samchain/econo-pairs-v1 huggingface dataset:
We were unanimous on the one decision to raise the interest rate by 0.25 per cent, but not on the other decision regarding the interest rate path. The majority of the Executive Board members considered it reasonable to have an interest rate path that involved a substantial probability of a further two increases during the year, while the minority considered it reasonable to have an interest rate path that involved some probability of one further increase. The minority’s assessment was that the slowdown of the economy that is now  BIS Review 100/2008  5  taking place would dampen inflationary pressures to a greater extent than assumed in the main scenario. There would therefore be less need to continue increasing the interest rate. 4. Developments during the summer  I have earlier discussed what happened during the summer in the world around us. The trend of falling growth and rising inflation has broadly continued. One important change is that the oil price and other commodity prices have begun to fall, which may further slow down price increases. The dollar has risen in value against the euro and the krona, which also means that the krona has weakened against a weighted average of other currencies. The financial market turmoil has also continued. I intend to conclude by summarising the important new information on developments in the Swedish economy since the monetary policy meeting at the beginning of July.

The proposal to transfer responsibility for exchange rate policy from the Riksbank to the government makes it more difficult for the Riksbank to safeguard the value of money effectively and thereby contribute to a favourable level of interest rates and also - when this does not endanger price stability - to stimulate the economy and employment. In a world with free capital flows there is a direct link between monetary and exchange rate policies. The two policy fields may have conflicting goals. Moreover, if the government, via exchange rate decisions, can affect the ability of the Riksbank to fulfil the inflation target, there may be misunderstandings about where responsibility for the operation of monetary policy lies. In my opinion it may be reasonable - though this, too, is questioned by some economists - for the government to decide the type of exchange rate system Sweden is to have in relation to other EU countries, whether the krona should join the European exchange rate mechanism or remain flexible. There is a close connection here with the rules and regulations BIS Review 32/1997  -8-  that apply in the rest of the EU and the matter is very much a political issue. But within a given exchange rate system, it is the Riksbank that should decide an appropriate rate for the krona or the band within which it may move.
At the same time, Spain can certainly contribute to move ahead some of the reforms needed in the euro zone. Euro area economic situation and avenues for reform A decade after the recession that followed the global financial crisis, the economic recovery is well underway. The euro area is experiencing robust and widespread growth, and a number of risks have receded. Economic sentiment has reached levels close to all-time highs. However, the robust economic recovery has not yet translated into stronger price dynamics. Several arguments have been put forward to explain that. Firstly, there is evidence that labour market slack may be larger than standard unemployment indicators suggest, owing to the existence of under-employment (i.e. those working fewer hours than they would like) and of a sector of the population classified as inactive because they are only marginally attached to the labour force. Secondly, the growing importance of global factors may come into play here, including spare capacity in other regions of the world, the prevalence of global value chains, and technological changes. And thirdly, and potentially more worrisome, the prolonged period of low inflation might have upset the way price expectations are formed, giving rise to persistent deanchoring of medium and long-run expectations of inflation from central banks’ targets. In any event, the strong economic recovery underway in the euro area together with the ambitious package of expansionary policies put in place by the ECB provides for growing confidence that inflation will eventually converge to levels closer to our 2% reference.

The analysis of the Banco de España suggests that the higher possibilities for firms, in the presence of adverse shocks, to adjust wages and, in particular, hours worked, which were introduced through the 2012 labour market reform, led to a significant slowdown in job destruction flows, despite the adverse economic situation in 2012 and 2013. Apparently, however, the reform has not been able to change either the structure of the collective bargaining system or the acute segmentation of the working population. These two features of the Spanish labour market have been at the core of the high volatility of employment and the high level of unemployment and, therefore, should be at the core of the reform agenda in this area. Raising medium-term growth prospects The third session will be devoted to the general question of how to improve medium-term growth prospects. Spain’s potential output growth is estimated to be somewhat below 1.5% over the following decade, a level much lower than that of 3% before the crisis. Among the most important structural factors limiting Spanish growth prospects are ageing of the population, a lower contribution of the participation rate now that many women have already been incorporated into the labour force, and a lower contribution of the stock of capital following the high growth recorded in the previous upturn. These factors are common to most developed countries. Hence, the growth of the Spanish economy will essentially rely on its capacity to raise low productivity growth.
Lars Nyberg: The crisis, the Riksbank and monetary policy Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at the Bankmarknadsdagen, Stockholm, 28 November 2008. *  *  *  Introduction The financial system is an important part of our social structure. The payment system and the supply of credit are central to all economic activities. When the general public’s confidence in the financial system is shaken and when the participants in the system no longer trust one another, then something serious has happened in our society. This means that all those involved, both in the private and public sectors, must have a discussion on how this situation arose and what we can do to avoid it happening again. The financial turbulence, which began in summer 2007 with problems in the US mortgage market, has during the autumn become an acute crisis. Also during the autumn we in Sweden have gone from largely watching the crisis from the sidelines, to being very much involved. Today I will give my views on how this could happen and on what has occurred during the autumn. Last spring there were many indications that conditions in the financial markets were gradually improving. I shall also reflect on the methods used by central banks and governments around the world to try to manage the problems and to safeguard financial stability.

Although it is not yet possible to know whether the measures will succeed in full, my assessment is that they have been sufficient to counteract the most acute problems. The measures create a basis for restoring confidence among the general public and between participants in the financial markets. If one tries, one can see some signs of normalisation in the form of falling interbank rates and improved liquidity in the form of higher turnover on some markets. But progress is slow. I consider it rather surprising that market functioning has not normalised to a greater degree, despite the extensive and forceful measures taken by central banks and governments. It is possible that the authorities have not succeeded in communicating the fundamental message that all who lend money to a bank will get their money back. A remaining problem is that, as a result of the crisis, the market is requiring that the banks reduce their risks in relation to equity capital. The banks are therefore selling financial assets, which squeezes the price in the entire world market. This is why the banks want to reduce their balance sheets by cutting back on lending. The process will continue until the banks have reduced their balance sheets sufficiently or acquired new risk capital. The Riksbank will contribute liquidity as long as is necessary The Swedish interbank market functioned satisfactorily up to mid-September, although the cost of the banks’ international borrowing rose, of course.
Column (2) adds lagged inflation as a crude measure of inflation expectations, and column (3) further adds the recruitment difficulties measure. Both enter with the expected sign and indicate that a 1 percentage point rise in inflation or a 1-point rise in the agents’ score would tend to correlate with rises in wage growth of between ½ and ¾ percentage point. The coefficient on unemployment remains at around unity. Columns (4) and (5) add measures of inflation expectations. Relative to (3), the inflation expectations measure in model (4) adds little explanatory power and enters with the “wrong” sign, possibly indicating multicollinearity. Dropping inflation, in column (5), restores a role for inflation expectations with the expected sign. Model (5) has overall marginally less explanatory power than model (3). Columns (6) and (7) add productivity growth to the model. In moving from model (4) to (6), there is a small increment in explanatory power, and productivity growth enters significantly, although the coefficient on recruitment difficulties falls and is now estimated less precisely. Inflation expectations continue to enter with the “wrong” sign and their coefficient is estimated  25  In Gali’s model, unemployment is positive under flexible prices and wages on account of a steady state wage mark-up, which captures inefficiencies in wage setting. Unemployment can move away from this rate in the short run, during which period nominal wages and prices are rigid, in response to shocks to the economy. 18  BIS central bankers’ speeches  imprecisely.

As a result, equity capital is eroded by around 3 ½ percentage points of risk-weighted assets. Yet despite this assumed marked worsening in the global economic weather, the FPC judged that UK households and businesses would continue to be supported by our banking system. 2  BIS central bankers’ speeches  2. Financial conditions and macroprudential policy  The improvement in the price and availability of credit is one sign of the normalisation of the UK financial environment. Another is that, after seven years of deleveraging, aggregate credit to the UK private non-financial sector has begun to grow again (Chart 2). This has not been a debt-fuelled recovery. Aggregate private credit growth is modest compared to pre-crisis conditions, and is just now coming into line with nominal GDP growth (Chart 3). Chart 2: Credit growth in the private sector is recovering Private non-financial sector credit growth (oya)  Sample average  25 20  Per cent  15 10 5 0  1967 1968 1970 1972 1973 1975 1977 1978 1980 1982 1983 1985 1987 1988 1990 1992 1993 1995 1997 1998 2000 2002 2003 2005 2007 2008 2010 2012 2013  -5  Source: Bank of England.
Higher capital requirements increase the banks’ lending rates and thus dampen the overall growth of credit in the economy. Considering that we currently lack tools that can be used to counteract risks of a systemic nature, this type of capital requirement is thus a welcome feature. Convertible debt instruments A question that is under discussion but not directly related to Basel III is whether a new way for banks to acquire new capital should be introduced. Traditionally, banks can, like other companies, acquire capital in two ways: by issuing bonds or by issuing shares. The choice of method often creates a conflict between the banks’ owners and the responsible supervisory authority. While the banks’ owners usually prefer the first alternative because it is cheaper 7 and because they do not want to see their share capital watered down, the supervisory authorities require the banks to have a certain level of share capital that can be used to deal with losses. As a result, the possibility to use so-called contingent convertibles, also known as coco bonds, is therefore now being discussed. These instruments have a mix of bond and share characteristics in that they are issued as a debt instruments but are automatically converted to share capital when a bank experiences problems. It is still unclear what role this type of instrument will be able to play when the banks calculate their capital requirements. A number of questions remain to be answered – for example what type of event should trigger a conversion?

Quite simply, this is a matter of designing a set of rules and regulations that will counteract future economic crises at the same time as the socio-economic costs for these rules and regulations are limited. What will the new regulations cost? It is easy to get the impression that all of the new requirements I have reviewed will lead to drastically increased requirements regarding the banks’ capital. One common and highlyjustified question is therefore how the new regulations will affect the banks and their customers. In recent months, we have read in the headlines about how expensive the new rules will be, above all for private individuals with mortgages. According to the banks’ calculations, mortgage rates will go up by up to one percentage point. And yes, it is quite likely that the new regulations will force the banks to adjust their business models, which may lead to certain price increases. While it is too early to say exactly what these costs will amount to, the Riksbank judges that they will not be excessively high. Basel III is a gradual process that will begin to apply in 2013, but which will not have its full impact until 1 January 2019. Furthermore, the market is already placing high requirements on the banks’ capital, and we can note that the Swedish banks are coping well – they are well-capitalised in terms of both level and quality. So there should be no question of any extra costs for acquiring capital.
Within our senior management cohort, female representation has gone from 21% to 27%, and our graduate intake has gone from 26% female to 34%. The direction of travel is encouraging, but we are far from satisfied. Diversity will remain a key pillar of the Bank’s strategy. Our goal is to attract and inspire the best people to public service. We want people with diverse ideas, willing to challenge and debate, and we want them to feel empowered at all levels, to take the initiative. To support these objectives, we have introduced diversity targets that for the first time are reviewed and challenged regularly by Court. We have two Bank-wide targets for gender. The first is for 35% of our senior management staff to be female by 2020; a two thirds increase from its 2013 level. The second is to have an equal split of men and women in the organisation at all levels below senior management by 2020 (from our current 44%). But achieving these goals isn’t just going to happen. It requires: •  Focussed recruiting  •  Active mentoring  •  Consistent and comprehensive performance management, and  •  A flexible work environment that values diversity of thought  Today, each division of the Bank knows where it stands and has plans in place to improve, where necessary. So in this sense, the Bank has implemented two of the Report’s recommendations. The Bank has also recognised the importance of executive accountability for diversity, another key recommendation of Jayne-Anne Gadhia’s report.

Furthermore, there is a very convincing argument for the extended repo-rate path in that it provides better outcomes for both resource utilisation and CPIF inflation, which can give it just as much credibility as the lower repo-rate path. 4  BIS Review 60/2010  The extended repo-rate path also has the advantage that the monetary policy alternatives can be reduced to the question of when we should begin to increase the repo rate: in July or September or, as I advocate, in December. The monetary policy choice thus boils down to deciding which point in time for the first increase gives the best outcomes for inflation and resource utilisation. That is, which point in time gives a forecast for CPIF inflation that is as close to the target as possible and a level of resource utilisation that is as close to normal as possible. Could the monetary policy decision between alternatives be any simpler, more distinct and more transparent? Given this background I thus decided to advocate the extend repo-rate path rather than the lower repo-rate path as an alternative to the path in the main scenario. The extended repo-rate path stabilises inflation and resource utilisation better than the repo-rate path of the main scenario In my view, various monetary policy alternatives must be discussed and assessed before any monetary policy decision can be clearly justified.
Our three-year programme of upgrades includes: Enhancing efficiency and risk management, including the launch of a new collateralised lending service in April this year; Upgrading the system for greater flexibility, by launching a new CMU platform in 2025; Strengthening the cross-border links through the CMU, including enhancing automated access to Mainland Central Securities Depositories in the third quarter of this year to facilitate Bond Connect operations; and Riding on the opportunity of the Mainland’s plan to connect the interbank and exchange-traded bond markets to explore the system enhancements to provide Northbound Bond Connect investors with a single access point to the entire onshore bond market. Enhancing the CMU’s service capabilities will enable investors from the Mainland and abroad to settle debt securities more efficiently, lowering cross-border settlement costs. It will also allow us to seize market opportunities and attract Mainland and international issuers to issue bonds in Hong Kong, thereby expanding the depth and diversity of the local dim sum bond market. Other opportunities – Green 13. Apart from these technical matters, another area that is impossible to ignore when discussing financial opportunities and developments is green and sustainable finance. Asia has the largest need for climate finance among all geographical regions. According to a report by the Global Financial Markets Association and Boston Consulting Group in December 2020, it is estimated that the region will require USD66 trillion of climate investment in the coming three decades1.

Unfortunately, the international environment is rarely stable: we have lived through many financial and other crises, we have just come through a pandemic and we are all aware of the geopolitical challenges across the world. We will overcome current and future challenges as we have done so in the past – by constantly evolving to meet the needs of the nation and of the world. In recent years, Hong Kong’s role has further evolved to include providing a pathway for the ever-expanding international use of the RMB. That will remain our key task for the foreseeable future. Our unique and irreplaceable role in connecting the Mainland and the rest of the world will continue to provide us with many exciting opportunities that we must be ready to seize. 18. I am sure the TMA and all its members will continue to participate actively in this journey to support Hong Kong’s status as an ever-evolving and highly resilient international financial centre for the mutual benefit of the nation and the international investment community. Thank you. 1 Source: The Global Financial Markets Association (GFMA) and Boston Consulting Group’s  (BCG) report “Climate Finance Markets and the Real Economy” https://www.sifma.org/wpcontent/uploads/2020/12/Climate-Finance-Markets-and-the-Real-Economy.pdf 2 Source: The PBoC Governor Yi Gang’s speech on 16 April 2021  https://www.bis.org/review/r210416a.htm  Last revision date : 16 September 2022
It is also our intention to change the supervision of the banking institutions from “compliance based’’ systems to a “risk focused” systems, whereby a corrective action plan is consistently applied across the industry. This will necessitate banks to develop integrated risk management systems and strengthen internal controls and procedures, in line with more advanced prudential requirements. Banks will also be required to set up integrated risk management mechanisms and begin ‘stress testing’ to assess their resilience to internal and external shocks, in order to facilitate the identification of risks and to initiate corrective measures. The supervision and regulation of non-bank financial institutions will also be strengthened by enhancing the minimum capital requirement of such institutions. This will facilitate the non-bank financial institutions to enhance resilience and expand their business activities. Accordingly, the existing finance companies will have to increase their core capital to Rs. 100 million by 31 January 2007 and to Rs. 200 million by 30 June 2008. Further, the regulatory framework of registered leasing establishments will also be further strengthened by carrying on comprehensive on-site examinations of selected leasing establishments and spot examinations of the others on a regular basis. In addition, in order to enhance the orderliness in the business of money changing, the minimum annual turnover required to be considered for the renewal of the money changing permits will be increased from US dollars 120,000 to US dollars 600,000 with effect from 1st January 2007.

Total contributions and refunds during this period amounted to Rs.16 billion and Rs.13 billion, respectively. The total investment portfolio consisted mainly of government securities at 98 per cent, while the total income for the first half of 2006 amounted to Rs.25 billion. The Central Bank also manages the Public Debt to ensure that the Government's financing needs and its payment obligations are met at the lowest possible cost over the medium to long term, consistent  BIS Review8/2007  5  with a prudent degree of risk. During 2006, the Central Bank took several measures to strengthen the management of public debt by: •  Increasing the capital requirements, introducing a risk based supervision system and supervision activities to strengthen the Primary Dealer System and financial sector stability  •  Introducing on-line data reporting to enhance the transparency in trading government securities  •  Facilitating capacity building of market players  •  Permitting subscription upto 5 per cent of Treasury bonds by foreign investors  •  Assisting the government to raise foreign currency commercial debt through syndicated loans from the international market  •  Developing a comprehensive debt consolidation strategy  •  Introducing a new debt instrument named Sri Lanka Nation Building Bonds for the Sri Lankan working community living abroad thereby offering them an opportunity to contribute funds towards infrastructure development in the country.