samchain/econo-pairs-v1 huggingface dataset:
Norwegian covered bonds are very different from US CDOs backed by subprime mortgages. The regulations ensure that Norwegian covered bonds are a more transparent and substantially more secure investment alternative. The cover pool in the mortgage credit institutions consists of mortgages with a maximum loan to value ratio of 75 per cent. The loan to value ratio of the cover pool in Norwegian mortgage credit institutions that have so far issued covered bonds is well below this. All holders of covered bonds have the same right to the mortgage credit institution’s cover pool. In other words, there is no tranching as is the case for CDOs backed subprime mortgages. Investors will also have an overview of the risk parameters for mortgages that are part of the cover pool. This means that Norwegian covered bonds are far more transparent with respect to the assets that are the bondholders’ cover than CDOs backed by US subprime mortgages. Another difference between subprime mortgages in the US and Norwegian mortgages is that the regulations relating to the provision of credit are stricter in Norway. Subprime mortgages in the US have been sold through agents and mortgage brokers that have not been subject to federal supervision. In a number of cases, mortgages have been extended to persons with no income. Before Norwegian banks extend a loan, they assess a customer’s debt-servicing capacity. Norwegian banks are also required to advise a customer against taking out a mortgage if they feel that the customer will find it difficult to service the loan.

Resale home turnover is still high, but it is taking longer to sell a dwelling compared with the same time last year. BIS Review 100/2007  5  Financial market innovations have also contributed to strong lending growth. In recent years loan products have been introduced that facilitate mortgage equity withdrawal – credit lines secured on dwellings. These loans are normally extended to borrowers with good collateral and debt-servicing capacity. They therefore present very little risk in a financial stability context. Credit lines secured on dwellings have rapidly increased in volume and now account for over 12 per cent of mortgages in banks and mortgage credit institutions. Foreign-owned banks were among the first to offer credit lines secured on dwellings and a far higher share of their mortgages are classified as this kind of loan. Other aspects of household behaviour in the housing market are increasing their vulnerability and giving greater cause for concern. First, the number of interest-only mortgages has risen. The possibility of interest-only periods is a buffer for households with debt-servicing problems. For many households, this buffer has already been used. Kredittilsynet’s 2006 mortgage survey, which includes loans secured on dwellings excluding credit lines, showed that around one in six mortgages in the survey had included an introductory interest-only period. This share was somewhat higher than in 2005. Another aspect that increases vulnerability is that a number of borrowers have a high loan to value ratio, particularly those below the age of 35.
Finally on regulation, I note with regret that far too often the discussion appears to focus solely on the notion of introducing so-called “green supporting factors” to seemingly “incentivise” banks to favour greener loans and investments. As I mentioned previously,  4/6  the Committee will not pursue such an approach, but will rather be led by its mandate. Accordingly, we will be focused solely on the risk profile of different asset classes when it comes to climate change. To the extent that there is clear and rigorous empirical analysis pointing to different climate risk profiles across different asset classes, the Committee will then consider whether additional regulatory measures are warranted to mitigate such risks. More generally, there are a lot of ongoing initiatives globally, and we are acutely aware of the potential fragmentation when it comes to different supervisory and regulatory initiatives, which in turn would undermine the global level-playing field. As such, it is crucial that there is broad agreement among the larger set of global public and private-sector bodies when it comes to issues such as consistent definitions, taxonomies and approaches. These are crucial prerequisites to any subsequent disclosure, supervisory or regulatory initiatives pursued by the Committee. Therefore, it is extremely important to maintain global coordination and seek global measures where relevant. Stress testing as a silver bullet?

Pongpen Ruengvirayudh: Thailand in 2014 – recent developments and challenges ahead Keynote address by Ms Pongpen Ruengvirayudh, Deputy Governor for Monetary Stability of the Bank of Thailand, at the Thomson Reuters FX Community Forum 2014, Bangkok, 18 February 2014. *  *  *  Distinguished Guests, Ladies and Gentlemen, 1. It is a distinct pleasure to be back here again and I would like to thank Thomson Reuters for the invitation. To the winners of this year’s FX awards, I would like to congratulate you on your notable achievements. And to the rest of the market participants, I would like to express my thanks for your continuing contribution to the development of the Thai foreign exchange market. 2. Much has changed both at home and aboard since I gave an opening address at this event last year. On the external front, the US Federal Reserve’s planned scaling-down of its QE program has sparked turbulence in the emerging markets as investors continue to speculate on the Fed’s exact tapering timeline. On the domestic front, the absence of political solutions continues to subdue public and private spending, with unavoidable repercussions on overall growth outlook. Certainly, the interplay between these recent developments will have profound implications for the Thai economy to some extent going forward. For this reason, I would like to take this opportunity to share with you my views on these important developments and the potential challenges they pose to the Thai economy. 3. Let me start with the developments on the external front.
We have enough evidence by now that interest rate policies can have effects on indebtedness, risk-taking (through maturity transformation,  Page 7 sur 11 search for yield, or other channels) and the profitability of financial actors. It would therefore be short-sighted to ignore the side effects of monetary policy on financial stability. Second, are these effects large enough to make it possible to preserve financial stability without compromising price stability? At this point, the precise terms of a possible trade-off are still being debated. xii The issues are complex: as Nuno Coimbra here at PSE emphasises in a paper with Hélène Rey, a decrease in interest rates can encourage risk-taking when interest rates are low, but discourage it when interest rates are high.xiii We need more work on this important issue. Let me just suggest two thoughts on this open issue. a/ Incorporating Financial Stability Concerns with an Extended Monetary Toolkit First, the binary opposition between the traditional separation principle and “leaning against the wind’’ makes less sense when monetary policy has itself several instruments at its disposal. A median way, which we could call “coordinated” or “integrated” is possible. Indeed, that several instruments can allow to pursue several objectives is just what the old Tinbergen rule asserts. This is particularly relevant within monetary policy in our current context. Over the past years we have brought innovations to our operational framework, and we have considerably extended our toolkit with balance-sheet policies such as quantitative easing and (T)LTROs.

Ardian Fullani: A short overview on the latest Albanian banking system achievements Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the EBRD 2005 Annual Meeting and Business Forum, Belgrade, 22 May 2005. *  *  *  Ladies and Gentlemen, It is a great pleasure to participate in this prestigious event of the EBRD Annual Meeting and Business Forum. For this purpose, I would like to thank the organisers of this meeting who provided us such an opportunity to present our achievements and ambitions for the future. Allow me first to tackle an important issue, which within the context of this meeting, I believe, is of paramount importance. I mean by that the regional co-operation, an initiative that has been completely supported by the European Central Bank. We have already taken the first steps in this regard through establishing bilateral relationships in banking supervision with National Bank of Macedonia, Central Bank of Montenegro and Banking and Payment Authority of Kosovo. Meanwhile, we are in the process of negotiating with National Bank of Bosnia and Herzegovina, National Bank of Serbia etc... I estimate that regional co-operation is an important forerunner of the integration process of the region with the rest of Europe; therefore I will not stop working to encourage a regional co-operation of high standards among the financial systems of Balkan countries. I hope that you share the same opinion with me, because only in this way, our region will be more credible and efficient to have its European dream.
Some such elements, which were to be included in the European transposition of Basel III, have already been implemented through the Capital Requirements Regulation (CRR) quick fix, introduced in late June.2 The objectives of the Basel III reform, which consist in balancing simplicity, comparability and risk sensitivity, remain wholly in place. In this sense, after deciding to defer implementation by one year so as to increase banks’ operational capacity, all the Basel Committee on Banking Supervision (BCBS) members have committed to its full and consistent implementation on the new date agreed. Both the economy and the financial system will thus have sufficient time to absorb the main effects of this crisis and to gradually rebuild any buffers that may have been used. In addition, it should be noted that the BCBS is carefully assessing the impact of the reforms, including the lessons learned from the COVID-19 crisis. This analysis, based on rigorous empirical evidence, will serve to determine whether any additional regulatory aspects need addressing. Further, it will be important to respond to any new risks that may emerge. At present, it is clear that the profound technological changes taking place in the financial sector bring new risks, such as those of cyberattacks or reliance on external service providers. These technological developments may also eventually give rise to significant changes in the financial services value chain, for example, by increasing the importance of technology firms.

4  Van Beers, N., Bijlsma, M. and Zwart, G., “Cross-country insurance mechanisms in currency unions: an empirical assessment”, Bruegel Working Papers, 2014/04, 2014; International Monetary Fund, “Towards a fiscal union for the euro area: technical background notes”, September 2013, available at http://www.imf.org/external/pubs/ft/sdn/2013/sdn1309tn.pdf. BIS central bankers’ speeches  3  The design of a capital markets union – regulatory harmonisation and institutional efficiency The Commission will soon present a first proposal on what a capital markets union could look like in practice. This proposal will then be submitted for public consultation. The details are not yet known, but I would like to share with you some of my ideas about an effective capital markets union. For me, the term “capital markets union” means more than simply tinkering with existing regulation. It means addressing areas that are politically sensitive as well, such as disclosure requirements for companies, supervision of the financial infrastructure, insolvency law and EU-wide harmonisation of capital gains tax regulation. We have already achieved a great deal in the field of payment systems, having broken down barriers and significantly reduced costs for citizens since we introduced the Single Euro Payments Area (SEPA), although the existing legislation now needs to be implemented with full force. We want to do the same in the medium term for the cross-border use of credit cards: in a monetary union, there should be no “roaming” fees when it comes to making payments.
12  BIS central bankers’ speeches  Figure 8 MPR and expectations (percent)  6  6  5  5 MPR  EES  Financial asset prices in March 2016 Report (*)  4  FBS  4  3  Financial asset prices in June 2016 3 Report (*)  2  2 11  12  13  14  15  16  17  18  (*) Built using interest rates on swap contracts up to 10 years. Source: Central Bank of Chile. Figure 9 Two-year-ahead inflation's deviation from target (*)  Nominal MPR (percent)  (percentage points)  8  8  6  6  4  4  2  2 13  14 Peru  15  16 Colombia  1,2  1,2  1,0  1,0  0,8  0,8  0,6  0,6  0,4  0,4  0,2  0,2  0,0  0,0  -0,2  -0,2 15  Apr. Mexico  Jul. Oct.  16  Apr. Chile  (*) Difference between target inflation and inflation expected for 2017 (Peru), December 2017 (Mexico) and two years out (Chile and Colombia). Sources: Central banks of Chile and respective countries.

Therefore, developments pushing in either direction will prompt the necessary adjustments in monetary policy. BIS central bankers’ speeches  3  In the world economy, risks are pretty much the same we identified in the March Report. Still critical is the trajectory that the Fed will choose to follow to advance in its monetary policy normalization process. In particular, because market expectations are still misaligned with the most likely scenario defined by the Fed itself, especially at longer horizons. The situation in China poses a risk because of its possible impact on world growth, and because it might trigger new episodes of financial volatility. Latin America also poses significant risks to Chile, both because it is a major trading partner and investment destination, and because of its effects on the external financial conditions facing us. Its macroeconomic challenges are compounded by complex political situations. In Brazil, the markets took the changes in the political scene well, but there are important adjustments pending. Argentina returned to international financial markets, but it also faces significant challenges. There are several other factors that could cause new or intensify ongoing episodes of financial volatility, including the UK referendum to define whether it stays in or leaves the European Union, and a number of electoral processes under way around the world that could cause a shift towards protectionism. However, the consolidation of economic growth in Europe and the United States could contribute to boost world activity.
He emphasised that Norges Bank had to be independent and free of pressure from the political authorities and civil servants He stated at the time: 12 “As I have said before, I believe that the Bank can be managed just as well from Trondheim as from Kristiania, and I believe, better, because in the capital city it will be subject to pressure that it is impossible to know how long the board will be able to resist, since there are those in Kristiania, and perhaps also in the government, that may seek to change the Bank’s objectives. Norges Bank should be maintained as an independent institution under the control of the Storting.”  10  See Kydland and Prescott (1977). 11  See Figueiredo (2007). 12  See Borlaug (1999), pp 34-35. 6  BIS Review 111/2008  Geographical distance to markets and government has no significance today, but it may well be said that Bomhoff expressed thoughts that were articulated in more modern terms by Kydland and Prescott 70-80 years later. History has also taught us that fiscal policy has considerable bearing on the role monetary policy can play. If the government's debt is too high, the political authorities have an incentive to increase inflation in order to reduce the real value of the debt. It is then difficult to anchor inflation expectations. No monetary policy can secure the nominal anchor if government spending spins out of control. Monetary policy and fiscal policy must therefore have a common platform.

It also started to become clear for old Taraldsen; but immediately afterwards, he became very confused again; because he understood the entire scope of this; he had the entire town's bills of exchange in his head; and of course he had seen a lot of this kind of thing during his long life but all of those were trifles compared to what would happen now. His voice shook as he almost ceremoniously asked: "Will Carsten Løvdahl's papers be protested?" "Yes," replied Marcussen without looking up. Old Taraldsen trotted out of the offices; but on the steps he met the messenger from Aktiebanken: "Is it true? – Taraldsen!" "Now the entire town is going to collapse," answered the old man, throwing up his arms in despair. Kielland’s description of a financial crisis and its consequences was realistic. There was speculation then and there is speculation today, but in other kinds of financial instruments than at that time. We might find employees at Lehman Brothers today who have expressed themselves in the same way as old Taraldsen. It seems to be an inherent property in financial markets that financial bubbles and crises occur from time to time. A monetary policy that is oriented towards stabilising inflation and inflation expectations will reduce the impact. We have seen that when the interest rate is raised to restrain the rise in prices for goods and services, it also has the effect of stabilising house and property prices. In some areas, however, regulations and frameworks – cf.
In addition, the Central Bank adopted some non-conventional monetary policy measures, extending the overnight liquidity facility for banks at the MPR to 180 day tenors and cutting the issuance of 1- and 2-year Central Bank bonds. It has been also announced that the MPR will be held constant at this minimum level for a prolonged period of time, and that it will use with flexibility all the monetary policy tools at hand, which goes way beyond setting the MPR every month. Several lessons and challenges arise for the Chilean experience. First, the volatility of inflation has been very large. This could be explained by the severity of the shocks hitting the economy, but this is not so clear when comparing with other countries. Although it was argued that indexation could be resuming and inflation would stay high, the turnaround was impressive, and hence, it is not clear how persistence has evolved, and it is difficult to  9  The output gap is actual output minus potential output; hence, an increase refers to a rise above potential output. BIS Review 113/2009  7  explain with a simple linear adjustment. It could be argued that the change in inflation is due to the impact on inflation of the widening of the output gap. However, the output gap changed little when inflation was rising, and the current decline cannot be explained by the current narrowing of the output gap.

In all these occasions, once the asset prices reversed down, there was an abrupt relaxation of the monetary policy. 2 This implicit insurance, popularly known as the Greenspan put, certainly makes the creation of bubbles more likely. This strategy, which worked in some earlier episodes, failed miserably during the biggest collapse in decades. A monetary policy strategy that used to provide insurance to speculation in episodes of limited financial turbulence proved incapable of confronting a financial crisis of systemic proportions. This strategy to deal with bubbles is a prescription derived not from inflation targeting, but from a need to insure financial stability. In my view, financial stability must be addressed first with appropriate regulation of the financial system that limits the excesses we saw before the crisis. There may be situations in which it might be appropriate to deviate transitorily from an inflation targeting regime in order to ensure financial stability, but this must be an exception, which in normal times should not arise. I think a first lesson for the conduct of monetary policy is to avoid providing insurance to speculators, which creates enormous moral hazard problems. In emerging countries we have lived this, with much milder consequences, when we attempted to manage exchange rates disconnected from fundamentals for a prolonged period of time. Therefore, an examination of monetary policy and financial dislocations around the world suggests that the culprit of the current crisis was related more closely with the functioning of financial systems than with monetary policy.
William C Dudley: Unconventional monetary policies and central bank independence Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bank of Mexico international conference “Central bank independence – Progress and challenges”, Mexico City, 15 October 2013. *  *  *  It is a pleasure to be here today. Does the implementation of unconventional monetary policies pose a threat to central bank independence? My short answer, which I will elaborate on, is that while the threat is low, central bankers need to be cognizant of such risks, and clearly explain the motivations for their actions in order to mitigate such risks. The best way for central banks to maintain their independence is to use all their available monetary policy tools to best achieve their objectives. Because the use of our unconventional monetary policy tools has been in pursuit of our dual mandate objectives of maximum sustainable employment in the context of price stability, I do not see the use of these tools as creating significant new risks to our independence. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. To start, it is important to be clear on what we mean by unconventional monetary policies.

During the upturn, Norwegian firms fared well in spite of high costs, thanks to efficiency gains, high turnover volumes and price increases. Despite the high cost of Norwegian labour, there has been virtually full employment. Markets will be more demanding ahead. Despite the floating exchange rate, our cost level cannot be expected to fall to any great extent as economic conditions are weaker in other European countries than here. The industrial structure in Norway’s relatively small economy is different from that of other advanced economies. The emergence of new Asian market economies is beneficial for Norway owing to its sizeable commodity exports and freight transport. This is also reflected in Norway’s equity market. The value of Norwegian listed companies correlates closely with the value of companies in emerging market economies. Norway is vulnerable to a slowdown in growth in Asia. In such a scenario, commodity prices might fall and the terms of trade deteriorate. Norway’s high cost level could at the same time make it difficult for the business sector to shift to new markets. Petroleum revenue spending Government petroleum revenue spending influences Norway’s cost level and trade conditions in international markets. BIS Review 44/2010  5  According to the fiscal policy guidelines, petroleum revenues should be phased gradually into the economy, approximately in pace with the expected real return on the Government Pension Fund Global, which is estimated at 4 per cent per annum.