensuring that the right mechanics are in place.
This means that the economy has significant excess slack and implies that we face meaningful downside risks to inflation over the next year or two. Also, there are those who express anxiety about whether the Fed has the tools and the will to raise the federal funds rate when the time is appropriate. I want to assure you that the Fed has the tools to tighten monetary policy regardless the size of its balance sheet. Moreover, we have the will to do so in order to keep inflation in check. Turning first to the developments in financial markets, there is little doubt that we have seen a vast improvement over the past six months. The major equity indices have risen sharply, credit spreads have narrowed and bank equity prices have generally shown a substantial recovery. Many large financial and nonfinancial firms have found it relatively easy again to tap the debt and equity markets. The recovery in financial asset prices has been mirrored – albeit with a lag – in the economy. Industrial production has begun to rebound as the pace of inventory liquidation has slowed. Housing prices and activity have recovered somewhat – aided by the improvement in housing affordability and the first-time homebuyer tax credit. Fiscal stimulus is providing support to consumption and to state and local infrastructure spending. The vicious cycle we had a year ago – in which the deterioration in financial markets led to economic weakness and that weakness reinforced the tightening of financial conditions – has been broken.

The vast bulk of the Fed’s portfolio is highly liquid – currently we hold $ billion of Treasury securities, $ billion of agency mortgage-backed securities, and $ billion of agency debt against about $ billion of excess reserves. All the excess reserves could be mopped up by asset sales alone if that proved necessary. The Federal Reserve has been very aggressive in responding to the financial crisis. We have rolled out numerous new liquidity facilities and have engaged in lending activity under Section 13(3) of the Federal Reserve Act for the first time since the Great Depression. These actions have been successful in mitigating the risks of financial collapse and a more severe  4  BIS Review 122/2009  contraction in economic activity. The financial system is now healthier and the economy is recovering. But despite these successes, we need to be clear that what has happened to our financial system and the economy is wholly unsatisfactory, and that a broad range of regulatory policies and practices need to be recalibrated to address the shortcomings of our financial system. With inflation low and long-run inflation expectations stable, and our ability to remove monetary accommodation in a timely manner intact, our near-term focus should be to keep significant monetary accommodation in place for an extended period in order to achieve our dual objectives of maximum employment and stable prices. Thank you for your kind attention. I would be very happy to take a few questions. BIS Review 122/2009  5
At the national level, structural reforms therefore remain a priority. We know that structural reforms boost growth: looking at the last 15 to 20 years, euro area countries with sound economic structures at the outset have shown much higher long-term real growth. And we know that they help countries recover more quickly from shocks, which prevents recessions from leaving lasting scars.29 That said, while sound domestic policies are key to protect countries from market pressure, the 6/9  BIS central bankers' speeches  crisis showed that, in certain conditions, they may not be enough. Markets tend to be procyclical and can penalise sovereigns that are perceived to be vulnerable, over and above what may be needed to restore a sustainable fiscal path. And this overshooting can harm growth and ultimately worsen fiscal sustainability. This creates a need for some form of common stabilisation function to prevent countries from diverging too much during crises, as has already been acknowledged with the creation of two European facilities to tackle bad equilibria. One is the ECB’s OMTs, which can be used when there is a threat to euro area price stability and comes with an ESM programme. The other is the ESM itself. But the conditionality attached to its programmes in general also implies procyclical fiscal tightening. So, we need an additional fiscal instrument to maintain convergence during large shocks, without having to over-burden monetary policy. Its aim would be to provide an extra layer of stabilisation, thereby reinforcing confidence in national policies.

These issues need to be addressed on the ground, with proper enforcement by management to prevent misselling practices, unclear documentation or explanations by agents and marketing staff, and contract terms and exclusions that are unreasonable. Wide gaps have also been observed between companies in the level of competence of staff selling the products, and in the quality of training provided to staff and agents. There is a need to achieve greater, as well as more consistent, progress in this area. Bank Negara is determined to improve standards in the area of market conduct, and we will continue to actively engage the industry in this effort. I hope that all insurers will throw their support, at the highest level, behind the various initiatives that are being implemented by both the Bank and industry associations to achieve this. As a newly-formed alliance, the Tokio-Marine-Asia Group has a valuable opportunity to set the correct tone at the outset in this area for your Group’s priorities in the Malaysian market. I trust that you will use the opportunity wisely to set a new benchmark in responsible market conduct for the industry. On that note, let me once again congratulate Tokio Marine and Asia on the official launch of TM Asia Life Malaysia Bhd. I look forward with great anticipation to your positive contribution to the further development and growth of the Malaysian insurance industry. BIS Review 24/2007  3