samchain/econo-pairs-v1 huggingface dataset:
Switzerland is directly affected by the EU’s intention to introduce a system of automatic exchange of information between banks and tax authorities in order to enhance tax revenues on savings income within the European Union. One can of course fear that such a plan might trigger capital transfers to non-EU financial centres for purely fiscal reasons. Our position is known: we do not want the Swiss financial centre to become a privileged haven for funds seeking to avoid EU regulations. We are thus ready to consider a reform of our withholding tax regime along the line of the EU directive. We even consider the possibility of handing over to the EU part of the tax on interest earnings of EU residents. We have already 50 years of positive experiences with a withholding tax: it is a convenient and efficient way to collect resources without income declaration. We have never considered introducing any system of automatic exchange of fiscal information for our own citizens, and we are not ready to consider such a scheme for foreign depositors. We feel that our current system secures an appropriate balance between protection of the private sphere and safeguarding the interest of the State. There are many misunderstandings between Switzerland and the UK about this fiscal issue. Let me recall a few points: –  First, it is wrong to say that foreigners can invest their funds tax-free in Swiss banks. We have a 35% withholding tax imposed on all interest and dividend payments made in favour of residents and non-residents.

With market globalisation and the free flow of capital, there is a real risk that a financial centre will become involved in illegal transactions against its will. I consider reputational risk as the major challenge facing financial centres at the beginning of this century. In Switzerland this has long become conventional wisdom. Know your customer rules have effectively been implemented and constantly adapted to the evolving requirements of the market realities for many years. Swiss anti money laundering rules and regulations are widely recognised as expressions of the state of the art. I shall come back to this thorny topic in a moment. Challenges ahead What are the challenges ahead? a)  Market globalisation  As I mentioned at the outset, the banking sector has gone through a period of heavy restructuring during the past decade or so. Banking no longer amounts to simply accepting savings and granting loans. Business has become increasingly complex and is dominated by a dwindling number of everlarger financial conglomerates. The trend toward concentration and the tendency toward onshore international banking can be observed in your country as in mine. The internationalisation of the banking business has led the large banks to establish major business units outside their home country. Our banks create now more jobs outside the country than in Switzerland. Obviously, global business is the first challenge to be faced by the financial centres as well as by the authorities. A close co-operation between supervisors is essential.
To simplify, I believe that the logic underlying the current regulatory system consists in ensuring the financial stability of market segments, but without adopting an overall approach. However, the crisis has forced us to acknowledge that this fragmented approach to regulation does not necessarily ensure the stability of the entire financial system. During this crisis, the fact that financial institutions had considerably increased their use of leverage and that risk was concentrated among a relatively small number of banks was neither well assessed, nor well captured, nor prevented by regulation. In view of this failure and in order to mitigate the impact in terms of financial instability, government interventions were designed, not to stabilize the situation of any particular institution, but to prevent systemic risk from materialising. As a result, we now require macro-prudential regulation. This naturally leads us to address the issue of the scope of financial regulation. Who should be regulated? The problem is not new; it is also complex. Like me, you will have noticed that, at their last summit meeting, the G20 Heads of State and Government laid down a clear principle on the matter. They have indeed committed themselves to ensuring that “all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances”. The crisis shows quite clearly that the markets and institutions that have a systemic role must be regulated. This criterion implies re-examining the functioning of certain OTC markets, such as the interbank money market or the credit derivatives market.

The Role of Sentiment Other than perception, the ringgit is also driven by sentiments, mostly adverse. These are commonly cited through the various sentiment indices, for example as measured by MasterCard or the Financial Times. Sentiments are shaped over time by analysts and interestingly, there are three factors that consistently drive market sentiment. One of these is the high level of external debt, frequently cited by international rating 3/7  BIS central bankers' speeches  agencies and analysts alike. The discussion on external debt has driven market sentiment negatively as it is being touted as a source of vulnerability. The fact is that some of these analysis ignore the evidence of more granular data and worse, only skim the surface without the discipline to deep dive into the available data; Market sentiments also play out based on the government financial position and the issue of governance. Sentiments can be easily affected if new issues or indicators are published on the Government’s financial position. This is further exacerbated by the perceived governance challenges that give rise to further negativity; Market sentiment is also affected by a string of negative news headlines. While there were a number of news headlines on ringgit this year, about 30% of the articles by foreign and local media were written in a negative light or perspective. This make it difficult to ensure a realistic view of the country and hence on the ringgit. Realities and Facts Let’s examine these perceptions, or rather misperceptions.
The policy rate has been raised markedly over a short period, and monetary policy is beginning to have a tightening effect on the economy. This may suggest a more gradual approach to policy rate setting. The future policy rate path will depend on how the economy evolves. The outlook is more uncertain than normal, but we will most likely raise the policy rate again in December, when we will also present this year's fourth Monetary Policy Report with new forecasts for the Norwegian economy. 2/3  BIS - Central bankers' speeches  3/3  BIS - Central bankers' speeches

When operational, such distributions should help guide judgements on how overall financial system vulnerability is changing. But the approach should also provide considerable additional information on pressure points within the system and on the channels of transmission and potential contagion. 14 I believe that this broad approach offers an important step forwards in the development of an analytically and empirically robust framework for financial stability work. Of course it is analytically hugely challenging – modelling non-linear tail events with endogenous strategic interactions is always going to be tough! The results will inevitably be subject to major uncertainty. But the approach does start to provide a consistent and coherent framework which should substantially improve the value of top-down stress tests and of risk assessment work. 15 A particular “operational” aim is to use the results to help improve the focus of risk reduction work and crisis management planning, for example through the identification of  BIS Review 81/2007  7  “weak points” in the financial system and through improved assessment of the impact of policy interventions. An important element of risk reduction work is to influence the behaviour of financial firms. “Bottom-up” or firm-level stress-testing practices have developed rapidly in recent years. But one challenge is that, as for the authorities, it is hard for individual firms to gauge the likely “systemic impact” of particular shocks, which takes into account macro and financial system interactions and feedback effects.
Page 2 of 9 Furthermore, the nature of inflation changed: it became more domestic, affecting services and manufactured goods, and it is precisely on this "underlying" component that monetary policy had to act, and acted strongly. But it must be reiterated, the rise in interest rates generally benefits French and European banks, thanks to their diversified business model, broad deposit base and large loan portfolio. The 'SVB model' in the United States, penalised by the rise in interest rates, was an exception rather than the rule. French banks have demonstrated their robustness: their net banking income and their interest margin increased by 5.3% and 4.5% respectively in 2022. I hear that French banks' margins would be penalised, compared to their European counterparts, on the liabilities side due to regulated savings, and on the assets side due to fixed-rate housing loans. With regard to the first subject, the interest rate on the Livret A accounts must strike, and continue to strike a balance between the effective financing of social housing and, more broadly, of the French economy, and the fair return on savings: in this regard, I am pleased to note that the Livret d'épargne populaire (LEP), which pays 6.1% interest, is finally ‘taking off’ with 9.6 million passbooks at the end of March; I encourage banks to pursue this progress with their customers.

Looking ahead, on the basis of current oil futures prices, inflation rates are likely to remain low over the next few months before starting to pick up towards the end of 2016, in large part owing to base effects in the annual rate of change of energy prices. Supported by our monetary policy measures and the expected economic recovery, inflation rates should increase further in 2017 and 2018. This pattern is also reflected in the September 2016 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0.2% in 2016, 1.2% in 2017 and 1.6% in 2018. In comparison with the June 2016 Eurosystem staff macroeconomic projections, the outlook for HICP inflation is broadly unchanged. Turning to the monetary analysis, broad money (M3) continued to increase at a robust pace in July 2016, with its annual rate of growth standing at 4.8%, after 5.0% in June. As in previous months, annual growth in M3 was mainly supported by its most liquid components, with the narrow monetary aggregate M1 expanding at an annual rate of 8.4% in July, after 8.7% in June. Loan dynamics followed the path of gradual recovery observed since the beginning of 2014. The annual rate of change of loans to non-financial corporations increased to 1.9% in July 2016, compared with 1.7% in June. The annual growth rate of loans to households remained stable at 1.8% in July.
Real GDP  percent  10  percentage change  8  -2  6 -4 4 -6  2  -8  0  -10  –2 –4  -12 –6 -14  –8  -16  *) including reinvested profit  2011*  2010*  2009*  2008  2007  Source: National Institute of Statistics, National Commission of Prognosis  4. Real exchange rate  3. Inflation rate (Dec./Dec.) percent  2006  *) forecast  **) forecast  Source: National Bank of Romania, National Institute of Statistics, National Commission of Prognosis  12  2005  2004  2011**  2010**  2009**  2008  2007  2006  2005  2004  – 10  lei/EUR; real percentage change, percent 25 based on CPI  *) forecast Source: National Bank of Romania, National Institute of Statistics  16  2009*  2008  -5 2007  0  2006  0  2005  2  based on PPI  2004  5  2010*  4  2009*  10  2008  6  2007  15  2006  8  2005  20  2004  10  *) forecast (-) appreciation / (+) depreciation Source: National Bank of Romania, National Institute of Statistics, National Commission of Prognosis  BIS Review 5/2010  References Backé, Peter, Égert, Balasz, and Zumer, Tina: “Credit Growth in Central an Eastern Europe: New Overshooting Stars?”, ECB Working Papers, No. 687, 2006.

Therefore, the measures set forth in the said arrangements secured the financing of Romania’s economy. This financing had a favourable impact in several areas: relatively larger investment compared to the case such arrangements would not have been concluded; slower depreciation and stabilisation of the leu against the euro and other currencies; the signing of the Vienna agreement based on which banks committed themselves to roll over the credit lines and to maintain capital adequacy ratios at safety levels. As for the future developments in the real effective exchange rate of the domestic currency, it is desirable that it stabilise around a level consistent with a current account deficit that may be safely covered via foreign direct investment. BIS Review 5/2010  15  Lower depreciation pressures on the leu and, implicitly, lower inflationary pressures ceteris paribus that emerge via the exchange rate channel, along with the fiscal consolidation efforts allowed the central bank to adopt a cautious easing of the monetary policy stance, which will make the descending slope of the GDP less sharp, without fuelling further inflationary pressures. The expected developments in GDP, inflation and the current account deficit presented in Figure III are similar to the profiles of the trajectories illustrated in Figure I. Figure III 1. Current account deficit* (% of GDP) 0  2.
Erik Thedéen: My view of monetary policy Speech by Mr Erik Thedéen, Governor of the Sveriges Riksbank, at Nordea, Stockholm, 23 March 2023. ***  Accompanying slides of the speech Good afternoon! Thank you for inviting me. I have now been Governor of the Riksbank for almost three months. It has been an intense period in which the most burning issue has of course been the far too high inflation that has not yet shown any clear sign of falling back. The past two weeks have also been marked by unease on the financial markets, which has made economic prospects more uncertain. The background to the concern is that a couple of US niche banks had problems with their liquidity and collapsed. This was followed by problems in the Swiss bank Credit Suisse – a different type of bank, but one that has wrestled with poor profitability and whose credibility has been eroded. These problems led to the bank being quickly taken over by its competitor UBS. The authorities in the United States and Switzerland have been working actively to resolve the problems. This weekend, the major central banks also launched a joint effort to make it easier for banks to obtain financing in dollars in general. Although the situation has become a little calmer, there is underlying concern that the problems will spread to other banks and further into the financial system. I think it is necessary to have a sensible but also sensitive attitude towards that risk.

They are prepared to take bitter medicine prescribed by the government. If our people resist change like they do in France and Germany, our economy would be sluggish and unemployment high. Investors and international analysts have noted the way Singapore has reinvented itself. Many foreign leaders have also studied Singapore to discover the secret of our success. The Foreign Editor of a German newspaper I met earlier this week said that he was struck by Singapore’s development. So he could not understand why many Singaporeans he had interacted with talked about Singapore’s survival in the same breath. This was his first visit to Singapore. He was not fully familiar with our history, geography and geopolitics. I confirmed that indeed we worried constantly about our future. I explained that as a small country with only a short history, we have an acute sense of vulnerability. I likened Singapore to a small boat crossing the vast ocean, fully exposed to the elements. So we have to be alert to changes in the wind and current directions, and any signs of danger. No matter how well we have done up to now, being vigilant and prepared will continue to be our approach to life in a changing environment. Ten years ago, before the Asian Financial Crisis, ASEAN was a preferred investment destination for global investors. Today, it is not the only choice. Moreover, competition for high-value investments will grow keener. China will move from low-cost manufacturing into higher-value industries.
A more restrained approach would be to use countercyclical policy not so much to lean against the cycle but to increase the resilience of the system further by putting in more protection as risks build up in exuberant times. Others remain unconvinced that there is much of a role for time-varying macroprudential policy at all and argue that it is better to bake all the necessary resilience into a very strong standing framework of standards and rules. There is certainly no easy way to estimate where we are in the credit cycle and the impact of macroprudential tools – while there are guides there are no simple rules. Against that background, I want to highlight some of the steps the FPC has taken in this area. First, using macroprudential policy to address changing risks depends upon a clear assessment of risks and of the action necessary to address them. The institutional incentives will inevitably tend to drive macroprudential authorities to the identification of all possible – and if we are not careful, some impossible – risks. Failure to spot a risk is worse than  BIS central bankers’ speeches  5  spotting one too many. The outcome of this dynamic, however, can too easily be a lack of clarity and focus: an assessment that identifies everything but actually identifies nothing. With this in mind, the FPC has changed the structure and content of its bi-annual Financial Stability Report (FSR).

However, some argue that monetary policy should react directly to asset prices, for example by including them in the Taylor rule. Cecchetti et al. (2000) are perhaps the best representatives of this position, claiming that any inflation-targeting central bank should react to asset price misalignments beyond their implications on expected inflation over the policy horizon. In my view, there are three reasons why monetary policy, in general, should not react to asset prices beyond their impact on projected inflation. First, it is not clear that an increase in interest rates will be capable of stopping an increase in asset prices. The required adjustments might be so large that they could end up unnecessarily generating high unemployment and an unwelcome drop in inflation. Second, what matters here is to safeguard the stability of the financial system. An excessive interest rate aiming at controlling asset prices could even trigger financial instability, which is precisely what it is meant to avoid, especially if the increase in asset prices is accompanied by higher financial fragility. Finally, under inflation targeting, any interest rate movements that are inconsistent with inflation converging to the target may undermine the credibility of monetary policy, and we know inflation expectations are critical in the functioning of the regime. To apply a policy that is inconsistent with the inflation target would end up weakening it as the inflation anchor. This is particularly important in the case of emerging economies with a shorter record of monetary stability.
As you know, the Banco de España, in its various publications and in my own addresses, has upheld the view that the fiscal policy response to the pandemic should be decisive in the short term, to mitigate the adverse effects of the crisis on businesses, the self-employed and households, and to prevent a deterioration in our economic growth potential. At the same time, in order to rebalance public finances in the wake of the extraordinary shock caused by this crisis, an ambitious fiscal consolidation strategy for the medium term is needed; it should be defined swiftly, include rigorous and credible measures and address, among other factors, a comprehensive reform of the Spanish tax system. In my view, the economic recovery under way still shows clear signs of fragility and is subject to considerable downside risks, so that a widespread increase in the tax burden is not advisable at this time. For this reason, I believe it may have been preferable to delay the introduction of some of these measures until our economic recovery is more robust. As regards the main instruments employed to achieve this projected increase in tax revenue, I insist that in my view what is needed is a profound and comprehensive reform of our tax system. In addition, in many cases (such as, for example, the taxes on financial transactions and digital services), these changes must be approached in a coordinated manner internationally, to maximise their revenue-raising capacity and prevent competitive distortions or relocation of tax bases.

These suggest that the unprecedented fall witnessed in business turnover in recent months will have significantly raised firms’ levels of financial vulnerability. In the non-financial business sector as a whole, the percentage of firms whose net worth is less than half their net debt is estimated to have risen from less than 20% pre-pandemic to somewhat over 25%. This percentage will have increased more significantly at SMEs (by around 6 pp) than at large corporations (around 2 pp) and, by sector, most sharply in tourism and leisure (over 15 pp), motor vehicles (over 10 pp), and transport and storage (around 7 pp). 1.3  Macroeconomic projections of the Banco de España  The high uncertainty over the future course of the health crisis made it advisable for the latest Banco de España projections released on 16 September to envisage several alternative scenarios. This had been the case in the two previous forecasting exercises, also influenced by the pandemic. Two scenarios were set out, the essential differences lying in how it was assumed the epidemiological situation would evolve both in the final stretch of September and in the following quarters and, consequently, in the severity of the restrictions on mobility and activity that it would be necessary to deploy to contain the pandemic. The design of scenario 1 thus considered a relatively favourable epidemiological path in the short term.