samchain/econo-pairs-v1 huggingface dataset:
In May 1986, the krone exchange rate was devalued by around 10 percent. The repeated devaluations in the preceding years had undermined credibility. The gains were short-lived. Price and wage inflation soared. It was only after several years of high unemployment that the relative wage level came down. The current account deficit rapidly turned into a surplus. The Norwegian economy grew out of recession, supported by external growth impulses and the development of the Norwegian oil sector. This time, we cannot rely on those sources of impetus. The Norwegian economy will need more legs to stand on in the future. The time to restructure has come. A necessary adjustment of the cost level can occur via two channels, either through lower wage growth relative to other countries or a weaker krone exchange rate. In the past few years, the krone exchange rate has depreciated more than in the 1980s. And this time, the krone depreciation has fed through to relative labour costs in a common currency. In a short time, the relatively high level of cost inflation over the past decade in Norway has been wiped out. The main responsibility for developments in relative wages lies with the social partners. A durable improvement in competitiveness is dependent on Norwegian wage earners’ willingness to accept future wage settlements without a substantial increase in purchasing  6  BIS central bankers’ speeches  power. This will make it easier for non-oil exposed industries to grow, which will create new and viable jobs.

Øystein Olsen: Economic perspectives Annual address by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), to the Supervisory Council of Norges Bank and invited guests, Oslo, 18 February 2016. *  *  *  Accompanying charts can also be found on the Norges Bank’s website. Introduction In late autumn 1857, a steamship left Christiania bound for Hamburg carrying a cargo of silver from Norges Bank to be deposited in one of Hamburg’s finance houses. In only a few months, 20 tonnes of silver worth 800 000 speciedaler were shipped south as collateral for the redemption into silver of bills and notes issued by Norges Bank. There was to be no doubt that the speciedaler was worth its face value in silver. Europe had just been hit by a financial crisis. Norges Bank intervened to maintain confidence in the country’s currency. The Bank remained faithful to the social mission it had been assigned 40 years earlier. This year is Norges Bank’s 200th anniversary. Under the Constitution, control of the monetary system was given to the Storting (Norwegian parliament). The establishment of Norges Bank in 1816 gave the authorities a tool to restore confidence in the country’s means of payment. Norges Bank had a monopoly on the issuance of currency, but the amount of currency in circulation was limited by the stock of silver. The organisation of Norway’s monetary system was inspired by the note-issuing banks that had emerged in Europe since the end of the 1600s.
For example, De Paoli and Paustian (2017) study a non-cooperative game between monetary and macroprudential authorities and find coordination problems to be significant following cost-push shocks in cases where objectives do not overlap. But they also find that a leadership structure in which macroprudential policy moves first – or is varied at a lower frequency than monetary policy given that financial vulnerabilities build slowly – mitigates these coordination problems. Future Research and Policy  Financial regulation has undergone a fundamental rethink and reform since the global financial crisis. By most accounts and on most evidence, that has resulted in a financial system which is more resilient than in the past, better equipped to head-off market frictions and failures of various kinds, better attuned to various adverse incentive effects, and better able to safeguard risks which imperil the financial system as a whole. It 35  All speeches are available online at www.bankofengland.co.uk/speeches  35  is a regime of “constrained discretion”, comprising a portfolio of regulatory measures calibrated, albeit roughly, to equate societal costs and benefits. That’s the easy bit. The hard bit is what happens next. Not least given the scale of regulatory change over the past decade, this new regulatory framework will plainly need to adapt in the period ahead in the light of the new evidence, experience and incentives associated with operating it. This paper has discussed some of those issues.

The reduction in the Eurosystem's monetary asset holdings is expected to be pursued in a predictable and gradual manner, with the first principles being announced in December. This will undoubtedly change the financing environment which borrowers have grown accustomed to. The most immediate impact will be on money markets and government bond yields, which later propagate to the cost of bank and corporate debt. Indeed, euro area sovereign yields have already risen markedly since last year and could increase further when balance sheet normalisation starts. Turning now to Malta, while the transmission of the latest monetary impulses to bank lending and deposit rates appears rather slow, government bond yieldsin Malta have already begun to increase. Such increases and tighter financing conditions abroad will eventually be reflected in a higher cost of funding for domestic banks, and eventually, households and corporates. It is essential to be reminded that on monetary, financial and economic terms Malta is very much integrated with the rest of Europe and that the decisions taken in Frankfurt ripple across the whole euro area, Malta included. 2/5  BIS - Central bankers' speeches  The transmission of tighter monetary conditions to the interest rates that banks offer to their customers is necessary for inflation to return to the policy target of 2% in a timely manner. But it is not sufficient. Other policy actors also need to do their part. In particular, fiscal support has to be temporary and targeted, so that it avoids supporting demand for longer than is necessary.
Notes: A dataset of around 600 paragraphs from each of the following sources was used. Banks – a mixture of terms and conditions and various reports from Barclays, RBS, HSBC and Lloyds. BoE – a mixture of Bank of England speeches, reports and news content. AH – a selection of my recent speeches. Political speeches – the Leaders’ speeches from Conservative, Labour and Liberal Democrat party conferences in 2012 and 2014. One Tabloid and one Broadsheet newspaper were also included. These measures consider not only sentence length but also the number of polysyllables (words of three syllables or more) and the average number of syllables per word. In general a lower number signifies lower complexity, apart from the Flesch-Kincaid reading grade level and Coleman correct completion measures where a higher number implies lower complexity. For further details please see DuBay (2004). 18  BIS central bankers’ speeches  Chart 4 Average sentence and word length across publications Sentence length / words  26  Banks  24 22  BoE  Broadsheet  20 Tabloid 18 AH 16 14  Political speeches 4.2  4.4  4.6  4.8 Word length / letters  5  5.2  5.4  Source: Bank calculations. Notes: A dataset of around 600 paragraphs from each of the following sources was used. Banks – a mixture of terms and conditions and various reports from Barclays, RBS, HSBC and Lloyds. BoE – a mixture of Bank of England speeches, reports and news content. AH – a selection of my recent speeches.

19  For example, Knack and Keefer (1997), La Porta et al (1997) and Boulila et al (2006). 20  Guiso et al (2008) and Zingales (2015). 4  information  please  see  http://www.financial-  BIS central bankers’ speeches  and protracted erosion of social capital. It puts finance on notice for losing its social licence. And, unaddressed, that jeopardises future wealth and well-being. The trust problem If this trust in finance problem is to be tackled, it needs first to be understood. Why trust is important, and what determines it, are issues that have occupied the world’s greatest minds for centuries, perhaps millennia. The philosopher Baroness O’Neill from Cambridge University often draws an important distinction between “trust” and “trustworthiness”. 21 Although this may sound subtle, it carries important implications. Seeking to maximise trust may be an unrealistic and, indeed, undesirable objective for society. In a world of risks and uncertainties, including about individuals’ trustworthiness, people need sometimes to mistrust if they are to avoid bad choices. If the principle of caveat emptor – buyer beware – is to work effectively, not just in financial services but more broadly, it requires a constructively sceptical public. Like cholesterol, there is such a thing as too much trust, as well as too little. A plausible objective of public policy, then, is not to maximise trust among consumers of financial services, but to maximise trustworthiness among its producers.
For a couple of decades we had failed to keep price and wage increases in check. However, a fixed exchange rate relationship is not, of course, compatible with an inflation rate that systematically exceeds that in the country to which the exchange rate is tied – sooner or later the exchange rate relationship must collapse. The rapid increases in wages and prices also repeatedly came into collision with the fixed exchange rate and the result was that the Swedish currency was devaluated on several occasions from the mid-1970s onwards. The economy was thus characterised by "boom-bust-cycles” with alternate strong acceleration and sudden braking. However, the fact that the fixed exchange rate did not work as a nominal anchor in Sweden does not mean that it could not function well in other countries; it has unquestionably done so in many cases. So let me therefore move on and mention some general advantages and disadvantages of the two methods. 3  2  See Easterly, W. and S. Fischer, (2001), “Inflation and the Poor”, Journal of Money, Credit, and Banking 33, 2 (part 1), 160178. For a more detailed account of the advantages of low, stable inflation, see for instance King, M., (2002), ”The Inflation Target Ten Years On”, Speech at the London School of Economics, November 19. 3  A more detailed discussion of the advantages and disadvantages of these and other monetary policy regimes can be found in, for instance, Mishkin, F.S., (1999), ”International Experiences with Different Monetary Policy Regimes”, Journal of Monetary Economics 43, 579-605.

Are there any other objectives than price stability and financial stability that may be suitable for a modern central bank? Many countries also have objectives for developments in the real economy written into the regulatory framework governing the central bank’s activities. For instance, in the US legislation it says that the Federal Reserve shall promote ”maximum employment”, while the British legislation says that the Bank of England shall support ”the economic policy of Her Majesty’s Government, including its objectives for growth and employment”. In Sweden there is no specific objective for real economic developments written into the law, but it is nevertheless considered to be understood that the  4  See, for instance, Oosterloo, S. and J. de Haan, (2003), ”A Survey of Institutional Frameworks for Financial Stability”, Occasional Studies Vol.I/No. 4, De Nederlandsche Bank, for an overview of how the task of promoting financial stability is dealt with in different central banks’ regulations and in practice. 4  BIS Review 52/2006  Riksbank – as an authority under the Riksdag, the Swedish parliament – shall support the objectives of economic policy with the aim of attaining sustainable growth and a high level of employment. Exactly how the objectives are worded thus varies considerably between countries, often depending on the fact that changes and modifications have gradually been made to regulations originally written much earlier. I dare to claim nevertheless that the essence of modern central banks’ wording of their objectives is the same.
To increase the chance that project developers can attract private funding, they need to enhance their communication with investors by understanding their risk concerns and speaking in their risk language. This is how we can make projects more bankable. On this front, IFFO has developed a reference term sheet for infrastructure investments in Emerging Markets together with key institutional investors last March. To further facilitate the use of this common language, IFFO has also rolled out a number of capacity building initiatives the past year for all partners. Fintech Apart from infrastructure financing, fintech counts as another most frequently discussed topics in industry events and international conferences in the past year. But like infrastructure financing, we are not just talking about it, we are also doing something about it. HKMA announced September this year a series of measures to facilitate the financial services industry to grasp the opportunities in fintech, covering financial infrastructure, regulatory sandbox, research and talent development, etc. I will leave this to my colleague, Shu-pui, to share more with you in the panel on fintech later this afternoon. But I wish to highlight one point, and that is, fintech is borderless. It requires collaboration among financial centres like Hong Kong and London. A fintech solution that works only in a particular jurisdiction is of little value to clients and financial institutions that are often located half-way across the globe.

2  BIS central bankers’ speeches
The situation prior to the meetings in both July and September was marked by a low rate of inflation, for example CPIF inflation has been below two per cent since 2011, and a level of resource utilisation in the economy that was deemed to be lower than normal. The forecasts in July and September were that inflation was expected to rise towards two per cent in 2015 and that resource utilisation was expected to increase as growth picked up. The assessment was that the expansionary monetary policy would contribute to this. I personally voted to keep the repo rate at the historically-low level of one per cent at both the July and September meetings. Figure 1 Repo rate remains low Repo rate, per cent 5  5 July September  4  4  3  3  2  2  1  1  0  0 07  09  11  13  15  Note. Outcome data are daily rates and forecasts are quarterly averages. Source: The Riksbank  BIS central bankers’ speeches  1  What were the trade-offs behind my decisions? On the one hand an even lower repo-rate path could, according to the Riksbank’s calculations, lead to inflation reaching the target somewhat sooner and to resource utilisation improving somewhat faster, while on the other hand there were other circumstances to take into account that made the decisions more complicated. For example, there is always uncertainty about exactly how monetary policy will affect the economy during the forecast period.

Against this backdrop, the ACPR redesigned its questionnaire on business practices and consumer protection. It can now understand current market practices, as well as trends in products, services and practices. I will now talk about ACPR inspections. They are firstly intended to ensure compliance with the applicable rules and to make sure that errors are corrected before they have consequences for customers. In the worst cases, such errors lead to sanctions. This approach is necessary to punish violations and useful to increase awareness in the profession. ACPR inspections are not however limited to dealing with bad practices on a case-by-case basis. They also identify more general problems that call for changes in market practices or even in regulations. Several examples will be discussed this morning to illustrate the lessons learned from such inspections. For instance, ACPR staff examined distribution channels in which there are a number of intermediaries between the customer and the producer (bank or more often insurer). The questions that we are asking today are simple. But they are important for the sector as a whole. Do all intermediaries provide value added to the customer? How can we guarantee the customer a reliable and efficient chain, irrespective of its organisation? To enhance practices, the ACPR also has a flexible legal tool, the recommendation. I believe that this instrument is useful for prevention. Recommendations are intended to change or guide the behaviour of professionals. It helps them to identify and actually integrate what is expected of them in terms of consumer protection.
Measured in conventional terms, the marked decline in house prices seen over the past two years has led to a pronounced deterioration in households’ balance sheets: house prices have declined by around 15% but the value of outstanding mortgage debt is largely unaffected. The lower level of house prices will eventually be reflected in a lower level of mortgage debt than otherwise as first-time buyers (and those trading up the housing ladder) enjoy the benefits of more affordable housing. But this effect will not fully materialise until the entire housing stock is turned over at the new lower price level, which may take a considerable time. In the meantime, not taking account of this missing liability exaggerates the deterioration in households’ underlying position. Moreover, by considering only the fall in prices of housing and financial assets, we could be exaggerating the extent to which people are actually less wealthy. For some households, these are their only form of assets. This is most obviously the case for the retired. But the largest asset owned by most people is not measured at all. It is the value of what they expect to earn in the future or, what economists refer to as “human capital”. Most estimates suggest the value of future earnings is significantly greater than the sum of net financial wealth and gross housing assets which typically forms the basis for balance sheet measures.

My own judgment was that the uncertainty surrounding both the economic outlook and the effects of asset purchases made it difficult to have a strong view as to the relative merits of increasing the asset purchase programme to £ billion or £ billion. Indeed, the inflation projection that was published in the August Inflation Report suggested that either policy was consistent with hitting the inflation target, depending on the future path of interest rates. For me, the decision came down to an assessment of the risks of doing too much versus the risks of doing too little. With regard to the potential risks of doing too little, my main concern was that nominal demand would not recover to a level consistent with hitting the inflation target. My main worry with doing too much stemmed from the uncertainty associated with using asset purchases as a policy instrument. We do not have much experience of conducting monetary policy via asset purchases and there is a risk that their effects will be transmitted through the economy in ways we do not predict and do not want. For example, the substantial injections of liquidity might result in unwarranted increases in some asset prices that could prove costly to rectify. I placed considerable weight on both risks and thought that they were best balanced by an expansion of the programme to £ billion. 6  BIS Review 114/2009  I am hopeful that we have started along the road to recovery.
It is also one reason why aligning with international standards - when they are appropriate to the UK makes Britain an attractive place for international firms to do business  We will tailor our rules to the UK Alignment with international standards leaves considerable scope for national authorities to make decisions about specific rules, and about risks not covered by those standards. So I’m going to move on now to explain another important way we can harness the UK’s strengths as a global financial centre. That’s by tailoring rules to UK circumstances. [15] This is something we work hard at. We are working alongside the Government to implement changes announced in December as part of the Edinburgh Reforms. [16] Meanwhile, we have used UK data to propose adjustments to some calibrations in the package of banking rules known as Basel 3.1 which we think would be overly conservative if applied here. That includes rules about unrated corporate borrowers, which form a very important sector of the UK economy. [17] We’re consulting right now on those Basel 3.1 proposals. So this is a good time for me to stress something important. That is that we are very open to evidence-based arguments about how we might change the tailoring we’ve suggested, or tailor other rules. In stressing this, I have in mind particularly some areas where the evidence is sparse, such as for infrastructure lending, or incomplete, such as for capital requirements for exposures to SMEs.

In general, we will always listen to arguments when people disagree with us, and we will always take into account new evidence. This includes tailoring rules that are already in place in response to our own evaluations or to evidence from industry, broader civil society and other stakeholders. Page 6  This is what we did when we implemented an earlier Basel regulatory package known as CRR2. In that case, we implemented a new standard for banks’ long term funding after tailoring it to be more risk sensitive for activities that are important for the UK. That was a change we made in response to evidence-based arguments we received during the consultation. We are now taking the same approach to work on Solvency II rules for insurers. Debates between us and the Government have got a lot of public attention. But there are many areas where we fully agree about the benefits from simplifying the regime to better reflect the needs of the UK. And with the high-level policy decisions now clear, we are focused on implementation and on delivering detailed proposals for consultation. My colleague Sam Woods recently set out what we are committed to doing. [18] All of this will be on top of what we are already doing to remove unnecessary rules we inherited from our time in the EU. We have so far deleted 13 guidelines issued by EU regulators, five superseded Supervisory Statements and 26 technical standards onshored from the EU. This work will continue.