samchain/econo-pairs-v1 huggingface dataset:
Although they have helped to limit tensions in the money market, the situation is still far from normal. Despite all the liquidity measures that have been taken, term premiums in the money market remain elevated. This provides further evidence of the fact that the lack of confidence in the market cannot easily be removed by central bank action alone. Market participants have to undertake the necessary steps themselves to restore market confidence. 7  In October 2007 (unrelated to the financial market crisis), the SNB expanded the list of eligible collateral by around 50%, including in its list securities from issuers domiciled in the European Union and the European Economic Area denominated in Swiss francs and other major currencies. BIS Review 71/2008  5  5. Lessons and consequences for liquidity management operations  What lessons can we learn from the financial market crisis? There are, of course, many lessons to be learned. However, I would like to concentrate on those that are related to central bank liquidity management operations. 8 Liquidity management vs. changes in the stance of monetary policy The first lesson concerns the distinction between liquidity management and monetary policy. The crisis has made clear to financial markets, but also to central banks, that in order to safeguard financial stability during financial market turbulence, central banks do not depend solely on the monetary policy rate, but have a broad arsenal of liquidity management instruments at their disposal.

The slower recovery abroad, with lower policy rates, indicates that interest rates in Sweden will not need to be so high. Household debts still cause concern One factor that I personally have taken into consideration when raising the repo rate this time and supporting the forecast for continued increases, is the development of household debt. If this does not slow down, I believe that there is a risk of financial imbalances arising, if not within, then beyond the forecast horizon. I believe that a gradual increase in the repo rate will contribute to reducing this risk. Finansinspektionen’s recently introduced loan restrictions are also one step in the right direction. A future challenge will be to find an appropriate balance between supervisory regulation and interest rate-setting. Of course, this overall picture may have to be revised if developments do not turn out as we are expecting. I have already pointed out that the global economy is facing fairly major challenges. A new economic downturn abroad could lead to lower resource utilisation and inflation in Sweden, too. Monetary policy would then need to be more expansionary than in the forecast. But there is also a possibility that the economic upturn in Sweden turns out to be faster and stronger than we have assumed. In this case we might need to raise the repo rate slightly faster. But none of these alternatives is our main scenario at present.
Svein Gjedrem: Housing finance in Norway Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), to the Norwegian Covered Bond Forum, Oslo, 27 January 2010. The text below may differ slightly from the actual presentation. This lecture does not contain assessments of the economic situation or current interest rate setting. *  *  *  From state to private housing finance After the Second World War, the credit market in Norway was regulated. Credit demand was high. The Norwegian state endeavoured to steer credit flows towards priority sectors and the state banks therefore played an important role as credit intermediaries. There were considerable housing shortages after the war. For some population groups, living conditions were poor. In1946, the Norwegian State Housing Bank was established to provide credit for new residential construction. This bank and Statens Landbruksbank (the state agricultural bank) dominated housing finance for new house purchases up to the 1980s. State bank mortgage rates were initially set based on political objectives, but were over the years gradually revised up and adjusted to market rates. With the gradual deregulation of the credit market in the 1980s, state lending institutions assumed a lesser role in housing finance and the private market took over. Sales of existing homes increased. In 1992 private banks provided the majority of residential mortgages. Their share of housing finance was also high compared with other Nordic countries. In Denmark and Sweden, mortgage institutions were the primary source of residential mortgages.

To facilitate banks’ access to borrowing from Norges Bank during the period of financial turbulence, collateral requirements for loans were temporarily eased. In October 2009, it was announced that the temporary rules for collateral requirements would be changed. Acceptance of new securities eligible under the temporary rules was discontinued in October. Securities already approved under the temporary rules would be eligible as collateral until maturity, or at the latest until 15 February 2012. Changes in the so-called bank quota were also announced. Under the current rules, up to 35 per cent of a bank’s borrowing facility can be based on collateral in bonds issued by other Norwegian banks. Debt instruments issued by foreign banks will be included in the bank quota as from 1 December 2010. Securities issued by banks will no longer be eligible as collateral for loans as from 15 February 2012. Covered bonds will still be eligible as collateral, including, until further notice, bonds to which no credit rating has been assigned and bonds issued by a bank’s own mortgage company. This is expected to contribute to the development of the Norwegian covered bond market. The housing market – a source of disturbances in the economy Banks have had strong incentives to extend credit for house purchases. Even during the banking crisis around 1990, Norwegian banks’ losses on residential mortgages were low. This is reflected in the low risk weights for residential mortgages in banks’ risk models. For an individual bank, residential mortgages are low-risk loans.
In addition, by pooling resources with those available in neighbouring countries, Luxembourg has managed to address resource limitations and other problems that it could not deal with in an effective way on its  1  Excluding OECD member states and a number of countries that are well known for their pro-trade orientation, Dollar and Kray (2001) find that developing countries who had the largest trade to GDP ratios also experienced the highest per capita growth rates since the 1960s. They note, for example, that these countries - which they term the “post-1980 globalizers” have seen their average annual growth rates jump from 2.9% in the 1970s and 3.5% in the 1980s to 5.0% in the 1990s. By contrast, the non-globalizers have seen their growth rates fall from 3.3% in the 1970s to 1.4% during the 1990s. Dollar., E. & A. Kray. (2001) Trade, Growth and Poverty. World Bank, Policy Research Department, Working Paper No. 2615. USA, Washington. 2  "The Challenge to Small, Landlocked Transition Economies - Trends and Policies in the World Economy”, in World Economic and Social Survey 2001, Department of Economic and Social Affairs, United Nations. 3  "Consequences of Trade and Financial Integration for Macroeconomic Volatility”, in IMF, World Economic Outlook 2002. 4  While Malta ranks 50th in terms of income per capita, these countries are among the 20 richest economies of the world. World Development Indicators 2002. World Bank. BIS Review 69/2002  1  own.

The situation is not expected to change in the near future in view of the differences among small 22 states themselves. As an EU member, moreover, since Malta’s representation in EU decisionmaking bodies would be more than proportionate to its population, its voice would stand a better chance of being heard, not least because most of the other acceding countries are also small and could be potential allies on issues of common concern. Indeed as Malta’s recent experience with the OECD and developments relating to the proposed EU savings tax directive have shown, Malta is likely to obtain a better deal as an EU member. Four years ago the OECD was planning to take action against non-co-operative countries on its list of “harmful tax havens”. Malta was not on the list because the Maltese Government undertook to eliminate any offending practices and to exchange information with foreign tax authorities once a level playing field was achieved. But the relevant aspect of this episode is that small jurisdictions are being compelled to revisit their strategies and diversify their economies in a manner which does not harm the interests of stronger, high-tax economies, and that standards and codes of good practice will increasingly serve as another dimension of competition. In these circumstances it cannot but be perceived as an advantage by prospective members that the EU not only has the capacity to resist threats to the competitiveness of its members, but also has enough bargaining power to persuade its competitors to reach a compromise acceptable to its members.
There have been reports in the media, for instance, on importers who can no longer withstand the cost increases caused by the weak exchange rate. Mad cow disease and foot and mouth disease have made us get used to the idea of higher meat prices. Poor harvests, worm-eaten apples, etc. have meant that the resistance to higher fruit and vegetable prices is weak. The fact that certain trade union representatives are also saying in the media that they may have to break wage agreements if inflation remains high, indicates that they do not fully rely on price stability being maintained. The implicit inflation expectations, which can be seen in the pricing in the interest rate market, also show that inflation expectations two years ahead are rather high. It is, of course, worrying that inflation is higher than expected. The lowering of the repo rate by 0.5 percentage points in September was partly to contribute to reducing uncertainty and raising confidence in the future in an unusually uncertain situation. However, the future prospects are no longer as uncertain and the economic slowdown appears to be in its final stages. There is therefore no longer a need for a large insurance against a severe decline. It is important to react quickly with interest rate policy when there are downside risks, but it is equally important to react quickly to upside risks.

Beyond the yearly shadow banking monitoring exercises, policy makers intended to make sure that no part of the financial system would be left unregulated and that a similar set of rules should apply to a similar set of risks. For the sake of a better regulation of globally systemically important institutions, some progress remains possible in the monitoring, and the need for relevant data in particular as regards the better understanding of inter-linkages among G-SII. Cross-sectorial consistency was seen as a key factor to prevent any opportunity for regulatory arbitrage and preserve appropriate level playing field. The Financial Stability Board following the G20 recommendation has launched an ambitious regulatory program which aims at better controlling risks which are related the shadow banking sector. Indeed, the US have recently adopted a regulatory framework for Money Market Funds (July 2014). Other reviews are still ongoing, I am thinking of the assessment of risks and systemicity of asset managers whose assets under management have experienced a major growth these last few years, or the rapid development of ETFs providing real time liquidity on their liability while their matching assets have a lower liquidity. In Europe, this global initiative translated into a number of regulatory initiatives such as the Securities Financing Transactions Regulation (repos and SFTRs) or the Regulation of Money Market Funds. The final objective was to turn the shadow banking sector into a safer and regulated “market-based financing”. 2.
This intelligence was soon being fed back to Head Office. During the 20th century, this intelligence-gathering role was expanded. It has grown steadily, in scale and importance, since then. Today, the Bank’s 12 Agencies across the UK have around 9,000 regular company contacts providing real-time intelligence on the economy. Structured surveys from the Agents first appeared in 1997. Agents’ National Scores were first introduced in the mid-1990s and first published in 2006. Agent’s Company Visit Scores were first developed in 2007 and first published in 2015. 59 Brexit provides as good an illustration as any of the ways the Agents’ high-frequency, high-resolution intelligence can improve the Bank’s understanding of the economy. A key question recently has been whether and how companies have been preparing for Brexit.60 The Agents’ network was used not only to track how prepared companies were over time, but what form this contingency planning was taking – stock-building, seeking alternative suppliers, building cash reserves etc (Chart 26). 56  Haldane (2017). For example, Agerström et al (2016). 58 Bank of England (1963). 59 Ellis and Pike (2005). 60 Bank of England (2019). 57  44  All speeches are available online at www.bankofengland.co.uk/speeches  44  Chart 26: Contingency planning by firms for Brexit  Sources: Bank of England and Bank calculations. Company contacts also helped the Bank’s Brexit scenario planning. Companies were asked about the consequences for their businesses of a “no deal, no transition” Brexit. The results are shown in Chart 27.

And house prices and consumer confidence do seem to be closely correlated. So house prices may be a leading indicator of sentiment about the economy and hence of consumption and domestic demand. But, just like equities, house prices also reflect changes in real interest rates. Since long-term real interest rates have fallen from over 3½% to below 3% over the past year, it is not surprising that house, and other asset, prices have risen. Precisely because housing is an asset, its price is more volatile than most goods and services in the retail price index. As such, it is important to look at house price levels as well as at their rates of change. Although house prices have been rising quite rapidly over the past couple of years, they returned to the peak reached in the late 1980s only at the end of last year, and exceeded it for the first time in the first quarter of this year. That, of course, followed the sharp fall in house prices in the early 1990s - house prices fell by over 10% between 1990 and the end of 1992. For most families, apart from future earnings and pensions, their wealth is dominated by one asset and one liability. The asset is their home and the liability is the mortgage on it. But the difference between these two is sensitive to the state of the economy. In a low inflation world, house prices are likely to rise and fall whereas the mortgage liability is fixed in money terms.
•  MAS will work with the financial industry, the Institute of Banking and Finance, training providers, and the universities and polytechnics to provide learning pathways relevant for a Smart Financial Centre. •  We will also provide FIs funding and other support for training opportunities, to help our people acquire specialist capabilities in the relevant areas of FinTech. Conclusion Let me conclude. I have said much about technology and FinTech. The larger picture is really about promoting a culture of innovation in our financial industry. •  Such innovation is not always about high-tech. •  It is about designing better work processes and creating new business models that will deliver higher growth, more enriching jobs, and better services for the consumer. •  Technology is very likely to be a key enabler for all this, and we must make a concerted effort to understand it and use it effectively. Thank you. BIS central bankers’ speeches  11

Big data has brought us tools and techniques that can be applied to rapidly process large sets of traditional data too. This makes it much easier for us to realise projects like MMSR and AnaCredit and helps us to keep pace with an ever-changing world. AnaCredit, for instance, involves immense sets of extremely granular data, reflecting the far greater complexity and interconnectedness of today’s economy. To understand this complexity and assess the interconnections, we need a very detailed view. And this is exactly what AnaCredit gives us. Thanks to the granular data it provides, we will be better able to understand what is driving credit growth, making it easier to know whether such growth is healthy or not. MMSR, on the other hand, is about speed: money markets move fast and never stop. So taking a snapshot every now and then does not suffice. We need much faster data, and that’s what MMSR provides. It allows us to constantly assess who lends how much money to whom in the money market and at what rates. This gives us a very clear and quick picture of how the market is structured, how exposed players are to one another and how vulnerable they are. And MMSR helps us to keep pace in other ways too. Look at the important role benchmark rates play. They provide anchors for contracts in financial markets and are important for the 3/4  BIS central bankers' speeches  transmission of monetary policy.
Moreover, it was difficult to communicate how “appropriate” the forward rate path was as an interest rate forecast, and the logical consequence of this was to quite simply go on to publish our own interest rate forecast. The period with implied forward rates as a forecast assumption can therefore be  1  See Irma Rosenberg’s speech “The Riksbank and monetary policy” in September 2005, on the reasons for changing over to implied forward rates in the forecasts. BIS Review 85/2010  1  regarded as a learning process on the road towards publishing our own interest rate forecasts, which has several advantages compared with using forward rates. 2 When we began publishing our own repo rate path, this was the start of a learning process for us at the Riksbank, but also for market participants. I believe that we have made a lot of progress in this direction. Monetary policy through “management of expectations” The established view today is that a large part of the monetary policy effect is through influencing expectations among participants in the economy. By publishing our own repo rate forecasts we improve the opportunities to influence rates with longer maturities by influencing the general public’s expectations of future repo rates (“management of expectations”), something that proved very useful during the financial crisis. Figure 1 shows the development of the repo rate and market rates with different maturities. We see that the Riksbank has considerable influence over developments in market rates with maturities of up to six months.

The Riksbank’s forecast indicated that the repo rate would remain at this low level until the second half of 2010. The forward rates prior to the publication of the repo rate path indicated that the repo rate would not be cut to 0.25 per cent and that increases in the repo rate would begin as early as the end of 2009. Surveys carried out by Prospera indicated that expectations were in line with the forward rates. Although the forward rates were adjusted down after the publication of the repo rate path, the pricing still showed that expectations were set at a first repo rate increase at the end of 2009. Where the Riksbank’s forecast indicated a first repo rate increase, the forward rate was already up at around 1.5 per cent. This large deviation caused considerable discussion, partly concerning the current situation and monetary policy, and partly more general as to whether it is a problem if market expectations deviate from the Riksbank’s forecast. As shown in Figure 2, however, market expectations were lower than the Riksbank’s repo rate forecast at the end of the forecast period. Seen across the entire forecast period, therefore, the average deviation is not so great. With hindsight, we can also note that in summer 2009 market expectations deviated considerably from the repo rate outcome we can see so far. Figure 2 The repo rate path and market expectations in July 2009 Per cent  Note. Market expectations are based on forward rates.
The financial regulator relaxed a set of regulations and allowed 1.6 million loan restructuring operations and postponed by one year the entry into force of the capital requirements established in the New General Banking Law. Finally, the CBC has applied some 20 measures aimed at expanding the monetary stimulus, deepening it through non-conventional instruments to encourage credit and liquidity, stabilizing financial markets, and gaining space to address additional stressful scenarios. These measures have pledged resources equivalent to more than 20% of GDP, doubling the size of the Bank’s balance sheet. These efforts have paid off. The decline in activity stopped in June and in the four months since then it has recovered more than half of the losses of the previous four months. As a result, almost a third of the workers who lost their jobs have obtained new ones and a large number of those who benefited from the Employment Protection Law have returned to their occupations. In the third quarter, fiscal transfers were able to compensate for all the fall in labor income of the poorest 20% of the population, and the remaining 80% will have obtained liquidity that far exceeds the loss of income through the withdrawal of pension savings. There is evidence that the FOGAPE-guaranteed loans reached preferentially the companies most affected by the drop in sales, which helped them to resume their activity.

In fact, reforms will enhance the gains from immigration, as there is some evidence that immigration offers most benefits in those countries with more flexible labour markets. Let me finish by recalling the words of Mr. Kofi Anan, the former United Nations Secretary-General, from a speech delivered to the European Parliament: “Migrants need Europe. But Europe also needs migrants. A closed Europe would be a meaner, poorer, weaker, older Europe. An open Europe will be a fairer, richer, stronger, younger Europe – provided you manage migration well”. It is hard to disagree with him. Managing migration well, will be very good for social and economic stability and will help make our job of maintaining moderate inflation easier. 4  BIS Review 59/2007