samchain/econo-pairs-v1 huggingface dataset:
This accordingly holds even if activity does move into a more subdued phase. •  The overall picture of inflation is also complicated by the krona having been weak recently instead of appreciating as we assumed in October. Moreover, the price of oil remains high. This may mean that the earlier tendency for import prices to counter what has otherwise been gradually growing domestic inflationary pressure may not apply to the same extent. In this respect, then, the outlook is more in line with the risk spectrum we outlined in the October Report than with our main scenario there. The composite assessment of the various risks associated with wage formation, the exchange rate, the price of oil and the possibility of weaker activity is naturally a matter of judgement. In my opinion, however, inflation prospects in general are now somewhat more troublesome than before. There has clearly been a gradual increase in resource utilisation. The overall assessment of activity in the coming years implies that growth will continue to be above the level of 2.0 to 2.5% that the Riksbank considers to be sustainable in the longer run. That applies even if there is a slight slowdown in international activity. There are also the high price of oil, the weakening of the exchange rate and signs of some disturbing tendencies in wage formation. To some extent, therefore, the situation for monetary policy has changed. That is also why I began by saying that the time will soon come to raise the repo rate.

The Ministry of Finance has been tasked with setting the level of the countercyclical capital buffer. Norges Bank has been tasked with preparing a basis for the buffer decision and providing advice to the Ministry of Finance regarding the level of the buffer. In preparing the basis for the buffer decision, Norges Bank will exchange information and assessments with Finanstilsynet. Since March of this year, Norges Bank has published an assessment of the need for a countercyclical capital buffer in the Monetary Policy Report in addition to its monetary policy assessment. Norges Bank will give its first advice on the level of the buffer to the Ministry of Finance in connection with the next Monetary Policy Report, to be published at the beginning of December. Text slide: Criteria for an appropriate countercyclical capital buffer In line with the purpose of the countercyclical capital buffer, Norges Bank has formulated three criteria for setting an appropriate buffer rate. The buffer should ensure that the resilience of banks is strengthened during an upturn. The buffer requirement should be viewed in the light of other requirements applying to banks, particularly when new requirements are introduced. One of the most important purposes of the capital buffer is to alleviate stress in the financial system. History shows that the foundation for banking crises is laid during upturns. When financial imbalances build up, this increases the likelihood of substantial losses in the entire banking system.
V.  Conclusion  This morning, I have shared some of my views on the need for risk management and supervision to evolve together and to reinforce each other. All of us recognise that both areas must keep pace with changes in accounting practices, and I think you would agree that the work we have to undertake in all three areas - risk management, supervision, and accounting - is quite demanding. To develop new ways of thinking about risk and about the techniques for measuring it, we will require hard research and significant resources. We must gather and pour over large amounts of data to sharpen our understanding of various risks and their relationships to each other. We must dedicate our talent, staff, and indeed funds to undertake this work. I would argue that is equally demanding to develop a supervisory structure that capitalises on and further encourages those advances, especially when we are trying to implement a shared framework across many jurisdictions. But the benefits are many. On a microeconomic level, the virtuous circle I have described should help individual firms to improve the quality of their controls in the short run and strengthen their competitiveness in the long run. Yet supervisors are especially motivated by the benefits we expect at the macro level. We believe that, when all financial institutions have the right incentives to pursue profits responsibly, the financial services sector becomes better managed, more resilient, and better able to serve as a source for sustainable growth for the economy.

Mr King looks at interest rates and the new Monetary Policy Committee in the United Kingdom Lecture delivered by the Deputy Governor of the Bank of England, Mervyn King, at Queen’s University in Belfast on 17 May 1999. Present at the creation Two years ago, when it announced that the Bank of England would be granted independence, the n(N)ew Labour Government surprised everyone, not least the Bank of England. Since then, decisions on interest rates have been taken not by the Chancellor but by the Monetary Policy Committee. Much has followed from that single bold decision to take interest rates out of day-today politics. The transfer of the operational responsibility for setting interest rates to a new Monetary Policy Committee was a major policy, indeed constitutional, innovation. The excitement of being involved in the construction of a new monetary institution for the United Kingdom has both motivated and rewarded the extraordinary efforts of the Bank staff who made the new process work, and I want publicly to thank them for that. In the words of Dean Acheson, to be “present at the creation” is an experience which few involved in policy are ever privileged to share. Inevitably there have been changes to the Bank. It has had to redirect its resources to focus on achieving and maintaining monetary stability in this country. Responsibility for banking supervision has been transferred from the Bank to the new Financial Services Authority. The job of managing public sector debt has passed to a new Debt Management Office.
Mr Heikensten examines different aspects of the new economy and its implications for monetary policy  Speech by Mr Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, to The Riksdag’s Standing Committee on Finance, Stockholm, on 24 February 2000. *  *  *  The new economy, our topic today, is a concept that people are using frequently without always taking the trouble to explain what they mean by it. As interpretations differ somewhat, the discussion is liable to be a little confused. According to the definition most people seem to have in mind, the new economy is a result of a favourable shift in trend productivity that has raised the potential growth rate. This shift is attributed in turn to the development and spread of information technology (IT). Another common explanation for the higher productivity growth is the stronger competition that has resulted from deregulations and an increasingly integrated global economy. Moreover, in that much of the discussion of the new economy originated in the United States in the light of the good economic performance there in the 1990s, emphasis has been placed on the importance of a good macroeconomic environment. My starting point today is the US economy. My primary aim is not to present a comprehensive picture of developments there but rather to highlight the issues that these developments have raised and initiated the debate on the new economy. While my discussion will centre on the advances in IT, for the US economy there have been other beneficial factors.

With regard to the situation in Malta, it bears recalling that a Financial Stability Office was created in our central bank as long ago as 2000 when the Bank was still responsible for banking supervision. The decision to add a macro-prudential dimension to our micro-prudential work was motivated by a realization that potential systemic risks were not being adequately monitored. Our work in this field was given a boost in 2002 when Malta became one of the first countries to undergo an IMF/World Bank Financial Sector Assessment Programme (FSAP). Though the Bank had already built up a small stress testing capacity and had undertaken assessments from a macro-prudential perspective, the FSAP proved a very valuable learning experience and gave our work a new sense of purpose and direction. Since then the Bank has endeavoured to build up expertise in this important field by following closely developments abroad and through exchanges with other national central banks and the ECB. We are even now in the process of restructuring our internal set-up and human  BIS central bankers’ speeches  1  resources to take into account lessons learned during the financial crisis and to be able to participate actively in the newly-established European Systemic Risk Board and its substructures. The financial stability function will be composed of two separate offices, one dealing with surveillance and the assessment of systemic risk, the other focusing more on policy, stress testing and crisis management.
First, the likelihood of a bank failure as a result of problems in Singapore is small as our banking system is sound and closely supervised, even though it is possible that problems elsewhere will affect a bank’s operations in Singapore. Second, even if a bank were to fail here, it should still have substantial assets to meet its liabilities to depositors. Under the law non-bank depositors enjoy priority in being paid, ahead of other unsecured creditors. This makes it more likely that the failed institution will have sufficient assets to pay out to depositors. Hence, for the guarantee to be called, two things have to happen: a bank has to fail, and at the same time its assets must be worth so little that there is not even enough to repay its depositors. Even then the draw on the guarantee should only be for the shortfall, which should be a fraction of the deposits outstanding. Hence we have calculated that the $ billion backing is an amount that will be ample to meet any eventuality except the most remote. $ billion does not in any way reflect an estimate of the likely draw over the two years of the guarantee. On the contrary, we expect the actual draw to be small or if we are fortunate even zero. Instead, the $ billion reflects the Government’s confidence in the banking system, and its intention to give all depositors that same confidence.

Singapore is in a good financial position to provide this guarantee because of the fiscal discipline of successive governments. We are in a strong fiscal position, having accumulated surpluses during good times for exigencies like this. In contemplating making this guarantee, the Government has carefully assessed that it is well within our means, does not impair our ability to meet all government obligations and will not jeopardise Singapore’s financial standing. We are using our reserves to back this guarantee. In the event of a payout, past reserves may be drawn upon. The Minister for Finance has sought and obtained the President’s concurrence to issue the guarantee, as required by the Constitution because of the President’s role in safeguarding our reserves. I should also make clear that this guarantee does not impact at all on MAS’ ability to defend the Singapore dollar. That is because even after giving this guarantee, the government still has ample means, with the full backing of our not insignificant reserves, to safeguard our currency if this should prove necessary. To prevent financial institutions abusing the guarantee by expanding aggressively and taking on excessive risks, MAS has emphasised to financial institutions in Singapore the need to remain prudent in this current operating environment. MAS will continue to supervise financial institutions in Singapore closely. It will take the necessary actions to see to it that  2  BIS Review 127/2008  they operate in a sound manner, and do not put at risk the stability of our financial system or the Government’s reserves.
Of course, the financial crisis was due to many factors acting together. But one of the most important lessons was that one should beware of allowing debts to grow too much. This applies equally to households, companies and governments. This is neither a particularly surprising nor especially new lesson; over several hundred years, financial crises have often been preceded by periods when the attitude to credit granting and lending has been too carefree. But it seems as though this is a lesson that we must experience again and again – at least once a generation, and perhaps even more often. BIS central bankers’ speeches  1  A rapid and substantial credit expansion can cause many different problems. If the expansion is characterised by an exaggerated optimism and an underestimation and underpricing of risk, large loan losses may arise in the banks when the sentiment changes. This can lead to banks failing and ultimately to a financial crisis. We experienced this in the 1990s, and Spain and Ireland are experiencing it now. Once the economy has entered a recession after a period of rapidly-increasing indebtedness and rising asset prices, the recovery from this level may be very slow. The reason is that the economy then often enters what is known as a balance sheet recession.1 Put briefly, what this means is that the economic agents need time to adjust their balance sheets if, for example, property prices have fallen. Their incomes will for some time to come be used for amortisation rather than consumption and investment.

4  BIS Review 85/2001  However, in the short-term and medium-term, real incomes may vary depending on the currency in which wages and prices are contracted, as wages, prices and nominal exchange rates are adapted at different rates to changes in productivity. As we know, in the short-term and medium-term, nominal exchange rates can vary considerably, and to a greater extent than is motivated by the differences in inflation rates between different countries. This means that an article can have different prices in different countries during a fairly long period of time. This can be noticed for instance, in Sweden, where price levels are still higher than in other countries in most fields, without this being fully explained by differences in VAT. While Sweden's membership of the single market has certainly led to stiffer competition and greater price pressure in some areas, competition still appears to be weak in several branches and sectors. Increased competition contributes in principle to a convergence in price levels, as the rate of price increase declines, or as prices perhaps even fall on a market exposed to greater competition. All else being equal, inflation in Sweden would then be lower than the inflation target of 2%, and this would not normally be counteracted by the Riksbank's monetary policy, as it is a temporary effect. Naturally, it is difficult for the Riksbank to decide in practice whether such price trends are a result of increased competition unless they are, for instance, connected to changes in regulations.
As the turbulence gathered strength, banks began to record growing valuation losses. The consequent erosion of their capital, and a reassessment of risk, led to a tightening of credit standards. In turn, this gave rise to concerns about “deleveraging” and a growing shortage of credit, which began to adversely affect the real economy. In the euro area, the Eurosystem’s response since the early stages of the crisis was to use the full range of instruments available to inject liquidity into the banking system. Here, the Eurosystem was fortunate in that it was already able to accept a wide range of assets as collateral and could deal with a large number of counterparties. Let us not forget, either, that the focus of the ECB’s monetary policy – correctly – was and remained price stability. Though driven by booming commodity prices, the major risk was that high levels of inflation would feed into inflation expectations and trigger second-round effects on wages and prices. At times of heightened uncertainty, the importance of price stability as the central objective of monetary policy cannot be overemphasized. As the financial crisis impacted the real economy, with the cost of financing rising and credit standards tightening, firms found it harder to raise money. Sovereign issuers, too, began to face higher borrowing costs. Evidence mounted of growing downside risks to economic activity and of moderating inflationary pressures. The monetary policy response was unprecedented.

Finally, I am worried that we are not going to achieve the full benefits from trade repositories. Regulators, market participants and TRs must continue to work together to ensure that comprehensive, and meaningful data are being reported to TRs and that authorities have the ability to access and analyze the data from the TRs. Although authorities currently receive data, the data are often fragmented and reported in different formats or are not comparable across TRs. This poses challenges for regulators and supervisors of market participants and global CCPs as well as authorities more broadly. Aside from the issues with TR fragmentation, data quality and regulatory access to data, we could be leaving considerable money on the table by not using the TR dataset to increase transparency into the marketplace more broadly. Moving forward on all of these issues will require global coordination and continued efforts across all stakeholders. Authorities must continue to coordinate their oversight of global infrastructures. Where FMIs are “global,” that is providing services across multiple jurisdictions and in multiple currencies, it is important for the relevant authorities to find efficient ways to cooperate with each other to effectively carry out their respective responsibilities. Additionally, where there are overlapping or contradicting regulations, authorities must provide clear guidance to the market on how regulation will be applied. One final point: What matters is not the standardization of OTC derivatives, central clearing or the use of the trade repositories per se, but instead the results that flow from these efforts.
The relative passivity shown by all economic agents in the face of the build-up of imbalances is also due to excess confidence in the adjustment mechanisms that were assumed to be inherent in the functioning of the euro. For instance, it was assumed that relative price and wage rises and the changes in competitive positions, induced by the demand and spending excesses in those countries showing signs of overheating, would prompt the necessary adjustments to move demand back onto a more sustainable path and to redress the differences in competitiveness. We now have proof that the effectiveness of this adjustment channel depends on the flexibility of price- and wage-setting processes. Regrettably, virtually no progress was made during the expansion in eliminating the frictions and structural rigidities that distort the operation of labour and product markets in many countries. This lack of reforming ambition has inhibited the functioning of this adjustment channel, leading to the divergences in competitiveness not being promptly corrected. It was also assumed that financial market discipline would contribute to correcting the imbalances since, on the basis of a proper risk assessment, those public and private  2  BIS central bankers’ speeches  borrowers that were accumulating excessive debts should have been penalised.

Elsewhere, the new framework for the prevention and correction of domestic and external macroeconomic imbalances has also been designed. This so-called Excessive Imbalance Procedure uses an early-warning mechanism based on a broad set of indicators which, together with timely economic analysis, should help detect sufficiently in advance those situations of vulnerability that may endanger financial stability in the euro area and give form to the measures needed to correct them. Progress in designing a permanent crisis-management mechanism has been considerable but clearly insufficient. First, temporarily, the European Financial Stability Facility was introduced, and later, now on a permanent basis, the European Stability Mechanism was set up, which it is assumed should start operating next July. The complexities involved in the design of these devices are evident, since they must combine strength and flexibility to provide financial assistance to ailing countries, while ensuring that incentives are maintained to pursue the ambitious fiscal consolidation and structural reform programmes needed for laying the foundations for sustained growth in the medium term. 4  BIS central bankers’ speeches  But exiting the crisis will not be possible unless a stronger European governance framework is accompanied by a far-reaching revision of national economic policies, enabling them to be fully adapted to the conditions under which a monetary union can operate. It is imperative that the authorities and economic agents should fully assume the consequences derived from sharing a single monetary policy. The soundness of public finances and the flexibility of economic structures are vital requirements in this framework.