samchain/econo-pairs-v1 huggingface dataset:
the ECB and the 11 national central banks of the Member States which have adopted the euro) is meeting this challenge, in particular since EU enlargement also implies the eventual adoption of the euro by the accession countries. Before doing so, however, I should like to make clear that I am not able to repeat Governor Zolotas’ remarkable performances at the World Bank some years ago, when he made speeches in English using only Greek words. Enlargement of the European Union Let me begin generally by saying that the forces and motivations driving the enlargement process are the very same as those that have driven the process of European integration over the past 50 years. Moreover, these forces have shown themselves to be extremely powerful, as can be seen from the remarkable events that have taken place since the Schuman declaration nearly half a century ago. Some 50 years ago, it was already clear to Europe’s political leaders that they needed to overcome the nationalism which had ultimately led to two world wars and devastated much of Europe in the first half of this century. In order to ensure a future of peace and stability they needed instead to pursue policies which would bring European nations closer together and in so doing eliminate the risk of future conflicts. This, as I believe we are all aware, was one of the original “political” motives behind European integration.

3  BIS Review 113/1999  The first of these criteria, generally known as the “political criterion” calls for a candidate country to have stable institutions which guarantee democracy, the rule of law, human rights, and respect for and the protection of minorities. I shall not comment on this criterion as its purpose and meaning are quite clear to us all. The “economic criterion”, as the second of these criteria is termed, requires the existence of a functioning market economy as well as the capacity to cope with competitive pressures and market forces within the European Union. The economic reasoning which lies behind this criterion is also quite straightforward and requires little elaboration. However, I should like to add that for the accession countries, while it is no doubt a difficult and sometimes painful task, fulfilling this criterion is an essential step towards creating a solid basis for future non-inflationary economic growth. And, finally, there is the third criterion concerning the adoption of the so-called “acquis communautaire”. This requires that a candidate country be able to take on the obligations of EU membership, including the adherence to the aims of political, economic and monetary integration. It is this last point which is of course most relevant to the Eurosystem. EU enlargement and the Eurosystem As I understand it, it has been decided that no new “opt-out” clauses, such as those negotiated by the United Kingdom and Denmark, shall be available to new Member States.
BIS Review 46/2006  1  Consequently, economic fluctuations in the euro area are important for both Israel and Switzerland. But in the Swiss case – and this is a kind of paradox for a country that does not belong to the EU – the relations are especially close: Switzerland shows a higher degree of cyclical integration with the euro area than the individual euro members themselves! Indeed, over the last five years, Swiss GDP growth has shown a correlation of 86% with economic growth in the euro area, while within the euro area, growth rates have had a correlation of only 65%. Israel's growth has a correlation with euro area growth of 62%. The deep integration of Switzerland in the European markets is not a surprise, since we are located at the heart of the Union, next to its largest members, but also because we have signed several bilateral agreements with the EU giving us free access to the European goods and labour markets. Israel's situation is quite different in that respect, but it remains a fact that, in both countries, fluctuations on the real side are closely linked to those in the euro area. Regarding the level of growth, Israel, as a relatively young country with a growing population, has outperformed both the euro area and Switzerland, with an average growth over the last five years of 2% versus 0.8% and 0.6% respectively. Nevertheless, Israeli GDP per capita is still only roughly half of that in Switzerland.

Monetary independence also helps reduce the variability of inflation and economic conditions, and I will turn to this issue next. Reaction to country-specific shocks The second reason why I think that Switzerland should not adopt the euro is that monetary independence gives us the necessary leeway to react to country-specific shocks. Although I mentioned earlier that the Swiss economy is highly integrated into the euro area, we are not an average European country. Over the last 20 years, Switzerland has become a platform for global activity: while we count 4.2 million jobs within our country, Swiss firms employ another 1.8 million people abroad. Moreover, we are an international financial centre: about 15% of Swiss GDP originates from the financial sector. As a consequence, Switzerland's business cycle is closely related to the development of the world economy and to the situation in financial markets. Mood swings in international financial markets and in investment decisions impact on the Swiss economy through different channels. On the one hand, they affect our banking and insurance industry as well as our exports. On the other hand, they may trigger a flight into the Swiss franc. The resulting exchange rate volatility is a major risk factor for our trading sector. Given our openness to capital flows and the importance of our production of capital goods, shocks to the global economy and international financial markets have a larger and faster effect on economic conditions and inflation in Switzerland than in the euro area.
It is thus necessary to keep watch on inflation expectations, to counteract expectations of falling inflation, and preferably to create expectations of higher inflation. In this type of situation it may be desirable to create expectations that actually exceed the inflation target. The Riksbank’s current regime, with a credible inflation target and the publication of forecasts, including their motivation, for inflation, the real economy and the repo rate, provides a very good base for maintaining confidence in monetary policy, for upholding inflation expectations and preventing them from falling too low, or even from falling unchecked. If, contrary to expectations, this should not prove sufficient, and inflation expectations were to threaten to become too low, it is possible that tightening the inflation target, in the form of a temporary target for prices, might work better. This type of temporary price target could be introduced in the form of an average inflation target, so that inflation over the coming five years should on average be 2 per cent. If inflation then falls below 2 per cent during a period of time, it must be kept above 2 per cent during a period of time to ensure the average will be 2 per cent. With a well-motivated average inflation target it may be easier to justify this monetary policy and to create confidence in allowing inflation to exceed 2 per cent during a period of time in order to provide a sufficiently low real interest rate.

4  BIS Review 50/2008  Section IV: Lessons The recent turmoil has highlighted clear deficiencies in banks’ liquidity risk management. And it has also demonstrated that these deficiencies pose serious risks to financial stability and thus to the economy more broadly. To address this risk in the near term, central banks globally have provided additional liquidity to the banking system and emergency operations have been conducted to support Northern Rock and Bear Stearns. Additional liquidity has been provided at longer-term maturities to address the problem of funding an unexpected overhang of illiquid assets. The Bank’s recently launched Special Liquidity Scheme is enabling UK banks to liquefy a proportion of their outstanding stock of illiquid assets by swapping them for high quality liquid government securities, while ensuring that credit risks remain very clearly with the banks. That should ease current funding pressures. But in the medium term, it is clear that action is needed to strengthen the financial system’s defences to liquidity risk to limit the likelihood of any recurrence of the recent problems. Central banks globally are reviewing the lessons of the episode for their market operations, for example, to ensure that the usefulness of facilities is not undermined by perceptions of stigma that may be attached to a bank that uses them. But it is clear that primary responsibility for bolstering the defences lies with the banks themselves and that supervisory regimes for liquidity risk need reinforcing to support that process.
I feared that we were facing a period of stagflation; that is high inflation and low growth, similar to the period that followed the oilprice increases of the 1970s. In such a situation we must, under the terms of our mandate, give priority to keeping inflation down close to the inflation target. However, the financial crisis radically changed the preconditions for monetary policy. 7  Taylor, J.B., (1993). Discretion versus policy rules in practice. Carnegie-Rochester Conference Series on Public Policy 39 (1993) 195–214. Amsterdam: North-Holland. The Taylor rule has the following simple form and describes the monetary policy conducted in the United States in the period 1987–1992 well: r = p + 0.5y + 0.5(p-2) + 2 where r = the policy rate, p = inflation over the last 12 months in per cent and y = the GDP gap in per cent. In the formula, it is assumed that the inflation target is 2 per cent and that the real policy rate in the long term is 2 per cent. 8  The HICP is a harmonized index for consumer prices that, among other things, is used in the EU for comparisons between the member states. Mortgage rates are excluded when calculating the HICP. 9  Minutes of the monetary policy meetings held on 29 March 2007, 3 May 2007 and 18 December 2007. 4  BIS central bankers’ speeches  Monetary policy worked well during the financial crisis My second thesis is that monetary policy worked well during the financial crisis.

The interest of the ECB in this process therefore relates especially to the independent status of central banks of the accession countries and to the implementation of sound legal regimes in the area of financial law. At a later point in time before an accession country adopts the euro, further legislative amendments will be required in order to integrate the central bank into the Eurosystem and to enable it to fulfil its part in our monetary policy and other operations. So, what has been achieved in terms of legislative amendments in accession countries and what remains to be done before accession? The ECB co-operates with the legal experts of the national central banks of the accession countries in order to follow the legislative developments, and I can therefore give some indications of the degree of progress. Turning first to the requirement of central bank independence, several accession countries have amended their central bank legislation, although further adjustments are generally required. The drafters of the Treaty placed a strong emphasis on central bank independence as a reflection of the generally held view that the achievement of price stability is best served by an independent institution with a precise mandate. In line with this Treaty principle, the precursor of the ECB, the European Monetary Institute, established a list of features of central bank independence, which will form the basis for the assessment of the compliance of the accession countries with the requirement of central bank independence.
Project Nexus aims to address the challenges of speed, cost, access and transparency, in line with the G20 goals set out for enhancing cross border payments. Users can look forward to: Faster speed. A transaction is cleared in 60 seconds, on a 24/7 basis. Lower cost. The aim is to meet the G20's target for cross-border retail payments across any corridor to come down to less than 3% of transfer value. Wider access. The model will enable connectivity for all users of fast payment systems: banks as well as non-bank financial institutions. Greater transparency. A payment sender will have upfront certainty of fees due, and immediate update on transaction status. High security. The central platform leverages on the strong security and risk mitigation protocols built into national faster payment system. The ten members of the Association of Southeast Asian Nations, or ASEAN, have a shared vision of a multilateral network of payment linkages across ASEAN by 2025. MAS believes that Project Nexus can be a key enabler towards realising this vision. ASEAN is well placed to be a first-mover on this multilateral solution. In fact, as this network expands, we hope to see more countries coming onboard as we build connectivity from ASEAN to the rest of the world. Linking faster payment systems solves the cross-border payments problem but not settlements. While cross-border payments can be made instantaneous through such linkages, the settlement process for such payments only happens sequentially. It goes through a series of correspondent banks and depends on the jurisdictions' respective settlement cycles.

As before, it will bring together thousands of people from across the world – finance professionals, technology experts, FinTech entrepreneurs, policymakers, regulators, academics, inventors, and many more – to make connections and to make an impact. As this will the first in-person Festival since 2019, do join us in Singapore for a week-long celebration next month. In the meantime, I wish you a fruitful SIBOS conference and success in your endeavours. 8/8  BIS - Central bankers' speeches
The Federal Reserve has cut its key rate on two occasions this autumn, which has contributed to a further downward revision of interest rate expectations in both the US and the rest of the world, including Norway. The interest rate differential between Norway and other countries can have an impact on the krone exchange rate. In the short term, however, the factors that influence the krone exchange rate vary. In periods, there seems to be a link between high oil prices and a krone appreciation, but there have also been periods when the krone has appreciated while oil prices declined. The krone appreciated when the interest rate differential against other countries was high in 2002, but as interest rates in Norway moved down to the level among our trading partners, the value of the krone fell back. In the past, we have observed that market turbulence has occurred in tandem with a weaker krone. This autumn the krone appreciated during the period of market turbulence, but has weakened somewhat in recent weeks, reflecting shifting themes in foreign exchange markets. However, it appears the krone will be a good 3 per cent stronger on average in the second half of this year than in the first half, and about 1.5 per cent stronger this year than last, which has a dampening impact on inflation. Given our inflation-targeting regime, we will be mindful of the effects of higher interest rates on the krone exchange rate when inflation is low.

Global growth will also influence oil prices and developments in prices for other commodities. Oil prices are high and futures prices indicate that they will remain so. The price of Brent Blend has averaged close to USD 70 per barrel so far this year. In recent months, the price has been well above this level. Gas prices have also increased in recent years, reflecting the rise in oil prices and gas shortages in Europe. Gas prices fell somewhat in the first half of 2007, partly as a result of the decline in UK gas prices and the fall in oil prices in the first half of 2007. Both UK gas prices and oil prices have risen again this autumn. Gas prices are expected to remain at a high level, and the price of Norwegian gas may rise in the period ahead. A long period of high oil prices has boosted investment in oil and gas activities, leading to a strong increase in domestic activity in recent years. The level of petroleum investment is historically high and the outlook is favourable. The discovery rate on the Norwegian continental shelf appears to be high this year. The number of applicants for new exploration activities is unusually high. Coupled with high oil prices, these factors will contribute to increased activity on the Norwegian continental shelf in coming years. At the same time, the composition of production is changing. Oil production is on the decline and has not been lower since 1994.
The way forward Going forward, therefore, it must be realized that in a monetary union the effects of institutional rigidities, inappropriate policies and inefficient practices on prices, costs and competitiveness will inevitably become visible in the shape of lower income levels relative to the other members of the union. Given that a sizeable income gap already exists with the euro area, removing the remaining impediments to faster growth is, therefore, a policy imperative. Two elements of an appropriate response to this challenge emerge spontaneously from an analysis of the current macroeconomic situation. Attention has already been drawn to the over reliance on consumption as a driver of growth since 2005, highlighting the need to devote more resources to investment. In Malta’s case, this must continue to take the shape predominantly of FDI because of the implied technology transfer and access to markets. Attracting further FDI, however, will require a determined effort because when the current recession is over the global marketplace will be characterised by fewer, but more costefficient suppliers and a slow-growing demand; a large pool of unemployed labour, implying downward pressures on wages; and an increased tendency for investment to shy away from relatively expensive locations. A review of Malta’s investment promotion strategy should, therefore, be undertaken that takes this scenario fully into account. Private investment must be supported by appropriate levels of public investment, mainly of an infrastructure nature.

For most of the first half of my own working life - through the 1960s and much of the 1970s - the essential emphasis of economic management in the UK was on short-term aggregate demand management, with too little regard to the structural, supply-side capacity of the economy to meet that demand. Monetary and fiscal policy were used in combination to try to maintain an appropriate balance between what were seen as conflicting objectives of growth and full employment on the one hand and price stability and balance of payments equilibrium on the other. Slow growth and high unemployment were typically met with monetary and fiscal stimulus. As the symptoms of imbalance inevitably emerged - in the form of external deficits or accelerating inflation - attempts were made initially to suppress those symptoms through various forms of direct control (for example, foreign exchange controls or credit ceilings or prices and income policies) but as demand pressures built up macroeconomic policies had eventually to be thrown sharply into reverse. This was the go-stop policy cycle that resulted in the exaggerated boom-bust economic cycle, which was for a long time a pronounced characteristic of British economic performance. Such macroeconomic instability was disruptive in itself, but it also had the effect of encouraging short-term attitudes to both financial and non-financial investment, with a corrosive effect on our longer-term, supply-side capacity.
It is mainly driven by a sharp reduction in private consumption, but cyclical swings in private consumption are a recurrent feature of Iceland’s economic history. Even if GDP contracts on the scale forecast by the Central Bank in 2009 and 2010, average GDP growth in the period 2005 to 2010 will still be well above 2%. Given the characteristic fluctuations in the Icelandic economy, one must take a longer view of developments than just one year to get a picture of long-term trends. It is also important to keep in mind that the contraction of the economy is unavoidable if sustainable balance is to be restored following the extended period of overheating. Once that has been achieved, the economy will be very well set for a recovery of growth to a long-term sustainable trend. Iceland is in the enviable position of being endowed with rich renewable energy resources in the form of hydro and geothermal power in addition to renewable resources of the sea. With rising energy prices and concerns for the environment, Iceland’s energy reserves become all the more valuable. In addition, Iceland has highly developed service sectors, including financial services and tourism, that will contribute to the recovery of activity following the adjustment of the economy. I should add here that in addition to favourable demographics, Iceland has a largely fully funded pension system with total assets equivalent to over 130% of GDP. Thus, there is no fiscal overhang related to a slowly aging population.

The popular media sometimes calls Singapore the “Switzerland of Asia”. We have always taken the comparison as a great compliment. Switzerland is known the world over for its stability, prudence, efficiency, and diligence – all attributes that we in Singapore also aspire to. Both Switzerland and Singapore are small trading nations with a shared interest in promoting free trade and maintaining an open, rulesbased global economy. Switzerland is an important economic partner to Singapore. Many Swiss multinationals have a strong presence in Singapore and they are a source of high value-added investments. Similarly, Singapore companies are actively making direct investments in Switzerland. Today, Switzerland is our 5th largest trading partner in Europe while Singapore is Switzerland’s 4th largest trading partner in Asia. As central banks, SNB and MAS share some common challenges. Since the financial crisis, the openness, financial soundness, and strong fundamentals of our two countries have made us highly attractive to global capital, with implications for monetary and exchange rate policies, on which we exchange views. Our two institutions also have to manage a growing pool of official foreign reserves in a global market that is increasingly uncertain. The opening of SNB’s Singapore branch is an important milestone in the strong friendship and good relations between Singapore and Switzerland, and between MAS and SNB. Through this branch, our two institutions will come even closer together and I look forward to new areas of cooperation. BIS central bankers’ speeches  1  We value highly our relationship with SNB.