samchain/econo-pairs-v1 huggingface dataset:
This is also why exchanges with fellow regulators during supervisory colleges are very helpful and important too. 13 I have earlier mentioned that rules and regulations should be risk proportionate. This is true as well for banking supervision. It is impossible for supervisors to review and inspect all the 2/5  BIS central bankers' speeches  financial institutions under our charge to a wide and deep extent given finite resources and time. This is neither feasible nor desirable. 14 It is more logical and effective to differentiate our supervisory intensity according to the risk profiles of each bank. In recent years, MAS has also moved towards greater use of thematic reviews and inspections. This means that we inspect a peer group of institutions at a time in a specific risk area. We find that such a peer group approach also facilitates better identification of vulnerabilities, and allow for industry benchmarking as well as the sharing of best practices. 15 An effective supervisory process should also involve a preparedness to take tough enforcement actions. It is a practical reality that no amount of regulations and supervisory reviews can catch all possible potential misdemeanours or excessive risk-taking. To do so, a financial regulator would have to be regularly and extensively intrusive to a point that a bank would find it hard to function. Ultimately, a bank’s Board and Management must be responsible for its business conduct and risk management.

Jaime Caruana: The impact of geopolitical events on the world economy Speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of The Basel Committee on Banking Supervision, at the International Securities Market Association Annual General Meeting, Madrid, 27 June 2003. *  *  *  It is a great pleasure for me to participate today in this International Securities Market Association Annual General Meeting. I would like to thank the organisers for their kind invitation to open this meeting and also to welcome you all to Madrid. The matters to be addressed in the Conference are not only highly topical, but are of crucial importance for all of us. Given the prestige of those who will be offering their opinions, I believe it will be a great opportunity to draw conclusions of enormous interest. The broad theme for this conference is the impact of geopolitical events on the world economy. By way of introduction, let me briefly share with you some thoughts on this topic. The world economy has been through a complicated period in recent years. The expected recovery has been slow, hesitant and disappointing. Several factors have come into play in this connection. On one hand, the persistent impact of the bursting of the IT and stock exchange bubbles has had a negative effect on business and consumer confidence as well as on investment.
Conclusion I began by considering whether the problems associated with making forecasts for the Riksbank’s current policy of targeting inflation could be avoided by changing to a different strategy. What I have said hopefully shows that this does not seem to be the case, at least with the knowledge that is available today. A less forward-looking policy, based for example on outcome data or forecasts that only illuminate the near future, would be liable to have destabilising effects on the real economy. Even a policy based on the money supply is dependent on forecasts of resource utilisation; it, too, can have destabilising consequences if the correlation between the intermediate variable and the ultimate objective breaks down. Neither would it be realistic or even appropriate to have a strategy whereby monetary policy is determined by automatic and mechanical rules; in the worst case, the simplicity of such a strategy can lead to unduly large fluctuations in both inflation and GDP. I therefore conclude that the problems connected with forecasting inflation cannot be avoided by choosing a different monetary strategy, at least with the present state of knowledge. As I see it, the problems with forecasts are manageable and relatively slight compared with the regime’s advantages in other respects. As the discussion has also shown, most monetary strategies have drawbacks as well as advantages. Most people will no doubt agree when I say that on the whole, Sweden’s experience of targeting inflation is favourable but of course that does not mean that we can rest content or smug.

The Scheme was designed to reinforce the transmission of the August 2016 cut in Bank Rate to 0.25%, thereby helping to lower the effective lower bound from 0.5% to close to 0%. It also led to a significant increase in the size of the Bank’s balance sheet, again via the APF, peaking at £  Acting in support of liquidity  While operations to meet our monetary policy remit might take the biggest share of our balance sheet, they are by no means the full extent of it. The Bank is the sole provider of sterling central bank money – the most liquid sterling asset. Because of this, our balance sheet has an important role to play in financial policy, through the provision of liquidity insurance. The core business of a commercial bank is to lend money by making loans to households and firms; to facilitate this it often needs to borrow money, by taking in retail deposits or by seeking funding from investors  7  There were also some smaller-scale initial purchases of private sector assets, partly financed by Treasury bill issuance; in August 2016 the MPC also voted to purchase £ of corporate bonds. 8 The APF itself currently holds £ of gilts and £ of corporate bonds, as well as the loans created via the TFS. For an overview of the estimated effects of QE and the mechanisms through which it works, see Haldane, A. G., Roberts-Sklar, M., Wieladek, T. and Young, C. (2016), “QE: The story so far”.
It is in the process of selecting the target rate of interest that art comes into the picture. The econometric models are not sufficient. Judgment is needed. This judgment is of a sophisticated nature. The Board members have to understand the limits of the models in order to be able to identify the weakness of their results. They also have to understand what is actually going on in the economy despite imperfect statistical data. “The art of central banking requires more than just intuition.”7 At the Swiss National Bank, we review monetary policy at least every quarter. In addition, our economists produce quarterly financial stability reports. Our economists pursue programmes of academic research and regularly publish their papers in refereed journals. The Swiss National Bank pretty much resembles a department of economics at university. The professors are there, the research economists and the statisticians are there. The students are lacking. But many of us continue to teach at one of the Swiss universities. This picture of the activities of economists at a central bank is not unique for Switzerland, but is similar to that found in most central banks. 7. Conclusion  The title of my paper is “Economics is What Economists Do”. By presenting a review of what this may mean at university, in government, in business and in central banking, I hope I was able to support your motivation for your study of economics.

Niklaus Blattner: Economics is what economists do Speech by Professor Niklaus Blattner, Vice Chairman of the Governing Board of the Swiss National Bank, at the Opening Session of the Integrated Master Programme, Faculty of Economics and Behavioral Sciences, Department of Economics, Albert-Ludwigs-Universität, Freiburg im Breisgau, 22 October 2004. * 1. *  *  Introduction  This is an important moment in the professional life of all of you who have chosen to participate in one of the three Master Programmes starting today and offered by the University of Freiburg. Your choice was either the Master of Economics and Politics, the Master of Finance or the Master of Internet Economics. A common denominator of all these programmes is economics. I felt it might be worthwhile, right at the beginning of your undertaking, to draw your attention to what economics stands for. This begs the question of what economics is. Jacob Viner (an eminent international trade theorist, 1892-1970) gave a slightly disturbing answer: “Economics is what economists do”. This sounds less scientific than you might have wished. But Viner has a point: when talking about a subject that has a history of constant change and development, why not simply look at the empirical facts and take instruction from what one observes? This is exactly what I propose to do. - I base on my own experience and observation.
Vítor Constâncio: Effectiveness of Monetary Union and the Capital Markets Union Contribution of Mr Vítor Constâncio, Vice-President of the European Central Bank, for the magazine of the Eurofi conference in Malta (5-7 April 2017), 4 April 2017. * * * The euro area recovery is continuing at a moderate, but firming pace, and is broadening gradually across sectors and countries. The ECB’s monetary policy measures have been a key contributor to these positive developments, and the only expansionary macroeconomic policy in support of the recovery. Real GDP growth has expanded for 15 consecutive quarters, growing by 0.5% during the final quarter of 2016. Dispersion in growth rates across euro area countries has fallen. Economic sentiment is at its highest level in nearly six years. The unemployment rate is back down to single-digit figures and over four million more Europeans are employed now than three years ago. Since the onset of the crisis, the ECB has put in place a number of conventional and unconventional monetary policy measures to stimulate the economy and rehabilitate the monetary transmission mechanism, which had become impaired at the height of the crisis. This comprehensive range of measures has worked its way through the financial system, leading to a significant easing of financing conditions for consumers and firms. Together with improving financial and non-financial sector balance sheets, this has strengthened credit dynamics and supported domestic demand. Bank lending rates for both euro area households and non-financial corporations have fallen by over 110 basis points since June 2014.

The respective contributions are estimated over rolling ten-year backwardlooking windows, based on annual data and applying the Asdrubali and Kim (2004) approach enhanced for relative price adjustments in the spirit of Corsetti, Dedola, and Viani (2011). 2/2  BIS central bankers' speeches
This is one considerable difference compared with the developments in the 1970s and 1980s. While real wages have risen by about 2.5 per cent a year since 1995, the annual increase in real wages was no more than around 1 per cent in 1970-89. So, even though nominal wages rose more than 9 per cent a year during the 1970s and 1980s, purchasing power improved by only about 1 per cent; the high inflation and devaluations eroded the rest. In fairness, I should add that in addition to the shift in stabilisation policy regime there were a number of significant changes in other areas too that may have contributed to the robust performance. For example, the rapid advances in information technology are likely to have contributed to the improved productivity. Another important factor underlying the stronger recorded productivity growth in the whole economy is the relatively smaller role of the public sector today compared with ten years ago. Yet another feature of the performance of the last ten years is deregulations and increased international competition, the latter boosted by membership of the EU and the ongoing integration of the world economy. So, Sweden’s economic performance after the crisis in the early 1990s has been healthy in many respects. This does not mean that there are no problem areas. One of these is employment. There was indeed a relatively fast upturn in employment after the crisis years.

Consequently, the guidelines for the exercise of ownership rights must be based, not on a specifically Norwegian world view, but on internationally recognised norms. And we are open about our principles and practices without losing sight of the limits of transparency. Declarations and resolutions may have their place, but in our day-to-day work we aim for real dialogue and results. The list of global issues that require urgent attention seems never-ending, and there have been calls for the Fund to address many of these. But priorities always have to be made to avoid the risk of spreading resources too thinly. Norway has chosen its goals for the Pension  BIS Review 6/2008  1  Fund based on a long-term perspective, and we do not want to be ruled by the tyranny of the impulsive and changing priorities that beleaguer many public programmes and sectors. There is another important ethical principle behind the Fund, which should not be forgotten: namely, our obligation to future generations. For the prosperity we are enjoying now, incurs obligations. Our oil and gas reserves are limited. Justice would not be served if all our petroleum wealth was allocated only to the generation lucky enough to experience our “oil age”. We perceive it as an ethical obligation to invest our wealth also for the benefit of future generations. International capital markets play a crucial role in allowing us to fulfil this obligation. Allow me the pleasure for a moment to look back on our less illustrious history as a borrower.
Lower real interest rate trend since the 1980s As the process of financial and economic integration in the global economy has increased, common factors such as global growth and global saving have played an increasingly large role with regard to interest rates.1 Real interest rates have fallen around the world which justifies calling this a global real interest rate. The fall is in the order of 4–5 percentage points since the 1980s.2 As Sweden is a small, open economy, the long-term global real interest rate can be regarded as an anchor for the Swedish real interest rate. During brief periods, the real interest rate in Sweden may deviate from the global real interest rate, but over longer periods of time the Swedish real interest rate will be determined by global factors. Figure 1 shows how the long-term real interest rate has developed in Sweden and the United Kingdom since the mid-1980s. More specifically, the figure shows the 10-year yield on Swedish and British real government bonds. From the mid-1980s and ten years onwards, the real interest rate varied around almost 4 per cent in the United Kingdom, while in Sweden it was much more volatile and at a higher level. This was followed by a trend decline that has continued until today. At present, the Swedish real interest rate is around –0–5 per cent, while the British one is around –1 per cent.

It also appears that in most countries the lower real interest rates are the main reason for the fall in nominal interest rates during this period. During the 1990s, when a number of central banks introduced inflation targets, lower inflation expectations also contributed to the fall in nominal interest rates. Secular stagnation or debt adjustment? An international discussion has been going on for some years now with regard to the causes of the fall in the global real interest rate. In simpler terms, one can say that two main explanations have been put forward in the debate.3 According to one explanation, the fall is primarily due to factors determining the long-term trends in investment and savings, such as demographic developments. This is partly connected to the discussion on secular stagnation initiated by Lawrence Summers, amongst others.4 In this view, long-term trends in saving and investment have pulled down the interest rate level compatible with full employment. The fall is so great that this interest-rate level is below zero. 1  See IMF (2014). 2  See King and Low (2014). 3  See Armelius et al. (2014). 4  See Summers (2014). 2  BIS central bankers’ speeches  Representatives of the other explanation, for instance Kenneth Rogoff,5 put greater emphasis on more short-term factors directly linked to the financial crisis, such as high indebtedness and increased uncertainty, which have held back investment and got households to save more.
For example, the HKMA supervises the banks that are located in Hong Kong, and it is unlawful for anyone to solicit for deposits in Hong Kong without authorisation. But if you click onto the website of someone in a far-off country and are seduced into transferring funds into a deposit with them, we may not be able to help you if things subsequently go wrong. This is a fairly simplistic example and I’m sure that everyone in this audience, at least, would be alert to the risks and would act with the necessary caution. But the proverbial man in the street, who may nowadays have his own internet access, may be more gullible. Moreover, there may be products on offer that are more subtle and beguiling than a straight deposit, and very seductively packaged too; all of us here today are potential victims to some sort of dupe; it is a brave person, or perhaps an arrogant one, who would deny that vulnerability. A still more significant manifestation of the internet, with potentially sinister consequences, is the speed which it brings to all dealings. Generally we marvel at the instant availability of up-to-date information, and the capability to act upon it, if we so desire, by a return click of the mouse. If the response is simply an e-mail message to a friend or colleague, the scope for loss or damage may be limited, but, even then, how often do we later rue the impulsive riposte?

We also see no justification for maintaining restrictions on food exports by some food-rich countries, on medicine by some producing  2  countries, and sanctions on some major oil exporters when the world is beset by high food and energy insecurity and health crisis. We endorse the GPA’s emphasis on “acting together and acting now” to alleviate the immediate hardship due to successive years of global crises, and to build resilience for addressing future shocks that could come with more frequency and greater severity. However, as mentioned earlier, the basic requirement of “acting together” for the common good is at risk by the growing global fragmentation into economic and trade blocks, including the critical energy sector. We welcome the IMF’s continued commitment to help members in need by enhancing and adapting its lending toolkit. The newly established Resilience and Sustainability Trust (RST) is an important addition to the IMF’s toolkit to help members build strong resilience to various shocks, including climate change and pandemics, through long term financing. We are encouraged by the strong uptake so far and look forward to seeing several RST-backed programs brought for the Board’s consideration by the end of this year. Against the background of swift tightening of global financial conditions, we are concerned about the precarious debt situation and the diminished debt service capacity of LICs and EMDEs, with many of them already in debt distress or at high risk of debt distress.
This is asking for strong vigilance so as to ensure that medium to longerterm expectations in the euro area remain solidly anchored at level consistent with price stability. 2. Macroeconomic stability and convergence  Price stability has not come at the expense of higher unemployment. Moreover, there are no visible signs of costs in terms of higher real macroeconomic volatility. Quite on the contrary, the volatility of real variables has declined relative to the averages observed during the 1980s and 1990s. Does one size fit all? It is often argued that a single monetary policy combined with inflation differentials leads to different real interest rates across countries, which in turn may destabilisize the currency union by creating divergence in output growth that exacerbate inflation differentials. This is by no way what we have observed: First, inflation dispersion among the euro area countries (measured as the unweighted standard deviation of annual HICP inflation rates) amounted to 0.7 percentage point in 2006 compared to around 6 percentage points in the 1990s. Since the inception of the euro, the average inflation dispersion across the euro area countries has been around 1 percentage  BIS Review 113/2007  5  point. This figure is very close to the dispersion observed across the 14 US metropolitan statistical areas. Concerning growth differentials, euro area averages naturally mask a variety of growth performances of individual countries within the single currency area, especially in a context where structural convergence has not been completed yet.

We remain ready to enforce the minimum exchange rate, if necessary, by purchasing foreign currency in unlimited quantities, and to take further measures as required. I would like to take this opportunity of stressing, once again, that the minimum exchange rate does not represent a peg to the euro. The Swiss franc is able to move freely above CHF 1.20 per euro. As I said, it is high, and should weaken with time. For many years, interest rates have been at a low level due to the overall economic situation. However, the danger of a longer period of low interest rates is that imbalances can build up, and we can indeed observe such a development in the Swiss mortgage and real estate markets. Allow me therefore to give you our assessment of this situation. Mortgage and real estate markets and countercyclical capital buffer The Swiss residential mortgage and real estate markets have been growing strongly for some time, giving rise to imbalances. Some time ago, these reached a level, in the view of the SNB, that poses a risk to the stability of the banking system and hence the Swiss economy. Why does the SNB not simply increase interest rates in order to slow down the mortgage and real estate markets? Although an increase in the interest rate would have a dampening effect, it would, at the same time, intensify upward pressure on the Swiss franc and, given the current situation, threaten price stability. Consequently, an interest rate increase is not an option.