samchain/econo-pairs-v1 huggingface dataset:
The development of interest rates abroad and the krona exchange rate Let me begin with the forecast for economic activity abroad, which I think in some respects has been given too much significance in the discussion of our forecasts for, for example, the krona exchange rate. As I see it, changes in interest rates abroad relative to Swedish interest rates say more about the current exchange rate for the krona than about the future development of the krona. The fact that interest rates increased more in Sweden than in the euro area in the first half of 2010 is thus an explanation of why the krona strengthened against the euro in the same period, but high Swedish interest rates relative to those in the euro area will not necessarily lead to the krona strengthening in the period ahead.8 My belief that too much importance has been attached to forecasts of policy rates abroad does not mean that financial prices abroad are of no interest. On the contrary, developments in 2010 illustrate that long-term Swedish rates often appear to be strongly affected by developments abroad, and especially in the United States, without these shifts being motivated by changes in economic activity in Sweden. We need to improve our understanding of international financial links of this kind. Can assessments stop short at the end of the forecast horizon?

2  BIS central bankers’ speeches  A financial-stability crisis can start when a financial institution is unable to repay funding to the lender at the repayment date, whilst the lender needs the liquidity at that repayment date. Fear of such occurrences happening simultaneously was an important element in the proliferation of the US subprime lending crisis to a global one. Central banks, recognisant of the impediments to markets’ functioning and the threat to the existence of solvent economic actors, utilise payment systems to grant liquidity not only to the market as a whole, but to individual institutions as well. Because of the re-emerging crisis, central banks can still use unconventional or non-standard monetary policy operations or target individual banks for assistance. The latter is however under-utilised by banks, because they avoid incurring a penalty over the market rate, fearing it may stigmatise them in the interbank markets. Talk of “emergency liquidity assistance” or “acting as a lender of last resort” is at present fading into the background because the commercial banks’ liquidity scare is largely, though not exclusively, a symptom of the sovereign debt crisis Nevertheless, risk stems from commercial banks typically holding positions across many participants (the central bank, other banks, brokerages, non-bank businesses and households) and across different payment systems. These positions lead to interdependencies among the real-time gross settlement systems, mainly operated by central banks, and designated-time net settlement systems, mainly operated by commercial banks jointly.
The PRA does not seek to operate a zero-failure regime. But when failure does occur, this should be with limited disruption to the provision of core financial services and without spillovers to the wider financial sector. One of the main strategic challenges in building the PRA was to establish a new approach to supervision. The key aspects of this are for the PRA to be judgement-based and forward looking, proportionate in its actions, and efficient in its allocation of resources. The PRA’s supervisory approaches for banking and insurance are summarised in published documents and updated regularly. In the first 2 ½ years of the PRA’s life, much of the effort has been taken up with the implementation of the regulatory reform agenda which is the main topic of this lecture. That is likely to continue to be the case until at least 2019. As I will illustrate, the main planks of the regulatory platform have been put in place and it is difficult to conceive of there being space to add many additional reforms to what is already a comprehensive design – neither the regulators nor the regulated are likely to have much spare resource to support substantially more regulatory change over the next few years than currently in train. BIS central bankers’ speeches  1  The FPC is increasingly focussed on implementation of the reforms for banks and insurers and on understanding the risk from market-based finance.

We probably won’t know for sure just how effective the new regime is until we reach another crisis. Meanwhile we need to guard against the reforms being rolled back as a result of a period without crisis. Let’s complete the programme, give it time to work, be supportive of growth wherever we can, and be open minded about change. But let’s also be cautious about the siren voices of financial self-interest that were partly responsible for luring us on the rocks in the first place. 12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  Annex 1 – Risk based minimum capital requirements and buffers under CRDIV  14  BIS central bankers’ speeches  Annex 2 – Key policy initiatives, by intended implementation date  This diagram, which appeared in the PRA Annual Report 2014/15, highlights some of the major policy work streams that will support delivery of the PRA’s strategy. It includes initiatives for which there is a publicly identified implementation date at UK or international level; however these may be subject to future revision. BIS central bankers’ speeches  15
Stefan Ingves: A cure for crises – confidence, confidence and trust Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Eurofi Forum, Gothenburg, 29 September 2009. *  *  *  It is an honour for me to hold this keynote address at the EuroFi-conference here in Gothenburg. We have recently witnessed a financial crisis of historic proportions. We may have seen the worst, but the crisis is not over. The development of the last year gives me an excuse to address a topic that has followed me for much of my working life: namely financial crises and trying to sort them out. I could go on and talk about financial crises for hours, but I promise you that I will stay – at least roughly – within my time limit. I have been working with the resolution of financial crises for almost two decades. I started out, here in Sweden, with the banking crisis of the early 1990s. Later, I toured the world as an IMF employee, assisting in crisis resolution in many different countries, and I came to know many difficult situations from within. In my present role, the last year has, to a large extent, been about dealing with the repercussions of the latest financial crisis. One difference this time is the magnitude and the global reach of the crisis – it is not really just any other domestic crisis. However, I do believe that financial crises are related creatures – or monsters if you prefer.

For sure, potential output estimates are chronically unreliable and often subject to substantial revisions ex post. Faced with the despair of failure, we often tend to underestimate our ability to overcome crises – a phenomenon I will return to in a minute. Moreover, recessions often tend to have a permanent effect on the level of potential output. It is much less clear, however, whether the crisis will also leave a permanent footprint on the trend 1/9  BIS central bankers' speeches  potential growth rate – something Laurence Ball called “super-hysteresis” effects. In fact, on the right-hand side of the first slide you can see that potential output growth had been slowing in the euro area well before the crisis, mainly reflecting a long-term slowdown in total factor productivity (TFP). So the question I would like to ask today is not so much why potential output growth appears to be decelerating in the long run, or whether we are entering a period of secular stagnation – the jury is still out on this. It is whether the crisis, and the persistent shortfall in aggregate demand, has accelerated, or not, the decline in potential growth. The first point to consider is whether the crisis has had a significant effect on labour participation – that is, the size of the total labour force. Hysteresis effects might be caused by unemployed workers becoming discouraged and discontinuing their search for employment, leading them to become detached from the workforce and lose their skills over time.
Net interest income was stable but provisions on credit risk reduced the size of profit. Generally, the banking sector maintained control over other costs of the activity. Liquidity indicators, shortterm and structural ones, stand at satisfactory levels. All banks complied with the requirements set out in the regulatory framework regarding the size of liquid assets, both in the lek and in major foreign currencies. Deposits continued to grow at good rates, although at lower levels than in the last year. Due to the credit growth slowdown, the credit/deposit ratio appears at very suitable levels to support the liquidity needs of the sector. Indicators of activity capitalization stood at good levels, due to capital increase by some banks and slowdown in risk-bearing assets growth. In the course of the year, the Bank of Albania applied tighter requirements for liquidity and capitalization of banks in accordance with the risk profile of their activities. In the interbank market, trading volumes and participation increased in the 2012. This performance is influenced by structural liquidity movements, banks demand and market operations of the Bank of Albania to support them. Market interest rates were downward, reflecting the trend of policy interest rate and banks' actions to control operations costs and profit margins. The foreign exchange market has been stable, despite increasing trading volumes and higher number of participants in the market. Banks were active and prudent in servicing their clients’ demand for foreign currency.

BIS central bankers’ speeches  3
11 / 12  BIS central bankers' speeches  I would like to make a final comment on the effects of our APP portfolio on bond yields. While, overall, our APP portfolio will continue to exert downward pressure on euro area long-term interest rates, other factors such as economic fundamentals and the creditworthiness of issuers, as assessed by market participants, remain key determinants of the levels of bond yields and spreads. Conclusion The winding-down of net asset purchases is not tantamount to a withdrawal of monetary policy accommodation. The ongoing rotation from net asset purchases towards enhanced forward guidance on key ECB interest rates has preserved the ample degree of monetary policy accommodation that is necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. Prudence, patience and persistence will continue to inform our policy decisions. The sizeable stock of acquired assets and the associated reinvestments, as well as the strong anchor for policy rate expectations provided by our enhanced forward guidance, will continue to deliver the monetary policy stimulus necessary for inflation convergence. In any event, all our policy instruments can be adjusted to ensure that inflation moves towards our aim in a sustained manner. 1 This speech builds on my remarks at the UBS Conference, London, 13 November 2018. 12 / 12  BIS central bankers' speeches

Achieving a complete and consistent macroprudential safety net, in addition to completing the microprudential one, is also desirable in the current context to enable banks to absorb further shocks while maintaining the provision of key services. This should take several avenues, ranging from countercyclical buffers, to be set at 0.5 % in France as of 2023, to borrower based measures. In this regard, there is clearly a need to act across Europe with regards to the buoyancy of the residential real estate market. In France, the macroprudential authority has put in place since 2019 a framework to regulate lending standards in the residential real estate market by imposing a debt-service-to-income ratio 2/4  BIS central bankers' speeches  cap of 35% and a maturity limit of 25 years on new housing loans. Such measures together with the prominence of fixed rates in France, has strengthened households’ financial resilience against any potential increase in market interest rate and any related rise in loan maturity. 3.Challenges associated with climate change and digitalisation of finance The challenges brought forward or amplified by the war in Ukraine should not blind us to more structural vulnerabilities, which the war in Ukraine has not made disappear. What I have in mind here is the transition to a sustainable economy and the digitalisation of finance. To conclude my remarks I would like to say a few words about the role we can play as supervisors and central banks to help banks address those two challenges.
Project Greenprint seeks to streamline the collection, access, and use of climate and sustainability data through four digital utilities:  3/4  BIS - Central bankers' speeches  an ESG registry of certifications an ESG disclosure platform to facilitate reporting a digital marketplace to connect data users with ESG solution providers a data orchestrator to aggregate ESG data from multiple data sources  Globally, GFANZ has formed the Net Zero Data Public Utility to address issues such as data gaps, data accessibility, and data inconsistencies. It will complement existing climate data initiatives, promote the effective management of climate-related financial risks, facilitate robust sustainability reporting, and accelerate the formulation of credible transition plans. I have provided a quick overview of Singapore's efforts in three key areas of transition financing - blended finance, carbon markets, and good-quality data. This afternoon, I will share some of the interesting and impactful work being done by the NGFS in the areas of blended finance, data, and capacity building. In all our efforts, I cannot emphasise enough the importance of collaboration and collective action. We have a common mission: to reduce global greenhouse gas emissions to net zero by 2050. But time is running out. We must act now, act fast, and act together. There has never been a greater opportunity for us to find common purpose, build solidarity, and ensure the sustainability of our planet and better lives for communities everywhere. Thank you. 4/4  BIS - Central bankers' speeches

These incentives are offered in the context of the so-called "international headquartering" policy. According to the latest Central Bank of Cyprus forecasts of December 2022, the growth of the Cypriot economy is expected at 2,5% this year which compares well to the euro area average of 0,5%. Inflation is expected to decelerate in 2023, levelling at 3.3%, from 8.1% in 2022. Foreign investment in Cyprus, as I mentioned before, constitutes a significant driver for development. In recent years, major multinational firms in the Information, Communication and Technology industry (ICT), have relocated or expanded their activities in Cyprus, supporting Cypriot GDP and reinforcing the vision to transform Cyprus into an emerging technology hub in the Mediterranean. Cyprus' importance as a foreign investment hub is also reflected in the Greenfield FDI Performance Index1, created by FDI Intelligence, according to which in 2021, Cyprus was ranked in 18th place out of 84 countries included in this index (climbing by 50 places compared to 2020). Undoubtedly, the shipping sector is another important pillar of Cyprus' economic success. Limassol, Cyprus' maritime capital, is the home of influential names in the shipping industry, which boosted the country to the top ranks of the sector. Indicatively, Cyprus is the largest third-party ship management centre in the European Union, one of the largest in the world2 and is primed for further growth.
The more closely a specific financial instrument is matched to the risk preferences of an individual investor, the harder it is to find another investor willing to trade that exact instrument in the event of a shock to those risk preferences. 32 In other words, the improved matching of risk to an individual’s risk profile has given rise to an increase in basis risk within the system. As one illustrative example, any investor wishing to hedge any exposure to the US sub-prime mortgage market over the past year or so would have little alternative but to trade in the standardised ABX indices (which themselves have often been relatively illiquid) rather than in the specific instrument they held. The developments over the past year have illustrated that hedges have often provided less effective than envisaged, and that there was a significant under-pricing of the inherent basis risk of many innovative structured instruments at the point of origination, given the lack of secondary market liquidity for such specific risk. Looking forward, it is quite likely that there will be greater unbundling of complex instruments into standardised components that are likely to be liquid and readily traded with low transactions costs, and bespoke elements that will command a higher risk premium given their inherent illiquidity. 8  BIS Review 93/2008  Strengthening financial infrastructure 33 Because of the specificity of the risk, innovative financial products are rarely exchange traded. Non-standardised products require the services of a broker-dealer to trade.

Banks succeeded in withstanding the first wave of these shocks, remaining at positive territory, in terms of both system level and individual level. Meanwhile, measures are gradually being taken to adequately manage investment portfolio, in line with the established conditions. Capitalisation of the banking system has continued to grow this year as well, to 19.26%, from 18.53%, reflecting also the enhancement in the regulatory requirements on macroprudential reserves and the minimum requirements for own funds and eligible liabilities (MREL). Both elements have strengthened the resilience and security of the banking system. The purchasing and then the merger of the OTP Bank with Alpha Bank drove to the further materialised consolidation of the banking system in 2022. This development introduced another important player in the group of large banks, which share above 70% of market, and it is expected to contribute positively towards a more competitive and expanded market. The segment of payments and the supportive infrastructure have also marked rather positive developments in terms of their processing during 2022, on the back of measures undertaken in the framework of the Albania National Retail Payments Strategy. The AIPS EURO system is already a reality, while your clients, consumers and businesses are experiencing its benefits, together with you. Based on available  2/4  BIS - Central bankers' speeches  statistics, we see that the euro-denominated interbank transactions within Albania have considerably picked up.
The federal fiscal stimulus sustained state and local governments through the severe revenue drops triggered by the recession. With the ebbing of the fiscal stimulus program, many state governments are taking actions to make long-term structural reductions in spending.   Federal fiscal policy is widely acknowledged to be on an unsustainable path for the long term and must be addressed (Chart 33). For example, the expiration of the Bush-era income tax cuts and legislated cuts in Medicaid, if they went into effect, would stabilize the debt to GDP ratio at around 80 percent; if, however, their effective date continued to be deferred, the debt to GDP ratio could move toward 100 percent fairly rapidly. The proposed budget delivered by the U.S. Administration on February 14 begins the process of adjusting the fiscal trajectory. Fifth, the challenge for monetary policy has been to provide stimulus and support in the wake of the combined financial crisis and recession. As noted at the outset, economic history suggests that such a combined financial and economic shock can drive the economy down very deeply. Strong, forceful policy – both monetary and fiscal – is necessary to stem the contractionary forces in the economy. The Federal Reserve responded by lowering interest rates to near zero, to provide substantial liquidity support to the economy and to conduct the first large-scale asset purchase program, more than doubling the Federal Reserve’s balance sheet. History also suggests that the recovery from a combined financial and economic shock can be fragile.

Third, substantial progress has been made on the large adjustment of financial positions in the household and financial institution sectors necessary after the substantial leveraging of households and financial institutions that occurred in the run-up to the financial crisis. Confidence is increasing that conditions are now in place to support sustained abovepotential growth, when it occurs.   Aided by the second installment of Large-Scale Asset Purchases (LSAPs), financial conditions have improved. After equity prices, interest rates and inflation expectations fell with the apparent slowing of the economic recovery in the summer, they began to move up again shortly after Chairman Bernanke’s speech laying out potential responses to the slowdown in late August in Jackson Hole, Wyoming (Charts 17–20).   The personal saving rate has risen to a level that is consistent with the historical relationship between that rate and household net worth relative to disposable income, reflecting the very large drop in household net worth from the combined impact of financial crisis and severe housing downturn (Charts 21–22).   The household financial obligation ratio has declined to the level that prevailed in the mid 1990s, reflecting a combination of debt repayment, debt charge-offs and lower interest rates (Chart 23). Households in all credit-quality quintiles are continuing to reduce their overall debt (Chart 24).   Banks tightened lending standards during the financial crisis and recession. Bank lending standards, while tight in level terms, have begun to ease (Chart 25).