samchain/econo-pairs-v1 huggingface dataset:
We already know that new loans and bonds can be issued without the index, based on the range of existing risk free rates and conventions already used in different markets. The SONIA Compounded index will provide an additional, optional tool to complement these, and firms can plan on the basis that the index will be ready to use ahead of the 2020 Q3 target for ceasing new LIBOR issuance. 14  FRBNY will commence publication of its SOFR Index on 3 March: www.newyorkfed.org/markets/opolicy/operating_policy_200212 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  FIGURE 3: Overnight Rates, Compounded Index and Compounded SONIA Rates 15  Some market participants may like us to go one step further by producing daily ‘screen rates’ for one or more specific period averages – for example 6-month, 3-month or 1-month compounded SONIA rates. Illustrative snapshots of those averages are shown at the bottom of Figure 3. But for screen rates to be of use and drive transition in sterling markets, the specific set of published rates would need to be simple, widely accessible, and based on a clear consensus from the market on the preferred convention to be used. Publishing a large number of alternatives could risk undermining the very certainty that borrowers need. So, in addition to announcing the index, we are today opening a consultation on whether there is sufficient market consensus for production of a given set of simple period averages, giving market participants the choice between a small number of alternative options.

Its final form will be a joint declaration by the Government and the Central Bank, like that dating from 2001. The discourse will therefore continue. In this context, I would like to thank the Confederation of Icelandic Employers for having this topic on its agenda today and for giving me the opportunity to express my views on the subject. But we must keep one thing in mind. The new framework will be better than the one we had before the crisis, but it will not be a panacea. Monetary policy is limited in terms of what it can deliver in the long run, and it will continue to be implemented under conditions of uncertainty in a constantly changing world. Under most circumstances, however, it should be able to provide us with medium-term price stability, and that is no small achievement. BIS central bankers’ speeches  5
Overview In my remarks today, I’d like to share with you the latest news on the status of our work. We continue to move forward on the basis of our commitment last October to finalise outstanding issues by mid-year and have made significant progress in a number of important areas. As I will discuss in more detail today, by calibrating regulatory capital to unexpected losses only, we found a better solution which will make regulatory capital requirements for credit losses more consistent with bank’s own economic capital models. We have made significant progress in securitisation, credit risk mitigation and operational risk. We have clarified Pillar 2, and we continue to make progress in the implementation of the Accord. After sharing this news with you on our progress to date, I’ll conclude with thoughts on the work ahead in the final months. BIS Review 12/2004  1  Common factor But first let me begin with a reminder of a goal that is a common factor in all our work: namely, the objective to recognise good risk management practices and to create additional incentives to further advance the discipline of risk management. This is possibly the most important and powerful channel of the New Accord for fostering financial stability in the medium and long run. And it builds on the widespread acceptance of the existing 1988 Basel Accord while addressing its key weakness.

That will help all of us to consider the work ahead and make us even better prepared for the implementation of the New Accord by the end of 2006. Indeed, those of you in the audience from institutions that anticipate adopting the most advanced approaches available when the New Accord is implemented have already begun to collect and process the necessary data. You know, as well as anyone, that the required commitment is substantial, and that supervisors’ expectations are high. Reading the results of the global Basel II survey conducted by GARP during the month of January, presented in your monthly newsletter, I was encouraged to see that “Most financial institutions (77%) across the globe are confident that they will achieve full compliance with the Basel II risk-capital accord in time for the 2006 implementation deadline.” Perhaps even more important is the conclusion that “these institutions are confident that their internal risk management will be at least somewhat improved (86% somewhat or greatly improved) following the rollout of Basel II”. This is why I think that what you will discuss at this conference mean much more than simply complying with new regulations and calculating capital requirements appropriately. We want banks to manage risks, not to manage Basel II.
On 17 September, American International Group (AIG), the largest US insurance company, had to rely on an emergency loan from the Federal Reserve. The company played a key role in the credit default insurance market. The financial crisis has heightened in several European countries. Banks in Belgium, Denmark, France, the Netherlands, the UK, Sweden and Germany have been taken over by the government or other financial institutions. In Iceland, the authorities took over the three largest banks and are now unwinding their international operations. The crisis at these banks prompted a flight from Iceland’s national currency which, combined with a property market crash, has triggered a sharp recession. In Norway, the effects of the financial crisis have also occurred more rapidly and become more pronounced than the outlook seemed to imply only recently. Norway is still in a better position than most countries. Capacity utilisation in the Norwegian economy has been very high. The surplus on current account is considerable and government finances are solid. Norwegian banks have limited exposures to international securities. They have suffered only small losses and recorded solid earnings in recent years. Furthermore, the Norwegian banking system is not large relative to the size of the Norwegian economy. In response to the uncertain environment, banks abroad and at home are reluctant to lend to each other and are tightening their credit standards. Credit channels are drying up. Money market rates have increased markedly, and to levels substantially higher than central bank key rates.

There is no definitive consensus on this question, and economists have an interesting debate underway about how much of this was luck and how much was skill. Most observers seem to attribute the record to the following mix of factors. The first, of course, is technology. We experienced during this period the benefits of a powerful technology shock that made possible a revolution in the productivity of investment, in transportation and communication costs, in business methods, in computing power, etc. Given the speed with which technological advances are diffused, one might expect the benefits to have been more broadly spread among other economies, but that has not yet happened on a scale that is sufficient to narrow the growth gap. The extent of technological progress and its impact on economic growth were magnified by the openness and flexibility of the U.S. economy. The United States became significantly more open over the past decade, with imports and exports as a share of GDP rising by about 50 percent. This happened in part because of the impact of trade agreements like NAFTA and the Uruguay Round that lowered U.S. trade barriers, and in part because we stayed out of the way of the impact of technology  BIS Review 4/2005  1  and globalization and did not, on the whole, try to insulate the U.S. economy from the pressures of competition. We are by choice significantly more flexible than the other major economies. The major deregulations (telecom, transportation, finance, etc.)
I thank you for your attention. BIS central bankers’ speeches  5

In 2010, the National Bank of Romania adopted the Strategy for IFRS Implementation by credit institutions starting with the 2012 financial year. For its implementation, the updating of the accounting regulatory framework was completed and steps were taken to ensure  BIS central bankers’ speeches  1  transition towards the new standards. Thus, credit institutions will prepare and present action plans whose implementation will be monitored by the central bank throughout the remainder of this year. Also in the first half of 2011, the financial reporting framework suiting the needs of the supervisory authority was updated. The National Bank of Romania, in its capacity as an authority responsible for prudential supervision of the banking system, has recently prepared and sent for public consultation the bills needed to elicit accounting figures reported by banks so that they match the banks’ prudential objectives. I trust this endeavour aimed at broadening the scope of applicability of such standards, serving as the basis for accounting and for preparing individual financial statements by credit institutions in Romania, should be seen as a sine qua non condition to secure effective supervision of the Romanian banking system. Let me stress that the importance of implementing the International Financial Reporting Standards by credit institutions in Romania is also reflected by the new financing agreements signed with international institutions (the European Commission, the International Monetary Fund, the World Bank).
Meat prices rose sharply as a result of livestock diseases, electricity prices rose considerably, partly the result of a normalisation following on from the extreme price falls during the previous year when the electricity market was deregulated, but also because of an unusually low level of snow during the winter season 1999-2000, which led to a shortage of water in the power station dams. There were also production problems at the oil refineries, which led to sharp rises in petrol prices. We noted as early as spring 2001 that even when an adjustment was made for these transitory factors, inflation had risen more than expected and we estimated that there was a risk that resource utilisation, which affects inflationary pressure primarily during the following year, could have been higher in 2000 than we had earlier believed. The krona weakened considerably during spring 2001, which added to the concern over inflation. A majority of the Executive Board decided to raise the repo rate in summer 2001. However, the downward revisions to the growth forecasts continued during the autumn and following the acts of  2  BIS Review 32/2002  terrorism in September, there was considerable insecurity. The terrorist attacks came during a sensitive time for the US economy, which was already in a downturn phase, albeit with a relatively good growth in consumption. It was estimated that the attacks would entail a deeper and more prolonged economic downturn with repercussions for the entire global economy.

This means that every person employed in the construction industry is providing a declining contribution to GDP, in relative terms. During most of the 1990s this difference increased, but it has recovered somewhat in recent years. This can perhaps be partly explained by the fact that there is still a large manual element that it is neither desirable nor possible to eliminate. At the same time, it is probable that the entire industry has a lower degree of rationalisation than other industries. This is also visible in the development of prices for both construction services and building materials, which is far above other industrial products, despite a relatively weak demand (OH 3 development of prices for building materials). There is  BIS Review 32/2002  5  something unhealthy in an industry where wages and prices rise despite a relatively weak demand and lingering unemployment in the industry as a whole. Let me conclude by saying that a recover in the Swedish economy is under way and that the Swedish economy has a good foundation on which to build, with a surplus in both our public finances and in Sweden’s international trade. Inflation is hopefully on the way down. At the same time, wage formation and pricing behaviour in general comprise an element of uncertainty as economic activity begins to pick up. Personally, I consider that this indicates a possibility that further interest rate hikes will be necessary in future.
The argument is that the same restraining effect on wage formation could now be achieved if the service sector sets the norm rather than the manufacturing industry. The idea is that if the service sector sets the norm too high, the Riksbank would increase the interest rate and that this would dampen economic activity, employment and inflation in the same way as if the manufacturing industry set the norm too high and lost international competitiveness. The sector exposed to international competition should set the norm My own view is that the sector exposed to international competition still has a central role to play in wage formation. But this sector should not be equated with the manufacturing industry. Other sectors are also exposed to international competition to varying degrees. It is also important that there is consensus between the negotiating organisations on what part of the economy should set the norm. I do not think that there is any major difference between the previous situation with a fixed exchange rate and the present situation with a floating exchange rate. Our inflation target is largely the same as in other countries. As we saw earlier, inflation over the last 15 years has also been more or less the same in Sweden and Germany. The only way that we can have higher wage increases is if the development of productivity in Sweden is higher than in other countries.

The growth of productivity was surprisingly strong; certainly much stronger than many of us expected when the agreements were negotiated. Productivity has now fallen in seven consecutive quarters (see Figure 6). My impression is that the recent development of productivity is in all essentials a result of weaker economic activity. Growth has declined rapidly while the number of people in employment has continued to increase. If we study how GDP and employment vary over the economic cycle it becomes clear that there is a time lag in the cyclical fluctuation in employment in relation to production. It also appears that this time lag has increased since the beginning of the 1990s (see Figure 7). The Riksbank's assessment is that a recovery in the growth of productivity is probable over the next few years. This is indicated, for example, by the historical links that I have just mentioned. However, we do not expect the rate of growth to be as high as between 2002 and 2006. In the latest Monetary Policy Update, the assessment is that the growth of productivity in 2010 and 2011 will average over 2.5 per cent. It is more difficult to assess the growth of productivity in the longer term. A number of explanations have been put forward for the rapid development of productivity up to and  BIS Review 154/2008  5  including 2006.
Maintaining “too low for too long” interest rate policy leads to excessive risk taking that can sink the economy. This risk-taking channel of monetary policy now features prominently in the mainstream economic literature. Today, virtually all central banks are taking financial stability considerations seriously in their monetary policy deliberation. Talk of risks to financial stability has now been mentioned frequently in several central banks’ monetary policy statements. The takeaway from this is  BIS central bankers’ speeches  1  that once their economies get back to normal, central banks in developed economies will consciously avoid keeping the policy rate too low for too long. Financial institutions must therefore prepare for a higher interest rate environment as well as volatility during the transition period. The recent emerging markets turmoil provides a fresh example of the latter, even though the current stage of QE tapering is just the tip of an iceberg of what is coming. Let me move on to re-regulation. The pre-crisis mantra was to let deregulated financial markets take care of themselves. Alan Greenspan, the former Fed Chairman who pushed to have derivatives remain unregulated, expressed that he was in “shocked disbelief” to see what happened. In addition, a number of observers, including Nobel Prize winning economist Joseph Stiglitz, believe that the repeal of the Glass-Steagall Act in 1999, which allowed commercial banks to engage in investment banking activities, was among the major factors behind the crisis.

That stance combines an exceptionally low policy interest rate – the federal funds rate in a range of 0 to 25 basis points – with forward guidance indicating that this range would be appropriate at least as long as the unemployment rate remains above 6½ percent, inflation is projected to be no more than 2½ percent between one and two years in the future, and inflation expectations remain well anchored. Moreover, to support a stronger economic recovery, the FOMC is purchasing Treasury securities at a rate of $ billion per month and agency mortgage-backed securities (MBS) at a rate of $ billion per month, and has stated its intention to continue purchasing assets until it sees substantial improvement in the outlook for the labor market, conditional on ongoing assessment of benefits and costs. Combined, these actions are intended to ease financial conditions and thereby help to establish a selfsustaining economic expansion. Turning to recent developments, incoming data on the U.S. economy have been mixed of late. Based on the advance estimate, real GDP declined slightly in the final quarter of 2012, which was below the consensus expectations of an increase of around one percent. In addition, in January payroll employment rose by just 157,000, below the 200,000 average monthly gain in the fourth quarter, and the unemployment rate edged up to 7.9 percent. Offsetting these soft indicators, we see evidence beneath the surface that private demand firmed in the final months of 2012 and has been reasonably well maintained thus far this year.
Another appreciation of the Swiss franc would constitute a very substantial threat to the Swiss economy and the risk of deflationary developments coming about. This is why it is necessary to accept an expansion of the balance sheet arising out of the enforcement of the minimum exchange rate. The SNB is in a position to bear the ensuing risks. Even at a level of CHF 1.20 per euro, the Swiss franc is still high, presenting large parts of our economy with a difficult situation. Consequently, we will continue to enforce the minimum exchange rate with the utmost determination and will buy foreign currency in unlimited quantities for this purpose. If necessary, we stand ready to take further measures at any time. Management of foreign currency investments I will conclude today with a few comments about the management of our foreign currency investments. In the recent period, this topic has returned to the spotlight of public discussion. In particular, the possibility of establishing a sovereign wealth fund with the SNB’s foreign currency holdings has given rise to discussion. In this respect, it is important, first of all, to point out that the SNB does not hold its foreign currency in the form of banknotes or bank deposits. The funds are invested in different investment categories and currencies. For a considerable period, the SNB has held not just the traditional instruments – government bonds of countries with high credit ratings – but also bonds issued by private sector borrowers and shares.

Overall, the economy in the euro area stagnated. As in the last monetary policy assessment, we assume that the global economy will continue to recover slowly. This will be driven by globally expansionary monetary policy and strong domestic demand in the emerging economies. In the euro area and the US, developments are likely to be more subdued. Here we assume that the European financial and sovereign debt crisis will gradually ease. However, risks in this respect remain high. In particular, the difficult situation in Greece and Spain has already led to a significant deterioration in the  BIS central bankers’ speeches  1  confidence of households and companies in the euro area. As a result, the economic situation remains vulnerable. These high risks are also affecting the financial markets. Following a temporary recovery at the beginning of the year, the situation on the financial markets at present is again tense. A substantial correction has taken place on the share markets. By contrast, investments perceived to be safe, such as US, German or UK government bonds, recorded all-time low yields and correspondingly high price gains. Real yields on these investments are in negative territory for most maturities, measured in terms of inflation expectations. In addition, interest rates on money markets are at record-low levels worldwide. Swiss economic outlook In Switzerland, real GDP rose faster than expected in the first quarter.