samchain/econo-pairs-v1 huggingface dataset:
As I have described, the Riksbank had detected at a relatively early stage that the Swedish banks’ lending in the Baltic region was not sustainable and that it would lead to significant risks. Admittedly, the severity of the risks did gradually become clearer as time went. We took a number of measures, although they were all of a ”soft” nature, such as discussions with the banks, with the authorities in the Baltic countries and with Finansinspektionen. However, it became clear that these measures did not have the intended effect. This is not a unique phenomenon; experiences from many countries show that it is very difficult for the authorities to require constraint from the banks as long as their profitability remains good and loan losses are low. A complicating factor was that the authorities in the Baltic countries did not see the impending risks, but expressly encouraged the Swedish banks to maintain a high level of lending. The Riksbank lacks sharp, legally-binding instruments for dealing with the banks in these situations. Prior to autumn 2008 there was also no Swedish framework for crisis management, and there are still significant shortcomings in the public management of individual banks in distress, which became clear in the case of Custodia. The Riksbank is currently analysing what further tools that might prove necessary. The Riksbank is also considering how our messages regarding risks to financial stability can be made clearer.

Given Estonia’s own currency board arrangement, it would not otherwise have been possible for them to provide support other than on a very small scale  BIS Review 11/2010  3  and the Swedish authorities would have been forced to take full responsibility for a liquidity injection. This agreement is a good example of the allocation of responsibility between countries with interwoven financial systems. The legal base for the Riksbank’s loan arrangements with Latvia and Estonia is described in the Sveriges Riksbank Act, which enables loans to be granted for monetary policy purposes and currency policy purposes. An acute crisis in these countries would probably have such repercussions in Sweden that it would be difficult for the Riksbank to conduct efficient monetary policy, and the exchange rate would probably be weakened to an extent which would be detrimental to Sweden’s economic development. The Riksbank has strengthened its own foreign currency reserve through extensive borrowing abroad to have sufficient resources to be able to act effectively in a crisis. The size of the foreign currency reserve prior to the borrowing was not adequate to meet the demand for support measures that arose. When access to foreign markets disappeared after the Lehman collapse in the autumn of 2008, demand for foreign currency from the Riksbank increased sharply. Why has the Riksbank acted in the way it has?
Today, the Fund can only invest in equities that are listed on a recognised stock exchange. Unlisted shares, so-called private equity, could be included in the investment universe. The Fund could invest in companies with plans for an imminent listing on the stock exchange. Successful private equity firms can provide an excess return, but I doubt that the Fund will become a big investor in private equity firms in the near future. Selecting good companies is demanding and management fees are high. Many are highly leveraged and the sector’s behaviour is procyclical. The second class is nominal fixed income securities. Over time these securities are expected to provide a lower return than equities. They are also less exposed to risk and are often easier to sell at short notice. The third – and new – class is real assets excluding equities. Real assets will provide a cash flow that is assumed to track inflation. Such investments thus deliver a long-term and fairly secure return in line with the Fund’s objective. Real estate purchases, an example of assets in this class, will commence in the near future. The dividing line between real estate and infrastructure is not very clear, and looking further ahead, it may be natural to invest in assets that can be classified as infrastructure. In addition, the Fund’s investments in inflation-linked bonds could be included in this class. The two latter classes combined will make up 40 per cent of the Fund. Many real assets are fairly illiquid.

In ten years’ time the Fund is projected to be twice as high as annual GDP 6 . Total public expenditure accounts for somewhat less than half of GDP. The Fund may then become about four times as large as total government expenditure. With Fund withdrawals in line with the fiscal rule of 4 per cent, the return will be able to finance 15–20 per cent of government expenditure in ten years. A large share of government spending will thereby be financed without the functioning of the economy being exposed to tax disturbances. Chart: Time line Construction of the Fund The first capital transfers to the Fund were managed in the same way as Norges Bank’s foreign exchange reserves, which are invested in government bonds issued by our main trading partners. The purpose of the Fund, however, is entirely different from that of foreign exchange reserves and the operational management of the Fund must thus also be different. The main difference is the investment horizon. The Fund is meant to span a long period, preferably many decades. Through 1996, about NOK 40 billion was transferred to the Fund and it became clear that the Fund would be sizeable. It would be accurate to say that there were divergent viewpoints within Norges Bank when it was discussed whether the Bank should take on the assignment of managing the Fund. Three challenges were considered in particular. First: Norges Bank could risk impairing its reputation by accepting this assignment.
•  Policymakers will be more cautious in the short-term as they work to ensure that the market volatility and ensuing capital outflows in late 2015 and early 2016 do not have a lasting impact on market confidence. But I believe the Chinese authorities remain committed to liberalising the capital account and promoting the international use of its currency in the medium term. •  The latest 13th Five-Year Plan, announced in March this year, has made clear the aim to reduce foreign exchange restrictions for both corporates and households and encourage the use of the RMB in cross-border payments and international reserves. Progress in RMB internationalisation will ultimately depend on getting right the sequencing of domestic economic and financial reforms. A strong and stable domestic financial system is a prerequisite for further capital account liberalisation and currency internationalisation. China-Singapore financial connectivity: the journey so far Singapore’s financial linkages with China have grown strongly over the years, particularly since the appointment of ICBC as Singapore’s RMB clearing bank in February 2013. •  The offshore RMB market in Singapore has expanded, with a wide offering of RMB products, including deposits, bonds, derivatives, mutual funds, and trade financing. •  China and Singapore have set up cross-border RMB arrangements for Suzhou, Tianjin and Chongqing, enabling corporates in these areas to borrow from Singaporebased financial institutions as well as repatriate proceeds from bonds issued in Singapore. 2  BIS central bankers’ speeches  But China comes to Singapore not only to do business in Singapore.

This obviously poses challenges for competing high value-added producers in Asia. •  But China is also offshoring lower value-added, labour-intensive production. This creates opportunities for the less-developed regional economies to catalyse their own industrialisation. Second, China’s import composition is shifting in favour of consumer goods and services. •  The more developed economies in the region are well-positioned to tap into China’s demand for financial services, healthcare, education, and tourism. Third, China is emerging as a significant source of capital for the region. •  In the middle of last year, while the world’s attention was focused on the volatility in China’s financial markets, an important development took place that went largely unnoticed. •  China became, for the first time, a net exporter of direct investment. •  Chinese FDI in ASEAN has been increasing by an average of 25% every year, in the five years to 2014. Vietnam and Cambodia are examples of countries that have become more plugged into the global markets as a result of becoming part of this new regional value chain. BIS central bankers’ speeches  1  •  Vietnam has emerged as a key assembly hub for electronic and electrical products. •  Cambodia has become a manufacturing base for Chinese garment and footwear companies, with three-quarters of its garment and footwear exports in 2014 headed for Europe and the United States.
The NPC has prepared a well-focused action plan after detailed deliberations with all stakeholders and is the apex body for payment system development policies and operations. I understand that India and some other countries too have NPCs. It  BIS Review 79/2007  5  may also be important to set up a secretariat in one of the countries to lead the regional payment initiative. The SPC, as well as the task forces, should establish close links with international organizations such as the WB, IMF, BIS and also with other regional payment groups and developed country central banks for guidance and technical assistance. As I mentioned before, the ACU is the only regional clearing mechanism that exists today among SAARC member countries. It needs a clear reform agenda to mitigate risks involved in that system and ensure safe payment flows among the member countries. Already, a technical committee has been appointed under the Chairmanship of Sri Lanka to look into some elements of modernizing the ACU. The whole of yesterday we debated on some of the short-term measures that need to be introduced to the ACU clearing arrangements in order to avoid any disruptions to cross border flows. That committee too could report its recommendations to the SPC. There may be many other modifications, modernizations and reforms that need to be introduced at national and regional levels which will shape the annual work program of the SAARC regional payment initiative.

Current account imbalances are no more than the arithmetic difference between gross capital inflows and outflows. As these gross flows increase as a result of financial liberalisation, it is natural to expect the difference between them to become more volatile (Obstfeld (2010)). As Chart 4 shows, the growth of gross capital flows in the  2  BIS Review 174/2010  years preceding the crisis was dramatic. At the start of the 1980s, gross capital flows were around 5% of world GDP. By 2007, they had risen to 7 times that. This growth in capital flows and imbalances has been mirrored in the path of the external balance sheets of the major economies. These, too, have adjusted rapidly. In 1985, the US was a net external creditor. By 2009, it had become a net external debtor to the tune of around 20% of GDP. In 1999, China was a net external debtor. By 2008, it had become a net external creditor of around one third of GDP. An interesting perspective on the drivers of imbalances is provided by looking at the gross saving and investment behaviour of surplus and deficit countries over this period. Chart 5 looks at these patterns. It suggests a couple of striking patterns. First, the correlation between saving and investment rates appears to have weakened significantly over the past two decades, for both surplus and deficit countries. This is consistent with increasing capital mobility. Historically, there has been a high correlation between national saving and investment rates – the Feldstein-Horioka (1980) puzzle.
During the second phase, the recovery phase, GDP growth increases and public debt then also decreases, as higher growth leads to lower public expenditure on social welfare and to higher tax revenue. In Sweden, for example, the higher growth after 1996 contributed to reducing the public debt ratio by as much as 28 percentage points during the period 1996–2008. 4 However, there are major differences in the conditions for the Swedish deleveraging and the consolidation of public finances in the euro area that has now begun. Swedish public debt amounted to only 46 per cent of GDP during the initial phase of the debt consolidation. The average for Greece, Ireland, Italy, Portugal and Spain, on the other hand, is still a good 112 per cent. 5 The Swedish recovery phase was also driven to a large extent by strong growth in exports, which was in turn partly due to the krona being allowed to float and quickly depreciating in this period. As a large percentage of trade in the euro area is internal, and they have a single currency and therefore cannot depreciate in relation to another currency in the euro area, there is a risk that the recovery in the debt-ridden euro countries will be more prolonged. The recovery in Sweden was also facilitated by international growth that was stronger than it is now.

Essentially, it would not result in the marginalisation of anyone target group, in particular women. Such programmes would therefore best serve its purpose as part of the core curriculum. Indeed, the national education system can play a pivotal role in financial literacy within a country. The responsibility of promoting economic and financial literacy needs to be a collaborative effort amongst the authorities, the financial service providers and the community to connect to the different target groups including all social groups. These would include the lower income groups, workers and businesses. Important are programmes directed to families where women have an important role and to engage those we have not been able to participate fully to benefit from the favourable economic environment prevailing in the region. BIS Review 64/2004  3  Among the successful financial education programmes are those with specific objectives that are tailored to meet particular needs. This includes programmes to promote savings for specific objectives; for education; or for retirement. The education programmes can also be linked to other objectives such as good health, house ownership and so on. Financial products can be tailored for such purposes to not only to promote interest but to also meet these objectives. All distribution channels need to be relied on to maximise the effectiveness of financial education programmes. Formal training programmes can be reinforced by web based content via the Internet. The World Wide Web offers dramatic economies of scale in terms of distribution of content at low cost.
The industrial base has shifted from reliance on cheap labour towards an industrial structure, which relies more on high quality workforce. As a result, labour productivity will increase which will lead to an increase in per capita income, something that we should not discourage. However, some export industries have little backward linkages with other sectors in the country, and rely on high import contents. As a result, the expansion in export has not contributed significantly to the overall economic recovery. Import was affected by the increase in oil prices, causing the trade surplus to decline to $ billion. In addition, the volatility in the world financial system caused the exchange rate of Thailand along with that of other regional currencies to be under periodic pressure, depreciating vis-à-vis the major currencies, which, in turn, affected investors’ sentiment from time to time. 1  This is an English language translation from the original version in Thai . For reference please refer to the Thai version. BIS Review 6/2001  1  However, Thailand’s international financial position has strengthened significantly, as external debt declined by $ billion during the first nine months, while international reserves stood at $ billion, providing more than two-fold coverage for short-term external debt. In the past year, commercial banks have continued to remain cautious in new lending. Commercial bank credits expanded by 1.8% if loans transferred to AMCs and debt write-offs were added back.

The Bank will continue to support this need as it is deemed possible, under the Inflation Targeting framework. As for the exchange rate, the stability of the baht has improved, due to measures that have been implemented. The Bank of Thailand will continue to closely monitor international capital flows and exchange rate movements in order to ensure timely policy responses to different circumstances. In the area of international reserves, the Bank of Thailand has set a plan to repay loans. However, given our relatively modest reserves, it might be appropriate to consider using new interest incomes that will accrue from these reserves to repay loans. This may be deemed a better alternative than to keep on accumulating reserves, whilst taking on new borrowings to repay existing debts. What I have said so far should help make it clear that, in spite of increasing global risks in the next year, we remain in a position to be able to steer our economy towards another year of satisfactory rate of economic expansion. As for the economic problems that remain to be solved, this should not be a cause for much concern, as we have already prepared the appropriate policy framework and strategy to address them. It is only for the newly formed government to give importance to these policy frameworks, as well as to pay attention to the following three areas that are critical to the long-term survival of the Thai economy: 1.
Dimitar Bogov: “The savings deposits soar also during crisis” – interview in Radio Free Europe Interview with Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, in Radio Free Europe, conducted by Mr Aleksandar Pesev on 29 September 2013. *  *  *  Mr. Bogov, is the ending of the crisis in the Euro area going to have a direct impact on the boost of the economic growth in the Republic of Macedonia? Of course, the Euro area and the European Union are the largest trading partners of the Republic of Macedonia, the largest portion of our export is placed there, and as a result, the demand in the Euro area has large influence on the production in Macedonia. We were encouraged by the data for the second quarter of the year on the Gross Domestic Product, where after six quarters of negative results, positive growth rate has finally been registered. We expect that this will endure also in the following period, we are aware that this growth in the Euro area and the European Union is still very fragile, meaning, there are still risks, but we are optimistic, the indicators that emerge in the Euro area economy every day are mainly positive, so it is expected that it will reflect adequately on the Macedonian economy growth, as well. Can the recent trade war we had with the neighboring Kosovo somehow spoil the perceptions for this positive growth?

Zeti Akhtar Aziz: Global challenges and local opportunities Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the IBBM-APABI Conference: “Global challenges and local opportunities”, Kuala Lumpur, 8 May 2012. *  *  *  It is my honour to officiate this Asian-Pacific Association of Banking Institutes (APABI) Conference hosted here in Kuala Lumpur by the Institute of Bankers Malaysia (IBBM). This Association has an important role in bringing together financial industry training institutes that share a common goal to equip financial institutions with the capacity to deal with the transformational developments that are shaping the financial sector – by supporting the continued renewal of its most valuable asset, human capital. The global financial industry is experiencing a period of profound change. In the advanced economies, decades of exceptional growth are giving way to contracting financial and economic conditions, greater regulation and significant government intervention, while in the emerging world however, financial and economic growth have continued. In addition, the intensification of policies and reforms to address structural issues in several of the major advanced economies will also have a significant bearing on the future growth prospects for many financial institutions and businesses. This is reinforced by the implementation of new prudential standards, both at the national and global levels, which are also set to substantially redefine the expected norms and the boundaries of modern finance.
In addition, financial fragmentation, which exacerbates heterogeneity across countries and which may exist in part for fundamentally justified reasons, poses an obstacle to the smooth transmission of the ECB’ monetary policy stance across the euro area. Like the other unconventional measures implemented by the Eurosystem, the OMT programme contributes to overcome this obstacle. The OMT has very significantly reduced spreads across euro area countries and we observe a partial reversal of Target 2 balances. There are however evidence that a certain degree of financial fragmentation persists. In particular, our very accommodative monetary policy stance is not fully transmitted to the financial conditions of small and medium size enterprises at the periphery. In this sense, the current degree of financial fragmentation within the euro area remains an obstacle to the smooth transmission of our monetary policy. Hence we are currently considering the introduction of additional unconventional monetary policy instruments that would further reduce financial fragmentation. This leads me to a couple of remarks on the institutional design of the European Monetary Union. Inspired by the hard lessons of history, the founders of EMU were especially concerned that governments might weaken the union through either debt monetisation or via a sovereign default that would cause financial instability in the area. These concerns were more than legitimate and led to the now famous Maastricht criteria. But one channel was not envisioned at the time: the possibility that a major financial shock could jeopardise fiscal sustainability, through large-scale bail-out programmes.

Christian Noyer: Current policy debate challenges – a euro area perspective Welcome address by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the 4th Bank of FranceDeutsche Bundesbank Macroeconomics and Finance Conference, Paris, 24 May 2013. *  *  *  Ladies and Gentlemen, dear colleagues, It is a great pleasure for me to speak in front of such a distinguished audience. As you might know, this is the fourth time that the Banque de France and the Deutsche Bundesbank have jointly organised a conference of this type. It is held every other year, alternately in Germany and in France. The fact that these two institutions sponsor an event of this nature sends a clear signal to the community of researchers: it illustrates the importance of research for the conduct of monetary policy. This is especially relevant at the current juncture as our understanding of the interactions between financial markets and the real economy remains incomplete. The work of outstanding quality presented during this conference could help influence the design and the conduct of monetary policy. The programme of this conference is very rich. It covers topical subjects that are of the utmost importance from the point of view of current policy debate. Let me take as an example the topic covered this morning: unconventional monetary policy, which have been my bread and butter as a member of the ECB Governing Council for the already six years.