samchain/econo-pairs-v1 huggingface dataset:
In 2012 three pre-existing sets of international standards were replaced with the Principles for Financial Market Infrastructure (PFMIs). 13  Crucially, the PFMIs embed the principle that firms providing systemically important financial market infrastructure have a responsibility to be ‘systemic risk managers’ – that is not only managing the risks to the firm but the risks to the system more broadly. I want to look today at three challenges that are increasingly prominent in this world of international financial market infrastructure –  Operational risk, especially cyber Prudential risk The regulation and supervision of cross border infrastructure. There are other challenges, not least the challenges posed to existing business models by new and potentially disruptive technology. But I want to concentrate on the first three because these are front and centre for those charged with ensuring financial stability. Operational Risk  It may appear strange to focus first on operational risk. When we think about financial stability, we usually think first about risk taking, about leverage and credit cycles and about banks, booms and busts – risks that one might call prudential. But in essence, financial stability is about ensuring the financial system can operate to service the real economy and is resilient to all types of shock. 12  Using initial margin as a proxy for the amount of risk managed, activity at UK CCPs has more than doubled in the last three years, from £ in January 2014 to £ in December 2016.The use of supervised payments systems has also increased significantly.

But this presupposes that, instead of again remaining outside, we participate in the contexts where developments are constructed. Opportunities and risks The idea behind a single currency in Europe is simple. One currency is better than many - it makes things work more efficiently. Eliminating the need to exchange currencies reduces transaction costs. The exchange rate stability facilitates trade and investment. A single currency makes price comparisons and economic estimates easier, not least for small and  BIS Review 14/1997  -2-  medium-sized companies. More direct price comparisons should lead in turn to stronger competition and downward pressure on prices, to the benefit of consumers. But risks are also involved when a single currency is introduced in so many countries with geographical, cultural and institutional differences. The Calmfors report has highlighted the insurance argument. I agree that this is an important point against EMU and therefore warrants particular attention. Monetary and exchange rate policy can be used as a kind of insurance against major, unforeseeable shocks in a single country. Without it, large adjustments may be required in other parts of the economy. However, when Calmfors and others claim that country-specific shocks have been more frequent in the Swedish economy than in the EU’s core countries, they are on uncertain ground. There are many indications that the shocks in Sweden have been occasioned above all by domestic economic policy and other institutional conditions, in the labour market and in wage formation.
This contributes to predictability for those who take decisions about saving and investment today, although the result of those decisions depends on how the economy develops in the future. Monetary policy must strike a balance between the various objectives. Strong growth in the Norwegian economy, a tighter labour market, a pronounced rise in equity prices and high credit growth must be weighed against unexpectedly low inflation. Norges Bank’s projections in the Inflation Report are based on an interest rate path that in the Executive Board’s assessment strikes a reasonable balance between the objectives of monetary policy. Previously, we based our analysis on various technical assumptions concerning future interest rates. One such assumption was market interest rate expectations. As from late last year, we now base our projections on an interest rate path that we consider reasonable. This gives Norges Bank more active ownership of the projections that are presented and of the uncertainty we believe surrounds these projections. In the baseline scenario presented in Inflation Report 1/06, interest rates in Norway and abroad are assumed to rise somewhat faster in the longer term than current forward rates may imply. Exchange rate movements are difficult to project. The interest rate path at home and abroad may be consistent with an approximately unchanged krone exchange rate. The high growth rate in the economy implies a gradual pick-up in price and cost inflation.

Through our duty to ensure the safety and soundness of the financial system, we aim to preserve depositors’ savings, to promote the circulation of credit, and ultimately to protect the health and growth of our economies. Indeed, we cannot alleviate poverty, we cannot promote economic growth unless our banks are well managed, our financial systems stable, and our markets transparent and open. That the health of an economy depends to a great degree on whether its banks are financially sound and well managed is certainly not coincidental. Banks are charged with critical public trust to safeguard the public’s wealth and to serve as a source of credit to consumers and businesses alike. When banks fail to discharge these tasks responsibly, the costs to society can be high and the impact on the economy devastating. At the same time, the duty for supervisors to promote the safety and soundness of the banking system entails achieving a delicate balance. Ensuring the prudent management of banks does not mean that we should hinder their growth or profit. Rather, the supervisor’s job is to promote the responsible pursuit of opportunity and innovation. Likewise, it cannot be our job to prevent every bank failure, for some failures remove poorly managed banks from the market and encourage other banks to improve their management as well.
According to Dr S Arsaratnam 4 , both the Sinhala kings and the Dutch used Arabic traders to export elephants, gems, areca nuts and spices, and import rice, textiles and other requirements in the 16th to early 18th centuries. The British period that followed the Dutch rule is marked by a continuation of the open-economy policy pursued by ancient Sinhala kings. During this period, the country continued to rely on foreign trade for wealth creation and maintaining high standards of living. Hence, the reliance on services, especially commercial services, for wealth creation was not a new policy paradigm for Sri Lanka. Around the time Sri Lanka gained independence from the British rule, the country’s GDP was distributed in the proportion of 46 percent for agriculture, 20 percent for industry and the balance 34 percent for services. The high share of both agriculture and industry amounting to about a two-third of GDP indicated the prevalence of a limit for their continued growth devoid of a vibrant and efficient services sector. This anomaly was to be gradually, and in a slow pace, corrected in the subsequent five decades. In 1960, a slight improvement in the respective shares was observed with agriculture falling to 38 percent and services rising to 45 percent. The period since then recorded a virtual stagnation of services till early 1980s when the country moved to an open economy regime.

It is this excessive credit cycle – the risk of “go and stop” seen during financial crises – that a moderate capital buffer must seek to smooth out. It should be noted in passing that a clear majority of Member States of the European Union have adopted other macroprudential measures  Page 3 of 6 to specifically limit residential lending, constraining households: in my view it is out of the question in France. II. To reduce fragmentation and improve private risk sharing in Europe, we must now complete the Banking Union. We must now resolutely work towards completing the European Banking Union. I would first like to explain why. The finalisation of the Banking Union should, alongside the Capital Markets Union, contribute to improving private risk sharing within the euro area. Private risk sharing fulfils an economic stabilisation function: in the United States, for example, private financial flows between the federal states are a more powerful damper than budget mechanisms involved in public risk sharing. Furthermore, this private risk sharing should help to channel the euro area’s large savings surplus – EUR 390 billion in 2017 – towards European companies, within a real Financing Union for Investment and Innovation at the European level. We have taken a step forward with the agreement of 25 May at the Ecofin Council meeting on the "banking reform package" set out in the Commission's legislative proposal of 23 November 2016.
Final remarks I would like to finish with some comments on a matter that has concerned me for some time which is, on what subjects a Central Bank board member can talk, and in particular the Governor of the Bank who is the official spokesman. There is no formal restriction, but there is a practical limit which is that no board member would like to spoil his professional and communicational reputation by speaking without well-founded arguments. It is true that the Bank has a limited mission but it also has an excellent group of economists. For example, at the request of the Senate Financial Committee, studies have been carried out at the Bank on the long-term growth of the Chilean economy and both myself and my predecessor have written articles on the same topic (Corbo and Tokman, 2007; De Gregorio, 2008). It is possible to speak and research on relevant topics as long as we do not stray far from our fundamental task. A few weeks ago, Ben Bernanke gave a speech on the challenges of health reform in the United States (Bernanke, 2008) and ten years ago Alan Greenspan gave a speech on income distribution (Greenspan, 1998). 6  BIS Review 92/2008  Just as the Central Bank asks that its autonomy is respected, which is far from not accepting criticism, the Bank must also respect the decisions of other institutions. Here the balance is certainly tenuous.

But we also must keep in mind the implications for the functioning of the global financial system in the near and medium term. This requires consideration of prospects for restoring normal market functioning and access, and the creation of appropriate incentives. •  When difficulties arise, the challenge remains, as always, to encourage and work with countries that are ready and able to implement strong corrective actions and to find financial solutions best suited to both the specific case and the broader functioning of the global financial system. A flexible, case-by-case, managed-market approach, represents the best bet - - and the only realistic option - - for achieving those goals as we face a challenging future. Thank you. BIS Review 61/2002  7
The spillovers from these projects are also benefiting the real estate market. Demand for properties continues to expand as we see mortgage loans growing at around 10 percent year on year in recent months. Financing conditions have also been favorable. Monetary policy stance remains accommodative and in full support of economic recovery. And, despite the slow economic growth, the overall credit and corporate bond issuance to the private sector continues to grow at around 7 percent. The Bank of Thailand would ensure that the cost of funds is conducive to the ongoing recovery, while also keeping a cautious eye on risks to financial stability. On the fiscal front, the government has become more effective in disbursing and implementing investment projects. Government relief and stimulus measures are also essential at difficult times, especially for those severely affected by adverse economic situations, such as from the current drought. But while taking care of the short-term issues, we must not forget to reckon longer term challenges facing the Thai economy. Thailand is in need of serious initiatives to upgrade and unlock our economic potential in the long term. In this context, we welcome many new initiatives by the government to push ahead with structural reforms. This brings me to the last part of my talk tonight on the way forward for the Thai economy, and how we and our partners like Japanese businesses may ride together toward sustainable prosperity.

The second factor driving market volatility stems from the plunge in prices of oil and commodities. Depressed prices put pressures on commodity-exporting countries and related industries. For oil producers, the prolonged low prices would also result in losses in  BIS central bankers’ speeches  1  revenue and profitability, and increase risks of default on their debt payments. These could trigger another rout of credit events and liquidity tightening in financial markets. The third factor is the monetary policy divergence between the US and other major advanced economies. While the US Federal Reserve is poised to gradually tighten its policy stance, the Bank of Japan recently joined the club of many European central banks to adopt a negative interest rate policy, and is likely to ease the policy even further. Amid the fragile global recovery, the divergence in the monetary policy stance as well as in the recovery paths among the major economies cause a great deal of global uncertainty, and prompt capital flows to be overly sensitive to news and even slight changes in market expectations. In this highly interconnected world, these global risks surely have widespread spillovers to all countries not least emerging markets, Thailand included. But, the impact on the Thai financial markets, as you might have seen, has so far been relatively limited, compared to other emerging markets, thanks to Thailand’s strong external position which serves as a great buffer against global volatility.
Unemployment has remained low. Chart2: Norges Bank’s key policy rate The key policy rate is lower than what can be considered to be a normal level. Norway is a small, open economy. Exceptionally low interest rates abroad influence the key policy rate in Norway. At the same time, there is still a considerable difference between the key policy rate and the interest rates facing households and enterprises. Banks’ lending margins are not particularly low as their lending margins are high. Chart3: Key rates abroad Low interest rates and unconventional monetary policy internationally reflect a continued low activity levels and high unemployment. In some countries, particularly in Europe, inflation has also shown a considerably decline. Policy rates are still close to zero in many countries and both the European Central Bank (ECB) and Sveriges Riksbank cut rates last year. Leading central banks have taken new steps to provide markets with forward guidance, with the aim of signalling low interest rates for a long period ahead. In today’s situation, the forward guidance is intended to signal low interest rates for an extended period of time in order to sustain inflation and boost growth. Other unconventional monetary policy actions are also in use. With large-scale securities purchases, the central banks in the US, the UK and Japan have sought to reduce long-term interest rates and thereby funding costs for firms and households. The provision of liquidity has also led to higher equity and securities prices.

In fact, we can have world-class policies, but if we don’t have a culture where people feel comfortable bringing their whole selves to work, rules alone won’t get us to where we need to be. This is true of every element of diversity and inclusion. In a culture where taking extended leave damages your career prospects, a generous parental leave policy won’t make up for that. In a culture where people don’t feel that their voices are welcome, few will speak up. In a culture that fails to embrace differences, we won’t reap the benefits of diversity. 1/3  BIS central bankers' speeches  The data are clear. Nearly half of LGBT people are closeted at work, and the top reason LGBT workers don’t report negative comments they hear about LGBT employees is they don’t believe that anything will be done about it.3 This gets to the heart of why the “inclusion” piece of diversity and inclusion is essential, and a personal priority. Obviously, there’s a moral imperative for diversity, and numerous studies have shown the benefits to both productivity and the bottom line.4 But for me, it’s my experiences as both an academic and a policymaker that have made inclusion so important. Economics is a profession that has a glaring diversity issue. As economists, we have not done enough to create a diverse profession or an inclusive culture. When I’m sitting in a room and see a bunch of people who look and sound the same, I know it’s a problem.
At the start of our oil journey, per capita GDP was low in Norway compared with many other countries. Rising oil and gas production lifted the income level in Norway in the decades that followed. When production peaked in the early 2000s, rising prices boosted our income level further. 3  NORGES BANK  Chart 3 Norway's rise to wealth. GDP per capita. PPP-adjusted. US = 100 140  140 Norway Mainland Norway  130 120  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  130 120  Switzerland  110  110 US  100  100 Sweden  90  90  80  80 Germany  70  70  60 50 1970  New Zealand  1976  1982  1988  1994  2000  2006  2012  60  50 2018  Sources: OECD and Statistics Norway  Even non-oil GDP increased faster than in surrounding countries, which can in large part be attributed to the growth of the domestic oil service industry. Norway’s oil history has produced many winners. Norwegian wage earners have over time experienced purchasing power gains that their counterparts in other countries could only have dreamed about. The main beneficiary of high oil prices this century has been government finances, thanks to the state’s direct financial interest and high taxation of production profits. In good times, the gains have been substantial. At the same time, this means that the state bears much of the risk associated with oil price fluctuations.

I said at the outset that a nation needs an efficient and secure payment system. If it does not function, that nation’s currency will lose its place in the monetary system. And therefore, for every central bank that issues a currency, it is important to govern and control developments in the payment system. This is the core issue: Only Norges Bank can provide final and secure settlement in Norwegian kroner. This will be the fundamental tenet for ensuring that the payment system in Norway continues to be efficient and up-to-date. 5/5  BIS central bankers' speeches
And there’s the breadth of issues the FPC covers. It’s not easy to build models that can incorporate banks, insurers, investment funds, households, corporates and all the markets they operate in. But we are working towards more joint analysis and models. We look at measures of ‘GDP at risk’[28] to help judge future risks of financial instability and help measure our progress[29]. In addition, Bank staff have developed some early ‘system-wide’ models[30] to think about how stress might propagate between different parts of the financial system. This is an area where we plan to do more and push our capabilities forward. We’re also exploring how we can more formally model some of the interactions between monetary policy and financial stability, and how these may vary in different states of the world and in response to different types of shocks. My hope is that we can eventually create tools that will help both committees think about issues which span both objectives. As well as aggregate supply, aggregate demand, inflation and interest rates, our models would more richly cover the impact on the economy of developments in the financial system, including the FPC’s actions to build the financial resilience needed to avoid crises. In this way, our analysis would cover not just the central case but tail risks too. This is potentially complicated stuff – it seems to me like moving policy making from lines to planes. But it is necessary if we are to maintain and build on our coordinated approach.

For this broad and interesting work we need a broad set of interesting, and interested, people. So this is where you come in, as talented potential policymakers of the future. Page 10  As I just described, the Bank has a broad remit, to pursue monetary and financial stability acting for the good of the people of the country as a whole. This means we need staff from a diverse range of backgrounds. Those that understand economics to analyse and forecast the economy. Those that understand financial markets to draw insights into their complex interactions and potential to propagate shocks. And those that understand financial institutions to ensure they are resilient and serving the UK economy. All technically strong to do these critically important jobs. We need diversity more broadly too. Indeed the Bank has become much more diverse and inclusive since I first joined, partly evidenced by my own presence as a female leader – one of many now, compared with a very small number when I joined. But we have further to go, and part of our strategy is to increase our physical presence across the UK. That includes here in Leeds – where we currently have a small pilot office, with plans to expand that in coming years reflecting the breadth of skills and backgrounds here. As we pursue monetary and financial stability, we need a wide range of people from a wide range of disciplines from all across the UK to help us do that.