samchain/econo-pairs-v1 huggingface dataset:
The mandate, formulated in the regulation issued in the spring of 1994, states: “The monetary policy to be conducted by Norges Bank shall be aimed at maintaining a stable exchange rate against European currencies, based on the range of the exchange rate maintained since the krone was floated on 10 December 1992. In the event of significant changes in the exchange rate, policy instruments will be oriented with a view to returning the exchange rate over time to its initial range. No fluctuation margins are established, nor is there an appurtenant obligation on Norges Bank to intervene in the foreign exchange market” (my italics). The regulation is based on the fact that we have a floating exchange rate. The first sentence means that this is a managed float. Instruments are to be oriented towards maintaining a stable krone exchange rate against European currencies. Norges Bank chose to define the reference European currencies as the euro from 1 January 1999. The last sentence in the regulation distinguishes our system from a fixed exchange rate regime in that no fluctuation margins have been established around a central rate. To the extent this system calls forth associations with a fixed exchange rate regime, the concept initial range should be interpreted as a broad indication of a central rate around which the krone can fluctuate. The second sentence refers to significant changes in the exchange rate in relation to the initial range.

Ardian Fullani: Review of economic policies for Albania’s fast, sound and stable growth Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Meeting with the Chairman of the Socialist Party and the Albanian Banking System Executives and Representatives, Tirana, 25 July 2013. *  *  *  Dear Mr. Rama, Dear Mr. Pencabligil, Dear banking system executives, First of all I would like to thank you for the invitation. This round table is a follow-up of our philosophy of a trialogue between the Bank of Albania, the banking system and the Government to discuss the economic policies for Albania’s fast, sound and stable growth. The presence of Mr. Rama, the incoming Prime Minister of Albania, gives this meeting special significance. The banking sector is not only the greatest and the most efficient driver of economic growth in Albania, but also the custodian of Albanian household savings and the determiner of funds destination in the economy. Today’s round table precedes discussions on the economic programme and budget of the incoming government. Dear guests, The Bank of Albania has just completed its periodic analysis of the Albanian economy. Also, in view of the Financial Sector Assessment Program (FSAP), we have maintained regular contacts with the international institutions to assess Albania’s financial soundness. Availing myself of this opportunity, I would like to share with you some preliminary conclusions and present the central bank’s vision for future development policies. The Albanian economy is facing big cyclical and structural challenges.
Domestic loans showed no increase in the first seven months of this year. The result is that loan to deposit ratios have fallen to their lowest levels for many years - around 53% for the local banks as a group. The effect on loan margins has been quite dramatic. In particular, the margin on mortgage loans has fallen from 1.25% over prime rate prior to the crisis to the current low of 2.25% below prime. The current situation may to some extent be temporary. It is difficult to believe that loan demand will not pick up soon given the pace of economic recovery in Hong Kong. Sentiment in the property market is now looking better and this may start to feed through into increased appetite for mortgage loans. But it seems unlikely that the boom conditions of the 1990s will return for the foreseeable future. The implication of this is that the banks in Hong Kong may have to cope in the future with an environment of more restrained loan growth and finer margins. This means that they will need to find alternative means to boost income. One option is to diversify into the sale of products like unit trusts, pensions and life insurance that offer the opportunity to earn fee income. Another is to focus on lending to sectors such as the SMEs that provide higher returns at the expense of higher risk. A common factor in such initiatives is the need to cope with greater complexity in business development and risk management.

François Villeroy de Galhau: The tale of the three stabilities: price stability, financial stability and economic stability Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Financial Stability Review Conference, 3 March 2021. * * * It is a great pleasure for me to welcome you to the publication today of the 24th edition of the Banque de France Financial Stability Review. We have a set of very distinguished speakers. I would like to thank them and all the contributors to the review, as well as the Banque de France’s teams who helped prepare this issue, which focuses on macroprudential policy in the midst of the Covid crisis. The past twelve months have seen some of the most dramatic events since World War II, with this unprecedented pandemic. For this reason, and given that today is about the Financial Stability Review, I will focus on the concept of stability itself. Other sources of instability have affected the world economy in the past decade or so: the Global Financial Crisis and ensuing recession, the European Debt Crisis, or more recently rising trade tensions. It seems that the world has become more unstable. Against this backdrop, stability is all the more important for our fellow citizens, and it has different dimensions, but I will focus mainly on three key aspects. I will start (and it will be a surprise to no one) with price stability.
Growth in the euro zone has been relatively weak, but last year there were signs that economic activity was beginning to improve there, too. At the same time as growth in demand in the world economy has been strong, price pressures have been held back. Although oil and other commodities have become significantly more expensive for consumers, the general price increases have been relatively small on the whole. This can probably be partly explained by increasing international competition. The upswing in global economic activity has also characterised developments in the Swedish economy, which has grown strongly in recent years, with the exception of a slowdown at the end of 2004/beginning of 2005. Despite the good growth in demand, inflation has been low in Sweden. This is largely attributable to import prices excluding oil  BIS Review 44/2006  1  developing weakly and to cost pressures being held back, partly by the strong productivity growth and low capacity utilisation. The development we envisaged in the February Inflation Report was that international growth would continue to be good. There were some question marks regarding developments in the United States and in the euro area, where preliminary statistics for the fourth quarter of 2005 were surprisingly weak. Our assessment was that this could largely be explained by transient factors and that the upswing could nevertheless continue, although possibly at a slightly slower rate. Our assessment for the Swedish economy was that domestic demand would be strong over the coming years, with GDP growth peaking in 2006.

When the SRR was introduced in June 2016, capital flows into the bond market had more or less clogged up the interest rate channel of monetary policy transmission. As a result, the effects surfaced primarily in a higher exchange rate. Because capital controls on outflows had not yet been lifted at that time, the risk existed of an overshooting of the exchange rate, with adverse repercussions for Iceland’s tradable sector. In addition, it was considered unfortunate, and actually unnatural, that large carry trade positions should accumulate before those that had entered the economy before the crash had been released. The exchange rate of the króna was also rising, and rose even further thereafter, because of strong tourism-generated inflows through the current account. This, of course, had a crowding-out effect on other segments of the tradable sector. If this had been compounded by a steep rise in carry trade-related inflows, Iceland would have found itself in a more dangerous position, with increased risk of an abrupt correction later on and the associated impact on economic and financial stability. Because of the recent decline in the exchange rate, this risk has receded, and it could even be argued that the risk is currently in the other direction; i.e., that excessive pessimism and self-fulfilled expectations of a further depreciation in the króna could lead to undershooting.
The household with an income of NOK 800 000 can cope reasonably well with a debt of NOK 2 million even after the interest rate has increased by 3 percentage points. The household with the lowest income will have a tight margin. Principal payments will have to be deferred and, even with a deferral of a few years, this household will have little leeway after basic expenses have been paid. In order to increase its financial leeway, it will either have to increase its income, or reduce housing consumption and dispose of its debt. Both households will be vulnerable should one member lose income from employment and have to rely on benefits. With an income loss of 10 per cent, even the household with the highest income level would have to make considerable spending adjustments. Although these households have higherthan-average debt, this debt level is not uncommon. 7  Based on the analyses in Inflation Report 3/05 and the assessments provided in the press release following Norges Bank’s monetary policy meeting on 25 January 2006. BIS Review 10/2006  5  However, for most households, it will be relatively easy to cope with gradually higher interest expenses. The outlook for the Norwegian economy is favourable. Output has picked up, although so far not to such a degree that there are visible signs of inflation. As long as the rise in prices is slow, it will be appropriate to maintain a low interest rate.

Since the implementation of our LSM, participants’ average peak intraday usage in CHAPS has fallen by around 20%, so this innovation has provided a technical means of saving liquidity, reducing incentives to otherwise adopt receipt-reactive behaviour. On-going and future priorities If the post-crisis initiatives I have discussed so far have been, or are, close to completion, one area of work where we have further to go is in ensuring continuity of access to payment services for banks that are in recovery or resolution. In the UK’s case, a new resolution regime was introduced in the Banking Act of 2009 which gave the UK authorities tools to address the risks of discontinuity. Nevertheless there is a good case that the effective statutory framework could be usefully supported by private sector initiatives (whether contractual or otherwise) to enhance further the ability of central banks, supervisors and resolution authorities to maintain continuity in payment, clearing and settlement services in recovery and resolution. For banks in recovery, that would involve avoiding “cliff-edges” in contracts that automatically exclude banks from payment schemes in the event of (say) a ratings downgrade. For banks entering resolution, we want to ensure that critical economic functions in the firm which rely on access to financial market infrastructure are not dislocated or denied. This is relevant not only for banks that are direct members of payment schemes, but also for indirect participants that rely on other banks for payment and other quasi-infrastructure services.
Luis de Guindos: Interview with Telediario 2, Televisión Española Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, and Telediario 2, Televisión Española, conducted by Mr Carlos Franganillo on 19 March 2020. * * *  One way or another, this massive asset purchase programme will be of particular help to those countries that have been deeply affected, such as Spain or Italy, to ensure that spreads don’t widen dramatically at this critical time. It will help all euro area countries. Some were in a weaker position; their public finances were also more vulnerable than others. But what the ECB will not allow is fragmentation of any kind in the sovereign debt markets and a return to the nightmare caused by widened spreads. We are dealing with a huge health crisis, there is a severe economic crisis and we are going to ensure that it does not result in some kind of financial crisis or debt crisis. This is what we are going to avoid because the ECB is at the service of the European people. The European Central Bank has said that it will do whatever needs to be done to combat this crisis. Does the ECB have more weapons at its disposal for the weeks or months ahead if the situation deteriorates? We can always do more. As you mentioned earlier in your news item, our commitment knows no limits.

We have to take all the necessary measures to ensure that our economic fabric is not destroyed, to ensure that businesses that are solvent can survive and that once this urgent health crisis is over, they can return to normal. You have talked about a temporary crisis, a sort of pause. The Spanish government has talked about the same thing. But do you think this is how things will turn out or do you think the economic consequences for Europe could be more severe for longer? This will depend on how long the health crisis lasts and, to be honest, I wouldn’t dare to guess how long it might last. What happened in China is a leading indicator. What’s happening to us now happened two months ago in China and now they are starting to get back to normal. Obviously this is something that gives us hope: we can get through this. From an economic perspective, we have to look for instruments to get us through this period at the lowest economic cost and, of course, with no financial cost from a debt market perspective. 1/1  BIS central bankers' speeches
These four institutions have submitted on a precautionary basis their recapitalisation plans to the FROB should they not be able to obtain private capital, although this is a possibility they consider unlikely in pursuing their strategies. Two of them, Bankia and Banca Cívica, are taking steps for a future market launch. If the plans proposed come to fruition, in less than 30 days these institutions will be listed, the process envisaged under the new regulations will have concluded, and they will operate with capital higher than the minimum requirement set in the new legislation. Another two banks, Mare Nostrum and Effibank, are also negotiating placing their capital in private hands, and they intend to conclude the operation within the schedule set, placing the proportion necessary to obtain the level of own funds required to meet the new core capital ratio. In both cases, the avenue being explored, without ruling out other alternatives, is the direct placement of capital with wholesale investors. Turning now to the other four savings banks, all of them have submitted their recapitalisation plans, a pre-requisite for applying for aid. The plans are in two parts: a business plan, with projections for profitability, leverage, liquidity and efficiency (among other variables); and a series of specific commitments regarding corporate governance and cost-cutting.

Falling short of these principles can drive up medium-term inflationary pressures, which would call for a stronger monetary policy response. Moreover, fiscal policies should be oriented towards making economies more productive and gradually reducing high public debt. Finally, countries should implement structural policies for intensifying their efforts to green and digitalise their economies. Inflation Euro area headline inflation declined from its October peak, reflecting a drop in energy inflation. Downward base effects, an easing of energy commodity prices, and the impact of government measures to shield consumers from high energy prices all contributed to this decline. By contrast, food and core inflation rates continued to rise, partly as a result of the past surge in energy and other input costs still feeding through to consumer prices. Pent-up demand related to the reopening of the economy and the lagged impact of supply bottlenecks also continue to push prices up. At the same time, employees demanding compensation for the loss in purchasing power amid tight labour markets has translated into higher wage growth, while many firms in sectors facing constrained supply and resurgent demand raised their profit margins. We expect euro area inflation to continue to fall, as lagged price pressures fade out and tighter monetary policy increasingly dampens demand. However, historically high wage growth, related to tight labour markets and compensation for high inflation, will support core inflation over the projection horizon, as it gradually returns to rates around our target. This outlook remains surrounded by considerable uncertainty, with both upside and downside risks.
But it took a crisis caused by the failure of Lehman Brothers to trigger the coordinated government plan to recapitalise the system. It would be a mistake, however, to think that had Lehman Brothers not failed, a crisis would have been averted. The underlying cause of inadequate capital would eventually have provoked a crisis of one kind or another somewhere else. So where does this leave us? The recapitalisation plan is having a major impact on the restoration of market confidence in banks. Perhaps the single most important diagnostic statistic is the credit default swap premium – an indicator of market concerns about solvency of banks. These premia have fallen markedly since the announcement of the UK plan. From the close of business on 7 October to now the premia on the UK’s five largest banks have more than halved. We are far from the end of the road back to stability, but the plan to recapitalise our banking system, both here and abroad, will I believe come to be seen as the moment in the banking crisis of the past year when we turned the corner. As concerns about the viability of our banks recede, banks should regain the confidence of the market as recipients of funding. There are already some signs of greater activity. But the age of innocence – when banks lent to each other unsecured for three months or longer at only a small premium to expected policy rates – will not quickly, if ever, return.

Such lending can tide a bank over while it is taking steps to remove the cause of the concerns that generated a run or lack of confidence. But it can also serve to conceal the severity of the underlying problems, and put off the inevitable day of reckoning. I hope it is now understood that the provision of central bank liquidity, while essential to buy time, is not, and never could be, the solution to the banking crisis, nor to the problems of individual banks. Central bank liquidity is sticking plaster, useful and important, but not a substitute for proper treatment. Just as a fever is itself only a symptom of an underlying condition, so the freezing of interbank and money markets was the symptom of deeper structural problems in the banking sector. So let me explain why a major recapitalisation of the banking system was necessary, was the centrepiece of the UK plan (alongside a temporary guarantee of some wholesale funding instruments and provision of central bank liquidity), and was in turn followed by other European countries and the United States. Securitised mortgages – that is collections of mortgages bundled together and sold as securities, including the now infamous US sub-prime mortgages – had been marketed during a period of rising house prices and low interest rates which had masked the riskiness of the underlying loans. By securitising mortgages on such a scale, banks transformed the liquidity of their lending book. They also financed it by short-term wholesale borrowing.
We are also working to improve the Fund’s website, which will include a continuous update of the Fund’s value. Conclusion Transparency is important. Transparency contributes to strengthening confidence, and confidence is crucial for an effective monetary policy – in normal times, but perhaps particularly in times of crisis. According to Lars Weisæth and Ragnar Kjeserud, two authorities in the field of crisis psychiatry, to be successful in managing a crisis, the responsible authorities must be perceived as competent and at the same time have a reputation for openness and honesty. 55 I started this lecture by describing how the Bank of England managed the crisis during the 1780 Gordon riots. A military defence was necessary to safeguard society’s values. The event gave rise to the expression “as safe as the Bank of England” and later “as safe as the bank”. We have experienced a deep financial crisis. We are now hopeful that it is coming to an end. The reputation of private banks has not been left untarnished. Banks’ own behaviour was one of the causes of the crisis. The very depth of the banking crisis is attributable to a collapse of trust among banks. They no longer considered their fellow banks as “safe”. Financial markets stopped functioning. The expression “as safe as the bank” became somewhat hollowed. We have seen that the most unexpected places, such as small coastal towns and the northern region of Norway, have been hard-hit by the financial crisis. The crisis has also left its mark on our language.

When the key rate was reduced sharply in autumn last year, we sought to communicate that the interest rate would remain low for a period, and not be raised back to the former level already the following week or month. According to theory monetary policy to a large extent seeks to affect expectations. We believe that by being transparent about our own interest rate forecasts, it is easier to influence expectations. This enhances the effectiveness of monetary policy. But the interest rate forecast is a forecast, and not a promise. The future is uncertain. Actual interest rate developments may therefore deviate from our forecasts. We try to be open about how we will react if new information implies a different interest rate path. Transparency about Norges Bank’s reaction pattern is a necessary element in the interaction with fiscal policy. It is important that the government and the Storting know the central bank’s response pattern when the size of government budgets is decided. It is also an advantage for the social partners take this into account. Our view on transparency and good communication is inspired by Wim Duisenberg, the first President of the European Central Bank. His definition of transparency was that “the external communication should reflect the internal deliberations”. 24 We have all experienced that memory is imperfect. The easiest approach is therefore to employ the same narrative everywhere. What we say in the Executive Board is also what we say to the Minister of Finance, at press conferences and in speeches.