samchain/econo-pairs-v1 huggingface dataset:
This trend began later than the decline in real interest rates, but Swedish inflation began to fall slightly before that in other western countries such as the United States and the euro area. The most recent downturn in inflation in the euro area can to some extent be explained by the fall in energy prices. However, underlying inflation has also fallen in the wake of both the banking crisis and the euro crisis. It is necessary to take into account the decline in both real interest rates and inflation in the monetary policy deliberations. The fundamental reasoning regarding the stabilisation ability of monetary policy with a floating exchange rate is based on the assessment of a normal nominal interest rate, simply described as an interval for a nominal interest rate that neither speeds up nor slows down the economy. To estimate how high the normal nominal interest rate should be, we look at the real interest rate and add to this the inflation target. If the real interest rate is 2 per cent and the inflation target is 2 per cent, then the nominal interest rate should be around 4 per cent. If the real interest rate rises to 3 per cent, and the inflation target remains unchanged at 2 per cent, the nominal interest rate will be 5 per cent, and so on. But as I have just shown, developments are instead showing a downward trend. Lower real interest rates and lower inflation and inflation expectations are pushing the nominal interest rate downwards.

Spain has a lower percentage of innovative firms5 and its industrial sector (traditionally the most innovative) makes less of a contribution to value added, while spending on R&D&I is lower across the different sectors of activity. But public investment is also slightly below the euro area average. Public policies should help to spur corporate innovation. In Spain, the most significant incentives for innovation take the form of corporate income tax credits. Although the subsidy implicit in these incentives is, in theory, among the highest in the Organisation for Economic Co-operation and Development (OECD, 2021), they are actually deployed notably less in practice (Independent Authority for Fiscal Responsibility (AIReF), 2020). Thus, the various analyses performed agree on the need for reform.6 In particular, evidence from around the globe shows that designing tax incentives that yield higher subsidies for start-ups leads to particularly effective policies.7 It may also be worth giving thought to measures that would allow innovative firms that do not make enough taxable profits to claim direct reimbursement for investments. As far as public support for R&D&I is concerned, as important as additional funding is, it must be properly directed towards projects that yield synergies with private initiatives. Part of this activity could, for instance, be channelled through venture capital firms, which have greater expertise in funding businesses at the start-up phase and innovative activities.
Øystein Olsen: Monetary policy and wealth management in a small petroleum economy Speech by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), at the Harvard Kennedy School, Cambridge, USA, 9 April 2013. *  *  *  Please note that the text below may differ from the actual presentation. Charts in pdf-format  Introduction I am delighted to be here at the Harvard Kennedy School, and I really appreciate this opportunity to talk to you. My topics are Norwegian monetary policy and the central bank’s management of Norway’s oil fund, the Government Pension Fund Global. I will begin with some background on the macroeconomic policy framework in Norway, and why we believe it works well. A rules-based approach was adopted after two turbulent decades of boom-bust economic cycles. The path towards the current regime was developed and supported by successive governments in the 1990s and early 2000s as it gradually came into place. Since 2001, the operational target of monetary policy has been annual consumer price inflation of around 2.5 percent over time. With growing petroleum revenues, asset management has also become one of Norges Bank’s main tasks. Both in our conduct of monetary policy and in asset management, transparency is a guiding principle. I will explain how we see ourselves as a global financial investor, and elaborate on the main elements of our investment strategy.

•  Thirdly, a fund owned by the government must be highly transparent, not only to the Norwegian public but also in an international context. Let me elaborate on these aspects. In the early summer of 2007, the fund’s strategic equity share was raised from 40 to 60 percent. From summer 2007 to 2009, the fund bought equities worth USD 180 billion in international markets, equivalent to 0.5 percent of all globally listed equities. The largest volume of transactions was carried out in the midst of the financial crisis of 2008 and 2009. The long-term horizon also enables us to invest countercyclically, by rebalancing asset classes: If the equity share increases by more than 4 percentage points from the target weight of 60 percent, we will sell equities and buy bonds. Conversely, if the equity share drops below 56 percent, we will sell bonds and buy equities. The capacity to withstand market turmoil was demonstrated during the financial crisis in 2008 and 2009. For a period of 18 months, the fund’s losses totalled roughly USD 120 billion – more than 25 percent of Norway’s GDP. The losses did not go unnoticed. They led to lively public debate on the fund’s investment strategy. However, the conclusion drawn was that the strategy was robust, and the government remained committed to it.10 Norway would have to accept that the fund’s capital would fluctuate, sometimes dramatically, given the high equity share. Indeed, through 2009 and 2010, not only were those losses reversed, but additional gains were also made.
•  Thirdly there are a number of different potential policy instruments that can affect the financial environment in various, sometimes conflicting, ways. And by no means are all in the hands of central banks  •  Fourthly national financial stability responsibilities are often shared. In the UK we work with Her Majesty’s Treasury (HMT) and the Financial Services Authority (FSA). For cross-border activities we operate alongside overseas central banks and supervisors. •  Fifthly although the roles of the UK authorities are outlined and published in a Memorandum of Understanding (MoU), this gives little guidance as to what financial stability is or a clearly identifiable target. •  And lastly it is harder to get motivational feedback – unless in unwelcome form should a crisis occur. 3. Defining Our Role in Financial Stability Oversight  These factors pose a number of challenges in defining our role in financial stability oversight – what activities should we as a central bank undertake? To make these decisions, firstly we should identify the main functions that need to be performed in each jurisdiction to promote financial stability. Then we can look at the Bank’s own institutional mandate. And finally we can determine the most appropriate way to fulfil it. i)  The Three Essential Functions for Public Authorities  There seem to me to be three essential functions to be carried out in securing financial stability: I think this is the case in most jurisdictions.

Firstly, there are the roles relating to supervision of firms and markets where financial instability could arise. Secondly, there is the oversight of the financial system as a whole - the systemic issues which could impinge on society. And thirdly there is the fiscal underpinning which may exceptionally be required to restore confidence in the event of failure. The fiscal underpinning is a role for Ministries of Finance. The other roles can either be combined institutionally or separated. I am sure each model is represented here today. In the UK, HMT has responsibility for the fiscal underpinning, FSA for the supervision of firms and market regulation, and the Bank of England for the stability of the system as a whole. ii)  The “Must Dos” for the Bank of England  The roles as such are set out with slightly more precision in the MoU, and it is from there that we start on our quest to decide what initiatives we – the Bank of England – should undertake, and how far we go with each. The MoU highlights three “must dos” for the Bank. I expect that these are similar in many central banks. They really define our mandate. a)  Assessment of Threats to Financial Stability  Firstly we need to assess the threats to the financial system. We need to be in a position to inform ourselves and to advise HMT at all times on the implications for UK financial stability of developments in both the domestic and international market places.
This is the first time that a zero coupon bond product is offered to the retail public in Hong Kong. It is also the first time we are issuing retail bond with a ten-year tenor. "Zero coupon" bonds are intended for investors who wish to save up funds for longer-term use. They do not need the cash flow from the interest payments on conventional bonds, but they would wish to save up the principal and interest for future retirement or children’s education. By investing around $ in this zero coupon bond, the investor will receive $ after ten years. If investors should find a need to sell the bonds prior to maturity, they are free to do so. We have a market making arrangement with our placing banks to provide quotes to buy such bonds to ensure secondary market liquidity. Apart from the zero coupon bond, the HKMC is also issuing two-year US Dollar retail bond, following our successful, inaugural issue of retail US Dollar bond last year. We are now offering two-year retail bond denominated in US Dollar as well as in Hong Kong dollar to provide more investor choice. Out of the total deposit base of over $ trillion in our banking sector, about one-third are in US Dollars. We believe there should be good demand for these two-year notes, especially given the recent pause in interest rate hike by the US Federal Reserve. To sum up, the retail bonds offered today will provide the general public with an additional, relatively safe investment vehicle.

I trust that our product innovation will also promote the development of the bond market in Hong Kong. This creates a win-win situation for the investors, the placing banks and the Corporation. I like to thank the banking community for supporting our bond issuance. In particular, HSBC and Bank of China (Hong Kong) are underwriting a portion of the bond issue as well as placing the notes. My appreciation also goes to the other placing banks, namely, Bank of America (Asia), Bank of Communications, Bank of East Asia, Chiyu Bank, CITIC Ka Wah Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, ICBC (Asia), Liu Chong Hing Bank, Nanyang Commercial Bank, Shanghai Commercial Bank, Standard Chartered Bank (Hong Kong), Wing Hang Bank and Wing Lung Bank. With your support, I am sure we will have another successful retail bond issue that is welcome by the investors. Thank you. BIS Review 81/2006  1
An important function of the Pilot Platform is to enable financial institutions to make use of securities held in one of the partner systems as collateral to conduct secured borrowing in the local currency of another partner economy. As an example, a European bank can make use of its securities held with Euroclear Bank as collateral to borrow Hong Kong dollar to meet the liquidity needs of its Hong Kong subsidiary. The cross-border and cross-currency collateral management service to be provided by the Pilot Platform is a timely solution to meet this market need, and will be a powerful tool to enhance financial stability in the partner economies. Talking about the alliance we have, we are indeed very fortunate to have three strong institutions to be the founding partners of the Pilot Platform – the RENTAS in Malaysia, the CMU in Hong Kong, and the Euroclear Bank. Each will bring unique and valuable contribution to the partnership and the potential synergy would be substantial. Through RENTAS, global investors will have convenient access to Islamic bonds. In the other direction, Euroclear Bank’ s clients will benefit from the large and increasingly wealthy investor base in Southeast Asia and the Islamic world. Likewise, the CMU will provide an easy access to RMB bonds and highly rated bonds in other currencies for the global investors and enrich Euroclear’ s investor base with the fast expanding investor clusters in greater China.

Peter Pang: Pilot platform for cross-border investment and settlement of debt securities Remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary, at the Press Conference on Pilot Platform for Cross-border Investment and Settlement of Debt Securities – Hong Kong, Malaysia and Euroclear Bank, Hong Kong, 13 March 2012. *  *  *  Deputy Governor Muhammad Ibrahim, Mr Anso Thiré, ladies and gentlemen, Good afternoon. Let me welcome you all to this press conference to announce the launch of the strategic alliance of the cross-border bond investment and settlement platforms in Hong Kong, Malaysia and Euroclear Bank. The Pilot Platform to be launched on 30 March under this strategic alliance goes well beyond commercial cooperation amongst the partners. It will advance the important policy objectives of fostering bond market development and promoting financial stability at both global and regional levels. There are strong demand and supply side factors that focus global investors’ attention on bond markets in Asia. On the demand side, the European sovereign debt problems and successive downgrades of sovereign credit ratings of the advanced economies underscore the need for geographical diversification by global investors. Asia is the obvious choice as it stands out as the bright spot and engine for global growth. According to IMF’ s forecast, emerging Asia, with China as the core, will contribute about 57% of the world’ s GDP growth by 2016. Augmenting this favourable demand factor is the improved credit ratings of Asian sovereign issuers.
those which the Bank’s analysis identified as being systemically important to the CHAPS system in terms of the total value of payments they send and receive. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  the first non-bank PSP to join CHAPS directly. Direct access allows non-bank PSPs to reduce their operational dependence on the banks they are trying to compete with. Over the longer term, this should also create a more diverse payments sector with fewer single points of failure. Reducing the cost of access. We continue to seek to avoid the costs of direct access being prohibitive to prospective and existing participants. We have enabled third-party aggregators to provide technical connectivity to RTGS for smaller CHAPS direct participants, reducing the upfront costs of direct access without reducing overall resilience. The RTGS Renewal Programme will further reduce the barriers to direct access. Its technical architecture will be designed to support several hundred Direct Participants in CHAPS; allowing for a significant increase from the current 33. We also intend to introduce automated testing to streamline the joining process. We will build simulators to help new joiners better familiarise themselves with CHAPS and provide broader RTGS functionality before going live. The renewed RTGS will also feature enhanced functionality (e.g. enhanced liquidity management and the capability to extend opening hours), facilitating innovation by both established participants and new joiners.

I would then like to say a few words about the proposed revisions to the capital requirements for international banks, announced last week by the Basel Committee; not just because it is topical but also because these capital requirements are central to the stability of the system and its capacity to withstand shocks; and as cautious central bankers it is important to take stock from time to time. US & UK Economic Ties As a very open economy, and one with close trade and investment links with the US, especially in the financial sector, the UK is a keen observer of events here. While much has been made in recent years of globalisation, the links between the US and UK are long-standing and deep-rooted, not least in the financial sector. For many years US financial institutions have been among the biggest players in the City. US firms take the top three positions in London as bookrunners in international bond and equity issues, and as arrangers of syndicated credits. Through their dynamism and innovation, US firms also play a major role both in maintaining London's pre-eminence as an international financial centre and as a potent force for strengthening the competitiveness of the UK's own financial institutions. Our interest in the continued financial strength of US firms is thus clear. Foreign banks are similarly active in US markets. For example, they account for 40% of the US syndicated loan market regularly surveyed by the Fed.
Against this background, it is timely that SEACEN Centre has initiated this course to explore the nature of financial intermediation, the role of financial markets in the allocation of resources and the need for appropriate regulatory framework. As regulators, we need to understand the concepts and the basics of the working, the pricing and trading strategies of the derivatives markets and instruments, how financial entities use them in risk management, as well as their potential impact on financial system stability. But more importantly, in these two weeks, we will benefit from the presence of a number of distinguished speakers that have kindly given up their time to be with us. I hope we will use this opportunity fully. On this note, I would like to thank Mr. Sunil Sharma, Chief, Asian Division, IMF Institute, for his efforts to coordinate this course with the SEACEN Centre and the Bank of Thailand. I trust that this course will be most fruitful and rewarding for all the participants, but above all that the interaction among yourselves will provide an opportunity for you to learn from one another, and strengthen the bonds of friendship that bind the works of our institutions for many years to come.

The Riksbank after the referendum The result of the referendum was, as we all know, a "no" vote. What this means for the Riksbank is that we will continue to focus our operations on our statutory objectives; to maintain price stability and to promote a safe and efficient payment system. Quite simply, it will be "business as usual" for monetary policy. This means that under normal circumstances we will continue to follow our simple monetary policy rule: if future inflation is forecast to be higher than the inflation target of 2 per cent, we will raise the interest rate, and vice versa if inflation is forecast to be lower than 2 per cent. This clear intellectual framework makes it easier to influence expectations of monetary policy in society and to evaluate the policy afterwards. Both we ourselves and external analysts can take a stand on whether the policy appears sensible in relation to the target, whether the forecasts we make are reasonable, and whether we follow the principles we claim to follow for attaining the inflation target. Even if the monetary policy framework remains intact, this is no reason to become too comfortable. During the spring we began work on a review of the process used to produce the information on which our interest rate decisions are based. This includes considering how one of our most important documents - the Inflation Report - can be improved. It also involves improving our ability to predict price trends.
3  European Union enlargement  At first glance, the link between this topic and the two issues I have been dealing with up to now appears quite tenuous. Yet, while the issues arising from market integration and financial stability are of concern for many Central Banks, managing the EU enlargement is a distinctive concern of the Eurosystem. I would like to share views on how the Eurosystem will act to address this concern, while performing their task regarding price and financial stability. Ten countries from Central, Eastern and Southern Europe –comprising 75 million inhabitants – are to join the EU, thus completing European reunification. Although their combined GDP is rather small (equivalent to that of the Netherlands for instance), in terms of population' size they will propel the EU (450 millions inhabitants) largely ahead of the combined population of both the US (population: 275 millions) and Russia (population: 145 millions). This testifies again, if need be, to the attractiveness of the European Union framework, which has provided us with economic prosperity and political stability for almost half a century. Accession countries have accomplished important progress in stabilizing and strengthening their economies and their institutions. Observing the accession countries, recent history shows the major improvements those countries have made, in hardly 10 years, on the road towards convergence with the EU. Let us keep in mind, the sometimes rather slow pace the current Member States took, regarding for example trade openness, price liberalisation, or macro economic discipline.

4  BIS Review 71/2002  10  split almost equally between intermediated and non-intermediated assets . Although credit 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 instability. 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 cross-border flows, and to perform well even in critical circumstances such as September 2001.