samchain/econo-pairs-v1 huggingface dataset:
Although credit  10  4  Source : Report on financial structures - ECB - 2002. BIS Review 2/2003  still plays a prominent role in the allocation of financial resources, credit institutions themselves are relying on the financial markets to manage their balance sheets. These two points suggest that the benefits of enhanced liquidity entail the management of a new range of risks. This should not lead us to conclude that financial integration has necessarily negative side effects from the point of view of financial stability. Financial integration may help to foster financial stability. I would like to put forward three reasons for this: –  First, the setting up of a large currency area eliminates disruptions arising from currency risk that would otherwise prevail between the participating countries. Domestic economies are immune to currency misalignment episodes that disturb regional trade. Currency risk premia are eliminated from interest rates. –  Secondly, the setting up of a large currency area implies an overhaul of market infrastructure. In this respect both public bodies, such as national central banks and market participants, have a unique opportunity to pool best practices. Indeed, this has been the case in the euro area where, for example - the TARGET system, interlinking domestic real-time gross settlement systems, has demonstrated its ability to absorb large volumes of crossborder flows, and to perform well even in critical circumstances such as September 2001.

At that time the Riksbank was legally responsible for the choice of exchange rate regime and ERM participation was considered simply as a way of preventing the flexible exchange rate regime from becoming a formal obstacle to Sweden's possible full participation in the monetary union. When the Government then judged that there was insufficient public support for Sweden's adoption of the euro, the question of altering the exchange rate regime ceased to be relevant. When the independence of the Riksbank was formalised in 1999, the legislation on exchange rate policy was amended. Today the exchange rate regime is chosen by the Government, while the Riksbank decides on issues of its implementation. So it is the Government that decides if and when the krona is to join ERM2, whereupon the Finance Ministry and the Riksbank discuss the SEK/EUR exchange rate that is compatible with a stable economic development. I want to make it clear that, contrary to the impression one is liable to get from reports in the media, this process is not to be seen as a struggle between the Riksbank and the Finance Ministry. There are extremely good reasons for these two institutions to agree on a joint line of action. Otherwise it is likely to be difficult to argue Sweden's case effectively in the subsequent discussions with our European partners.
By slowing the rate tightening cycle somewhat so that labour demand increases, the central bank can contribute to promoting employment. But when employment rises sharply and rapidly, wage growth has a tendency to accelerate. Inflation usually follows suit. As shown in the Chart 5, we have previously experienced that the rise in prices for domestically produced goods and services accelerates in the wake of a sharp rise in employment. Chart 5 When employment rises rapidly, inflation tends to follow suit Four-quarter change. Percent 5  5  4  4  3  3  2  2  1  1  0  0  –1  –1  –2  1993  1996  1999  2002  2005  2008  2011  2014  2017  Employment growth, moving average Domestic goods and services inflation six quarters later  –2  Sources: Statistics Norway and Norges Bank  6  The role of monetary policy is to promote maximum employment without causing inflation to accelerate. Monetary policy cannot take primary responsibility for employment. Entry into the labour market is determined by the education system, the social benefit system and labour market policy. An increase in labour supply will create more room in the next round for an increase in employment without causing inflation to accelerate. NORGES BANK ECONOMIC PERSPECTIVES 17 FEBRUARY 2022  THE LABOUR MARKET IMPROVED RAPIDLY Monetary policy is a first line of defence in stabilisation policy. Economic downturns are countered by rate cuts (Chart 6).

10 The preexisting capital buffers available in the banking system, globally and in Switzerland, played a key role in this regard. The continued credit flow, together with extensive public support measures, helped firms and households bridge their income and liquidity shortfalls. Hence, concerns that the economic shock from the pandemic would be amplified by banks scaling back their lending have not materialised. A qualitative survey launched by the SNB in 2020 shows in fact that loan rejection rates did not increase significantly, even in the most acute phase of the pandemic, and virtually no banks reported their own capital situation as a factor limiting credit supply. 11  Macroprudential policy beyond the pandemic We have seen so far that macroprudential policy can help to contain the build-up of vulnerabilities and strengthen banking sector resilience. The pandemic has moreover shown us that a well-capitalised banking sector can dampen the economic impact of shocks, contributing to a faster recovery. So where do we stand today? According to our monetary policy assessment last week, the global economic recovery is expected to continue, although somewhat subdued by the economic consequences of the war in Ukraine. At the same time however, financial system vulnerabilities are increasing. Several national authorities and international institutions have highlighted stretched valuations, in particular in real estate markets, and are pointing to high levels of corporate and sovereign indebtedness. Let me elaborate further, focusing on real estate markets. As we discussed earlier, these markets are mostly credit financed so that 9  Cf.
This retail banking model was under debate before the financial crisis broke out in summer 2007, and many analysts considered it obsolete. However, it has proved to be more resilient in the current situation than the originate-to-distribute model which was used intensively in certain banking systems, and lies in fact at the heart of the crisis. Other considerations aside, since the institutions hold on to the risks originated, the perverse incentives associated with the originate-to-distribute model have not been generated in the extension of credit and in its subsequent monitoring. A second factor why the international financial crisis did not directly impact the Spanish banking system has been the Banco de España’s prudent regulation and supervision. I can offer two widely known and acknowledged examples. The first refers to supervision of credit institutions. The broad scope of this supervision acted as a deterrent for the creation and use of certain off-balance sheet vehicles. The second example refers to the area of regulation and, in particular, a system of provisions characterised by very demanding specific-purpose provisions and, especially, dynamic provisions. Under this latter type of provisioning, which has been in force in our system since mid-2000, latent risks and losses in upturns must be recognised, with the result that their build-up on banks' balance sheets has an immediate effect on institutions’ income statements. Obviously, the above-mentioned measures have not been sufficient to isolate Spanish institutions from the financial crisis.

Miguel Fernández Ordóñez: Spanish financial institutions in the face of the new competitive scenario Opening address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, of the XVI Financial Sector Meeting “Spanish financial institutions in the face of the new competitive scenario”, ABC-Deloitte Forum, Madrid, 21 April 2009. *  *  *  Thank you very much for inviting me to participate in this meeting which will address a subject –Spanish institutions in the face of the new competitive scenario – of the utmost importance at the current juncture. The highly exceptional difficulties besetting the global financial system and economy require decisive action from all of us who, in one way or another, have responsibilities in these matters. The public authorities of different countries, including those in Spain, are taking measures which in many cases are unprecedented. But their efforts cannot and should not be restricted to this area: the managers of financial institutions must reorganise and adapt their business models to the new competitive environment, actively seeking out levers permitting this process of change. I will devote the bulk of my address to this issue, not without briefly describing the situation of the Spanish banking system as a whole set against the international outlook. The external environment remains hugely complex.
Deviations should be permissible if the CPI change figure is influenced by transitory factors (for example, changes in indirect taxes and subsidies or household interest expenditure) or if bringing inflation promptly back to the targeted level would be costly for the real economy. The magnitude of these factors is to be stated in advance by the Riksbank. In this way, the members of your Committee, as well as other observers, will be in a better position to assess the Riksbank and the policy we implement. For each decision it is clear which transitory factors the Riksbank has chosen to disregard in the formation of policy. These clarifications are essentially a codification of the approach that the Riksbank has applied to the formation of monetary policy in recent years, although any deviations from the target were then discussed less precisely. In the period from 1997 to 1999 the path of inflation was affected to a large extent by transitory price movements that the Riksbank considers should be of secondary importance for monetary policy. Policy has therefore focused on the underlying or core rate of inflation as measured by UND1X; this averaged 1.2%, with constituent annual rates in these three years of 1.4, 0.9 and 1.4%. The Report that has been submitted to the Committee today contains an appendix that is intended to serve as a foundation for the Committee’s evaluation of the implementation of monetary policy and its outcome in the period 1997-99. This is something that the Committee requested earlier.

Debt service has not risen by the same proportion, due to rising  BIS Review 41/2007  1  incomes and easier credit terms, and arrears are at a low. However, some borrowers have stretched their capacity to the limit and the most indebted group has seen its debt grow substantially as a proportion of income and assets in recent years. Conditions will not need to change much to cause them serious difficulties. The bulk of household debt is in the form of CPI-indexed mortgage loans, making low inflation critical. Household debt in foreign currency was very low, but has been increasing. High levels of foreign currency-denominated debt could prove questionable for households with no income in foreign currency. Since house prices are currently buoyant, they are likely to rise by less than general inflation or even fall in nominal terms. Household equity could shrink under such conditions. Business profitability appears to have been strong in 2006, in spite of a massive increase in financial expenses from exchange rate losses on foreign borrowing, higher interest expenses and a substantial increase in interest-bearing debt. Debt of listed companies grew as a ratio of equity and the same is probably true of other businesses. Higher debt levels leave them more vulnerable to a contraction in the economy. Equity prices have soared in Iceland in recent years. One explanation for the increase may be that Icelandic companies were undervalued by the markets, for example by international comparison, and another that bold investment ventures have driven up their value.
“Financial literacy” or “the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources” is an important life-skill in our diverse capacities as students, employees, consumers, savers and investors etc. By now you may wonder as to why how you manage your personal finances is of any interest to the Bank? You may wonder as to why the Bank should care on how best you can manage your personal finances? The answer is simply this – We believe that economic development can be fostered by educating individuals on how best to manage their personal finances. We don’t have to rely on the big businesses or other forces for this – each and every one of us has the potential to foster economic development. Therefore we stand before you today not as leaders or dictators of your wallets and purses, but as counterparts on a way to forward our future financial prospects. And so it gives me great pleasure to introduce to you a tool designed to help you take charge of your personal finances and take you closer to realizing your full potential as agents of economic development – the MoneyPACIFIC Money Guide The Guide is simple enough for EVERYONE to understand. It is featured in, Samoan, Tongan and English and with this in mind, Samoa has accepted the privilege to be the imperative starting point for launching this project. This Guide was by you and for you.

I would therefore, like to implore all delegates to engage fully in these discussions and make the most of the wealth of knowledge and experience represented in the house. Ladies and Gentlemen, it is my pleasure and privilege once again to welcome you to the second AFRACA Central Banks’ Forum. I now wish to invite our distinguished Guest of Honour, the Minister of Finance and National Planning, Honourable Ng’andu P. Magande MP, to officially open this Forum. Honourable Minister! BIS Review 118/2008  3
5/5  BIS central bankers' speeches

Finally, Japan and the euro area should continue on the path of structural reforms geared to increasing their flexibility and adaptability and, ultimately, their potential growth rates, giving particular priority to reforms bearing on the services sector. Turning to the international financial system, banks have gained in soundness and are now in a position to face a correction of the global imbalances, even if this were accompanied by some adjustment of financial conditions and a moderate increase in volatility. However, further headway must be made in improving the measurement of the risks implicit in the complex financial linkages present in some segments of the international financial system. Although they provide for greater risk diversification, greater financial integration, new participants on the markets and the emergence of new financial instruments all make it more difficult to determine on which agents and sectors the risks finally fall. It is also more complicated to evaluate, where necessary, the risks of excessive concentration in segments where supervision by regulatory bodies is lighter. It is thus important to foster awareness in companies, and in households too, of the risks they assume, and for regulators to exercise effective surveillance of financial intermediaries and markets. All the more so given that the uncertainty over the effects arising from future bouts of turbulence on the markets will be exacerbated by the fact that this relatively new financial structure has not so far been tested in less favourable phases of the business cycle.
Those policy responses bring us to where we are today by being a cushion to the worst of the Covid-19 impact on the economy. Where we are today The recovery is there, and it is happening. We saw a GDP growth especially in the fourth quarter last year mainly from exports, which have surprised us on the upside. The recovery will be slow and uneven nonetheless. It will be uneven because, while certain sectors particularly manufacturing and exports have done relatively well, services and tourism will be lagging. Households will be hit very hard by the high impact of Covid-19 on tourism and unemployment that I have discussed previously. That is the overall picture. We expect the growth path to be there, but it will not be a rapid or a Vshaped recovery, and it will be slower than other places in the region. Risk to the outlook We had initially been expecting real GDP growth in the mid-three percent this year, but that was before the situation in Russia and Ukraine. We will release a forecast later as our Monetary Policy Committee meets towards the end of this month. As with many countries, we will be lowering our growth forecast and increasing our inflation forecast for this year. We are still looking to see a positive growth number this year and that the recovery will continue despite the substantial pickup in inflation. But what are the risks to that recovery trajectory that we see gradually happening?

Therefore, inflation has not spread as broadly, and the likelihood of seeing second-round effects to date remains relatively low partly because of the softness of our labor market. That is the current state of the economy and the outlook, and so, what is the way forward a bit further? Page 4 of 8  Part 2: The Way Forward Immediate policy challenge is to keep the recovery intact. “No cliff” Looking a bit further, the immediate policy challenge is to ensure that the recovery is intact. We have to make sure that there are “no cliffs” or things that will interrupt our recovery path. What kinds of things would cause this? Firstly, we do not want financial conditions tightening too early because that would hurt the ongoing recovery path. In this case, we must do what is necessary to ensure that the banking sector still provides credit facilitation to the economy and help keep the recovery going. We also do not want to see an adverse impact on the Thai financial markets from the tightening in global financial markets due to the Fed or the ECB policy normalizations. However, we are well-placed to withstand the tightening, given our low external vulnerability. The other thing that would constitute a cliff is the deteriorating financial conditions. For example, a sudden and sharp uptick in non-performing loans could interrupt the banking sector and the credit intermediation channel.
It will need increasingly to pivot from design of new international standards to ensuring consistent implementation across jurisdictions. It will need to be prepared to speak out loudly when standards are not being met. Where standards have been met, it will need to encourage national authorities in one jurisdiction to recognise and defer to equivalent regulation and supervision in another. And it will need to monitor and address risk throughout the system. Of course, while I think and hope we can continue and indeed reinforce the international governance that has been developed, it is not a given that we will succeed. It is very much in everyone’s interest to ensure that we do. If we cannot ensure consistent application of international standards, the result is very unlikely to be more unconstrained global financial activity of the sort we saw before the crisis. Rather it is likely to be the further rolling back of financial globalisation to the detriment of the global economy as national regulators feel compelled take local action to protect their own jurisdictions. BIS central bankers’ speeches  3  Intensive supervision It is not all about new approaches to regulation – to how you set the rules. It is also about new approaches to supervision – to how you apply those rules, day to day. From the outset, a key element of the international reform agenda has been more intense and more internationally co-ordinated supervision of systemically important firms.

Things get even more difficult when national supervisory practices are transferred into national law limiting the usual range of discretion needed by a supervisor to correctly do his job. These new national rules risk not removing but creating new elements of fragmentation and supervisory arbitrage. Conclusions Let me conclude by recalling a key lesson from the recent financial crises. The crises did not solely result from weaknesses in the regulatory framework. It is important to remember that the supervision of banks did not function optimally, either. We can all agree that banks should be subject to consistent prudential requirements based on their business model, risk profile and governance arrangements; to only name the most important characteristics. Prudential requirements should not be driven by the location of a bank’s business or headquarter. Ultimately, banks which face comparable economic and financial conditions should receive the same regulatory and supervisory treatment. This is why a truly European Banking supervisor, the SSM, was created. The SSM’s first year of supervision was overall a successful one. But we continue to face challenges so there is no reason at all to stop training. We have to stay vigilant and keep on with the work we have started. BIS central bankers’ speeches  3
W A Wijewardena: The role of statistics and challenges for statisticians Keynote address by Mr W A Wijewardena, Deputy Governor of the Central Bank of Sri Lanka, at the Stat Day, organized by University of Colombo, Colombo, 26 March 2009. *  *  *  Consciously or unconsciously, we use statistics in everything we do in our day to day life. When we say that it rained yesterday, we simply pronounce a fact we have observed as having happened. When we say that it is raining now, we again mention something that we have observed as happening. When we say that it will rain tomorrow, we are predicting a future event. Our life is full of such statements: facts that have been experienced by us in the past, facts that are happening now and being experienced in the present and facts that we feel would happen in the future. What has happened and is happening now are our personal experiences. What will happen are our learned judgements based on our experiences. If we keep these experiences and learned judgments to ourselves, then, it would not form the subject matter of statistics. It becomes statistics only when we share them with others. Hence, statistics is basically, observing, analysing, learning and sharing facts about the real world. That sharing of facts need not necessarily be in quantitative or measurable form. They can be simple expressions in verbal form so that others could form opinions on the happenings in the real world.

Monetary policy decision We have decided to leave the current Libor target range unchanged and to continue aiming for the middle of the range. This decision is based on the following considerations. Our analyses show that, following the slowdown in the global economy, the outlook for inflation has improved, if we disregard the temporary rise that will occur over the next few months as a result of the rise in oil prices. Moreover, the turmoil affecting the international financial markets and the uncertainty with respect to the extent of possible fall-out on the rest of the economy all call for prudence. The risk of a rise in inflation has not been dispelled; of that there can be no doubt, given the rise in oil prices, the weakness of the Swiss franc against the euro, and the high level of capacity utilisation. Nevertheless, we do not consider this to be a matter of urgency and view an adjustment in our policy as unnecessary under the current circumstances. It is evident that we will continue to keep a very close watch on developments in the situation. Inflation forecast graph I will now turn to the final part of my remarks. What is our inflation forecast? The dashed red curve on the graph represents the new forecast. It relates to the period between the fourth quarter of 2007 and the third quarter of 2010, and maps the future development of inflation on the assumption that the 2.75% level remains constant over the forecasting period.