samchain/econo-pairs-v1 huggingface dataset:
Furthermore, a major strength of the domestic banking 8  BIS central bankers’ speeches  system is its prudent approach towards credit, where loans are fully covered by deposits, while loan-to-value ratios, which were already at relatively prudent levels at the time of the global financial crisis, declined further to around 70%. Another major strength of the domestic banking sector is its strong capital base. Capital adequacy ratios improved further from already healthy levels, with the core capital adequacy ratio rising to 12.4%. This ratio is significantly higher than the present statutory requirement of 4%. The debt crisis has highlighted the importance of risk diversification. Encouragingly, the investment portfolio of the domestic banks has limited exposure to securities issued by countries in financial distress. It is equally important for the banks to diversify risk in their loan portfolio. Most of the troubles of banking systems overseas, particularly in Ireland and Spain, stemmed from their relatively large exposure to the construction sector, especially the housing market. While the latest update of the Central Bank of Malta’s Financial Stability Report6 provides a generally  6  Central Bank of Malta, Financial Stability Report Update – June 2011, 17 October 2011. BIS central bankers’ speeches  9  favourable assessment of the situation in the domestic banking sector, it notes that credit and concentration risks remain elevated, mainly due to corporate borrowers in construction and real estate activities.

BIS central bankers’ speeches  3  In Malta GDP per capita grew by 11.6% over the last decade while the increase in the euro area amounted to 5%, and the recession in 2009 was shorter and relatively less deep than that experienced by Malta’s trading partners. The Maltese economy, nevertheless, still faces a number of challenges. One area of relevance is the inflation rate, which at an average rate of 2.5% since 2004, has tended to stay slightly above the 2.1% average rate in the euro area as a whole, although the latest data show an annual inflation rate below that for the euro area. In this context, greater attention should be given to the identification of any structural shortcomings that may be contributing to the slightly higher inflation, and the excessive volatility apparent in Malta’s inflation rate as compared to the euro zone. Although imported inflation is inevitable, we have to be particularly mindful of locally generated price pressures or inflexibilities in structures which may not be responding sufficiently to competitive pressures. Productivity growth is essential not only for enhanced competitiveness but also to justify wages that permit a sustainable increase in living standards. Productivity growth in Malta since EU accession was broadly in line with that experienced by the euro area as a whole. Still, catching up with the rising living standards of the more affluent EU countries requires even faster growth in productivity.
The developments we see ahead of us, with a drawn-out recovery and weak labour market, make it difficult to imagine anything other than that there will be low wage increases in the period ahead. In December’s monetary policy update, we expect wages to increase by an average of approximately 2.5 per cent per year during the period 2010–2012, this figure being slightly lower towards the start or the period and slightly higher towards the end (Figure 25). However, this should not be interpreted as a recommendation, but rather as a forecast based on developments in the economy and other available information. Naturally, developments in this area may take a course deviating from our expectations, just as in other areas. Wage increases include not just contractual wage increases but also wage increases over and above central wage agreements. Wage development forecasts form a part of the overall forecast for the Swedish economy. We base our wage forecasts on the short-term wage statistics of the National Mediation Office, with adjustments made to the preliminary statistics for estimated retroactive wage payments. Following this, a forecast is made in two stages. The first stage covers the next six months, considering previously agreed wage increases, the situation on the labour market and inflation expectations. The second stage covers the next two to three years and considers unemployment, corporate profits and inflation expectations. As in other forecast areas, a final assessment of wage developments is made in consideration of model results and other information not included in the models.

Svante Öberg: The financial crisis and wage formation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at the National Mediation Office, Stockholm, 29 January 2010. * * * Why is the Riksbank interested in wage formation? Wage formation and monetary policy are interrelated. The development of wages affects inflation and inflation affects the development of wages. The target for monetary policy is to maintain a low and stable level of inflation. This job is made easier if wage formation works well. Consequently, it is important for the Riksbank to follow this year’s comprehensive wage bargaining rounds. I will not make any recommendations to the social partners regarding the outcome of this year’s collective bargaining. Instead, I will describe the economic setting for this collective bargaining. This may seem to be an extremely subtle distinction, but it is an important one, nevertheless. We make no normative pronouncements regarding which rate of wage increase may be most appropriate. However, considering the drawn-out recovery and the weak labour market, the scope for wage increases seems to be highly restricted. I would also like to make two points during this introduction. Firstly: I will not be reporting any new view of economic developments beyond that presented in the monetary policy update of 16 December, although a few figures will be updated with the latest statistics. Secondly: The assessments and valuations I make here are not necessarily shared by all of my colleagues on the Executive Board of the Riksbank.
That is the primary aim of this morning’s symposium, bringing together the scientific committees of both the ACP and the AMF who play a key advisory role in each of our  BIS central bankers’ speeches  1  institutions and who clearly work in areas of common interest. It is organised around the following specific themes that I would like to introduce with a few words. I.  Firstly, in a difficult context, French households have altered their investment choices: what are the consequences of this alteration? Already high before the crisis, the savings rate of French households has further increased, reaching levels close to those recorded at the start of the 1980s. This increase in the savings rate seems to reflect a precautionary attitude on the part of households. The year 2011 was also characterised by a significant reallocation of assets between the various savings options. Alongside a substantial withdrawal from UCITS and a fall in net new money flowing into life insurance contracts – a movement that has nevertheless slowed since the beginning of 2012 – bank savings products have posted a significant rise in deposits. Savers clearly decided to place their money in more liquid and less risky banking products such as passbooks to the detriment of long-term investments, despite the need for the latter to cover certain requirements for both households and the economy.

Twelve joint missions were conducted in entities distributing life insurance contracts and financial products; the common actions also concerned operators offering leveraged transactions on the Forex market and the processing of complaints throughout the financial sector. In 2012, joint missions will continue to focus on the different players involved in the marketing of insurance contracts, particularly among portfolio management companies, banks and distribution platforms. This joint work proves, if proof is needed, the shared determination of the two authorities to place consumer interests at the heart of the regulatory framework governing different financial products. Indeed, by their very nature, certain subject areas automatically imply collaboration between the two bodies. This is the case for example of household savings. While the financial markets are a natural target for these savings, in the vast majority of cases, retail investors can only access these markets via the services offered by financial institutions and insurance entities. The crisis we have experienced these last four years has had a profound impact on the economy of our country and of the world, affecting as much the financial markets, banks and insurance companies as the savings behaviour of households. To understand the changes that the crisis has induced and to take appropriate action in the best conditions, the ACP and the AMF need to work together and be attentive to the views of experts and practitioners.
Third, smaller banks are increasingly becoming direct customers of larger banks, which means that less trading is taking place on the interbank market. Nevertheless, because the interbank market allows for price determination and therefore provides reference prices, it performs a key function for the foreign exchange market. Consequently, a well-functioning interbank market is also very important for the SNB. Our analyses show that the decline in turnover has not yet resulted in a deterioration in market quality. Despite the fall in turnover, transaction costs are low and the interbank market is still working properly. However, we are keeping a close eye on developments in the structure and quality of the market. The focus of monetary policy implementation is currently the foreign exchange market. However, a well-functioning money market is no less important to us. Structural changes have also taken place in this market. On 2 May 2014, SIX Group Ltd commenced operations with a new trading platform for the Swiss money market. Since then, the SNB has conducted all open market operations, all transactions for its standing facilities as well as the auctions for the Swiss Confederation through this platform. This also means that banks can only obtain funds under the liquidity-shortage financing facility through this platform. The successful launch of the new platform can be measured by the fact that 140 foreign and domestic participants already have access, and additional participants have applied to join. With the introduction of the new platform, collateral eligible for SNB repos has been combined in new baskets.

Fritz Zurbrügg: Current developments in the financial markets Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 19 June 2014. *  *  *  I will begin today by looking at the situation on the financial markets. Then I will discuss structural changes on the foreign exchange and money markets which are of importance for the SNB. I will close with a few comments on the progress that has been made in reforming benchmark interest rates. Situation on financial markets The positive sentiment on financial markets overall has continued since the beginning of the year. On the one hand, investors have been encouraged by the fact that economic recovery has continued on both sides of the Atlantic, even if it has been hesitant, as well as by mainly positive business results. On the other, the general low-interest-rate environment, with the accompanying search for yield by investors, is likely to have been a major factor. Nevertheless, this positive sentiment was put to the test on a number of occasions – for instance, in January, when signs of economic weakening and political risk in a number of emerging economies gave rise to considerable uncertainty, and again in March, when the political conflict in Ukraine intensified. The gradual tapering of the US Federal Reserve bond purchase programme, however, was taken quite calmly by market participants.
Lately, a trend has been the emergence of new suppliers of payment services outside of the bank domain, in Europe facilitated by legislation. Their heterogeneity is large, but so is the potential of some of them. Private and public sector do what they do best My third takeaway regards the role of the private and public sectors. While their roles may have changed over time, they have invariably explored their comparative advantages. Throughout history, the private sector has showcased that it is an  8 [15]  excellent innovator and understands consumer needs. Where there is a problem, it often provides a solution. The primary role of the public sector revolves around trust, universal services to all citizens, and security. One fundamental role of central banks today is to facilitate payments between banks. While the predecessor to our current clearing and settlement system may have started life in a London tavern, it later moved into the central banks. The main reason for this is to help banks settle payments using accounts at the central bank, i.e. in central bank money, thus abolishing the credit risks that could arise if they instead used commercial bank money. Central bank money is generally regarded as the safest settlement asset that could be used. While the private sector innovates, the public sector needs to be ready to ‘step in’ and correct market failure, provide coordination, guidance, and exercise its comparative advantages from time to time.

Hence, we need to ensure sound regulation and oversight. Network and scale effects are as important as ever. With globalisation, the network effects are moving from the domestic market to the global. Regarding scale effects, I would argue that digitalisation has increased the fixed costs and lowered the variable costs, thereby increasing the large-volume advantage. Next-generation payment systems I will now turn to the present and focus the remaining part of my speech on the work at the Riksbank on developing the current infrastructure – building the payment systems of tomorrow, if I may say so. Naturally, this is not a solo task, but a joint effort involving many stakeholders, public and private, domestic and foreign. I will concentrate, however, on the Riksbank’s rationales for this work. They are to a large extent related to the lessons that I just highlighted. Before I do this, let me briefly reflect on what I said earlier about the higher pace of innovation in recent years. For those in the commercial sphere of payments, this has increased the risk of ‘falling behind’, we often hear. You need to master the new opportunities offered by the ‘era of digitalisation’ to avoid losing market shares. Add to this that network and scale effects tend to benefit suppliers that are first with a new solution or service. Here my point is that the same factor has also led to demands on central banks to be as vigilant as ever.
This became a major problem when there was a run on the dollar-denominated bank liabilities of non-US international banks post-Lehman.3 Second, the Icelandic banking system expanded very rapidly prior to the crisis, growing in just five years from a combined balance sheet of less than 2 times GDP (at the end of 2003) to almost 10 times GDP (in mid-2008). Most of this expansion was cross-border, and a significant part of it was really off-border, having very little to do with Iceland, as both financing and investment took place abroad. This was facilitated by two factors: first, Iceland’s membership in the European Economic Area (EU + Iceland, Lichtenstein, and Norway), which gave banks headquartered anywhere in the region the right to operate throughout the region, and second, the prevailing global conditions of abundant, cheap credit. Just before their failure, the Icelandic banks had foreign currency balance sheets amounting to almost 7.5 times Iceland’s GDP, with a significant maturity mismatch between assets and liabilities. In comparison, the Central Bank of Iceland’s foreign reserves amounted to 21% of GDP.4 These and other examples I could mention were accidents waiting to happen. And happen they did in the autumn of 2008, when, during the panic that gripped markets after the collapse of Lehman Brothers, there was a full-scale run on cross-border banks’ foreign currency liabilities.

This goes back to the 19th century, to the time of the Austro-Hungarian monarchy, when this part of the empire used to be its industrial undisputed powerhouse. This tradition has survived through wars and totalitarian regimes to the present day. Even now, the Czech Republic is the country with the highest ratio of industrial production to GDP in the whole of the EU and the ratio is higher than in Germany, a fact which many do not know. And it has actually been rising rather than falling over the last 10 years or so. This is manifested in the fact that the Czech Republic is the second biggest producer of cars per head in the world. Moreover, the Czech Republic and Slovakia – which formed a single state until 1993 – are together by far the biggest car-producing countries in the world in per capita terms. With 150 cars produced per every 1,000 citizens these two countries are well ahead of South Korea and Germany combined in per head metrics. So whenever you drive your Skoda, Hyundai, Peugeot, Kia, Volkswagen or even Porsche, don’t be surprised to learn that they were actually manufactured within a radius of 300 kilometres of Prague. By the way, Ferdinand Porsche, the 1/2  BIS central bankers' speeches  founder of the Porsche car manufacturer, was also born here, 100 kilometres north of Prague.
The easing of monetary conditions in the economy aimed at fostering the economic activity and creating more spaces to crediting to the economy, without infringing the long-term perspective of the inflation target. This monetary policy resulted to be a right one. Bank of Albania has been successful in achieving its objective on inflation, easing simultaneously the appreciation pressures on the domestic currency. Notwithstanding the easing monetary policy, Bank of Albania has kept under control the growth rate of monetary aggregates. The weak inflationary pressures from the fiscal policy, the good-management of money supply, as well as Lek appreciation, have provided appropriate conditions for a moderate rise of consumer price over 2004. In general terms, Bank of Albania believes that this favourable situation will continue to prevail even during the current year. It will be supported by the favourable monetary conditions of the economy and by the controlled development of domestic demand. Based on the available information and in absence of shocks, the consumer price rise for year 2005 is expected to be within the two-tofour percent targeted range of the Bank of Albania. Monetary indicators performance To achieve its primary objective, that is maintenance of price stability, Bank of Albania relies on the monetary aggregates control as an intermediate instrument. Expectations on monetary indicators performance are provided in detail in the annual monetary program, which serves to orient the Bank of Albania monetary policy. Based on this strategy, the objective of increasing money supply for 2004 was fixed to be 12.4 percent.

A positive development of year 2004 was also the agricultural production, which increased by 4.9 percent. The industry sector performance has been characterized by a mixed performance. Sub-branches of the processing industry like foodstuff industry, manufacturing of mineral products and metallurgy, performed higher sales during the nine-month period of 2004, while sales of the textile industry and processing leather industry marked rather low levels. The energetic sector experienced a positive performance during 2004. The electric energy production marked an annual growth of 12 percent, being expressed in the rise of exports by 20 percent and the decline of energy imports by 30 percent. Sales of the transport sector increased by 5 percent over the nine-month period of the year. An important aspect of the Albanian economy over the last years is the fact that the economic growth did not generate macroeconomic imbalances. On the contrary, it is accompanied by the ongoing consolidation of this stability, being expressed in the low and stable inflation rates, in the reduction of budget deficit and public debt, in the improvement of the balance of payments position and in the overall stability of monetary indicators.
These problems made it difficult to maintain a sustained growth rate in the medium and long term, and rendered our economy particularly sensitive to the adverse events that might occur. Accordingly, redressing these problems through resolute economic policy action, especially in the area of structural reforms, was unavoidable. Notable among these imbalances was the excessive concentration of resources in the real estate sector and high private-sector debt, which were compounded by the persistence of serious structural deficiencies in the functioning of the labour market. Under these conditions, the 2008 and 2009 recession had a most virulent effect on Spain. This gave rise to a very intense fiscal policy response which, along with the other expansionary economic policy measures, helped soften the adverse effects of the crisis on activity. However, the budget deficit rose to a very high level and did not prevent more severe job destruction than in other countries, despite the fact that the decline in output was on a similar scale. The excessive levels reached by both the budget deficit and the unemployment rate opened up additional fronts of vulnerability in our economy, which was particularly affected by its high dependence on external borrowing, despite the enormous correction the external imbalance has undergone in the past two years. Against this background, the Greek crisis has undoubtedly had a contagion effect, exposing the weaknesses of the European institutional arrangements and the potential implications for the more vulnerable countries, Spain among them owing to the above-mentioned reasons.

Implementation of monetary policy • If it appears that inflation will be higher than 2½ per cent, with unchanged interest rates, the interest rate will be increased. • If it appears that inflation will be lower than 2½ per cent, with unchanged interest rates, the interest rate will be reduced. • It is just as important to avoid a rate of inflation that is too low as it is to avoid a rate that is too high. Fafo og Makt- og demokratiutredningen 6. september 2002  The mandate implies that the interest rate must be adapted to the outlook for the Norwegian economy. If it appears that inflation, with unchanged interest rates, will be higher than 2½ per cent, the interest rate will be increased. If it appears that inflation, with unchanged interest rates, will be lower than 2½ per cent, the interest rate will be reduced. This orientation of monetary policy will normally also contribute to stabilising production and employment. Monetary policy functions with considerable and variable lags. The current inflation rate does not provide sufficient information to determine the level at which interest rates should be set now. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Two years is therefore a reasonable time horizon for attaining the inflation target.