samchain/econo-pairs-v1 huggingface dataset:
Developments in house prices and household indebtedness are regularly analysed in the Riksbank's Financial Stability Reports. Of course, any assessments of the valuation of the house market are connected with a large measure of uncertainty. However, the calculations we have made so far do not indicate that the pricing of houses in Sweden as a whole is significantly out of balance. Price trends can be explained fairly well by the increase in household incomes, the decline in interest rates and a low construction rate, despite strong demand. However, one should be aware that the rate of price increase varies substantially between different regions. House prices have increased at a much faster rate in metropolitan areas than in the rest of the country. The possibility that price increases may have been exaggerated in certain individual regions or markets cannot be ruled out, although developments in Sweden as a whole appear to be balanced. Indebtedness, house prices and inflation forecasts What significance do house prices and household indebtedness have for the Riksbank's inflation forecasts? The inflation forecasts are based on an analysis of the various driving forces behind domestic inflation and the international rate of price increase, imported inflation. Domestic inflation is largely governed by cost trends and by how total demand develops in relation to production capacity, that is to say, resource utilisation. Household consumption comprises a significant part of total demand and this is where indebtedness and house price trends mainly come into the forecast work.

Of particular interest is that Indian actors are providing fresh interpretations of Ibsen’s work, both in India and in Norway. The topic of my speech today is Norwegian experiences in balancing economic development with macroeconomic stability from a historical perspective. As a background for the subject, let me start with a brief characteristic of Norway today from an economic perspective. First, Norway is a small, mountainous country with a population of only 4½ million people scattered across a land area that is one tenth of the size of India. Second, Norway’s economic growth has been favourable for many years, and the per capita income is among the highest in the world. An abundance of natural resources, not least oil and gas, and openness to trade and capital movements are important reasons for this. The petroleum sector’s share of GDP was approximately 24 per cent in 2005. Over the last 10 years, the government has earned higher petroleum revenues than it has spent. Today we have a sizeable Government Pension Fund, which invests all its funds globally. Globalisation and cyclical developments have been kind to the Norwegian economy. Prices for our imported goods are falling in relation to prices for goods we export. Norway’s terms of trade are improving. The impact of the rise in oil and gas prices is particularly strong, but the terms-of-trade gains for the mainland economy have also been high. One aspect of this is that trade in services with India is increasing.
In short, the banking sector will have to live with a structure of higher financial costs, which will squeeze the net interest margin and, therefore, the capacity to generate revenues. This situation, common to all financial institutions at the international level, may be partly relieved in Spain, insofar as a high percentage of the financing of Spanish institutions is granted at a variable rate, which allows them to adjust interest rates more rapidly to the general market risk premium, helping to keep their interest rate spreads more stable. The second challenge is lower demand for credit both from households and businesses. The lower demand for credit is a natural response to a weaker economic climate than in previous years. However, this response will be larger in the case of those economic agents who, after years of very notable growth in their indebtedness, have begun a process of financial deleverage. For banks, this will mean a smaller volume of activity, that is to say, slower growth or even contraction of their business. In the past, banks responded to narrowing margins (income less financial costs) by increasing their volume of lending. However, this lever will not be available in the coming years, or at least not with the same strength, since lending can be expected to continue to decelerate, and to grow at below the economy’s nominal growth rate. Also, a smaller volume of activity puts further pressure on results, since overheads cannot be spread across a larger volume of activity.

That, in turn, would have provided some offset to the global inflationary pressures we have been experiencing over the past year. Instead, as Chart 5 shows, sterling has remained relatively weak, both against the full trade-weighted basket of the currencies of our trading partners, and particularly against the euro – which is the most important currency for UK trade, with the euro area accounting for around half of our total exports and close to half of total UK imports. Chart 5 Sterling depreciation since 2007 Rebased to 100 in January 2005 110 105 100 95 90 Euro-Sterling exchange rate  85  Sterling EER *  80  Average EER *, 97-07  75 70  2005  2006  2007  2008  2009  2010  2011  *: Effective exchange rate Source: Thompson Datastream and Bank for International Settlements  This weakness of sterling is one of the key reasons why UK inflation has been much higher than our peer group of European economies. As Chart 6 shows, the differential between inflation in the euro area and the UK is closely associated with the relative strength and weakness of the sterling/euro exchange rate. And there are good reasons for this. While the  BIS central bankers’ speeches  7  UK has an independent monetary policy, it is a member of the Single European Market which covers all European Union economies.
Inflation developments  Distinguished Members of the Press, The second quarter of 2009 was marked by persistence of the adverse effects of the global financial crisis that erupted in developed markets and then spread across the world during the last quarter of 2008. In this period, economic activity maintained its weak course despite the counter-cyclical effects of fiscal and monetary policies implemented extensively in a coordinated manner at global level so as to remedy the excessive shortage of liquidity in markets. While recent data releases on the global financial system and economic activity indicate that the worst may be over, improvements in leading indicators have been slow, problems in credit markets linger, and employment remains in a precarious state, suggesting that the recovery will be anemic and protracted. The sharp contraction in aggregate demand and the fall in commodity prices since the last quarter of 2008 has led to plummeting inflation rates all over the world. In Turkey, a similar trend has also been observed in the said period and CPI inflation has edged down to 5.73 percent over the last three quarters. Thus, as of June, inflation remained at 6.8 percent, well below the lower limit of the uncertainty band set around the target path (Figure1).

It is timely, therefore, for you to consider what type of leader you want to be, what type of firm you want to lead, and what type of industry you want to work in and influence. I have some views on all three, which we will get to in a moment. I am encouraged that members of the industry have convened here today to engage on these issues. I think it is important that the industry tackle this together. You can learn from one another. And, given the scandals of recent years, you really do have to sink or swim together. Before the recent spate of conduct problems, there were times when one might be secretly happy when a competitor stumbled through some sort of misconduct. All the better if such a stumble generated negative publicity and headlines. Today, the situation is vastly different. When each new scandal emerges, the industry is painted with the same broad brush. This underscores the importance of taking both individual and collective responsibility for reform. You have a personal stake in improving bank culture. Your firms have a stake too. And so does the industry. There are three messages I am going to focus on today: First, stay in banking and be good role models of the behaviors and conduct that we all want to see. It’s important. The banking industry needs your talents. And, if done the right way, it will result in a fulfilling career.
The second point is that Iceland is a small, open economy, where domestic demand is often less of a driver of GDP growth than foreign demand than is the case in much larger economies. There is a tendency in Iceland to forget this in discussions of economic policy. Honoured guests: We are at a turning point with respect to monetary policy implementation. For most of last year, inflation and inflation expectations were well above the inflation target, and the economic recovery was gaining momentum, while inflation forecasts suggested that it would remain above target for a sustained period, provided that the exchange rate remained close to the level prevailing at the time. It would have been possible to conclude from this that the monetary stance was too loose. Actually, several critics maintained that the monetary stance was too tight, but economic developments have shown no signs to support  2  BIS central bankers’ speeches  that argument, nor is it consistent with common measures of the appropriate stance of monetary policy. The Monetary Policy Committee considered the monetary stance sufficient to bring inflation back to target in the near future. In February, we were gratified to see inflation subside to target for the first time since early 2011. As far as monetary policy is concerned, there are three factors that have contributed to this achievement. The first is the interest rate hikes between August 2011 and November 2012, a response to the foreseeable inflation spike following the spring 2011 wage settlements.

In the long run, monetary policy can affect inflation, and in the short run it can smooth out cyclical fluctuations, particularly when it is credible; i.e., if inflation expectations remain close to target even during attempts to mitigate recessions. Once the slack disappears, however, monetary policy cannot deliver output growth beyond the growth potential of the economy, and any attempts to do so will ultimately lead to inflation persistently above target. By law, the Central Bank of Iceland has two main objectives. The first is to promote price stability, the main task of monetary policy. The second is to promote financial stability. As regards monetary policy implementation, the Central Bank is independent and stands alone. It is also independent as regards its contribution to financial stability; that is, its own analysis and decisions on the prudential rules it is tasked with setting; i.e., concerning liquidity and  BIS central bankers’ speeches  3  foreign exchange risk. In addition, like other central banks, it plays a key role in crisis management through its liquidity facilities and its role as lender of last resort. But it is emphatically not alone in this regard, as there are other bodies that make important contributions – the Financial Supervisory Authority in particular, but also the relevant ministries. The legislature also plays a larger role here than in monetary policy, as the statutory framework for monetary policy seldom changes, while amendments to financial system legislation are much more frequent.
The size of these effects will depend heavily on the eventual design of any systemic digital currencies, their attractiveness relative to bank deposits, the availability and price of alternative funding sources for banks, and borrowers’ ability to substitute between types of credit. It is not a foregone conclusion that these effects will necessarily be large. Indeed, an illustrative scenario published by the Bank of England in 2021 suggested that the steady state impact could be quite modest, with lending rates rising only slightly, and credit provision falling by a little over 1% – though varying the assumptions can generate somewhat larger results (Chart 5). 6  See for example, ‘Money creation in the modern economy’, Bank of England Quarterly Bulletin 2014 Q1. Bank of England  Page 8  Source: Bank of England Discussion Paper: “New Forms of Digital Money”  More serious disruption to credit supply could occur if deposits transferred into digital currencies in an unexpectedly rapid or disorderly way, for example during a stress event. But a range of design choices, including potential holding limits, could in principle be deployed to deal with such situations. And banks suffering sudden deposit outflows may also, as now, draw on market-wide central bank liquidity insurance facilities7 – though the pricing of such facilities, and their implications for encumbrance, make them less well suited to providing long-term structural support. A particularly sensitive question is whether central banks may seek to use CBDCs, or other forms of digital currency, to enhance monetary policy implementation – e.g.

Mr McDonough discusses the changing nature of banking, risk and capital regulation Speech by the President of the Federal Reserve Bank of New York, Mr William J McDonough, at the 29th Annual Banking Symposium, Bank and Financial Analysts Association, New York City, on 17 March 1999. Good afternoon. I am pleased to be here today to discuss the changing nature of banking, risk and capital regulation. With the new millennium on the horizon, it seems a particularly fitting time to discuss some of the key trends that are affecting the way both bankers and supervisors think about these issues. Also, as I’m sure many of you are aware, the Basle Committee on Banking Supervision currently is engaged in a fundamental review of the Accord, which is the cornerstone of existing capital standards. In many ways, the changing nature of banking and its risks have led supervisors to revisit the current capital framework, and so I welcome this opportunity to provide my perspective on these risks and how they relate to the future of capital regulation more generally. In the last several years, we have witnessed an increase in the diversity and complexity of businesses in which banks are engaged. While lending and deposit-taking are still the mainstays for a majority of commercial banks, many banks have grown their derivatives trading, securities underwriting and corporate advisory businesses. Some banks have expanded their traditional credit product lines to include asset securitizations and credit derivatives.
Ravi Menon: Monetary Authority of Singapore's Annual Report 2019/20 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2019/20 Virtual Media Conference, Singapore, 26 July 2020. * * * Good morning, and welcome to MAS’ first virtual media conference for the annual report. I hope everyone has been keeping well. GLOBAL ECONOMY Let me begin with the global economy. There are three points I’d like to make. The world is facing an unprecedented economic situation. The outlook is highly uncertain. Recovery will be uneven. The world is facing a public health crisis and a consequent economic crisis. The COVID-19 virus has now spread to all corners of the world. Measures necessary to contain the pandemic – lockdowns, movement restrictions, border controls, and safe distancing – have brought many economic activities to a grinding halt. We are now in the midst of an economic recession without modern precedent. The global economy contracted nearly 14% q-o-q [1] in the first quarter of 2020 – this is almost three times deeper than the sharpest decline seen during the Global Financial Crisis. The contraction in the second quarter is likely to have been even deeper, since this is when economies outside China were most severely affected by the virus and shutdown measures. The policy responses to the COVID-19 crisis have been equally unprecedented – in scale and in speed. Governments injected massive fiscal stimulus, estimated on average to be twice the fiscal impulse in 2009.

As conservative central banks, our involvement in the forex markets is limited to strategic investments and stabilising the exchange rate. Following this role, the Central Bank of Sri Lanka does not get involved in speculative type of trading. However, it plays a major role in the development of the country’s forex as well as other financial markets. We know that in a market-oriented economy, all financial market segments, namely, the foreign exchange market, money market, government debt securities market and the stock market are inter-linked. The Central Bank, while watching the operations of each market segment individually, needs to take a macro view of all the market segments to ensure financial market stability. The focus today, however, should be on the foreign exchange market. In the exchange rate area, it is appropriate to mention at this juncture, Sri Lankan authorities made a fundamental change to its policy on 23rd January, 2001 by moving to a freely floating exchange rate arrangement. This was necessitated by the inability of the then prevailing exchange rate system and the crawling band regime to sustain themselves. Immediately after the float, the market experienced some volatility as is usually expected. However, this volatility has been contained overall since then. This, not only brought confidence to the market, as evidenced by increased foreign exchange inflows, but also allowed greater flexibility and market opportunities to foreign exchange dealers of commercial banks.
This was to enable a single entity to manage risks right across the system, increasing resilience and positioning the UK at the leading edge of global best practice in terms of technology, governance and risk management for payment systems. And from a regulatory perspective, the Bank’s FMI Directorate continues to supervise the HVPS to the same standards as other systemically important payment systems. Since the transition, the Bank has introduced new mechanisms to maintain openness, accountability and challenge in the operation of the HVPS. 7  As part of the wider renewal programme, the Bank has also broadened RTGS settlement account eligibility 8  to non-bank payment service providers, subject to appropriate safeguards. Non-bank payment service providers are now eligible to apply for direct access to payment systems, with TransferWise and Ipagoo becoming the first non-banks to join FPS and Bacs, respectively. Here, more diverse payment arrangements with fewer single points of failure, and increased settlement grounded in central bank money, all contribute to enhanced financial stability. And we cannot ignore the game changer that wider access represents for the promotion of innovation and competition in the payment market. Taken together, these examples illustrate the Bank’s work to stay in touch with the evolving payments sector and to facilitate innovation, wherever possible, in a thoughtful and proactive way. Conclusion To conclude, we in payments are working through a period of extensive change, on a journey to reinforce the UK as world leading in delivering best in class payments.

Ladies and Gentlemen, In the Turkish context, the Islamic finance practices are embodied in a uniquely defined compartment of the banking system. These banks are called as the “participation banks” in Turkey and they constitute an integral part of the Turkish banking system. There are four Islamic banks categorized as participation banks, and 45 conventional banks in Turkey as of  BIS Review 124/2009  1  September 2009. It is crucial to highlight that the participation banks are not considered as an alternative to the conventional banks. While they are functioning similar to deposit banks, their fund collecting and lending processes differ significantly. Participation banks are authorized by the Turkish Banking Act to collect funds from the public under the “profit and loss participation accounts” and the “special current accounts”. The profit and loss participation accounts are essentially a version of the Islamic financial instrument, where the bank utilizes the funds deposited by account holders to fund specific business activities. Any profits earned are shared between the account holder and the bank, in proportion to an agreed ratio. Participation banks in Turkey mainly offer two types of lending. The first type of financing is Murabaha, which is a transaction consisting of two sales contracts. The first contract involves a bank client requesting the bank to undertake a Murabaha transaction and promising to buy the commodity specified by him or her if the bank acquires that commodity.
Compared with our June staff projections, the outlook has improved for 2021 and is broadly unchanged for 2022 and 2023. Inflation Inflation increased to 3.0 per cent in August. We expect inflation to rise further this autumn but to decline next year. This temporary upswing in inflation mainly reflects the strong increase in oil prices since around the middle of last year, the reversal of the temporary VAT reduction in Germany, delayed summer sales in 2020 and cost pressures that stem from temporary shortages of materials and equipment. In the course of 2022 these factors should ease or will fall out of the year-on-year inflation calculation. Underlying inflation pressures have edged up. As the economy recovers further, and supported by our monetary policy measures, we expect underlying inflation to rise over the medium term. This increase is expected to be only gradual, since it will take time for the economy to return to operating at full capacity, and therefore wages are expected to grow only moderately. Measures of longer-term inflation expectations have continued to increase, but these remain some distance from our two per cent target. The new staff projections foresee annual inflation at 2.2 per cent in 2021, 1.7 per cent in 2022 and 1.5 per cent in 2023, being revised up compared with the previous projections in June. Inflation excluding food and energy price inflation is projected to average 1.3 per cent in 2021, 1.4 per cent in 2022 and 1.5 per cent in 2023, also being revised up from the June projections.

Finance has come a long way- from serving the basic societal needs to save and borrow at its infancy to its role today as the backbone of the global economy. In ancient days, kings and rulers look to astronomers, magicians and soothsayers to tell them about the future. The Greeks for example, consulted the Oracle at Delphi before embarking on major decisions. The world today is much wiser I hope, and we no longer believe that the future can be predicted with absolute certainty. What finance and technology can bring for the future of human kind is so exciting that it can go beyond containment. Yet if left on its own, the outcome can be perilous. Resisting them, however, is not an option. While we embrace them as they synthesise and evolve, we also need to shape and control them such that they would not lead us to face extreme financial market fragilities and devastation. In the words of Nassim Taleb, we need to make ourselves “antifragile” – not only able to withstand shocks, disruptions and volatility but able to position ourselves to take advantage of it. But I always like the quote by Peter Drucker, “The best way to predict the future, is to create it.”  5/5  BIS central bankers' speeches