samchain/econo-pairs-v1 huggingface dataset:
When we gradually raised the repo rate this year by a total of one and a quarter percentage points, it was because our inflation forecasts indicated that inflation would otherwise have been above the two per cent target at the end of the forecast period. This in turn was primarily due to economic activity developing strongly, both in Sweden and abroad. If the repo rate had not been raised to counteract this development, it would in the long term have affected capacity utilisation in the economy and pushed up inflation. Good productivity growth and low imported inflation have meant that inflationary pressures are lower than they usually are in corresponding cyclical phases, which has also enabled us to make the increases at a slow rate. I am therefore not particularly worried at present that the property market, either the commercial or the residential, will cause problems for financial stability. I can recommend to anyone interested in more in-depth information that they read the Riksbank’s Financial Stability Report, which will be published at the beginning of December. I am not particularly worried that house prices and household indebtedness have increased to such levels that a rebound would cause serious problems to the real economy and thereby affect the inflation-targeting policy. However, we are alert, as we do not wish this to happen. Thank you. BIS Review 105/2006  5  1.

This is something on which individual banks will have to take a view, but I would like to offer some general advice. First, banks should accept that profits for 2003 may not reach budgetted targets as a result of the outbreak; and they should not strain too much to make up the difference. When profitability comes under pressure, it is important to avoid the mistakes that might arise from over-aggressive business tactics. Keep the bank healthy from a capital and liquidity point of view in order to benefit from the business recovery when it comes, as it surely will. Banks should also monitor closely the financial position of their customers and adopt a supportive attitude to those experiencing financial difficulties as a result of the SARS outbreak. This means being prepared to offer temporary relief arrangements to borrowers who find that they cannot service their debts in the current environment. This should not be seen as soft option for customers since the banks will certainly not benefit if those customers go bankrupt. Nor do I suggest that relief should be offered indiscriminately. The long-term viability of the customer or his business, his track record and his willingness to cooperate with the bank are all factors to be taken into account in deciding whether to restructure debts. Each case thus needs to be looked at on its merits.
We wrote in the press release from the Executive Board meeting on 18 March: "If economic activity continues to strengthen as expected - and if there are no grounds for changing the appraisal of the inflation propensity - it is, however, reasonable to assume that the level of interest rates in Sweden will be adjusted successively upwards." We thus see before us a path leading towards a less expansionary monetary policy than we have now. I think this assessment will remain the case. BIS Review 25/2002  3

Eva Srejber: Frameworks and stabilisation policy in a monetary union Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at the Bank of Uganda, Kampala, 17 August 2006. *  *  *  Let me begin by thanking you for the invitation to come here and speak today on the occasion of Bank of Uganda’s 40th anniversary. On several occasions the members of the Executive Board of the Swedish central bank, including myself, have had reason to address the interesting topic of monetary unions. Besides being a stimulating theoretical exercise, it has been of great practical importance with the creation of the euro. Also, from a Swedish point of view, because of the national referendum in 2003 when a majority of Swedish voters said no to adopting the euro. Another reason, from an international point of view, is the trend in exchange rate policies towards corner solutions, of which membership in a monetary union is one. Although the East African Community (EAC) – with member states Uganda, Kenya and Tanzania – aims at eventually forming a political federation, and not only a monetary union, I am convinced that the experiences from other monetary unions, for instance the CFA Zone, will prove valuable to you in your efforts. However, since my comparative advantage concerns the Swedish and European experience I will discuss monetary unions from that perspective and I hope that this might be of some value.
Luis M Linde: The changing role of central banks Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the 4th Future of Banking Summit, organised by Economist Conferences, Paris, 26 February 2013. *  *  *  Ladies and Gentlemen, It is an honour, and a pleasure, to address such a distinguished audience as is gathering today in this conference. I would like to thank The Economist for giving me the opportunity to analyse some of the changes affecting central banks policies. I will organize my talk around the two main areas of Central Banking: monetary policy and banking regulation. Firstly, I will address the changing role of central banks in monetary policy, before the crisis and after the crisis. Up until August 2007 – before the global financial crisis –, the general mood prevailing among academics and policymakers was that there existed a well-defined, so to say, “science or model of monetary policy”. There was a kind of consensus among central bankers about most elements of monetary policy strategy; and monetary policy was perceived as being highly successful in developed countries, with low inflation and low variability of inflation and output. According to this consensus, macroeconomic stability was achieved through rule-based monetary policy, delegated to an independent central bank with an implicit or explicit inflation target and with very little role for discretionary fiscal policy.

It is clear that some of the old beliefs will remain more or less intact: for instance, the idea that fiscal policy is limited as a stabilization tool. There are, however, two areas where I see more changes. BIS central bankers’ speeches  1  First, the conduct of monetary policy, through the implementation of non-conventional monetary policies; and, second, the monitoring of the efficiency of financial markets and the banking sector, and their interaction with macroeconomic stability. Let me comment on these two issues. Non-conventional monetary policies At the outset of the crisis, all central banks reacted using conventional monetary policies. First, they reduced interest rates in a rather aggressive way to prevent the disinflationary process from translating into deflation. The outcome of these decisions is that official rates in the main developed economies (Euro area, United States, Japan and United Kingdom) stand now at values very close to zero. At the same time, faced with the freeze of interbank markets, the main central banks, including the Fed and the ECB, had to take on, directly, the task of redistributing liquidity. In the early stages, the Fed and the ECB provided a generous monetary base to meet the gross needs of banks. The ECB used its flexible array of financial instruments, while the Fed was forced to adapt its operational framework to introduce new forms of intervention. However, when the crisis worsened after the Lehman Brothers crisis, it became necessary to take stronger action. This required the use of new, non-conventional, monetary policy measures.
Looking ahead, the uncertainty about the potential rise in the NPL ratio is notable since this crisis is on an unprecedented scale and is deeper than that envisaged in the adverse macroeconomic scenarios applied in the stress testing of the financial system in recent 10  years. The timing is also very different since in this episode, if current macroeconomic forecasts are confirmed, the adjustment to GDP would be concentrated in the first year of the shock (2020), to be followed by a recovery whose strength is still uncertain. In addition, the impact will hinge on the size and duration of the measures adopted, which will influence their effectiveness. In any event, the increase in NPLs is expected to be higher among smaller firms operating in sectors involving greater social interaction; and, in the case of households, in exposures not secured by mortgages. Accordingly, banks are already recording earlier part of the provisions that they might have to set aside in the future. Furthermore, my previous remarks about the aggregate situation of the system mask considerable diversity. This is mainly because the starting positions of the various institutions, in terms of own funds and credit quality, are already different. Likewise, some segments of households and non-financial corporations are also still in highly fragile financial situations. For example, smaller firms are more vulnerable to a scenario of falling revenues.

At the same time, persistently high public debt (as will inevitably be generated by this crisis) would reduce the scope for action in response to future adverse shocks, expose the economy to a situation of chronic vulnerability and limit its growth capacity. In this situation, we should accept that the necessary short-term fiscal expansion must be accompanied by an ambitious reform agenda to address the structural challenges facing the Spanish economy and a fiscal consolidation programme, to be implemented as soon as the recovery firms. Without doubt, further analysis and experience will be required before we can draw all the lessons from this crisis. However, we should be aware, in any event, of the unprecedented scale of the collective challenge that we as a society face to return to a path of prosperity and opportunities for all. Hence, once again, I advocate broad-based agreements to shape the urgent, ambitious and comprehensive growth strategy that Spain currently needs. The financial system can and should make a significant contribution in this regard. Thank you for your attention. 17
The reform of export tax rebates will also benefit exporters. Continuing efforts to strengthen financial markets and the financial infrastructure12 will enable more effective financial intermediation and promote economic growth and development. 15. Fourth, in any case, the competitiveness of the Mainland of China is based on broader structural factors including underlying factor costs, market leadership and the trade policies of major importers. Even after the marked depreciation of Asian currencies, labour costs in the Mainland of China is still lower than most of Asian economies, perhaps with the exception of Indonesia13. And there is in China a continued access to a huge labour pool made up of redundant state sector workers and surplus labour in rural areas. The effect of devaluation on the manufacturing costs in the Asian economies, on the other hand, are 9 Chinese Vice-Premier Mr Zhu Rongji said on 14 January 1998 that ’the renminbi will be maintained at a stable rate.... it will not be devalued’. Governor of the People’s Bank of China, Mr Dai Xianglong, reiterated this on 16 February 1998. 10 Based on the Mainland’s consumer price index, inflation declined from 24.1% in 1994 to 2.8% in 1997 and, based on the  retail price index, from 21.7% to 0.8%. 11 According to European Union (EU) Trade Commissioner Sir Leon Brittan who led an EU team to visit Beijing in February  1998, China had promised to submit to the WTO in March 1998 detailed tariff cuts as part of its bid to re-join the trade body.

Last year, the Mainland of China ran a trade surplus of $ billion, equivalent to 4.5% of GDP. Foreign direct investment amounted to $ billion. Its foreign reserves are the second highest in the world. Its foreign debt amounted to only about 14% of GDP and consisting of mostly long-term loans from official sources such as the World Bank and the Asian Development Bank, and the debt service ratio at well below 10% of exports. The fiscal deficit in 1997 was small at below 1% of GDP and the monetization of such deficits is now prohibited. My contacts in Beijing have told me that even on the basis of very extreme assumptions with the amount of foreign direct investments and the growth rate of exports being halved in 1998, there will still be a balance of payments surplus. In the circumstances there really is no pressure to devalue the RMB. 17. The stability or otherwise of the RMB, understandably, would appear to some observers to have implications for the Hong Kong dollar’s link with the US dollar, particularly given the economic closeness between Hong Kong and the Mainland of China. But this does not necessarily mean that the Hong Kong dollar will need to move in sync with the RMB, in the highly unlikely event that the RMB is devalued. The Hong Kong dollar is linked to the US dollar and not to the RMB. The economic relationship has always been very close between Hong Kong and the Mainland of China.
In the other direction, with China being a dynamic and sizable economy, the world’s investors would be increasingly keen about participating in China’s capital markets, thereby gaining exposure to new investment opportunities. The experience of many other economies also suggests that capital-account liberalisation brings along with it a deepening of financial markets, making them even more attractive to investors. 10. In all of this, the role of the RMB will be crucial. Notwithstanding the current, only partial convertibility of the RMB, it is already the ninth most actively traded currency according to the latest Bank for International Settlements Triennial Survey. And the RMB has advanced to rank eleven as world payments currency according to SWIFT, a financial messaging service provider. Meanwhile the RMB is being added to the foreign exchange reserves of an increasing number of economies. 11. In terms of international transactions where RMB can already play a role, such as in trade settlement and foreign direct investment, transactions in RMB have climbed steadily. Today, some 13 percent of all of China’s trade transactions are settled in RMB and about 15 to 20 percent of foreign direct investment into China is conducted in the currency. Bearing in mind that the RMB trade-settlement pilot scheme was only introduced in 2009, this is an impressive achievement in such a short space of time. And there is plenty of room for further expansion of these numbers. 12.

Indeed some companies have already begun to adapt their internal systems and processes so that they are able to make greater use of RMB, both in dealing with their Chinese counterparts and in their own financial management. This integration of RMB in their business decisions has in many instances served to strengthen their trade and investment links with China. 2  BIS central bankers’ speeches  16. For financial institutions, things are also in motion. It can be envisaged that the intermediation and servicing of capital flows into and out of China present fresh new opportunities, not least with the entry of a whole new grouping of investors into international capital markets. Also, with the institutional management of household savings being relatively low in China at present, an increase to levels more commonly observed in other economies would signify a great deal of opportunities for the asset management sector. 17. Hong Kong, being the gateway to China, has become the hub for cross-border asset management, and it has been a natural base for the managers of QDIIs, QFIIs and RQFIIs. As we look ahead, while the investments funds are coming through Hong Kong as a first step, it does not mean that the flows necessarily have to stop here. As a global financial centre and an important base for asset management, London makes a natural partner for Hong Kong when it comes to serving the growing needs of Chinese investors when they start investing into a wider array of markets and instruments.
Mugur Isărescu: Is European financial integration stalling? Opening remarks by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the EUROFI High Level Seminar, Bucharest, 3 April 2019. * * * Honourable guests, Ladies and gentlemen, Please allow me to welcome you here, at the Royal Palace. We are honoured to host here, in Bucharest, so many outstanding guests at such a landmark event. It is a perfect occasion to exchange views and liaise with representatives of public and banking authorities and of the financial industry across the European Union. During the talks over the past few days, and particularly on the occasion of the EUROFI Highlevel Seminar, I heard strong voices from the banking community which were rather pessimistic about the prospects of further banking and financial integration. We, at the Eastern frontier of the EU, are compelled to take a more positive outlook regarding the future of our continent. Speaking about the difficulties of the financial sector in Europe, it is important to point out the positive aspects and evolutions as well. Certainly, favourable developments have taken place all over Europe and we should acknowledge them and move forward with more confidence. Specifically, financial fragmentation has been mitigated as a result of broad-based non-standard policy measures taken by the ECB. Looking ahead, completing the Economic and Monetary Union, which involves risk-sharing tools and risk-reduction efforts, is the way forward to address financial fragmentation.

And if I add that beautiful and sunny Malta became an increasingly popular holiday destination among Romanian tourists, I think I have touched on each of the 27 current EU Member States besides Romania. Let me conclude by saying that Romania is fully committed to the united Europe and to European values, but this is nothing new and is also the case with the other Member States. The need for unity of Europe is better perceived from its Eastern border, on the Black Sea coast, as we are so close to Crimea. And I want to make a call for unity in Europe and to stress that it is us who, through our decisions, shape its future. As Abraham Lincoln once said, “The best way to predict your future is to create it”. With this in mind, allow me to make a toast for a strong and united Europe. Thank you for your attention! 3/3  BIS central bankers' speeches
A temporary phase, which we are in, of low interest rates makes it more likely that we will return to a situation where savers get a better deal. It is a temporary phase, but there is no doubt that there are consequences for those looking to earn income. This is not a situation that is ideal. But we are still in the legacy of the crisis and I think this policy path is correct. We also always say that, in terms of the speed of the recovery, European fiscal policymakers can do more. Those countries which have fiscal space can do more to accelerate the recovery. Some have said that the continued low interest rates and quantitative easing have had benefits for large investment funds, and for the area of property investments in particular these benefits come at the expense of individual prospective house buyers, or indeed people who end up renting. It’s become an issue here as it has in other parts of Europe. How would you respond to that? The low interest rate environment has many benefits. It helps to create jobs. For those with a 1/4  BIS central bankers' speeches  mortgage, it reduces the cost of maintaining that mortgage. For highly indebted governments there is a saving in terms of debt service payments. But there is no doubt about it: it does mean that it raises the purchase price of homes.

Work on the Riksbank's other main objective - financial stability - has been characterised to a great extent by the experiences of the financial crisis that shook Sweden in the early 1990s. The Riksbank has been something of a pioneer, being the first central bank in the world to publish reports on financial stability. There is also reason to make a fresh effort in this field. We are in the process of appointing a group of experts, which includes a couple of international experts, who will evaluate our work and present suggestions for improvements. The evaluations we make will be followed up with open seminars, where we can discuss the future direction of our operations with economists from the academic world as well as actors in the financial sector. The Riksbank is currently one of the world's most open central banks, but we can certainly become better. Our work will in future be aimed at ensuring that the Riksbank reaches a broader general public than is currently the case. Our ambition is to create even broader support for our operations and thereby greater understanding of what we do and why we do it. Personally, I intend to travel around  BIS Review 44/2003  1  the country before the autumn and spring monetary policy meetings to talk and listen to representatives of local industries and regions. The inflation perspective It was observed in the June Inflation Report that for some time there had been gradual downward revisions to the forecasts for the world economy.
In this regard, we should also be ready for new crises that will be different from the present one. No matter whether the next crisis ahead will be due to increases in the prices of oil and food, to geopolitical tensions or to the bust of potential asset bubbles in emerging markets, we should stand ready to react to any of those possible shocks. In order to be prepared we need to understand that finance and economics are not natural sciences, there are no “fundamental laws” to discover, but they are more about modelling and understanding the outcome of interactions between humans in human-made systems. That is, probably, one of the biggest challenges risk managers need to face. 4. Challenges ahead for central banks as risk managers  Last but not least, I would like to quickly refer to the challenges ahead for central banks. I’m not going to refer to the challenges faced by those central banks which are also banking supervisors or regulators, which are relevant enough to be deserve a full conference on their own, but I will focus on the crisis and risk management function in central banks. The job of central banks is akin to that of risk managers, in the sense that they have to deal with crisis situations and manage risks to the economy using a limited toolbox.

The fourth lesson is the benefits to long-term growth and stability that come from disciplined policy management and the pursuance of policy that enhances flexibility in the economic system. The 1997–1998 crisis has been an important lesson for Asia on this point. Disciplined policy reduces the risk of an internally-induced crisis due to policy error and provides the authorities with greater room and flexibility to deal with unexpected events or shocks. In the current crisis, the ability of many Asian economies to respond aggressively to the impact of the crisis without undermining policy credibility is a case in point. From my own experience, policy discipline relates closely to decisions that are made with a long-term perspective. The lack of discipline more than often reflects policy that focuses overwhelmingly on short-term outcome. In economics, emphasis on short-term outcome tends to reduce volatility initially but a cost of a much larger volatility and welfare loss at a later date as the needed adjustment is postponed. A long-term perspective, on the other hand, allows the adjustment to be spread out with lesser volatility and effects on economic welfare. Next, enhancing flexibility in the economy through policy that raises the role of the price mechanism in the allocation of resources is another crucial policy choice that can make important differences to the economies of emerging markets. Again, we in Asia learned this lesson well in the 1990’s.