samchain/econo-pairs-v1 huggingface dataset:
Oil prices are of importance for the activity level in the Norwegian economy and the government revenues. In recent years, oil prices have risen sharply. High demand for oil, limited idle production capacity and uncertain production levels in many oil-producing countries have contributed to this. Oil prices have risen to over USD 74 per barrel, partly as a result of the uncertain political situation in a number of producer countries. Futures prices for Brent Blend are now more than USD 72 per barrel until autumn 2008. Futures prices indicate that oil prices will remain at around USD 70 per barrel several years ahead. This is higher than the level assumed in the March 2006 Inflation Report. Statoil and Hydro gas prices have also increased sharply in recent months. Petroleum production is expected to increase gradually in the period to 2011, and decline thereafter. Developments in the gas market will become increasingly important. During the next 10 years, gas production could become as high as oil production, measured by energy content. High oil prices have led to a strong increase in activity on the Norwegian continental shelf. Many projects have been launched to increase recovery from fields in operation. A number of companies have revised up the long-term oil prices that are used as a basis for investment decisions, but they are still moderate compared with futures prices. Further out in the projection period, developments in petroleum-related investment become highly uncertain.

The projections are based on the assumption that interest rates in Norway and abroad will rise somewhat faster than may be implied by today’s forward rates. Since the previous Inflation Report, the upward movement in Norwegian and international long-term interest rates has become more pronounced. Exchange rate movements are difficult to project. In Inflation Report 1/06, the path for the interest rate in Norway and abroad was assessed to be consistent with an approximately unchanged krone exchange rate. The high rate of economic growth implies that price and cost inflation will edge up after a period. Inflation measured by the CPI-ATE is projected to increase from today’s level of around 1¼ per cent, up to almost 2 per cent at the end of 2007. There are prospects that inflation will increase further and be close to the target of 2.5 per cent three years ahead. With a gradual reduction in unemployment, Norges Bank expects wage growth to edge up. At the same time, it will probably be easier for enterprises to pass on cost increases to prices in pace with the rise in demand and capacity utilisation. Capacity utilisation is now projected to be somewaht higher than its normal level. Mainland GDP is still growing strongly in 2006. Capacity utilisation in the economy is expected to rise over the next two years. Even though a gradual increase in the interest rate will result in somewhat weaker growth impulses after a period, monetary policy will still be expansionary.
On credit markets, the financial position of banks can also be seriously jeopardised if they are tempted to reduce margins drastically in order to maintain or increase their market share, or if they make insufficient provisions during cyclical upturns. More generally, some of the most widespread management methods are not entirely without risk: •  The accounting practice of marking-to-market most of the assets in credit institutions’ balance sheets renders them more vulnerable to price fluctuations. The spread of market valuation through the concept of “fair value” could make banks’ total assets and profits highly volatile. This is why French prudential authorities have reservations about this method. •  In the same vein, the Asian crisis has highlighted the limits of systematically resorting to rating agencies, which can reinforce the herd behaviour of markets. These ratings, which can never be perfectly accurate and up-to-date, should be taken for what they are: just one of several instruments for risk management. •  The turbulence surrounding the Asian crisis also clearly showed that the models used for managing complex derivatives do not adequately take into account abrupt gyrations in one or several markets. BIS Review 85/2000  4  And lastly, the public authorities must meet new challenges. •  In general, the default of the LTCM fund in September 1998 underscored the risk of contagion between financial systems.

This is an extension of a worrying pattern that has seen the number of extreme weather events more than triple and inflation-adjusted insured losses rise five-fold in the past three decades.2  1 2  See Munich Reinsurance Company (2018), ‘A stormy year: Natural catastrophes 2017,’ Geo Risks Research, NatCatSERVICE Ibid. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  The outlook is even more concerning. As noted by HRH, last month’s IPCC report shows that many land and ocean ecosystems have already changed due to global warming.3 It concludes that the physical risks of climate change will intensify even under 1.5 degrees of warming, including increased heatwaves, droughts, heavy rain, flooding, melting of sea ice, and species loss. In turn, this will have a marked impact on human health, livelihoods, food security, water supply, human security, and economic growth. And that is very much the IPCC’s best case scenario. The impacts will be significantly worse under 2 degrees, and the Paris commitments – even if fully implemented – are consistent with more than 2.7 degrees of warming.4 The longer meaningful adjustment is delayed, the more transition risks will rise. To deliver on the Paris Agreement commitments and limit temperatures to 1.5°C, carbon emissions would have to decline by about 45% from 2010 levels to 2030 to reach net zero around 2050.5 Even if this happens smoothly, it will have major implications for most sectors of our economies. If the transition is delayed and then happens abruptly, financial stability risks will rise considerably.
The second key question is, how concerned should we all be about a flare-up in inflation – and aren’t the measures the Fed has taken inflationary? Many have expressed concern that Federal Reserve policy actions that expanded our balance sheet dramatically will cause inflation. I firmly believe that in the short run inflation is likely to remain quite low – and that in the longer term we have the tools, and the steadfast commitment, to address inflationary pressures. Indeed, while monetary policy works with lags, I would note that it has been more than two years since the Fed’s balance sheet expanded dramatically. Since that time, core inflation  1  Of course, the views I express today are my own, not necessarily those of my colleagues on the Board of Governors or the Federal Open Market Committee (the FOMC). BIS central bankers’ speeches  1  has fallen and core inflation measures using the CPI or PCE indexes are at something like 50 year lows. Today I will briefly address the role of the low inflation rate for the economy and policymaking. In doing so, I will discuss why inflation concerns have not materialized to date, and why I expect core inflation to remain below 2 percent over the next several years. Question 1: Housing and the economic recovery The economic recovery officially began in the third quarter of 2009, according to the organization responsible for dating our recessions – the National Bureau of Economic Research (NBER).

As we have already underlined, the main problem with regard to lending remains the low business and consumer demand for loans. However, banks’ lending policies appear more conservative, as reflected in the relatively tight lending standards. The forecast for subdued consumer prices and weak economic growth in the period ahead motivated the further easing of the monetary policy at the outset of the current year. In January, the Supervisory Council of the Bank of Albania cut the key interest rate by 0.25 percentage points to 3.75%. Through anchoring inflation expectations, easing liquidity pressures and cutting the short-term interest rates, the monetary policy has aimed at reducing the costs of long-term lending to the economy and supporting the growth of credit, consumption and investments in Albania. The Bank of Albania's easing policy did not reflect uniformly across the financial market segments. The latest key interest rate cut was reflected swiftly and completely both in the interbank market and the primary market of government securities. On the other hand, it was only partially transmitted to the deposits market and even less to the credit market. These developments illustrate the fact that, in the presence of added risk premiums and structural changes of behaviour in the financial market and the real economy, the effectiveness of monetary policy action is lower. Based on these reasons, the Bank of Albania decided to support its stimulating monetary policy with a number of changes on the easing side of the supervisory, regulatory and macroprudential framework.
The interest rate path we published last week showed that the key policy rate will probably be raised gradually. When households and firms perceive signals concerning future interest rate developments as credible, the impact of interest rate increases that lie ahead may occur earlier. Communication enhances the effectiveness of monetary policy Communication about the evolution of the economy is therefore an important part of Norges Bank’s monetary policy. We communicate our view of the economic situation and our monetary policy trade-offs in various ways. The Bank’s most important channel of communication is the monetary policy report. The report contains a thorough review of new information that is relevant to the evolution of the Norwegian economy and the background for the interest rate decision. Last week, the Bank launched a new product – Pengepolitikken kort fortalt [Monetary policy in brief]. [1] We believe there is a need for this. This product is designed for Norwegian readers looking for a more generalised, brief description of the background for the interest rate decision. The fundamental message conveyed is of course the same as in the Bank’s monetary policy report. Norges Bank has published forecasts for the key policy rate three to four years ahead since 2005. If the economy evolves as envisaged by Norges Bank, this is the Bank’s best forecast for future key policy rate levels. The interest rate forecast is thus a summary of the message in the monetary policy report.

Øystein Olsen: How does the key policy rate operate? Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Centre for Monetary Economics (CME), BI Norwegian Business School, Oslo, 25 September 2018. * * * Accompanying charts of this speech. Introduction Just over a week ago, we marked the tenth anniversary of an event that shook the global economy. The Lehman Brothers bankruptcy added fuel to a smouldering financial crisis, which gathered strength and spread quickly. Financial market activity came to a halt. Investors demanded high risk premiums. Faced with a crisis that could lead the economy into a deep recession, central banks cut policy rates sharply and injected liquidity into the market. It was the beginning of ten years of historically low interest rates and the use of unconventional instruments. It would take a long time to get economies back on their feet again. For Norway, the financial crisis brought an abrupt end to a three-year long period of gradual increases in the key policy rate. In the course of autumn 2008, the key policy rate was lowered three times, by a total of 2.75 percentage points. By the following summer, the key policy rate had been lowered further, to 1.25 percent. Even though growth in the Norwegian economy picked up fairly quickly, Norwegian interest rates over the next few years were influenced by a persistently low international interest rate level.
You have ageing populations in Japan, Europe and United States, which  BIS central bankers’ speeches  1  means that this baby boom generation, the people who were born just after the second world war were now starting to retire are consuming less and saving more and as a consequence you probably don’t have that space for a consumption led economic impetus that developing countries such as ourselves dependent on for the last 30 or 40 years to grow our economies through an export-led strategy. So my first question is; is that export-led strategy relevant any more given these demographic changes that we see in the advanced economies? And secondly given the fact that the advanced economies are in debt – what happened in the great recession was they nationalized private bad debts in their housing sectors, nationalized it, bought it into the government’s balance sheet and as a consequence that the western economies are effectively net borrowers in the system – do they then have all the gear to stimulate consumption and create another repeat cycle of that export-led boom that really lifted countries like China and other big Asian exporting economies out of the low income status that they had enjoyed for several decades. That to me is a very relevant question that we have to ask ourselves at this conference.

Such lending can tide a bank over while it is taking steps to remove the cause of the concerns that generated a run or lack of confidence. But it can also serve to conceal the severity of the underlying problems, and put off the inevitable day of reckoning. I hope it is now understood that the provision of central bank liquidity, while essential to buy time, is not, and never could be, the solution to the banking crisis, nor to the problems of individual banks. Central bank liquidity is sticking plaster, useful and important, but not a substitute for proper treatment. Just as a fever is itself only a symptom of an underlying condition, so the freezing of interbank and money markets was the symptom of deeper structural problems in the banking sector. So let me explain why a major recapitalisation of the banking system was necessary, was the centrepiece of the UK plan (alongside a temporary guarantee of some wholesale funding instruments and provision of central bank liquidity), and was in turn followed by other European countries and the United States. Securitised mortgages – that is collections of mortgages bundled together and sold as securities, including the now infamous US sub-prime mortgages – had been marketed during a period of rising house prices and low interest rates which had masked the riskiness of the underlying loans. By securitising mortgages on such a scale, banks transformed the liquidity of their lending book. They also financed it by short-term wholesale borrowing.
Hedging markets developed rapidly. All in all, financial engineering emerged as a new area of knowledge. Dear Guests, The aggressive capital movements among countries and developments in financial markets generated a number of economic benefits at the global level. When borders between countries have disappeared in favor of capital flows, funds flew to regions where capital had the highest return. So, it has been observed that competitiveness and productivity of capital in global scale increased considerably in the 90s. There has been also a substantial rise in the volume of global merchandise trade. However, all developments that I mentioned now represent only the front side of the medallion. The back of the medallion has not been as bright as the front. In the 90’s, not only the scope, timing and speed of the financial liberalization varied across countries, but also the consequences of economic policies had various effects on national economies, depending on the initial conditions and country specific factors. Hence, the rapid increase in capital movements among countries shook the financial markets from time to time, led to financial and banking crises in many countries and, even more importantly, caused the crisis in one country to spread to others. In 2003, Caprio and Klingebiel reported 117 episodes of systemic and highly costly financial crises in developed and emerging market countries since the late 1970’s1.

A corollary fundamental principle in the design of monetary policy in this environment is that – in order to avoid a long-term de-anchoring of inflation expectations – easing measures must be sufficiently pre-emptive to guard against a further downward drift in inflation dynamics. Furthermore, under conditions in which policy rates are likely to rise only gradually over time, fiscal measures have an especially powerful macroeconomic impact, both by providing stabilisation in the event of adverse shocks and by supporting the return of inflation to our aim. In conclusion, I have briefly described some of the forces shaping the ECB’s current monetary stance. However, there are still many open questions that are raised by the combination of low interest rates and low inflation. Accordingly, this year’s review of our monetary policy strategy provides an excellent opportunity to take stock, reflect on our experiences and listen to a wide range of external voices. 1 For a more detailed discussion, see: Lane, P. R. (2020), “The monetary policy toolbox: evidence from the euro  area”, speech at the US Monetary Policy Forum, New York, 21 February; and Lane, P. R. (2019), “ Determinants of the real interest rate”, remarks at the National Treasury Management Agency, Dublin, 28 November. 2/2  BIS central bankers' speeches
I hope that in time, the bulletin will become a popular portal through which retail investors could easily navigate and shop for the bonds that will suit their investment needs. Thank you. BIS Review 1/2006  1

Foreign currency deposits are expected to have a considerable annual increase, of about 18.2 percent, or Lek 17.7 billion, by the end of 2004. Table 4. Money supply growth as to trimesters (in Lek billion) T1  T2  T3  T4  2004  Money supply  10.9  11.0  11.5  14.0  47.4  Money outside banks  1.7  3.1  3.2  6.9  14.9  Lek deposits  4.1  3.6  3.7  3.4  14.8  Foreign currency deposits  5.1  4.3  4.5  3.7  17.7  Generally, the M2 aggregate growth will follow the performance of the economy demand for monetary assets. This demand is expected to higher in the first trimester of the next year. BIS Review 8/2004  5  Table 5. M2 and monetary assets demand growth (in Lek billion).
Key among these are improved national and international supervision, higher capital requirements depending on the particular features of each institution, improved prudential and accounting regulation, and the establishment of an incentives system to persuade institutions to adopt structures which are more solid and less exposed to the risks inherent in organic business expansion. *** Many of the proposals described here are still under discussion or at the public review/comment stage and are thus subject to change. Furthermore, there is general agreement on allowing a reasonable lapse of time before they come into force. Nevertheless, I believe that the direction of change is now sufficiently clear, and Spanish institutions should hasten to digest it so they have time to plan how they will adapt to the new regulatory environment in the least traumatic way. To this end, institutions must not only prepare themselves to comply with higher capital requirements, but must also become familiar with many other significant changes, such as, for example, the applicable rates of deduction (minority interests, investments in financial and non-financial firms, tax assets, etc) and the required liquidity ratios, which are new to Spain, where regulation had previously focused only on the attendant qualitative aspects. Spanish deposit institutions have in fact begun to increase their levels of capital, particularly higher-quality capital. In doing so, they are acting in anticipation of future regulatory requirements and, moreover, strengthening their solvency at a time of heightened uncertainty.

We need only review the documents published by the Basel Committee last December, at the request of the G20 and the FSB, to realise how sharp the change in direction has been, to the extent, indeed, that some have called this new regulation “Basel III”: more capital of higher quality, more stringent requirements on trading activity, an obsession with avoiding procyclicality, etc. And the same can be said of the work of the various agencies and institutions (IMF, EU, IOSCO, etc.) that are contributing to shaping the new regulation of financial systems. The objective is clear: this can not happen again. Taking advantage of the eminent audience here today, I shall mention some of the developments I consider most important, since this international regulatory earthquake will entail a substantial change in how financial system players from all countries can act. And although the effects will not be felt immediately, our banks should take them very much into account so that they may adapt in an orderly fashion to the new setting. Among the vast number of issues under discussion today in various international fora, I am only going to mention those I consider to be of most importance to Spanish banks. 2  BIS Review 51/2010  One of the guiding principles of the reform of the financial system promoted by the G20 is the reinforcement of the prudential regulation of capital and liquidity.
The other point of view is that the two roles can co-exist if there are sufficiently high and thick Chinese walls between them, and that, furthermore, there are synergies between the two roles, and cost benefits to be achieved. The HKMA has an open mind on this issue, and we are hoping to receive views on the way forward, from the industry, from Legislative Councillors, and from the community at large. And I should stress, before the charge of empire building is raised, that this is not necessarily one of the functions that the HKMA would wish to add to its already onerous responsibilities. There is, of course, the parallel question of whether HKAB, as the main industry organisation, and as the traditional vehicle for self-regulation, should play a role in consumer protection. Here again the arguments seem to be evenly balanced. On the one hand, the knowledge and proximity to the industry would place HKAB at an advantage in handling complaints. On the other hand, there could be the perception of a conflict of interest. I note that it is not HKAB’s wish to take on the formal role of consumer protection, and I respect that. But, whichever organisation takes on the formal role, HKAB will almost certainly have a part to play in shaping policies and practices in this area.

Before I turn to that subject, I should like to address, very briefly, two broad interconnected subjects: first, the theme of competition, particularly in the context of the current programme of banking sector reform; and secondly, the question of consumer protection, in the light of increasing competition and other trends. Competition and banking sector reform We are now two years into our programme of extensive banking sector reform. In fact, the first measure under that programme was my clarification, at your dinner in June 1999, of the HKMA’s policy on the question of Lender of Last Resort. It was a pretty heavy-going speech for an after-dinner occasion, and I still recall the drooping eyelids and stifled yawns. But at least those of you who sat through it can take satisfaction in the fact that you were witnessing a minor historical event. Since then, the reform programme has made a great deal of progress. In 1999 we relaxed the “one building” condition on foreign banks licensed since 1978. Last year we expanded access to Real Time Gross Settlement and implemented the first phase in the deregulation of the remaining Interest Rate Rules. We also completed a study and a public consultation on the case for establishing a commercial credit reference agency. Earlier this year, a similar public consultation was completed on the case for a deposit insurance scheme. The general view in these consultations was that the two schemes should be pursued, although we fully recognise that there are dissenting opinions on the question of deposit insurance.