samchain/econo-pairs-v1 huggingface dataset:
The Swedish economy is less open to competition than the American. For example, even adjusted for differences in value added taxes, the level of prices in Sweden is on average 15-20% higher than in the USA. Many deregulations that were carried out long ago in the USA, such as the deregulation of the transport sector, for example, have been carried through more recently in Sweden and there are many indications that we have not yet seen their full impact. However, competition in many markets is expected to increase in Sweden in the future, in part as a result of increased globalisation and European integration. One area in which very little has been done is the labour market, which is very rigid and regulated compared with the American. BIS Review 132/1999  4  –  Where the introduction of new technology is concerned, Sweden has gone further in this than many other OECD countries. For example, we have the highest number of Internet users per capita in the whole world. –  Like the American economy, the Swedish economy is very open to the world around it and Sweden has a long tradition of free trade. To some extent this counteracts the tendencies towards limited competition on the Swedish market. –  But on the other hand, as yet we have seen no clear indications in the statistics of the impact of the new economy.

This is remarkable considering the fact that the new jobs have principally been created in the service sector, where productivity generally increases at a lesser rate than in manufacturing. Three principal groups of reasons for the positive trend in America can be distinguished. One important reason behind the upswing appears to be good economic policies. Since the beginning of the 1990s, fiscal policy has been directed towards achieving a balanced budget, and for a year or so now the budget has been balanced. In order to achieve this, taxes have been raised, expenditure 3  BIS Review 132/1999  diminished and budgetary procedures made more stringent. Monetary policy has been directed towards keeping inflation low and stable and has succeeded in warding off both destabilising inflationary and deflationary pressures at an early stage. The policy mix of monetary and fiscal policy therefore appears to have been favourable. A number of structural factors seem to have been important. Deregulations in many sectors and increased globalisation have intensified already tough competition and increased the pressure on the partners on the labour market, leading to greater flexibility in the labour market and enhancing labour mobility. The increased and more effective use of new technology (IT) has raised productivity, and the use of JIT (Just-In-Time Inventory Management) has meant that the match between supply and demand in the economy has improved.
In other words, there have been grounds for counting in the Inflation Report on a somewhat stronger krona even in the period one to two years ahead that guides monetary policy. But when the krona began falling almost 5 per cent in the course of only a fortnight early this summer, it ultimately became difficult to count on the exchange rate becoming as strong as the forecast envisaged in the coming two years. The weaker the initial position, the larger the requisite appreciation. To quote the press release from 15 June, the Executive Board considered that “The krona’s depreciation since the latest Inflation Report is the most important single factor that may lead to the inflation target being threatened 1-2 years from now”. The Riksbank had then initiated currency market interventions with a view to strengthening the krona. When the Executive Board met on 5 July the krona was still weak. In the light of the current forecasts of resource utilisation, the exchange rate and demand, a majority of the Board members concluded that the repo rate should be raised 0.25 percentage points, to 4.25 per cent, in order to avoid the risk of inflation exceeding the target 1-2 years ahead. The picture also included considerable price increases during the spring which, although mainly transient, were liable to influence inflation expectations. The decision was not an easy one for the Executive Board. As the minutes show, it was preceded by an intensive discussion. Three members had a different view.

However, we are also seeing a proliferation of Central Counterparties (CCPs) and trade repositories being set up in Asia. While this will provide choice to Asian market participants, it may also increase risk and lead to higher costs. 17. Regulators will need a comprehensive view of risks in the cross-border, interconnected market. Having multiple CCPs and trade repositories in the region may risk fragmentation, and may hamper monitoring of systemic risks as regulators may see only their own segments of the market. Market participants will also face additional costs if CCPs and trade repositories lack economies of scale. 18. Asian regulators will therefore need to work closely together to enable infrastructural entities to offer their services across different jurisdictions. For example, the infrastructure of a DTCC global trade repository and AsiaClear CCP in Singapore offers the prospect of effective surveillance by regional regulators and economies of scale. We will continue to ensure that our market infrastructure operates in a transparent and accessible way so that the needs of regional regulators and the industry can be met under clear and robust guidelines. 19. At the global level too, there are real benefits for regulators to ensure interoperability in market infrastructure to allow for more effective risk monitoring. However, interoperability will require time and effort, as risk management practices such as margin eligibility standards have to be harmonised across CCPs in different jurisdictions. 20.
If we are to prevent another crisis, action is required on both of the fundamental causes. First, we need to resolve the problems caused by massive capital flows from poor to rich countries. Yet the imbalances are growing again. This problem can be tackled only by international cooperation – most obviously through the G20 – and I hope that the trade union movement will continue to engage with that process. Second, our financial system needs radical reform. Slowly but surely, we must move towards a banking system that does not put both the economy and your members’ livelihoods at risk. In the long run, banks will have to hold much more capital and be much less highly leveraged. Part of the answer is improving the way we regulate banks, and devising policy tools to control the risks taken by the financial system as a whole. The aim should not be to prevent all bank failures. Just as with every other company in the economy, banks that get it wrong must be allowed to fail, without risk to ordinary depositors or taxpayers. In 2008, banks were bailed out not to protect them but to protect the rest of the economy from the banks. That may not seem fair – and it isn’t – when other companies, such as Jaguar, had to stand on their own feet or go to the wall. So banks too must face market discipline. But we need to do more than reform our banking system.

To say that was risky is an understatement: at such levels, a 2% fall in the value of a bank’s assets is sufficient to wipe out its capital and render it insolvent. Remuneration, especially the structure of financial sector bonuses, encouraged excessive risk-taking, and distorted the aspirations and career choices of too many talented young people. Investors, banks and regulators had been swept up by the apparent success of modern finance. When investors realised that many of the assets that banks held on their balance sheets were opaque and hard to value, there was immediate and justifiable concern about the solvency of many of those banks. At the end of 2008, these two fundamental factors culminated in the worst financial crisis in history. In the six months after Lehman Brothers collapsed world trade fell by nearly 20% – a faster decline than in the Great Depression. Around the world, the same telling phrase was repeated: economic activity was “falling off a cliff”. In its statement to the London G20 summit in April 2009, the international trade union movement argued that “The first priority for G20 leaders must be to restore confidence by halting the freefall in world growth”. That has been achieved. World output grew by 4% over the past year. And in the United Kingdom, growth has been somewhat faster than anticipated a year ago. Nevertheless, total UK output remains around 10% below where it would have been had the crisis not occurred. So how do we prevent this happening again?
·  Going forward, we must improve our financial architecture to raise efficiency and ensure nationwide access to financial services. ·  In term of market competition, the opening up of our banking system has accelerated the transfer of technical knowledge and ensured competition for our domestic financial institutions. ·  In term of market structure, the new Financial Institutions Bill – currently at the Senate and is expected to be passed in the course of this year – will provide a legal and formal framework that accommodates the establishment of financial conglomerates. Financial institutions will be allowed to offer varieties of financial services such as insurance or securities through their subsidiaries. Though this is still a step away from universal banking model where all financial services will be offered under one entity but the draft law is flexible enough to make room for such eventuality, and in the meantime boost competition. ·  Among the major milestone in the law are: consolidated supervision of financial conglomerates, unified legal framework for both banks and finance companies, and prompt corrective actions for weak financial institutions. ·  As for the availability of our financial services and product qualities, our recent survey of financial product availability within Thailand indicated that market participants are keen to expand product range, thus structural impediments obstructing them need to be dealt with.

In the present context this means that a succession of good news items about a company’s profits may lead investors to project the trend well into the future and accordingly generate an over-reaction; if the share price then rises, this is seen as confirming the analysis. A period of good returns also boosts the investor’s self-confidence, making her/him bolder and more prone to take risks. Bit by bit the over-reaction takes shape and, if the worst 3 comes to the worst, leads to a bubble. A phenomenon - also studied in experimental psychology - that works against taking an independent stance is group thinking. It is not easy to stick to an opinion that differs from what a majority of the group seems to hold; “surely all the others cannot be wrong” is a common thought. An example with which you may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer one that has many guests - they simply rely on the judgement of others. Even if you hold a different opinion from others, it could be profitable to act as you think the majority will. An investor who considers a stock to be valued above its fundamental level could still decide to buy or hold on to the stock if he or she believes that others might still be interested in buying the stock at an even higher price, for instance due to the factors mentioned earlier. In a paper the authors draw 1  Hagstrom, R.G.
Because market participants will not know for certain which path U.S. authorities will ultimately take – allowing resolution under ordinary insolvency law, as contemplated under Title I, or instead initiating a Title II resolution – this uncertainty in and of itself could cause investors in short-term obligations that are likely to be protected under Title II to run. Several other issues are also worthy of note. First, for the Title II single point of entry strategy to work properly, there needs to be a sufficient amount of debt outstanding at the parent  2  BIS central bankers’ speeches  company that can be converted by the FDIC into equity to ensure that the bridge company will be demonstrably well-capitalized. We don’t yet have a long term debt requirement – this is an area where we are still working out the details. My own view is that a holding company needs a substantial amount of long term-debt to ensure that the newly created bridge company is viewed as fully viable by its counterparties. We also need to ensure that the holding company is structured so that the bridge bank formed upon resolution can easily downstream capital to its operating subsidiaries. The ability to do this will help reduce the risks of preemptive ring-fencing by foreign regulators and runs by counterparties of the foreign operations of U.S. firms.

Our economies and our societies have suffered heavily – indeed, on all available forecasts, this year will see the biggest declines in GDP recorded in peacetime – and we will have to endure a period of painful reconstruction for which sound knowledge and also good judgment will be essential. 1/1  BIS central bankers' speeches
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The Central Bank will continue to base its interest rate decisions on its mandatory role of contributing towards price stability and on the joint declaration of the government and the Bank from March 2001 which specifies the inflation target. Through steadfast monetary policy which ensures price stability, monetary measures will contribute towards promoting a stable economic environment which is the foundation for the economy’s growth capacity in the long run. On the basis of the new inflation forecast and national economic forecast, the Central Bank announced a cut of 0.5 percentage points in the policy interest rate on February 10. The Consumer Price Index for the beginning of February was published this morning and the change in it turned out to be fully consistent with the Bank’s latest inflation forecast. Developments in the next few weeks and the prospects ahead will determine the next step as regards interest rates. Opposing trends are at work there and at present it is impossible to state in which direction or when the next step will be taken. It also needs to be underlined that if the current outlook turns out to be correct, the proposed construction programme in east Iceland will gradually begin to influence the formulation of monetary policy. To conclude, I would like to reiterate that monetary decisions by the Governors of the Central Bank of Iceland are made after extremely careful consideration of a large number of indicators.
We have moved away from the forward guidance that signalled Bank Rate would remain floored at its effective lower bound that met me when joining the MPC last year. In its place, the MPC has emphasised that its policy decisions are driven by the evolution of the data, while signalling a willingness to respond more forcefully to signs of greater persistence in inflation, should that prove necessary. At every juncture, the MPC has remained committed to a medium-term view that stabilises inflation around the 2% target. In that spirit, a couple of weeks ago I argued at a talk in London that the significant market reaction and economic implications of recent macro news – including recent fiscal policy news – was likely to prompt a significant monetary policy response at the MPC's next meeting on 3 November. Of course, that rendezvous is still some time away. And, of course, much can happen in the intervening period, with markets exhibiting volatility and the geo-political and economic environment uncertain. Anyway I can only speak for myself today, not for the nine-member committee as a whole. But as things stand, I stand by my London statement. Given where we are, I continue to expect a significant monetary policy action at the MPC's next scheduled meeting. So in the body of my remarks this afternoon, I don't want to dwell further on what we are trying to achieve or whether we are working towards it. I hope I have made my views on those two questions very clear.

In taking this action, the Bank has sought to prevent the emergence of a self-sustaining vicious spiral of collateral calls, forced sales and disappearing liquidity from emerging in a core segment of the financial markets. Restoring market functioning helps reduce any risks from contagion to credit conditions for UK households and businesses. Such actions preserve the effective transmission of monetary policy. But crucially they are not monetary policy actions in themselves. Were monetary policy to be re-oriented towards serving financial stability ends, not only would it be less effective in addressing dysfunction than more temporary and targeted interventions in specific dis-orderly market segments, but it would also be distracted from its central task of maintaining price stability and returning inflation to the 2% target. At the time of writing, this distinction between monetary policy actions and actions taken by the Bank to support financial stability has been recognised and priced by market participants. 4/8  BIS - Central bankers' speeches  In the face of a substantial re-pricing of financial assets a few weeks ago, markets originally anticipated that Bank Rate – the active instrument of monetary policy in the eyes of the MPC – might be changed at an ad hoc meeting outside the regular schedule of MPC decisions.
Underlying this stable rate of price increases have been offsetting developments at the level of services and goods prices. In February, services price increases moderated further slightly, mainly owing to downward adjustments in prices 1  BIS Review 39/1999  in the telecommunication area. At the same time, goods prices contributed slightly more to overall HICP increases than before, due both to price developments for unprocessed food and a deceleration in the fall in energy prices. It may be worth noting that goods prices may continue to move upwards temporarily, in particular as oil prices increased strongly from mid-February onwards. Such movements reflect the higher volatility of price changes of some categories of goods, in particular imported oil and other commodities. The interest rate decision has been taken in a forward-looking perspective, focusing on the mediumterm trends in inflation and the compatibility of these trends with the Eurosystem’s definition of price stability. In the view of the Governing Council, monetary growth is - at the current juncture - not a risk for future price stability. The decision taken today keeps monetary policy on a longer-term stability-oriented course and, by doing so, contributes to creating an economic environment in which the considerable growth potential of the euro area could be exploited.

Those responsible for other policy areas are urged now even more to take the necessary steps to improve longer-term growth prospects for the euro area through strictly and decisively adhering to the aims of the Stability and Growth Pact and through convincing structural reforms in the economy. I should now like to inform you about some of the other matters considered today. The Governing Council examined the outcome of a test run of the production of euro banknotes. This so-called zero production run involved the printing works of the participating countries. The main purposes of this test were, first, to check the compliance of the test banknotes against the technical specifications and, second, to prove that all printing works are in a position to produce the euro banknotes to the same high quality standards. The result of this test was positive, as only some minor technical specifications need to be modified slightly. The printing works will now start their final preparations for the commencement of the mass production of the euro banknotes. The Governing Council also decided to establish an Analysis Centre for Counterfeit Euro Banknotes. As is already indicated by its name, the main purpose of this Analysis Centre will be to technically analyse and classify new types of printed counterfeits, and to store the related technical data in a database. The Analysis Centre will be located at the ECB in Frankfurt. We are now at your disposal should you have any questions.