samchain/econo-pairs-v1 huggingface dataset:
One point of interest is that the railway construction also gave Gothenburgers the decisive influence in determining the time in the 19th century. It was the railways that ensured that the whole of Sweden followed the same time. Prior to the railways, time was determined by the sun. It was 12 noon when the sun stood at its highest point in the sky, regardless of which part of the country one was in. This meant that there was a time difference of 52 minutes between the most eastern and western parts of Sweden. When the western trunk line between Stockholm and Gothenburg was complete, it was necessary to have the same time so that the timetables would work, and Gothenburg time became the standard. This period of liberalisation and internationalisation of the world economy was abruptly broken off by the outbreak of war in 1914 and was replaced by national isolation. Although Sweden was largely an open economy during parts of the interwar period, it was not until after the Second World War that this isolation was broken at a global level. For the past couple of decades we have been in a clear period of internationalisation and financial integration. Same driving forces now as then Today, information technology and communications technology have replaced the railways as symbols for economic progress, but the driving forces are basically the same now as they were then and the interaction between the financial markets and other parts of the economy plays the same important role.

There is also a risk that financial operations will simply be moved somewhere else, where the regulations function better. Role of the krona unchanged Now that I have discussed the role of the euro in integration of the financial markets in the euro zone, I will take the opportunity to deviate from the subject slightly and mention briefly the euro's role on the Swedish financial market. You will no doubt remember the discussions on the marginalisation of the krona prior to the introduction of the euro in 1999. Some prophets of doom claimed that the krona would not be able to survive so close to such a large currency. Swedish companies and individuals would spontaneously and rapidly go over to the euro. As we now know, this was not the case. According to the statistics the Riksbank collects on a monthly basis from the Swedish credit institutes, it can be concluded that the krona's share of the total assets has declined slightly. However, it has not been replaced by the euro, but by other currencies, probably chiefly the US dollar. At the end of last year, the euro comprised only 6-7 per cent of the total assets. The Riksbank's studies also show that the total Swedish activity in euro on the money market is relatively slight and in particular concentrated to the deposit and swap markets. There are still a few programmes of certificates in euro and the secondary trading in euro-denominated short-term papers is very small.
But it is unlikely that disclosure can be the sole response, and, thus, this initiative will have to be flanked by other measures targeted specifically at practice-based deviations.   Our latest policy proposals stemming from the fundamental review of the trading book were released at end-October, and incorporate a number of proposals that flow directly from the findings on practice-based variation in the trading book. For example, certain modelling choices with respect to the choice of stressed periods and the scaling of short-horizon estimates to longer horizons have been constrained in the latest proposals, along with more gudiance on expected supervisory practices.   More generally, within the policy framework, we are looking at how far greater constraints on the modelling practices of banks are needed. This could involve enhancing the data requirements on which models are built, limiting certain modelling assumptions or techniques, and/or strengthening validation requirements.   To make a more direct impact, we are also examining the role of floors and benchmarks within the regulatory framework. Floors are not a new phenomenom in the capital framework, but we need to look at whether existing floors are effective, and whether there is a case for their greater use, particularly for products and markets where data are limited, or other characteristics that make them hard to model reliably. BIS central bankers’ speeches  5    Finally, as I mentioned earlier, we also intend to ensure that the leverage ratio fulfils its intended role as a backstop to the risk-based regime.

This only can occur with the support of a healthy financial sector, including a banking system that provides the needed volume of credit at interest rates that reflect the European Central Bank’s (ECB) provision of ample and low-cost liquidity. Over the course of the crisis the ECB has launched various measures to avert the risk of more severe ramifications from the financial crisis. In July the ECB introduced forward guidance, assuring the financial markets that its policy stance will remain accommodative and interest rates low for as long as necessary. As a matter of fact, the recent interest rate cut was consistent with this forward guidance. Throughout the crisis, the ECB has played an important role in ensuring, within its price stability mandate, the proper financing of the euro area economy in a context of subdued credit dynamics. A series of measures were introduced to ensure that banks can pass on low policy rates to the real economy, in particular where most needed. These measures include providing ample liquidity to euro area banks, reviewing the collateral framework, lengthening the maturity of operations to three years, and reducing redenomination risk in financial markets through the announcement of Outright Monetary Transactions. Over the longer term, further decisive steps are needed for the establishment of a genuine banking union, so as to further enhance the resilience of the banking sector, reduce financial fragmentation, and strengthen the institutional framework of the euro area.
And it will head off potential bouts of financial fragmentation and promote inflation convergence towards our medium-term objective in a sustained fashion, in line with our commitment to symmetry. Second, in the current phase of the crisis in which problems are more concentrated in specific sectors, the policies aimed at supporting firms should be adjusted so as to focus on those most affected by the shock. Further, we should consider a more selective focus that prioritises support to viable business projects. In the specific case of the public loan guarantee programmes, some of their parameters may need to be adjusted to encourage the granting of bank financing to viable firms. Striking the right balance between continuing to provide the necessary protection and maintaining a sufficient degree of selectiveness will require practically continuous evaluation and adaptation of these instruments in the coming quarters. Third, fiscal support to date has focused on avoiding the materialisation of liquidity risks. This strategy has been successful but, as a result, firms have amassed more debt. A greater accumulation of debt might prove unsustainable for firms that already have a high level of debt. Admittedly, the extension of the grace period and maturity of loans under the ICO guarantee facilities, approved by the Government this month, will help to alleviate the financial pressure borne by many companies. But in some cases it would also be advisable for them to strengthen their solvency position by means of capital instruments.

On the fiscal front, emergency stimulus  1/3  BIS - Central bankers' speeches  measures have already pushed high public debt to unprecedented levels - 67% on average, exceeding Maastricht criteria, and in some countries reaching up to 100% of GDP. In this context, credible medium-term fiscal consolidation is necessary to rebuild buffers and maintain credibility of public finances which is very important as investors are expected to start more vigorously differentiating countries based on their vulnerabilities. On the monetary front, apart from the conventional side effects of "too loose for too long" stance, as credit conditions remain highly accommodative, the risk of the so called "zombification" emerges. It is argued that this process reduces the overall productivity in the economy by trapping the available resources and hindering the emergence of new, more productive companies. In a nutshell, the general economic conducive policies need to be smoothly substituted with more specific sectoral polices that will facilitate optimal reallocation of resources and thus underpin post-crisis transformation of economies. Notwithstanding all these policy measures, the Western Balkan economy is projected to rebound by 5.1 percent in 2021, which implies that pre-crisis GDP level will not be reached this year; it will be lower by around 5% in comparison with pre-pandemic forecasts, and the overall loss will not be recouped even over the medium term.
In addition, although the EU has not yet reached all the objectives of the 1999 Financial Services Action Plan, there is evidence that they will be met on schedule, not least because the euro will provide the market with the necessary impetus to identify the remaining obstacles to the completion of the single market. A clear example of this is provided by the regulation on cross-border payments in euro which seeks to eliminate unjustifiable differences between charges on cross-border transfers and  24  On the same reasoning Malta should withdraw from international financial institutions such as the World Bank and the European Bank for Reconstruction and Development since it is no longer entitled to financing from these institutions. This, however, has not occurred because it is recognised that membership in these institutions yields more than monetary benefits. BIS Review 69/2002  7  those on transfers within Member States. Another consists of the initiatives underway to extend the single passport beyond the banking sector to investment services, insurance intermediaries and securities markets. This will have at least two implications. First, a financial product licensed in one Member State would automatically be recognised in all others without the need for the service provider to go through licensing and listing procedures afresh. For financial service providers this is an opportunity to by-pass the regulatory and other barriers that would otherwise render them uncompetitive.

17  I refer here to the concept of “limited access social orders”, see North, D., J. Wallis and B. Weingast (2009). Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, Cambridge University Press. BIS central bankers’ speeches  5  At European level, we need to provide a framework that supports and incentivises the introduction of such national policies. This is the role of economic union in the euro area, the “E” of EMU. I would stress, however, that economic union does not mean defining a single economic model across all countries. On the contrary, its purpose is to create the conditions for each country to identify and develop its comparative advantage. Paradoxically, it is only by encouraging difference – comparative advantage – that the euro area can achieve convergence – that is, a more even distribution of economic outcomes. Avoiding re-nationalisation and protectionism Let me finally address the third lesson learnt from East Asia. Europe needs to avoid protectionist temptations and calls for re-nationalisation. Protectionism and beggar-thyneighbour policies would lead to further losses of welfare at both European and global level. Fortunately, there has been no significant surge in barriers to global trade in recent years – unlike during the Great Depression – thanks to global and regional policy coordination. These efforts remain important. Barriers to trade in goods and services cannot be raised within Europe thanks to our Single Market and competition rules which are enshrined in European laws, but the Single Market can be further enhanced.
Month by month there have been a series of small downside surprises in the inflation rate as oil prices have been relatively stable; the effects of administered and officially regulated prices now seem to be a bit less than previously expected; inflation expectations remain well anchored and the exchange rate has been rising which may help keep a lid on imported costs for a while (but importantly, at the cost of less balanced growth which is a separate problem). Taking the inflationary news together, it would appear that we have a favourable situation in which to explore how much more capacity the economy has, before inflationary pressures begin to build. Another positive factor supporting our probing strategy is the emergence of macro-prudential policy. Monetary policy has a difficult challenge ahead, as I have outlined. It will help enormously if financial policies can help deal with, or at least mitigate the risks from, some of the imbalances that are arising in the economy while the MPC aims to restore medium-term stability in the economy as a whole. The housing market is an example of where monetary and macro-prudential policies can helpfully interact and the November 2013 Financial Stability Report sets out some of the policy measures that are underway or could be called on if necessary. 4  BIS central bankers’ speeches  Funding for Lending Scheme One decision that has been implemented is in relation to the Funding for Lending Scheme (the FLS).

The FLS contributed to a substantial fall in bank funding costs after it was launched in July 2012. This fed through to a significant improvement in household credit conditions. Rates on new household lending have fallen markedly since mid-2012, with falls of more than 100 basis points in some representative mortgage rates. Both gross secured lending and repayments have picked up strongly. And the number of approvals for house purchase has risen significantly, indicating higher mortgage lending in future. The Scheme has probably been one of the driving influences behind the resurgence of business and consumer confidence – although there are many other factors behind the sort of swing we have seen. Partly because of its own success, there is no longer a need for the FLS to provide broad support to household lending. It is not the case that net lending for mortgages by UK banks is, as yet, excessive. Indeed, the annual rate of growth in the stock of secured lending to individuals was under 1% in November 2013. But sharply rising house prices are a potential source of instability and we should not risk adding policy oil to that particular fire. Credit conditions for smaller businesses have also improved, but to a lesser extent, and lending to businesses overall remains muted. The FLS extension will therefore provide continued substantial support for lending to businesses, with incentives in the scheme skewed heavily towards lending to small and medium-sized enterprises (SMEs).
If their non-financial activities run into trouble, the banks may feel compelled to support them beyond normal commercial considerations, to protect their own reputation. In so doing the banks may undermine their own soundness; yet if they did not extend the rescue, the problems of the affiliates may trigger a loss of confidence in the bank itself because of the close association. Secondly, with banking and non-banking activities inter-meshed within a conglomerate, there will be a strong tendency to stretch any safety net intended for the banking system also to cover non-bank operations in the group. If failure of an associated non-bank threatens the bank and systemic stability, the regulator or government may be forced to rescue both. We have seen this happen in the recent Asian crisis. An implicit safety net for the banking system may be a necessary evil; but extending it to 1  BIS Review 53/2000  non-banks compounds the problem of moral hazard. It also tilts the playing field against non-bank competitors who are not associated with banks. Thirdly, separation minimises the risk of non arms-length transactions between banks and their nonbank affiliates. When a bank lends to a related entity at more favourable terms than market, or invests in an affiliate in order to control it even though the investment does not perform, minority shareholders of the bank are disadvantaged, and so are depositors.

The first is public money’, money issued by the Bank of England in the form of physical cash; the second is ‘private money’, issued by commercial banks in the form of electronic bank deposits. Until relatively recently, the great majority of everyday transactions in the UK were made in publicly issued money, notes and coin. Electronic transfers of commercial bank money tended to be reserved for higher value transactions. However, as the cost of electronic money transactions has come down and the functionality increased, and as our daily lives have become more digitalised, commercial bank electronic money has come to dominate payments in the UK. Card payments surpassed cash as the most commonly used form of retail payment in 2016. By 2021, 85% of payments were made electronically (either through cards or bank transfers). However, as the experience with contactless and mobile payments shows, innovation in  payments will continue as new technologies and business models develop. The ability to transact in cash, of course, remains very important to a substantial part of the population and often to the most vulnerable. And cash is clearly an important store of value for many in times of stress[3]. The Bank of England has been very clear that it will continue to issue cash as long as there is any demand for it[4]. But the recent trend away from publically-issued, Bank of England, physical money and towards electronic money issued by private sector banks is very clear.
Savers criticize the Central Bank for low interest rates whereas producers who fund their production activities from bank loans appreciate low interest regime. The Central Bank is also routinely criticized by various segments for its policy for managing the exchange rate. Ultimately, the Central Bank manages monetary policy to suit its mandate to secure the objectives it priorities, given the economic knowledge of the authorized officers and the Monetary Board Members. It is the monetary policy that determines how much money the Central Bank should print to facilitate the economy. Under the MLA, the Central Bank has the powers to print money by acquiring several kinds of assets. Those assets are provisional advances to Government, purchase of Government securities, purchase of foreign exchange and lending to banks. In conducting monetary policy, the Central Bank determines the annual growth of money desirable for the economy taking into consideration price inflation and production growth. In line with the desirable growth of money, the Central Bank maintains its asset growth to facilitate new money required. In the US and Euro area during the last six years, central banks have been expanding their assets many times to print money so that the economy is flooded with money to be invested in production and creating employment while keeping interest rates at rear zero levels. Third, regulation and supervision of banks and financial institutions Banking, finance and leasing businesses fall within the purview of the Central Bank under the MLA and relevant statutes.

The ideal which it is hoped that the proposed law will achieve is one in which there will be continuous and constructive co-operation between the Monetary Board and the Government. The principal instrument for achieving this co-operation should be the Permanent Secretary to the Ministry of Finance whose membership on the Board will ensure at all times that his Minister’s views will be made known to the other members of the Board. The effectiveness of this co-operation and co-ordination between the Board and the Government will depend more upon the men occupying the key positions at particular times than upon any legal formula, no matter how carefully or elaborately it might be worked out. A relationship as complex, and sometimes as delicate, as this one is certain to be, cannot be established fullblown by a piece of legislation. It must be the result, as in other countries, of years of experience and the slow growth of political conventions. One further point is well worth making. There is a clear need in Ceylon for some sort of economic council at Cabinet level to achieve improved co-ordination of Government economic policies. If in future such a council is set up it is suggested that the Governor of the Central Bank should have a place upon it……”  BIS central bankers’ speeches  7  Finally, officers of the central banks are not gods to know all problems in advance and give 100% solutions. We are all human beings and make mistakes.
A public fire service was introduced in Scotland in 1824 and in England in 1833.13 The Bank’s fire engines and firemen were stood down. This particular public good also arose, with a lag, from the destruction of 1666. From the ashes of the Great Fire emerged a new public infrastructure of laws, regulations and institutions. That supported a new private infrastructure of contracts, companies and services. And this mass flourishing created one of the world’s leading financial centres, a position London retains. The regeneration spawned by the Great Fire set the economy and society – as well as the Bank - on an entirely different course. Enlightenment Now? That is the story of fire. But it is a story repeated for most transformative innovation over the course of human history: a spark of imagination; a flame of creativity as an imagined future is made real; periodic destructive burn-outs; and an eventual mass flourishing.14 History tells us it is through this evolutionary process of creative destruction that economies grow and societies improve. But is the creative flame still burning? Prominent economists, such as Robert Gordon in the United States, have recently argued that the world may be, in Haldane’s terms, at risk of perishing for lack of wonder.15 This hypothesis has support, with falling returns on research and development spending. The low-hanging fruit of creative innovation may already have been picked, leaving slimmer pickings for future generations. These fears do need, though, to be set in some context.

We will, in any event, reassess the value of each portfolio component before making the transfer to the special purpose vehicle. The lowest valuation will be applied. To secure initial financing for the operation, we will obtain US dollars through a Dollar-SwissFranc swap with the Federal Reserve. Thereafter, we will turn to the market for refinancing. The SNB will therefore not incur any currency risk. Since the entire operation will be effected in US dollars, it will not affect the National Bank's monetary policy in any way. Reasons for operation This operation is nevertheless unprecedented with regard to the reasons for it. In carrying it out, we are making a contribution to an essential element of the Swiss financial system, at a time when financial markets have been in turmoil for some months now. A better functioning of the financial markets – in particular the banking sector – is essential so that our country will be able to weather the economic difficulties resulting from the anticipated global economic slowdown in the months ahead. It is therefore preferable that we go ahead with this operation now, in an orderly fashion, despite the fact that the markets have regained a certain degree of optimism in the past few days – rather than at a later point under potentially more adverse conditions. The Federal Council and the Swiss Federal Banking Commission have been kept abreast of the preparations underway and our negotiations with UBS. BIS Review 125/2008  1