samchain/econo-pairs-v1 huggingface dataset:
Without prejudicing this objective, it should also strive to promote a stable development of the real economy, or stabilise resource utilisation if you like. So what can we say about inflation in Sweden? At present, inflation is low and it is probably fairly safe to say that it will continue to be low for some time. Resource utilisation is difficult to measure, but it is probably below its normal level at the moment and will remain so for a while. Economic activity will gradually improve, which will lead to rising inflation and the normalisation of resource utilisation. But this will take time. Growth may not increase significantly in Sweden until next year. Given this, my assessment was that it was necessary to cut the repo rate to 1.50 per cent in February and to leave it at this level in April. I have also expressed my support for the repo-rate forecasts in the Monetary Policy Report and the Monetary Policy Update, which predict that the repo rate will remain unchanged in the year ahead. The forecasts also say that we will need to raise the repo rate when economic activity recovers and inflationary pressures increase. Let me say that the situation is really uncertain at the moment. The greatest uncertainty factor is how the situation will develop in Europe.

Supervisors must ensure that banks improve their operational resilience by strengthening their ability to respond to and recover from cyber-attacks. At a minimum, mitigating cyber threats would require effective collaboration between regulators and the industry, adequate contingency and Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -4-  recovery plans by banks and sound security practices by all participants of financial market infrastructure. In Kuwait, we are in the process of putting in place an advanced platform for effective information sharing about cyber threats that can later be used at the regional level. Supervisors in this regard can leverage CPMI-IOSCO guidance that calls for ‘resilience by design’, encouraging to incorporate sound security features in the system right from its earliest stage of conceptualization. This approach will help address the potential cyber compromises that could stem from banks’ dependence on legacy technologies. To help strengthen cyber resilience of financial institutions, Financial Stability Board (FSB) is currently working on ‘identifying practices to help financial institutions recover from and respond to cyber incidents’. Next year, they are planning to release a toolkit of effective practices that banking industry can use in improving operational resilience against cyber threats. Coping with climate change The second emerging issue warranting our close attention is climate change. According to UN estimates, around 60 million people were affected by extreme weather events in 2018 alone. And within this year, we have witnessed the damaging impact of wildfire in California, hurricane in Bahamas, cyclone in Bangladesh and typhoon in Japan.
There has also been a recent shift in opinions coming out of academic research, from a broad resistance to taking financial stability into account when shaping monetary policy19 to greater openness to the view that there may be good reasons for doing so.20 Even before the financial crisis hit Europe and Swedish with full force in autumn 2008, there were concerns in the Executive Board that the credit expansion was too rapid and that housing prices were increasing too quickly so that a bubble might build up, and later burst to cause a severe recession. This was not the case in Sweden, but did happen in the United States and several countries in Europe. During the crisis years 2009–2010 the endeavour was instead to use low interest rates and liquidity assistance to the banks to avoid a credit crunch that could intensify the crisis. And we succeeded well in this. During the entire period, the banks’ total lending to households and companies in Sweden increased (see Figure 11). Put greater emphasis on the initial situation and the forecasts for the coming year We should put greater emphasis on the initial position and the forecasts for the coming year than on the long-term forecasts. At the Riksbank, considerable resources are put into analysing the state of the economy. The statistics received are analysed and commented on regularly.

The uncertainty bands are based on the Riksbank’s historical forecasting errors for these variables.6 The uncertainty increases as the forecast horizon lengthens. When one evaluates forecasts, one usually compares the current forecasts with a naïve forecast. Here I shall use the average of the series as a naive forecast. The forecasting error is measured as the standard deviation between outcomes and forecasts and the forecasting error for the naïve forecast is measured as the standard deviation for the outcomes themselves. The forecasting performance can then be expressed as how much smaller the actual forecasting error is than the forecasting error of the naive forecast. This measure of the forecasting performance is 1.0 if our forecasts are perfect and 0.0 if our forecasts are no better than the historical average. Figure 6 shows the forecasting performance for GDP growth and CPI inflation at 1–12 quarters ahead.7 As the figure refers to annual percentage changes, the first quarters are mixtures of known outcomes and forecasts. It is only four quarters after the most recent known outcome that we have pure forecasts. The figure shows that the forecasting error with regard to forecasts one year ahead is just over 20 per cent less than the forecasting error for the intended naïve forecast and not at all less two and three years ahead.
The recent price increases of agricultural products should make it easier for the EU to make some concessions on the Common Agricultural Policy, in order to eliminate the subsidies which tend to distort international prices. This would be an advantage for European producers and consumers alike. Regarding currencies, it is important to continue talking with those countries which still peg their currencies to the US dollar, although their economies show a higher growth rate and a strongly positive balance of payments. Pegging to the US dollar slows down the adjustment of global imbalances. A speeding-up of the appreciation of the exchange rate of the yuan visà-vis the US dollar as well as the euro would be in the interest not only of the international community, but of China itself. In the past 12 months, the exchange rate of the Chinese  BIS Review 61/2008  5  currency has gained approximately 9% vis-à-vis the US dollar, while losing about 3% vis-àvis the euro. Only in the past months have markets experienced the inverse process, with the yuan gaining also against the euro. The appreciation of the yuan would allow China to effectively counteract internal inflationary pressures and to reduce the balance of payments surplus, which fuels the accumulation of global imbalances. The increase in food prices should ease fears that an appreciation of the yuan could penalise the income of rural areas, which are still quite sizeable.

BIS Review 61/2008  3  was characterised not only by its deepness but also by the policy mistakes committed at the time, which introduced protectionist barriers with the aim of protecting national economies from international competition in the hope that this would succeed in better coping with the crisis. Many countries adopted measures to restrict trade with the aim of favouring local production at the cost of imports and trying to protect jobs. In June 1930 the United States introduced the Smoot-Hawley Tariff Act, which imposed disproportionately high duties on imported goods. Other countries took retaliatory measures. International trade declined (some say it contracted sharply), deepening the depression and delaying the recovery. 2 At the current juncture one the few factors supporting growth is international trade, driven in particular by emerging economies. Without this contribution, growth would be stalling completely in advanced economies. Under these conditions, thinking of curbing international trade would be a mistake in the same way as in 1929. To isolate a country from globalisation means weakening it economically. The empirical evidence shows that there is a clear relationship between a country’s degree of integration in the global economy and its economic performance over a relatively long period of time. It is the more integrated countries that compete better and develop, not those which shut themselves off from competition. The microeconomic evidence confirms the macroeconomic trends.
The Swedish National Debt Office then carried out extra issues of treasury bills and provided loans through reverse repos in covered mortgage bonds. At the same time, the Riksbank expanded its list of approved forms of collateral. All in all, this meant that in principle the government assumed the risk that lay in the outstanding stock of Swedish mortgage loans. In order to convert borrowing in foreign currencies to lending in Swedish kronor without taking a currency risk, the banks usually conduct currency swaps. In simple terms, this is done like this: A Swedish bank borrows euros in Germany at a maturity of five years. However, as the bank does not really need the euros but needs kronor to fund mortgage loans to Swedish households, the bank has to exchange the euros for kronor. To protect itself against the currency risk, the bank enters into a currency swap in which the euros are exchanged for kronor today under an agreement to exchange the kronor back to euro at a predetermined rate in five years’ time. In this way the bank matches the currencies of its assets (the mortgages) and its liabilities and thereby eliminates the currency risk. The Swedish banks are thus dependent on acquiring kronor in the long-term from a counterparty in a currency swap. They can in principle do this in three ways: through a foreign bank, another Swedish bank or an insurance company. Today, it is often a foreign bank that acts as the counterparty in these swaps.

Against this backdrop, the facing of the economic activity contraction at a global level remains an open issue. The Euro area economy is already experiencing an economic slowdown. Euro area GDP contracted in the third quarter while the unemployment rate reached 7.8 percent in November 2008. The U.S. economy showed quite similar features. The further contraction of economic activity – owing to the deterioration of financial indicators in the U.S. corporate and household balance sheets, mirrored in lower consumption spending and reduced aggregate investment – drove the unemployment rate to reach 7.2 percent. Monetary and financial stimuli managed by central banks and the ministries of finance have helped to bolster confidence and relieve pressure on the financial institutions. Against this backdrop, the “resilience” shown by emerging countries is displaying the first signs of weakening. In contrast to the first half of 2008, the latest data attest to the moderation of economic growth rates in the majority of these countries. The channels through which the slowdown in advanced economies has affected the emerging countries differ depending on their development characteristics. China and India have been severely hit by the slowdown in exports; Russia had hard times owing to the slump in raw material prices in the global market, while East European countries have been impacted by the tightening of funding conditions on a global level.
The story of monetary policy in Britain during the intervening period is told by the Mais Lectures. The first Mais Lecture was delivered by my predecessor, Lord Richardson, in 1978, at a point when monetary policy was emerging as the main tool to deal with inflation. Not before time, you might think, since only two years earlier inflation had reached 27%. In 1981 the Chancellor of the Exchequer, Geoffrey Howe, chose as the title of his Mais Lecture: “The Fight Against Inflation”. As he said then, with inflation still in double figures, "squeezing inflation out from an economy which has become accustomed to higher rates over a period of years cannot be an easy or painless task. … the inflationary mentality must be eradicated. … When we have done that we will find that low inflation or even price stability need not be painful". The conquest of inflation was to prove harder than expected. In the decade that followed Geoffrey Howe’s lecture, inflation averaged over 7% a year. Only since 1992 has inflation fallen to levels that could be described as price stability. In retrospect, two Mais Lectures seem to have been of particular significance: those by Nigel Lawson in 1984 and by Tony Blair, then Leader of the Opposition, ten years ago this month. Despite clear differences of view, what stand out from those two lectures are their similarities. Both emphasised the need for a medium-term framework for monetary and fiscal policy.

We can discourage the second by being open and transparent about the reasons for movements in inflation and decisions on monetary policy. If we have no hidden message, then eventually people will stop looking for it. Rational optimising behaviour is in many situations too demanding, and actual decisions may reflect the use of heuristics. That must be taken on board in the choice of monetary policy strategy. In turn the strategy may affect the heuristic chosen by economic agents. And a good strategy will not only help agents choose a heuristic but will be robust with respect to that choice. Does inflation targeting meet those criteria? Inflation targeting as a framework which accommodates learning So far I have emphasised three key points about monetary policy. First, expectations play a fundamental role in the way monetary policy works. As the Maradona theory of interest rates shows, expectations of future monetary policy actions are at least as important as the level at which the official interest rate is set today. Second, our knowledge of the economy is continuously evolving – as the history of the Mais lecture has itself demonstrated. There simply is no unchanging rule, however complex, that can adequately describe the optimal monetary policy strategy. Third, the complexity of optimising behaviour means that central banks need to allow for the possibility that people use simple rules of thumb. Taken together, these arguments provide a powerful case for inflation targeting.
With regard to the Federal Reserve Bank of New York, which I have the responsibility of leading, I’d observe that the New York Fed, like the other eleven reserve banks, serves to  19  A historical example was the disclosure of Reconstruction Finance Corporation loans to banks in the Great Depression. This disclosure often created runs at the respective banks. See James Butkiewicz, “The Reconstruction Finance Corporation, the Gold Standard, and the Banking Panic of 1933,” Southern Economic Journal, vol. 66, no. 2, October 1999, pg. 271. BIS central bankers’ speeches  7  support the overall mission of the Federal Reserve System. But, by virtue of its location, the New York Fed has a unique responsibility on behalf of the System – namely to serve as the operational arm of the Federal Open Market Committee with respect to the implementation of monetary policy. This separation of the policy arm and the operational arm of monetary policy in two distinct institutions is a very unusual setup among central banks. 20 There are good reasons why these important functions are assigned to the New York Fed. Monetary policy works by affecting financial market conditions in order to promote the economic outcomes consistent with the Fed’s dual mandate. As such, effective and efficient monetary policy execution requires a practical and thorough understanding of the broad range of the financial markets through which monetary policy operates. New York City is the nation’s principal financial center.

In 1986, Norges Bank provided substantial loans to the banks – at the highest around NOK 80 billion – to prevent a rise in money market rates after large-scale NOK purchases had been made in support of the krone. 44 The loans, which were unsecured, were kept on Norges Bank’s balance sheet when solvency problems at the banks began in 1987. Norges Bank was later criticised for providing these loans. Although the criticism was misdirected, the loans did make it more difficult for the government to manage the banking crisis. 45 Today the Bank no longer provides unsecured loans and we have gradually tightened collateral requirements. Many banks rely heavily on short-term funding in international and domestic money markets. The lesson from the most recent financial crisis is that a shortfall in foreign funding can weaken stability in the financial system in Norway, even if the banks’ financial position is not in jeopardy at the outset. The next step will therefore be not only to require collateral, but also impose requirements on our clients – the banks – to improve their funding strategies. Banks must not be given the scope to take on substantial liquidity risk in the belief or with the certainty that Norges Bank will intervene should foreign funding seize up. A market functions poorly in the long term with such hidden support. With large unsecured loans, Norges Bank ended up providing income support in one instance in the 1980s when a savings bank experienced solvency problems.
An international economic crisis often heralds an inflow of domestic and foreign capital to the Swiss franc, which has acquired a reputation as a safe haven on account of its historical behaviour. In other words, in uncertain times, the franc is seen as an anchor of stability, and is therefore much in demand. The currency can thus experience a strong short-term appreciation as a result. At the same time, a weak global economy can put pressure on sales volumes for the Swiss export industry. This increases the risk that production capacities cannot be fully utilised, that unemployment will rise sharply, and that the Swiss economy as a whole will slide into crisis. If an appreciation threatens macroeconomic stability in Switzerland through these channels, this has consequences for monetary policy. When conventional instruments reach their limits, the SNB has to resort to other tools in order to fulfil its mandate (cf. chart 11). First and foremost among these are foreign exchange market interventions. Since 2009, the SNB has, as you know, used this tool in a number of ways, purchasing foreign currency amounting to nearly CHF 500 billion. Between September 2011 and January 2015, for example, the SNB used this tool to enforce a minimum exchange rate against the euro. In this regard, I feel it is important to stress that considerable risks accompany on such interventions. First, market interventions aimed at preventing an appreciation expand the SNB’s balance sheet.

The Financial Mediation Bureau aims to serve as a one-stop center for the resolution of retail consumer complaints against financial institutions regulated by the Central Bank. The Central Bank is also establishing a one-stop service centre in the Bank that will function as a Public Information Centre for the promotion of financial literacy among the Malaysian public. The service centre will provide advisory services on financial matters to small and medium enterprises. Ladies and Gentlemen, Concluding remarks Financial literacy among women is all about having sufficient awareness of financial matters to enable women to protect and prosper for themselves and their families in a world that is becoming increasingly more complex and uncertain. To be an effective participant in this modern economy, we cannot take financial literacy for granted. It is a knowledge and skill that must be deliberately pursued. From a national and institutional perspective, promoting financial literacy must be an integral part of the overall agenda for financial and economic reform and development. Let me conclude with the words of Jawaharlal Nehru, “We talk of revolutions, political and economic. And yet the greatest revolution in a country is the one that affects the status and living conditions of its women. It is in so far as our revolution has affected our women that it is basic.” Thank you. BIS Review 64/2004  5
We must not forget that our region has had failed experiences before. Countries that had all the conditions to become developed didn’t make it, and froze their economies exactly at that crucial moment. Today Chile is in a BIS central bankers’ speeches  7  state of anticipation. It is our duty to succeed and take the leap that is pending. On the part of the Central Bank, with monetary policy and our role as financial regulator, we will continue to work towards achieving the objectives we have been entrusted: to safeguard price stability and the normal functioning of internal and external payments. Thank you. Figure 1 Inflation indicators (*) (annual change, percent)  8  8 CPI  Services EFE  6  6  4  4  2  2 CPIEFE  0  0 Goods EFE  -2  -2  -4  -4  -6  -6 11  12  13  14  15  16  (*) As from January 2014, the new indexes with annual base 2013=100 are used, so they are not strictly comparable with earlier numbers. Sources: Central Bank of Chile and National Statistics Institute (INE).

8  BIS central bankers’ speeches  Figure 2  CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0 11 12 13 14 15 16 17 18  0 11 12 13 14 15 16 17 18 March'16 Report  June'16 Report (*) Gray area, as from second quarter of 2016, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE). Figure 3 Real exchange rate (index, 1986=100)  120  120  110  RER  110  2001-2015 avg 1996-2015 avg  100  100  90  90  80  80  70  70 89  92  95  98  01  04  07  10  13  16  Source: Central Bank of Chile.