samchain/econo-pairs-v1 huggingface dataset:
Eva Srejber: Financial markets in a globalised world Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at the Swedish Mutual Fund Association, in Stockholm on 4 September 2001. *  *  *  I should like to begin by thanking you for the opportunity to participate in your conference on mutual fund investments in Europe. Mutual fund investment is now a very important part of the financial system, both at a national level and at a global level. I therefore intend to take this chance to discuss the significance of the financial system for economic development, using mutual fund investment as a basis, and to take up some of the problems connected with the way the system functions. Rapid transformation of the financial system Over the past few decades the financial system has been fundamentally transformed. Deregulation and technological achievements have made the Swedish financial sector part of a global network where the sun never sets. Those of us who work in this sector cannot have a limited local, or even regional, perspective. We have had to learn to live with the fact that events in countries such as Indonesia and Thailand can have a direct bearing on our operations. This is of course exciting, although it also makes our work more complicated. But that is the consequence of living in a globalised world. Swedish savers have adapted to this development on a large scale.

What is required is a constant monitoring of the economic system, how its various parts are integrated and what possible risks there are that problems in one sector or country will spread to other sectors or countries. On a more comprehensive level, it can also be concluded that the internationalisation of recent decades has given the financial markets greater opportunity to contribute to global economic development. Savings can now be channelled with relative ease into the sectors and countries where they will be of most use, while financial innovations facilitate risk management in economic life. Together, these advances have meant that more investments could get off the ground and improve the welfare of millions of people in both rich and poor countries. At the same time, the strength of the recurring international financial crises has shown that these markets do not always function entirely without problems. At times, there has also been considerable criticism of the players on the international financial arena. Although this may sometimes be warranted, unfortunately it all too often stems from the opinion that financial operations are a bad thing. I have therefore tried to describe today the tasks carried out by the financial system in society. These not only make our daily life easier, but also provide a crucial contribution to economic development. It is therefore important that our solutions to the problems we see in the financial system do not destroy these welfare-creating mechanisms, but instead contribute to reinforcing them.
Following an exceptional increase of 6.2% last year, real GDP expanded at a more than respectable average annual rate of just over 4% during the first half of 2016. The expansion in output is being driven by domestic demand, especially by strong growth in private consumption and investment. Exports of services are also performing well, indeed significantly better than the export of goods. Growth is being driven by private market services, encompassing a mix of traditional and new sectors, including tourism and distribution, aviation and professional services. The  utilities, which were formerly loss-making, have now returned to profit, reflecting the use of cheaper energy sources and efficiency gains. Manufacturing is holding its own, with pockets of success and others that continue to face strong competitive pressures. At the same time, following vigorous growth last year, growth in value-added in construction has eased. Growth in output depends upon and feeds into a dynamic labour market. According to administrative records, which are available up to April 2016, annual employment growth consistently exceeded 4% in recent quarters. The Labour Force Survey paints a similar picture, with employment gains averaging around 3% during the first half of the year. More recently, registered unemployment has continued to fall to record low levels over the summer. Notwithstanding such a dynamic economic performance, price pressures remain contained, with inflation fluctuating in a narrow range around 1% since the beginning of the year.

It is encouraging to hear that the Institute has had a successful year and that you are working on new initiatives to promote even higher professional standards. This is most welcome, as education and professional development are fundamental to the sustainability of our financial sector and its continued success. Your strategic partnerships with the University of Malta and overseas professional bodies such as the European Banking & Financial Services Training Association (EBTN), the London Institute of Banking and Finance, and the Global Association of Risk Professionals  Page 1 of 8  (GARP) - whose representatives are with us tonight - reflects the Institute’s excellent reputation. That a Committee member of IFS-Malta has been elected to the highest decision making body of a European association for a third consecutive term confirms the Institute’s integrity and professionalism. The Central Bank has always worked closely with IFS and will continue to support its activities. This year, we also cooperated with the IFS during the European Money Week to promote financial literacy to underprivileged youths and participated in the successful IFS Malta Annual Seminar on pension reform. I look forward to even more cooperation in the future. Mr President, well done and thank you for taking a proactive stance towards raising the standards of financial services education. I wish you and your Committee every success in your future endeavours. Malta’s recent economic performance: Against a backdrop of weak growth in Europe as a whole, economic activity in Malta remains robust.
About the financial situation of companies, their aggregate debt decreased in recent quarters, to 113% of GDP as of the third quarter of this year (figure 10). In one year it diminished 0.9% in real terms, explained mainly by the exchange rate effect in the valuation of the external component. This trajectory owes largely to the fact that the increases in corporate bond issuances observed since mid-2016 have not translated into more borrowing. On the contrary, the low cash flow assigned to investment suggests that these funds have been oriented to the refinancing of liabilities, consistently with the lower interest rates. On the other hand, delinquency indicators, while still low, show a marginal deterioration with respect to the previous FSR. In the case of services, this increase has concentrated in some real-estate firms. As for the productive sectors, marginal rises are observed in several industries such as construction, transport and telecommunications, and electricity, gas, and water. Meanwhile, in others such as mining, trade, and manufacturing, the declines identified in the last FSR continue. Residential market figures have shown more stability in recent quarters. After the adjustment process described in previous Reports, the sale of new homes in Santiago has remained stable for several quarters. At the same time, in the second quarter this year, the various home price 8  indicators —in the Metropolitan Region and nationwide— show positive but modest growth. Residential building activity remains weak and different sources of information see no recovery anytime soon.

Most importantly, we will not accept empty shell companies. All entities in the euro area must have adequate local risk management, sufficient local staff and operational independence. All that should be self-evident. Banks which seek to permanently book all exposures back-to-back with another entity in London should change their plans. And so should banks that plan to book all exposures with a euro area entity while having their risk management somewhere else. We are aware that it is a burden for UK banks to apply for a new licence in the EU. With a view to internal models, we would aim to be accommodating regarding the timing. There will be a transitional period in which new euro area entities might use internal models that have not yet been approved by the ECB. But of course, there are conditions attached. First, the relevant models must have been approved by the UK’s Prudential Regulation Authority. We would also reflect on any comments on the quality of the models from our UK colleagues. Second, the banks must have applied for internal model approval in the euro area. The transitional period will cease as soon as we have approved or rejected the bank’s model application. Ladies and gentlemen, sound banks are at the heart of a strong economy. Banks therefore should note Walter Bagehot’s words and remain cautious. It is our job as supervisors to help them do so and steer clear of risky adventures. Thank you for your attention. 2/2  BIS central bankers' speeches
Doubts persist in the U.S. about how the transition to a sustainable medium- and long-term debt trajectory will proceed. Special attention is due to the possibility that political difficulties to reach agreements on the fiscal front could trigger the automatic adjustments foreseen towards 2013, hurting its GDP growth. In the emerging world, a sharper and/or longer Chinese slowdown than foreseen in the baseline scenario cannot be ruled out, hindering growth in other economies due to its weight in the global economy, and affecting commodity prices significantly. Domestically, as aforesaid, medium-term risks for inflation are still present. The growth rate of domestic demand and output has dropped, albeit not as fast as expected. Although the Board estimates that output gaps have not narrowed further, if output again takes up a more dynamic path, there can be pressures pushing inflation up and demanding a monetary policy response. Domestic demand has outgrown GDP in the last two years, thus widening the current account deficit. Households’ saving is low compared with earlier years, while corporate savings have decreased in the past year and investment is in record-high levels. If domestic demand becomes more dynamic, it could amplify the current account deficit. This could be risky in a scenario of weak world growth. As noted in our Financial Stability Report, aggregate solvency and liquidity of the Chilean economy remains stable. This is important, considering that banks’ and enterprises’ access to external credit could be hampered by a further deterioration of the global financial environment.

The U.S. will fall short of March forecasts, due to the slow recovery of its labor market, a real-estate sector that is still unable to leave the subprime crisis behind, a household deleveraging process that continues its course, and little additional room to apply any measures to boost growth. But, compared to March, the biggest difference in terms of world growth lies in the emerging world. In contrast with 2011, the main emerging economies have lost dynamism. Some indicators for China suggest that the decline in its growth rate will be sharper than forecast in March. This has prompted the adoption of more expansionary fiscal and monetary policies, and India has followed suit. The rest of emerging Asia is feeling the effects of lower growth in China, the U.S. and Europe in its exports and its manufacturing industry. In Latin America, although there is more heterogeneity, the poor performance of Brazil in the first quarter stands out. Other economies, like Mexico, Peru, Colombia and Chile remain strong, sustained by their domestic demands. This world scenario of weaker economies and reduced inflationary pressures due to the lower oil price has triggered a relaxation of monetary policies of several emerging economies. The baseline scenario forecasts that Chile’s trading partners will grow 3.6 and 3.9 percent in 2012 and 2013, respectively, a little less than was foreseen in the previous Monetary Policy Report. This will also result in lower prices for copper and oil than were expected in March.
Honed by international benchmarks, best practices and the scrutiny of a global audience, Central Banks are institutions that over the years, have built a strong reputation for intellectual rigour, credibility and independence. Given this, Central Banks are often called upon to be the institution that drives important and often challenging financial reforms in an economy. Additionally, in most emerging economies, the largest concentration of talent resides in the Central Bank, providing it with the resources and intellectual capacity to undertake multifaceted developmental roles that extend beyond our core mandates. The fact that Central Banks are often a highly-regarded public institution in a country also lends it to having greater legitimacy in addressing challenging domestic issues. In managing this role effectively, three elements are key: clarity of the outcomes to be achieved, a governance process which gives clarity on the decision making process and accountability, and finally, ensuring the integrity and the independence of the Central Bank is not undermined. Another recent important element of Central Banking in the emerging economies that contributes to the effectiveness of the Central Banks in policy making is the close collaboration amongst Central Banks in the emerging economies – in particular in the Asian region. The formation of formal regional platforms for collaborative initiative facilitates the sharing of information, experience and knowledge which are crucial in driving the national, regional and even international agenda.

Recognizing its great potential to alleviate poverty in the Pacific, the UNCDF has joined forces with the UNDP, the European Union, AUSAID and other Donor Agencies together with Governments and central banks in the region, to drive and spread the benefits of financial inclusion throughout the Pacific Island Countries. For today’s Workshop, the focus will be on Mobile Money and Banking, an important Financial Inclusion strategy already launched in many developing countries. And, I don’t want to pretend that I am an expert on mobile money or mobile banking. Suffice it to say, that these Initiatives have presented great opportunities for the previously unbanked communities in large, developing countries such as Kenya, the Philippines, Mexico, and Brazil to name a few. Here at the Central Bank of Samoa, we believe that the introduction of mobile money and mobile banking in the domestic economy will be hugely beneficial. It will allow better financial access to our low-income community in the rural and isolated areas as well as to improve and speed up our payments system. In launching an Automatic Teller Machine (or ATM) for one of the commercial banks yesterday, I acknowledged the benefits of having and maintaining bank branches out in the rural areas, as these will help increase access to financial services. It is expected that some of these rural branches will not be financially viable in the short term.
Assuming a difference in the expected levels of inflation between the euro area and Switzerland of 1 percentage point, the Swiss real interest rate advantage thus accounts for about 60 basis points. A second finding is that euro area and Swiss interest rates basically move in tandem, as one would expect considering we face the same economic conditions. The high correlation of interest rates does, however, not imply causality. Rather, our monetary policies are similar because our economies are highly integrated. The third and final result is that the SNB tends to adjust policy before the ECB does. It is possible that shocks impact faster on our small open economy than on the euro area, making an earlier reaction of Swiss policy desirable. I also think, and I will return to this in a minute, that the SNB's small size helps us agree faster on interest rate adjustments. Conclusions What do I conclude from our experience since the introduction of the euro? To start with, I disagree with the notion that small open economies on the edge of a large monetary zone are bound to do worse on their own and had best join the union. On the contrary, it would be easy to demonstrate that living on the edge of the euro area is far preferable to being surrounded by an array of small European currencies facing crisis periodically, as was the case before 1999. Remember the instability of the European monetary scene in the 1990s and the volatility of hard currencies.

In the long run, the persistence of structural reforms remains a priority for stimulating the economic growth rates. The Bank of Albania has constantly called for the restructuring of the Albanian economy and the need for a new economic growth model. It should be an export-oriented growth model and it should create a more favourable environment for promoting foreign direct investment  BIS Review 175/2010  1  at home. Increasing economic growth potential is, among others, a necessity against a background of steady employment growth and lower unemployment figures. The Bank of Albania has been consistent and transparent about the targeted macroeconomic policy approach. We have requested and welcomed the re-orientation of fiscal policy towards bringing the budget deficit down and keeping the public debt level in check. The successful borrowing via the issuance of Eurobond is a positive signal for the Albanian economy and it will help finance public sector’s activity with foreign currency in the short-run. On the other hand, the quotation of the Albanian sovereign debt in the international markets will require greater commitment in order to maintain appropriate parameters of fiscal sustainability. Pursuing these principles in 2011 budget and in the medium-term public finance framework would be the first right step in this regard. Keeping inflation under control will continue to guide our monetary policy judgment and decision-making on interest rates and the liquidity conditions in economy.
In the situation where some forecasts have been extremely pessimistic, one might expect markets to adjust correspondingly in an abrupt fashion. In the event, in the foreign exchange markets the dollar overall has remained rather steady; and the short-term interest rate futures curve implies that rates are expected to bottom out later this year and then begin to rise. Moreover, while the stock market has fallen back over the past year from what many felt were unrealistic levels, and has been volatile again in recent days, the downturn in the mainstream market has so far been relatively limited, with the greatest fall concentrated in more speculative stocks. Equity valuations are always uncertain at times of adjustment, and we could see some continued volatility in that area, but the overall picture is that the markets as a whole are "looking through" the present slowdown, on the basis that they see a reasonable prospect for a recovery in US growth after the present adjustment. A second area of uncertainty lies much closer to home, and happily its ramifications are almost wholly beneficent. This is the question of whether changes in the supply-side of the UK economy mean that we can hope to achieve higher rates of sustainable growth, consistently with our inflation target, than has been possible in the past. One essentially empirical argument that is sometimes made to suggest that we can achieve faster sustainable growth is that inflation has in fact run a little below our target for most of the past two years.

MONETARY POLICY REPORT PRESENTATION BEFORE THE FINANCE COMMISSION OF THE HONORABLE SENATE OF THE REPUBLIC  Mario Marcel Governor Central Bank of Chile 5 December 2018    The December 2018 Monetary Policy Report can be found at http://www.bcentral.cl. Introduction Mr President of the Senate’s Finance Commission, Senator Juan Pablo Letelier, senators members of this Commission, ladies, gentlemen, I am grateful for your invitation to present the vision of the Board of the Central Bank of Chile (BCCh) on the recent macroeconomic developments, prospects, and implications for monetary policy. This vision is contained in detail in our December 2018 Monetary Policy Report published this morning. Its contents provide the background for the decision adopted by the Board at yesterday’s Monetary Policy Meeting, and consider the October Imacec1 that was released today. At yesterday’s meeting, the Board decided unanimously to keep the Monetary Policy Rate (MPR) unchanged at 2.75 percent. At the same time, we reiterated that the evolution of macroeconomic conditions make it possible and necessary to gradually reduce the monetary stimulus. This decision is consistent with the analysis and baseline projection scenario I will be sharing with you now. This analysis begins noting that annual inflation has risen throughout the year. After being under 2% almost the entire second half of 2017, today annual inflation is around 3%.
For example, government bond yields are more or less equal, which given the lower level of short-term rates in the US implies a steeper slope of the term structure and higher expected short term rates in the future. Interest rates on long-term corporate bonds were between 4.9% and 8.2% in October, depending on the risk profile, while they were between 5.7% and 9.6% in the US. As far as household credit is concerned, short-term mortgage lending rates were indeed lower in the US in September (5.1% against 5.8%), but long-term rates (which are prevailing in the US) were higher than in the euro area (5.8% against 5.4%). 30 To sum up, financing conditions to non-financial firms and households remain slightly more favourable in the euro area, and they will continue to be so after yesterday’s decision to reduce ECB policy rates. 29  Afonso, A. (2001), Government Indebtedness and European Consumers’ Behaviour, Working Paper del dipartimento di economia dell’ISEG No 12/2001/DE/CISEP. 30  Note that the data are not fully comparable since the lending rates refer to primari mortgages in the US, and to all mortgages in the euro area. BIS Review 135/2008  11  In conclusion, the euro area and the US economies are different and their management requires monetary and fiscal policies that cannot be the same. They are more gradual and less activist in Europe.

These measures keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency. A renewed appreciation would still be a threat to price and economic developments. The new conditional inflation forecast for the coming quarters is higher than it was in September. This is mainly due to increased oil prices and the further weakening of the Swiss  Page 1/4  Berne, 14 December 2017 Thomas Jordan  News conference  franc. The longer-term inflation forecast is virtually unchanged. For the current year, it has risen marginally to 0.5%, from 0.4% in the previous quarter. For 2018, we anticipate an inflation rate of 0.7%, compared to 0.4% in September. For 2019, we continue to expect inflation of 1.1%. The conditional inflation forecast is based on the assumption that the threemonth Libor remains at –0.75% over the entire forecast horizon. Global economic outlook  I would now like to turn to economic developments abroad, as these have a considerable bearing on the inflation and economic outlook in Switzerland. The past few months have seen further improvements in the international environment. The global economy exhibited strong, broad-based growth in the third quarter. International trade, in particular, remained very dynamic. In view of companies’ improved capacity utilisation and growing confidence, investment continued to recover. Developments in employment remained positive, which helped to raise household confidence, too. In most countries, inflation moved sideways. Economic signals for the coming months are positive, as well. We expect the global economy to continue developing favourably.