samchain/econo-pairs-v1 huggingface dataset:
Economic statistics are the most important source of information, but they are published with a lag and some of the figures are revised frequently. In autumn 2002, Norges Bank established a regional network as a tool to gauge the level of activity in the Norwegian economy. The network consists of companies, organisations and municipalities throughout Norway. In the two rounds of talks in connection with Inflation Report 2/03, 450 contacts were interviewed. We will be having six rounds of talks each year with business and community leaders concerning financial developments in their enterprises and industries, with about 200 visits in each round. The selection of contacts represents the production side of the economy, both industry-wise and geographically. In the course of 2003, the number of contacts in the network will rise to about 1000 persons, who will be contacted once or twice a year. The Department of Economics at the Norwegian University of Science and Technology is responsible for the network in Trøndelag county and conducts contact meetings. Official statistics and current market information will continue to be the main basis for our assessments, but due to the time lag and revisions of statistics, supplementary information is useful. The regional network provides up-to-date information on the state of the Norwegian economy. Regular communication with local contacts in Norway's business and community life provides us with information that supplements available official statistics.

The Fed and the Bank of England have introduced a new “collateral swap facility”, under which the banks can temporarily swap their unsaleable securities against liquid government paper. The pressure on banks to refinance their balance sheets is thus reduced without additional central bank money having to be injected into the market. The Fed went even further in providing support during the sale of investment bank Bear Stearns. It took illiquid and risky securities directly onto its own balance sheet. Thus, in the third phase, some countries administered new remedies in addition to the existing ones, and even performed a few emergency operations. In the SNB’s case, the range of counterparties admitted to repo auctions has already been very broad for some time. Indeed, shortly before the turmoil began, we decided to expand the range of eligible securities for money market operations, whilst still retaining stringent quality standards. Measures such as those used in the US and UK have not proved necessary in Switzerland to date. Monetary policy steering during the crisis The measures taken by the SNB, as described above, were primarily aimed at ensuring the smooth functioning of the Swiss franc money market during the turbulence. However, it is also important to look at the actual implementation of monetary policy strategy during the crisis. Of particular interest in this regard are two aspects which have occasionally been misinterpreted by the general public.
And, once the capital outflow had started, adjustment needed to be more abrupt than might otherwise have been necessary, in order to re-establish confidence. But there are real dangers in extreme market movements or in excessively severe macro-economic adjustment to contain them. That could cause a vicious circle of domestic default and systemic financial weakness in the affected country. And it would have seriously adverse implications - in terms of both financial and economic knock-on-effects - for the global economy. That, essentially, is why it is in the self-interest of the international community to attempt to mitigate the market and macro-economic adjustment pressures in Asia by providing financial support. It is why the international community responded to the crisis in Asia by promptly offering very large amounts of official assistance - $ billion in the case of Thailand, $ billion for Indonesia and $ billion for South Korea. But such official financial help cannot be unlimited and it cannot be provided without strings. It, too, has real dangers. If it were too readily forthcoming it could encourage “moral hazard”, partly by encouraging macro-economic laxity in other potential borrowing countries, but especially by encouraging commercial lenders - particularly foreign currency creditors - in the belief that they will be bailed out if things go wrong. That would be likely to add to the problem of potentially volatile capital inflows next time around.

Complex and opaque links between government, financial institutions and non-financial companies made it difficult for outsiders to understand the real nature of their exposures. Financial markets were not well developed, leaving the system heavily dependent upon the banks. There was inadequate regulatory or supervisory oversight. There was widespread government influence over financial flows, which importantly also contributed to a perception that much of the borrowing was effectively under-written by the government. The list could go on. The problem was compounded by the absence of any real perception of exchange rate risk. Borrowers were evidently confident that governments would maintain their exchange rate pegs against the dollar so that unhedged foreign currency debt, much of it at short term, appeared a cheap alternative to domestic currency borrowing. The result was a build-up of short-term private sector foreign currency liabilities, by banks and non-banks, which was not fully appreciated, and which left the Asian economies especially vulnerable to a flight of capital in the event of a change in sentiment. The problem is that national authorities can create their domestic currency, if they choose to do so, even if it leads to inflation, but they cannot simply create foreign currencies in the same way. So, once the run started, it was violent and contagious. There are certainly all sorts of lessons to be drawn from Asia’s experience for the future relating to the structural weaknesses in the financial system that allowed the problem to emerge.
Via the programme, we are offering banks loans of up to SEK 500 billion, on condition that the banks in turn lend the money to Swedish companies. To strengthen the programme and ensure that the money reaches companies, the Riksbank has also made it possible temporarily for more banks and credit institutions to gain access to our money. We are doing this because many small companies around the country are customers at smaller, local banks rather than at the major banks. Something else that often happen in times of crisis is that the demand for safe and liquid assets increases as agents try to dispose of riskier assets. The safest and most liquid asset on the financial markets is central bank money, money created by the central bank. The Riksbank has therefore taken measures to make it easier for banks to gain access to central bank money without having to sell their assets to a great extent. We have eased the requirements regarding the collateral banks can pledge when they borrow from the Riksbank. We have, for example, given banks generous opportunities to use a greater proportion of mortgage bonds and other covered bonds as collateral. More generous collateral requirements also strengthen the programme of corporate lending and simultaneously help to keep the large Swedish mortgage bond market running. We have also cut the lending rate for Riksbank loans overnight to banks from 0.75 to 0.20 per cent.

In addition, banks are being offered the opportunity to borrow an unlimited amount of money each week against collateral at three months’ maturity at an interest rate of 0.20 percentage points above the repo rate, which is at zero per cent. In addition to this, the Executive Board has decided that the Riksbank will extend its purchases of securities by up to SEK 300 billion up until December. The Riksbank normally buys government bonds. In these exceptional circumstances, however, it is important to ensure that all major markets continue to function. For this reason, the Riksbank has now also begun to purchase mortgage bonds and will purchase municipal bonds. In the last few days, corporate bonds and commercial paper issued by Swedish non-financial corporations have also been included in the asset-buying programme. These bond purchases increase the access to credit in the economy in general and future purchases of corporate bonds and commercial paper will provide additional support to Swedish companies in particular. Just like the Riksbank’s previous purchases of government bonds, the new purchases will also help to keep monetary policy expansionary and to stimulate activity in the economy. Given the global nature of the crisis, it is also important to ensure that there is access to US dollars (USD) in the Swedish financial system. To strengthen access to one of the most important currencies for Swedish companies, the Riksbank has announced that we will lend up to USD 60 billion.
Advances in the last two decades have made Bayesian econometrics a key tool for central banks. Norges Bank has benefited greatly from this, and two of our most important policy tools are results of such advances. NEMO (Norwegian Economy Model) is our estimated DSGE model. The model is based on international research and model development over the past 20 years. We use it to produce forecasts and guide monetary policy analysis. This year, the hype is “forward guidance”. The Fed does it, the Bank of England does it, and the ECB also. We have done it since 2005. We publish forecasts of the key policy interest rate and NEMO has been essential for the construction and, above all, explanation. When I describe Norges Bank’s policy decision at press conferences, I often refer to NEMO equations in order to explain our decisions. Our second key policy tool is our System of Averaging Models, SAM. The short-term forecast from SAM is the basis for the initial conditions when we use NEMO and when we make our policy decisions – and hence of core importance to monetary policy. Theory and experience suggest that a weighted average of forecasts from different models is often more accurate than forecasts provided by individual models. Norges Bank’s short-term forecasts are based on combinations of statistical and econometric models, where each model is assigned a probability depending on past density forecasting performances. Currently, we are working on how to incorporate mechanically density predictions from SAM into NEMO.

Jan F Qvigstad: Seminar on Bayesian Econometrics (ESOBE) – opening remarks Opening remarks by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the fourth annual meeting of the European Seminar on Bayesian Econometrics (ESOBE), Norges Bank, Oslo, 22 August 2013. *  *  *  Good morning everyone! It is a privilege for me to welcome you to this year’s European Seminar on Bayesian Econometrics, which has attracted the interest of such a distinguished group of international scholars. I would like to extend a special welcome to those of you who have traveled far in order to be here today. As a practitioner of economic policy, I have experienced the use of economic models for almost half a century. Back in the late 1970s, the Norwegian Ministry of Finance used a large input-output model to calculate the effects of fiscal policy. Somewhat contrary to common sense – even then – the model suggested that an increase in government spending would reduce inflation. To remedy this obvious mistake, we calibrated a new model – using our priors on critical parameters – to get results that were more consistent with our experience. The lesson I take away from this is the following: To be useful, models need to be consistent with the view of the world that we apply to policy. This consistency principle, in my view, lies at the heart of the progress made possible by Bayesian modeling.
A Swedish export company with income in dollars, but paying out wages and taxes in kronor, must exchange dollar income for kronor. The company transfers the foreign exchange risk to the bank, by selling dollars for kronor. This can be done in two ways: either the company sells the dollars when it receives them, on the spot market, or it sells its future dollar income as soon as it receives an order, on the forward market. In both cases the bank buys dollars and thus takes over the foreign exchange risk. The bank also makes a charge for doing this. Today the margins in foreign exchange trading are 0.02 per cent. The bank's foreign exchange risk thus increases, unless another client happens to make an equally large foreign exchange transaction in the opposite direction at exactly the same time, ensuring that the bank's holdings of various currencies remains unchanged. This is, of course, very unlikely. The export company's foreign exchange transaction therefore gives rise to several transactions between banks, with the aim of distributing the foreign exchange risk throughout the banking system. This means that the clients' purchases and sales of various currencies and in various banks are matched against one another, to avoid an increase in the total risk in the banking system. The first foreign exchange transaction will therefore lead to many new transactions before all of the banks have once again achieved a healthy level of risk taking.

Eva Srejber: How do we create stability in financial markets? Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at a public hearing in the Riksdag: “Economic policy in a global economy - is the Tobin tax an obstacle or an opportunity?”, Stockholm, 3 April 2001. *  *  *  Thank you for the invitation to come here. This is a subject that I am often asked to discuss in various parts of the country. There is considerable interest in the challenges facing economic policy in an increasingly internationalised world. The credit market is central to a country's economy. Financial institutes are needed to mediate payments for households and companies, such as wage and invoice payments. In addition, the institutes mediate capital from savers to borrowers. This can comprise companies making investments or households buying their own home. All in all, a well functioning financial sector is a necessary condition for a country to achieve prosperity. However, mediating payments and lending money also involves taking risks. The international foreign exchange market in turn links together the national credit and payment markets, so that payments in one currency can be exchanged for payments in another currency. This enables trade, investment and foreign aid between countries. International capital flows enable savings in countries with a capital surplus, after exchange on the foreign exchange market, to finance investments in countries with a capital deficit.
These applications are using a “matchmaking concept” to link customers to trustworthy financial advisers, based on their unique investing needs and personality. In addition, different pricing strategies could also be explored. These should be commensurate with the profile of a prospective Gen Y customer. For example, fees can be adjusted in proportion to a younger customer’s income level, rather than linked to assets under management, as is typically the case now. Flat fees or hourly charges may also be considered for customers with smaller account balances. Conclusion I have spoken at length about the key tenets of a trusted adviser today, but I also understand that transforming the profession into where it needs to be in the future is not something that can happen overnight. Like any other transformation, the effort will require meticulous planning, strategy and sheer determination through the many changes to come. Professionalism, independence and adaptability will all be hard-won victories. While Bank Negara Malaysia stands ready to support initiatives in this direction, it is the industry that must ultimately collaborate to create the business models and value propositions that will define the financial advisory services of the future. The Association serves as an excellent platform for such collaboration, with the potential participation of 618 registered financial advisers’ representatives to date. I welcome the innovations that are to come from the Association and the members.

To many, financial planning can be a fairly complicated task. Identifying personal financial needs requires consideration of an impossibly wide array of factors, finding the right solutions for them even more so. For years, financial advisers have played the crucial role of condensing the vast technical complexities of finance into practical, reliable advice on a personal level. It is a role whose prominence I am certain can only grow with time, but only if it successfully adapts to a rapidly transforming financial and social landscape. In this connection and before elaborating further on the concept of a trust, I would like to draw your attention to three major trends that are shaping the industry as we speak. 1/5  BIS central bankers' speeches  First, demographic shifts. Malaysia is a relatively young nation. 40–50% of our workforce are aged between 21 to 35, also known as Gen Y. This remains a largely untapped market for financial advisory services, and for a reason – many individuals within this age group are skeptical of, or distrust financial advisers. According to a survey by the Asian Institute of Finance in 2015, only 37% of these individuals had sought advice from a financial adviser. Of this, only 26% trusted the advice they received. This is complicated by the fact that these are highly connected, tech-savvy individuals with broad access to online platforms that act as a primary source of information and advice.
On the international front, global and European GDP growth forecasts have been revised downwards in recent months. To mention what appear to have been the most important factors, this has been due to the decline in activity in some of the main emerging economies and to the sluggishness of world trade. BIS central bankers’ speeches  1  As a result, for this year and for next year too, we should expect more moderate growth in the Spanish economy than in 2015. Indeed, the latest projections published by the Banco de España and by various analysts and international institutions are along these lines, with GDP growth rates of 2.7% in 2016 and 2.3% in 2017. This lower growth will come about when we are still far from having sufficiently corrected the serious imbalances that built up in the expansion and in the early years of the crisis. These may be listed under four headings: the labour market; fiscal consolidation and public debt; private debt and dependence on external funding; and productivity. Let us look more closely at each of these four aspects. 1. The reduction in unemployment  Firstly, unemployment. The main challenge facing the Spanish economy is to reduce the unemployment rate, which stood at the end of last year at almost 21%, 6 pp down from its peak at the start of 2013, but still far above the average for the European Union and the level in almost every other euro area country.

It is planned to finalize the studies on the Financial Sector Assessment Program, which were started at the beginning of 2006 with the  4  BIS Review 68/2006  coordination of the Undersecretariat of the Treasury in order to contribute to the ongoing reform process of the Turkish financial sector, by the end of the year. The Financial Sector Assessment Program process in Turkey is expected to contribute to the development of the financial sector in terms of institutional infrastructure. Furthermore, the resistance of the sector will be analyzed on an international platform via stress tests to be applied to banks within the framework of the Program. Distinguished Guests, Proper and effective implementation of macroeconomic policies, in other words, the achievement of macroeconomic stability, is the sine qua non of financial stability. It is very important for the banking sector, which should be able to cope with the Basel II process in the near future, that the improvement of the infrastructure of the financial system continues and that efficient control and supervision is carried out. As firms will contribute to stable growth with the funds that they obtain from banks, the compatibility of the corporate sector with the Basel II process is of great importance as well. In this framework, determined implementation of current economic policies, increased confidence in financial markets, the establishment of risk culture and the adjustment of economic actors’ risk perceptions according to dynamic conditions will strengthen the stability in financial markets.
Peter Pang: Islamic capital and money markets Welcoming remarks by Mr Peter Pang, Deputy Chief Executive, Hong Kong Monetary Authority, at the workshop on “Islamic capital and money markets”, Hong Kong, 19 March 2013. *  *  *  Distinguished guests, ladies and gentlemen, 1. It is my great pleasure to welcome you to this Islamic finance workshop. We are particularly grateful to Mr. Mohd. Radzuan, Mr. Azidy and Mr. Azahari, the experts from Malaysia, who have flown all the way to Hong Kong to share with us their knowledge on Islamic capital and money markets and their valuable experience in developing these critical components of Islamic finance. I would also like to thank Mr. Najmuddin of Bank Negara Malaysia for bringing the Malaysian delegation here. Two fast developing asset classes in the global markets 2. This workshop comes at a very opportune time as Hong Kong is looking to develop Islamic finance as a way to diversify our financial platform and further enhance our capability as an international financial centre. In my view, to be a truly international financial centre, one needs to develop a conducive platform for the two fast developing asset classes in the global markets – Islamic financial products and RMB-denominated investment assets. 3. The development of Islamic financial markets has been phenomenal in the past two decades.

First was the so-called flash rally of October 2014; then, the repo market distress in September 2019; and third, the extraordinary dislocations at the onset of the COVID-19 pandemic in March of 2020. General George Patton once said, “Prepare for the unknown by studying how others in the past have coped with the unforeseeable and unpredictable.” It’s a good piece of advice—and one that 1/4  BIS central bankers' speeches  should guide our work on Treasury market reform. The IAWG report I mentioned earlier reviews these events, so I won’t repeat them here. However, two lessons are clear. First, the unforeseeable and unpredictable will happen, and can result in significant stresses in the Treasury and related markets that may spread to broader financial conditions. Second, when disruptions have been sufficiently severe and persistent, the market has not been able to quickly self-correct without official-sector intervention. The severe disruptions to the Treasury and funding markets in March of last year illustrate these points. The incipient breakdown in market functioning quickly spread to other segments of the U.S. and global financial markets, risking a broad-based pullback in the availability of credit that is essential for our economy. The speed and extent of the market disruption necessitated immediate and dramatic action, the scale of which was truly unprecedented. At the New York Fed, we are used to talking in very large sums, but even for us, the figures were staggering.