samchain/econo-pairs-v1 huggingface dataset:
The team visited a petroleum refinery complex 1/3  BIS central bankers' speeches  in Pengerang. It was towards the end of the event; it had been a long day and all they could think of was going back to be in the comfort of their own accommodation. This was when they noticed a number of migrant workers of various nationalities, noticeably tired from many hours of working – they were using their mobile phones; engaged in highly animated video conversation with their families back home. Some of these workers had not seen their family for years; some were fathers who left for Malaysia before their children were born – and the closest that they can get to see their families was through the small screens of their mobile phones. Listening to this story, I was reminded to a quote by the former Secretary General of the United Nations, Ban Ki- Moon on migration. He said “Migration is an expression of the human aspiration for dignity, safety and a better future. It is part of the social fabric, part of our very make-up as a human family.” Indeed, the single most important reason why these workers travelled thousands of kilometers away, was to seek for opportunities to secure a better future for themselves and their families; and the simplest form of these opportunities is to earn more money. This brings me to my second story; on remittances.

Responses to those sorts of questions can, for instance, help us work out how businesses have been affected by the recent depreciation of sterling, and the tightening in credit conditions. A fourth use of the surveys is in providing measures of variables for which there is no official counterpart. In particular, the amount of economic slack in the economy is a key determinant of inflationary pressures. We have official indicators of slack in the labour market – unemployment, vacancies and the like – which is one factor determining pay growth. But we have no official measures of the amount of slack within businesses, which potentially affects pricing pressures. Business surveys such as the Industrial Trends survey do, however, ask how intensively firms are working their capital (see Chart 5). And the MPC draws on this  4  BIS Review 95/2008  information in forming a judgement about the overall margin of spare resources in the economy. A fifth, and perhaps less obvious, use of survey information is in refining our picture of the past. I noted earlier that the official data tends to get revised for some while after it is first released. But it turns out that there are some systematic patterns in the historical revision process. Moreover, for some series, we have found a tendency for revisions to be in the direction of reducing the discrepancy with the corresponding survey information.
Let me return to the mortgage example I used above. Controlling prices would in this case entail an increase in the capital requirement for mortgages. In the EU, for example, it has been discussed whether the capital requirement should to a greater degree depend on the leverage ratio. Quantitative regulations could include stipulating amortisation requirements or regulating the loan-to-value for mortgages. Economists usually advocate price control, but the arguments for price control are not as strong when we are facing an either/or situation – crisis or no crisis. In such situations, price control may entail too much uncertainty and thus make it necessary to control the behaviour of the participants in a more concrete way. The choice between price control and quantitative regulations thus requires a lot of thought, both on the general level and when designing specific regulations. Influencing behaviour by regulating capital is however, not the only form of price control that is being discussed. More direct control by levying charges is also under discussion in various international arenas. One element of this discussion concerns the regulation of systemically-important banks. Risks in systemically-important banks also entail the risk that problems will spread to other parts of the economy, that is there are external effects. It is thus not unreasonable to expect that this systemic risk should be internalised. Several different measures are therefore under discussion to achieve this. One possibility is to introduce a special capital surcharge for systemically important banks. Another is to introduce a charge for systemically-important banks.

Eva Srejber: Financial markets in a globalised world Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at the Swedish Mutual Fund Association, in Stockholm on 4 September 2001. *  *  *  I should like to begin by thanking you for the opportunity to participate in your conference on mutual fund investments in Europe. Mutual fund investment is now a very important part of the financial system, both at a national level and at a global level. I therefore intend to take this chance to discuss the significance of the financial system for economic development, using mutual fund investment as a basis, and to take up some of the problems connected with the way the system functions. Rapid transformation of the financial system Over the past few decades the financial system has been fundamentally transformed. Deregulation and technological achievements have made the Swedish financial sector part of a global network where the sun never sets. Those of us who work in this sector cannot have a limited local, or even regional, perspective. We have had to learn to live with the fact that events in countries such as Indonesia and Thailand can have a direct bearing on our operations. This is of course exciting, although it also makes our work more complicated. But that is the consequence of living in a globalised world. Swedish savers have adapted to this development on a large scale.
The growth of exports in 2010 was fuelled by the recovery of global economy and the favourable conjuncture of prices in the global markets, the depreciation of the exchange rate, the Albanian entrepreneurship efforts to expand the market and by some other factors of transitory nature. Therefore, promoting exports in a stable and long-term fashion requires undertaking structural reforms, which will in turn enhance the competitiveness of the Albanian economy. This would ultimately serve to the transition to a more stable economic growth model and, at the same time, to curbing the reliance on foreign financial sources. Our analysis of monetary indicators concludes that the growth of money in economy is concurrent with the economic agents’ demand for monetary assets, hence creating no room for inflationary pressures in the future. BIS Review 170/2010  3  Aggregate M3’s average growth was 11.2% in July and August, being in line with the nominal economic growth and the enhanced confidence in the banking system. Its growth during this period was mainly determined by the increase of the banking system’s net foreign assets. Private sector credit grew by 9.8% y-o-y, close to the previous quarter’s rate. Although the better liquidity figures and the improved banks’ balance sheets led to higher banking supply and provided greater room for lending, the latter has progressed at moderate rates. Our analyses on lending in economy show that demand remains contracted and the number of worthy projects to lend is still low. The foregoing remains a constant concern for the Bank of Albania.

Let me address the following issues: • • • •  Firstly, I will show you the importance of gold in the National Bank’s monetary reserves; Then I will outline why the revaluation of our gold holdings will necessarily lead to disposals: In a third part, I will describe the different political stages down the road, the uncertainties surrounding this process, and the timetable we can expect to adhere to. Finally, I will conclude by indicating in what spirit we plan to tackle the delicate task of disposing of an important part of our gold holdings. 1. Switzerland’s gold reserves The situation in Switzerland is completely transparent. With 2590 tonnes of gold in its reserves, Switzerland is one of the major holders of the yellow metal. Its holdings are comparable to those of Italy, slightly lower than those of France, and significantly higher than those of Great Britain (see graph 1). Graph 1 Gold Reserves of the G10 Countries as of December 1998 in Tonnes 8137  United States Germany  3700  France  3184  I taly  2593  Switzerland  2590 1052  Netherlands Japan  754  United Kingdom  715  Belgium  296  Sweden  147  Canada  77  source: I WF  In relative terms, however, Switzerland is the largest holder of gold reserves: per capita, per GDP unit, in proportion to imports or relative to currency in circulation (see graph 2).
It is worth reminding that this initiative has led to a considerable drop in charges for cross-border transfers in the euro under correspondent banking, although for the time being the drop is of benefit mainly to banks, and hardly at all to clients. SEPA consists of the following elements: the single currency, a single set of euro payment instruments – credit transfers, direct debits and card payments, efficient processing infrastructures for euro payments, common technical standards, common business practices, a harmonised legal basis, and ongoing development of new customer-oriented services. I am sure than many of you are wondering "Why SEPA?". To answer this question we have to think like Europeans. Currently, the euro area economy is unable to fully exploit all the benefits of the Monetary Union. Customers face difficulties when making euro retail payments to other euro area countries, as these payments often turn out to be more time-consuming. As long as this is the case, the euro cannot be viewed as a fully implemented single currency. Despite the introduction of the euro in 1999 and the development of TARGET, the common largevalue payment system for euro, low-value electronic payments (i.e. retail payments) continue to be processed differently throughout the euro area. Overall, the number and variety of payment instruments, standards and processing infrastructures for retail payments has not really changed since the introduction of the euro.

We also need to explore the possible channels of contagion that may result in adverse market dynamics. Gaining a better understanding of the functioning of the shadow banking system is a key element of and a precondition for improving the efficiency of financial regulation and supervision across markets and jurisdiction. I strongly encourage the FSB to continue to work very actively on all of its work streams regarding the regulation of the non-banking sector. This includes regulatory reform of money market funds, securitisation and the interaction with the banking sector. I am looking forward to the progress report to be delivered for the G20 meeting in October. Further regulatory challenges In a number of key domains, decisions have been taken by the international community. It is no time to challenge them. It is time to implement. In a crisis period where confidence is of the essence, it would be extremely damaging if the authorities were to hesitate, demonstrate an absence of resolve and of the fortitude that is required by the circumstances. I see resistance of some in the financial sector against Basel III. I see similar messages on the SIFIs. For me, it is crystal clear: what has been decided is decided. But there are other areas of regulatory reform where work is still underway. Let me briefly highlight two key areas on which we need to stay committed and where swift progress is of the essence.
Commentators have, indeed, been emphasising that CCPs are becoming systemic. To my own way of thinking, they have already been systemic for the markets they clear for a very long time. Three clearing houses have failed in recent decades. In 1974, the Caisse de Liquidation failed in Paris, due to default on margin calls when sugar-futures prices fell sharply. In 1983, it was the turn of the Kuala Lumpur Commodities Clearing House, when half a dozen large brokers defaulted following a crash in palm-oil futures. And, most dramatically, the Hong Kong Futures Exchange clearing house failed in the wake of the global stock market crash in 1987. The effects were devastating. The Futures Exchange had to close. Traders had hedged margin-financed cash equity positions in the futures market. They faced margin calls on their cash positions but, with the futures market closed and the clearing house bust, they  1  “The role of margin requirements and haircuts in procyclicality”, Committee on the Global Financial System, March 2010. 2  BIS central bankers’ speeches  could not get margin moneys returned on their profitable futures positions. For that and other reasons, the stock market closed too. The upshot was that Hong Kong’s main capital market shut down. Reopening the market was no small feat. World markets had fallen further in the meantime, so there was a risk that a modestly “recapitalised” Clearing House would go broke again if positions had to be marked down immediately.

The first of these factors, namely trade tensions, have already been reflected in the lower growth of global trade in 2018 (4%, compared with 5.3% in 2017), which does not prevent them from continuing to pose a significant downside risk, subject to the future of the international negotiations currently under way. 1 See Macroeconomic projections for the Spanish economy (2018-2021): the Banco de España’s contribution to the Eurosystem’s December 2018 joint forecasting exercise.
In the future, we may well end up in the opposite situation with the repo rate being set higher than justified by this particular part of the economy. Longer fixed-rate periods desirable It is difficult to determine how large a proportion of variable interest rates is desirable in an economy, but I suspect that we have gone too far in that direction in Sweden. And by this I mean from the point of view of systemic risk. For an individual household there may be good reasons for choosing a variable interest rate, but for the economy as a whole it would probably be good if we could limit the proportion of variable rates. This can be achieved in different ways. In some countries, regulations have been used to either limit how large a proportion of the mortgage may have a variable interest rate or how much a variable interest rate may increase during the maturity of a mortgage. In other countries, long fixed-rate periods have become the norm without the need for regulations. The fact that this has not happened in Sweden indicates that the financial markets are not working well enough for some reason. This may, for example, be due to the lack of a market for mortgage bonds at really long maturities, or of regulations concerning how mortgages with long fixed-rate periods can be paid off prematurely.

Aggressive hike is not warranted as the Thai economy is still in the early phase of recovery, while it could risk derailing the recovery. A gradual approach is needed to strike a balance between facilitating a smooth take-off of the recovery and minimizing the impact from potential bumps. • Measured: Policy decision will be calibrated taking into account economic conditions and circumstances prevailing at the time. If a pause is required, we will pause. If 50 bps is necessary to meet our policy objective, we will raise 50 bps. But with the current circumstances, aggressive rate hikes or too early withdrawal of financial measures can jeopardize the economic recovery given pockets of vulnerabilities and the uneven impacts on different groups. c. We have taken first steps towards this at the Financial Institutions Policy Committee (FIPC) meeting on June 30th and the Monetary Policy Committee (MPC) meeting on August 10th. • The FIPC decided to withdraw some of the blanket-type measures including FIDF fee cut and bank dividend payment restrictions. • The MPC voted 6 to 1 to raise the policy rate by 25 bps. Part 3: What is our rationale for monetary policy normalization? [3.1 MPC decision: 10 August] Two weeks ago, the MPC has delivered the first policy rate hike after having held the policy rate at its historically low level for more than two years.
It is now widely accepted that these are determined by factors that are not directly affected by monetary policy, such as the rate of technological advances and the efficient functioning of various markets. In general terms, one can say that the policy conducted by the Riksbank is aimed partly at limiting the inevitable deviations from the inflation target and partly at ensuring that the real economy does not fluctuate excessively. The objective of monetary policy is price stability, but the Riksbank also considers real economy considerations to be important. This is characteristic of what is known as flexible inflation targeting, which as far as I know, is conducted by all central banks that have inflation targets. Monetary policy affects the economy with a certain time lag. Monetary policy decisions must therefore be based on forecasts of future inflation. Normally, monetary policy is aimed at achieving the inflation target within two years to avoid the deviations from target from being too large and too protracted. This two-year horizon can be regarded as a restriction that the Riksbank has placed upon itself as a means of upholding confidence in the inflation target. At the same time, it provides an opportunity to show consideration for the real economy.

The way in which the Riksbank can manage this type of risk when making monetary policy decisions is, in principle, to make changes in the interest rate sooner or later than would otherwise be assessed as the most appropriate timing, given the “normal” forecasts for inflation and the real economy. It is hoped that such a policy will contribute to a smoother adjustment process for house prices and help to avoid a more abrupt correction. One example of when this type of reasoning has been applied is at the monetary policy meeting in February. We then chose to raise the interest rate by 0.25 percentage points, which was also in line with market expectations, despite the fact that the forecasted inflation path showed the rate as being at the lower edge of the target margin two years ahead, and low for the majority of the forecast period. The inflation forecast as such could therefore have warranted delaying a few months before raising the rate. It is important to realise that this type of decision with preventive interest rate changes does not mean the inflation target has been “downgraded” or that we now have a special target for house prices. The reason is that we believe it is the best way to safeguard that we have been set to safeguard – stable prices while avoiding large fluctuations in the real economy. I do have some understanding for those who consider this type of consideration to mean that monetary policy becomes “discretionary”.
As a result, small C&I loans now constitute a smaller portion of total C&I lending, both in the Second District and nationally (Chart 2). This is likely due, in part, to nominal factors, but could also reflect underlying economic conditions. Turning to community banks, they have historically held a disproportionate amount of small commercial loans, and this is a trend that has continued post-crisis. Among all Second District firms with less than $ billion in total assets, community banking organizations (CBOs) hold 54 percent of total assets, but 66 percent of total small commercial loans. This share has declined somewhat since 2011 (Chart 3). Within small commercial lending, CBOs are especially important when it comes to small commercial real estate (CRE) loans, providing 79 percent of total CRE loans under $ million. 3/6  BIS central bankers' speeches  Given the importance of small businesses to employment and growth in so many communities around our District, we welcome hearing your views on what might be driving these trends. More generally, we are interested in your assessment of business and lending conditions in the communities that you serve. What are the key challenges and opportunities that community banks face? Your insight will provide a key supplement to our quantitative research, and combining these two perspectives will support our efforts to understand what we are seeing in small business lending. Our supervisory teams are interested in your insights when we visit your organizations to conduct examinations and in venues like this conference.

Trends in small bank and small business lending As we evaluate the financial system and the broader economy, we regularly examine firms from a horizontal and aggregate perspective to gain insight on the trends in the provision of financial services in the Second District. Today, I’ll say a few words on trends in small business lending. Of course, looking at trends is not sufficient to identify causal relationships, but it does provide one perspective on these developments and identifies areas for future inquiry. The overall level of commercial and industrial (C&I) lending at Second District firms with under $ billion in total assets has grown steadily in recent years (Chart 1). Since the financial crisis, these loans have increased by just over 80 percent, which is somewhat faster than growth at the national level of 64 percent over the same period. 2/6  BIS central bankers' speeches  Within commercial and industrial (C&I) lending for these banks, small business lending is particularly important, given the traditional role of small businesses in job creation. While data are not immediately available on borrower size, we can look at a simple proxy for small business lending by isolating individual C&I loans to commercial borrowers that are each under $ million. These data show that while the dollar value of small C&I loans has grown since 2010, the pace of growth has not been as high as overall C&I lending growth.