samchain/econo-pairs-v1 huggingface dataset:
We can, therefore, safely affirm that the fiscal rule has been normative for fiscal policy. The new guidelines have changed the interaction between the different components of economic policy. Monetary policy has been given a clearer role in stabilising economic developments. A clear monetary policy objective is a necessary complement to the fiscal rule for ensuring reasonable macroeconomic stability. The operational target of monetary policy as defined by the Government is inflation of close to 2½ per cent over time. The inflation target provides an anchor for economic agents’ choices concerning saving, investment, budgets and wages. Households, businesses, public entities, employees and employers can base decisions on the assumption that inflation in Norway will be 2½ per cent over time. High oil prices have a different impact in Norway than in oil-importing countries. When oil prices increase, the value of Norway’s national wealth rises. The idea behind the Petroleum Fund is that the cash flow from an increase in oil prices should accrue to the Fund and be invested abroad and should not be included directly in the government budget. As a result, the increase in the cash flow will not immediately affect the domestic economy. The effect of higher oil prices will gradually be seen when the real return on the Fund measured in NOK increases. Thus, the government authorities will be able to budget a higher deficit in the years ahead.

At the monetary policy meeting of 11 August, the Executive Board stated that new information since the previous monetary policy meeting does not suggest that we should deviate from the interest rate path envisaged in the June Inflation Report. Monetary policy easing through 2003 and into 2004 has resulted in low real interest rates. Short-term real interest rates may now be considerably lower than the level that implies long-term balance in the economy – the neutral real interest rate. A low real interest rate, and expectations of a continued low real interest rate, will contribute to stimulating activity even after the effects of the interest rate fall unwind. Calculations may, on an uncertain basis, indicate that the neutral real interest rate for Norway lies between 2½ and 3½%. It has probably fallen somewhat in recent years. Although the projections are based on rising real interest rates, the real interest rate will be lower than the neutral rate during the entire period. The monetary policy stance is therefore expansionary. So far,  the effects do not appear to be stronger than expected, but we have little experience of such low interest rates. It is uncertain how quickly prices and wages will react when growth in output and employment picks up. There is also a risk that an interest rate that is kept low for a longer period may lead to expectations of a persistently low interest rate. This may involve a risk of persistently high capacity utilisation and inflation eventually overshooting the target.
Furthermore,  our  active  supervision  demonstrates the strong value of regular stress tests, which are this year typically based on a sharp rise in short and long-term interest rates: this is the way we in Europe already deal actively with IRRBB, including for smaller institutions. Page 3 of 6 Resolution is the third ‘blessing’, also less operational. The fact that the Swiss authorities opted for a merger in the case of Credit Suisse raised new questions about how to make resolution more reliable. Let me share just some thoughts at this point. The first concerns the resolution of large or even systemically important banks. The provision of potentially significant amounts of liquidity in times of crisis is a prerequisite for successful resolution. The framework for the ECB to provide "Eurosystem resolution liquidity" has yet to be built. The other priority, at the other end of the spectrum, is to shift from resolution "for a minority" - a far too small minority of cases: two in the last nine years - to resolution "for the majority" of cases, including small and medium-sized banks. The European Commission's proposal for a revised crisis management and deposit insurance (CMDI) framework is a step in the right direction. Yet, level-playing field must be ensured not to give unfair advantage to smaller banks; and greater pooling between the Resolution Fund and deposit guarantee schemes should not lead to large companies potentially benefiting from the same protection as the smaller deposits of individuals or SMEs. II.

It is now my pleasure to introduce Nancy Lee of Interise, Marlene Orozco from SLEI, and Claire Kramer from the New York Fed. 2/2  BIS central bankers' speeches
To complement our oversight functions, we are putting in place basic safety nets for depositors and policy holders, as well as working towards the further empowerment of consumers. Disclosure requirements are currently in place but the presentation of information is often less than satisfactory. As more complex investment products emerge, this situation will become untenable. We will work towards refining existing disclosure requirements. Consumer education efforts will also be stepped up. Feedback obtained from the national financial literacy survey to be launched early next year will help us to tailor our consumer education programmes. To help consumers resolve disputes with their financial institutions promptly and affordably, we are facilitating the setup of a one-stop Financial Industry Disputes Resolution Centre, or FIDReC. It will  4  BIS Review 72/2004  serve consumers across different sectors and ensure consistency in processes. We have also recently announced that we will publish details of market conduct regulatory actions where it is in the public interest to do so. This will further enhance market discipline. Leveraging and building on our reputation The third priority for MAS is to leverage and build on our reputation. Singapore has acquired an international reputation for its strong macro-economic performance, its robust and vibrant financial system and its high standards of regulation and supervision. This reputation has accorded us some influence in the international financial community. This influence has in turn helped us to expand our economic space by opening doors to strategic partnerships and removing market access barriers.

This year marks the 60th anniversary of the Treaty of Rome that created the European Union and the 25th anniversary of the Maastricht Treaty that created the Monetary Union. Further progress is needed. The institutional architecture of the Economic and Monetary Union remains incomplete in a number of aspects. The crisis has exposed structural weaknesses in our construction and has forced us to address them. The repair has started with the creation of 1/2  BIS central bankers' speeches  the banking union. But the work is far from over and the challenges we face go beyond Economic and Monetary Union. They pertain to security, migration, defence, and generally all those challenges that can be addressed only by pooling sovereignty. And these challenges are greater than in the past. Today we can sense a rising wave of energy in demanding joint European action. The European Union and the euro always commanded the support of the majority of European citizens, but, often, it was only the vocal opposition that was heard. Now this silent majority has regained its voice, its pride, and its self-confidence. Only by working together can the nations of Europe overcome these challenges. The opportunity for progress is real. Values and judgement lie at the heart of all our undertakings. But they need to be supported by continuing research, ever increasing knowledge, and uncompromising examination of facts.
In general, banking competition brings very positive aspects for the real economy and to welfare, and there is no doubt that liberalisation of the banking sector in Spain has been very positive for the country. However, we should bear in mind, as some chapters of the book point out, that too much competition may significantly increase bank risk-taking and that this may have negative implications and that  BIS central bankers’ speeches  1  this may undermine financial stability.1 The recent very intense competition for retail deposits may also be a notable example in this regard. Another important aspect of liberalisation has been the internationalisation of the banking sector, which is very well explained in the book. I would like to stress two aspects of this phenomenon: i) the foreign expansion by Spanish banks (particularly Santander and BBVA), and ii) the significant dependence on foreign liquidity (mainly through international wholesale markets), especially after the introduction of the euro.2 Expansion abroad, when it is well executed, definitely brings benefits in terms of geographical diversification, which have become clear during the crisis, however a reliance on funding from abroad may bring some fragility if that source of liquidity dries up, as the crisis has shown.3 In previous banking crises, banks typically suffered from runs on retail deposits, whereas nowadays these runs are wholesale-based.4 In the light of this, the sector should aim to diversify its sources of funding liquidity.

Michael Gondwe: Collective bargaining Remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the official opening of the Zambia Union of Financial and Allied Workers (ZUFIAW) Negotiations Forum – Phase 1, Lusaka, 20 March 2012. *  *  *    The ZUFIAW President, Mr Cephas Mukuka    The General Secretary of the Zambia Union of Financial Institutions and Allied Workers (ZUFIAW), Mrs Joyce Nonde Simukoko    The Executive Secretary of Federation of Free Trade Union in Zambia, Mr Lyson Mando    The Representative from the International Labour Organisation    Workshop Facilitators    Distinguished Participants    Ladies and Gentlemen  I wish to welcome you all to this important Workshop, on Collective Bargaining, organized by the Zambia Union of Financial and Allied Workers (ZUFIAW). Let me take this opportunity to commend ZUFIAW for taking the initiative to organise this Forum, which is intended to facilitate exchange of information and views on aspects of effective collective bargaining. Mr President, as you are aware, in spite of the recent global economic crisis, our country has continued to enjoy relative macroeconomic stability, with favourable prospects for the future. As a result of consistent implementation of appropriate macroeconomic policies: i. The country has registered positive real GDP growth averaging 6.5% annually since 2007. This is a necessary condition for poverty reduction efforts;  ii. Inflation and exchange rates developments have also been favourable.
The UK is not immune to this change in trade balances, and the impact of the Asian crisis on our exports has, of course, been compounded by the rise in sterling since 1996. If the Asian crisis affected most a relatively young, and only temporarily wounded, tiger, the recent turbulence was heralded by the growl of a much older, more grizzly, bear. The announcement by the Russian government on 17 August of its intention to restructure payments on its domestic bonds led to a fundamental reappraisal of international investors’ willingness to bear risk. The reappraisal caused the average cost of capital to emerging market economies - measured by interest rates on their bonds - to rise to levels not seen since the immediate aftermath of the Mexican crisis in 1995. This increase in cost is likely to lead to a further reduction in net capital flows to emerging markets and so magnify the adverse trade effect faced by the industrialised world. Second, the greater aversion to risk has led to falls in equity prices throughout the industrialised world. The FT/S&P world stock market price index has fallen by nearly 12% since its peak three months ago. In the UK, the FTSE All-Share fell by nearly 20% over the same period. The fall in equity prices is likely to lead to both lower consumption growth, as consumers adjust to the fall in net wealth, and lower investment growth, as firms react to the higher cost of capital.

One of the first accomplishments of the Basle Committee was a study of banks’ capital adequacy. Issued in 1988, under the title ”International Convergence of Capital Measurement and Capital Standards,” this report was soon endorsed by many countries. Also known as the ”Basle Capital Accord,” the study took BIS Review 41/1999  2  account of credit risk. Although the variety of risks in the international markets is increasing, credit risk is still the most significant risk category for banks. Credit risk means the probability of defaulting on one’s obligation to the other party in any transaction. As I already mentioned, the growth of competitiveness in the international credit markets in recent years, the active participation of non-bank financial institutions in these markets, and borrowers’ resort to the capital markets for loans at lower cost, have all brought about a considerable narrowing of profit margins in credit transactions. This has forced the banks to make more loans in order to have a competitive edge. But they have encountered credit problems due to adverse developments in the economic and financial conditions. All these developments have resulted in the design of new methods for more effectively evaluating the risks and yields of credit transactions. Besides creating credit rating models for use within banks, these efforts have produced analytical methods calling for intensive data analysis such as retrospective analysis of credit losses, models of bankruptcy probabilities, and stress tests.
At present, with less than one percent of outstanding bonds globally being “green”, the G20 is considering initiatives to catalyse this market, including: • Developing a “term sheet” of internationally recognised standardised terms and conditions to make issuance more efficient; • Creating voluntary certification and validation frameworks to give certainty to issuers and investors that a project is “green”; • Integrating environmental risk and green certification into credit ratings; • Developing green bond indices to unlock the potential power of passively managed investments; • Standardising and harmonising principles for green bond listings to promote resilient and efficient trading and adequate liquidity; and  10  The IPCC estimates that additional investment of $ is required annually in the energy sector alone if the rise in average global temperature is to be capped at 2C. www.ipcc.ch/report/ar5/ Mercer estimates that additional cumulative investment in efficiency improvements, renewable energy, biofuels and nuclear, and carbon capture and storage could be in the range of $ trillion by 2030. www.mercer.com/insights/point/2014/climate-change-scenarios-implications-for-strategic-asset-allocation.html  11  See the Task Force on Climate-related Financial Disclosures “Phase 1 Report and Public Consultation” available at www.fsb-tcfd.org/phase1report/  BIS central bankers’ speeches  3  Evaluating mechanisms for consistent, transparent dispute resolution processes. •  We all know the paradox that, as climate risks are a function of cumulative emissions, earlier action will mean less costly adjustment. Better climate disclosure and an effective green bond market will mean more investment with foresight and less regret in hindsight.

That’s why the FSB is now developing new policies to address liquidity, leverage and securities financing risks in asset management activities. These measures will help ensure asset managers can provide sustainable and reliable financing to EMDEs. That’s why the FSB is working to ensure the central counterparties that support the plumbing of the new system are resilient and can be resolved without disruption to the flow of financing to the real economy. And that’s why FSB members are working to develop more effective macro prudential policies. These will dampen the impact of capital flows on domestic vulnerabilities and allow countries to be more open and connected to global trade and investment. The FSB’s work plan is highly complementary to other G20 priorities in infrastructure, inclusiveness and climate change. A FAIR system is essential if we are to move to a 2 degree world. A FAIR system is critical to achieving the economic and moral imperatives of the SDGs. I look forward to our discussion of how to build such a system to the benefit of all. 15  BIS International Debt Statistics, (all sectors, nationality basis). 16  IMF World Economic Outlook data show that average annual portfolio flows to EMDEs have more than tripled from their average in the decade prior to the crisis to an average of $ billion annually between 2009 and 2015. BIS central bankers’ speeches  5
In the case of solvent institutions, we have known theoretically since Thornton (1802), and probably over a century, as a practical policy, how to deal with that vulnerability in a domestic setting: with central bank LOLR operations, later complemented by deposit insurance. In the current setting, it is far from guaranteed that this process can be replicated at the international level. Of course, in normal times and with developed capital markets, banks can use foreign exchange swap markets to convert domestic liquidity into foreign exchange liquidity speedily and relatively cheaply. However, this process broke down almost completely during the global run on cross-border non-US bank liabilities in the immediate aftermath of the Lehman collapse. In a situation like this, the home central bank’s ability to assist banks to acquire the foreign liquidity denied them on the market and thus avoid a failure of banks to deliver on their foreign currency payments is limited by the size of its reserves or the willingness of the central bank issuing the international currency in question to help. Although the provision of foreign currency liquidity through reserves was clearly important during the crisis, most studies seem to support the conclusion that the dollar swap lines made the crucial difference, especially when they were uncapped vis-à-vis some key central banks. To a significant degree, this was the domestic LOLR process replicated at the international level. Does this mean that we have the solution? At the conceptual level, yes, but at the practical level, maybe not.

In that case, national authorities would licence domestic banks that would face significant restrictions on the type and magnitude of cross-border activities they would be allowed to undertake; for instance, by limiting the size of foreign currency balance sheets and maturity mismatches and not allowing collection of foreign currency deposits in foreign branches. These banks would then be supervised by the national supervisor, their deposits would be insured by the domestic deposit insurance system, and the national central bank would be their LOLR. Those banks that want a European passport would be licensed and supervised by an EU authority, however; they would be part of an EU-wide deposit insurance system, and in most cases, their LOLR would be the ECB. Let me now say a few words about the national level. The key issue here is that, as long as global risks and EU flaws are not dealt with, individual countries are forced to take action to protect themselves: action that might contribute further to the retreat of cross-border banking. These might take the form of restricting international activities of home banks and placing much more strict prudential limits on foreign currency maturity mismatches. For example, when Iceland lifts its current capital controls on outflows, it will probably impose restrictions on both the size and composition of foreign currency balance sheets of home-headquartered banks. Some might see such restrictions as capital controls in another form, but I see them as prudential rules.
The issue of communication is particularly relevant in the current economic environment. For much of the past three years, financial markets have reflected a high degree of certainty about the near-term outlook for monetary policy in the United States. Market expectations in the weeks preceding each of the last 16 Federal Open Market Committee (FOMC) meetings attached a probability close to one that the FOMC would raise the target for the federal funds rate by 25 basis points. Also, there was very little probability attached to inter-meeting moves over this period, or to moves in increments larger than 25 basis points. And, although market expectations about how far the FOMC would ultimately move were revised significantly over the course of this period as the economic outlook was revised, these changes occurred without the Committee needing to deviate from the near-term path. This period of unusual certainty in the path of the fed funds rate was the result of a confluence of factors. When the Committee first moved to tighten policy in June 2004, the fed funds rate was at the historic low of 1 percent, and it was clear that policy would have to move a substantial distance to get back within the range of plausible estimates of the neutral rate. Over the course of the following months the incoming data tended to reinforce the case for a progressive move up in the target rate.

And, the Committee made a conscious decision to signal that in view of the likely path of growth and inflation further tightening of monetary policy was necessary and could be achieved at a relatively gradual pace. We are now in the process of emerging from this rather exceptional period, and this provides us with an interesting context in which to reflect on uncertainty and how it affects the conduct of monetary policy and communications about monetary policy. The degree of confidence in the sign and shape of the near-term path of the fed funds rate we've seen in recent years is unlikely to be a common feature of monetary policy in the United States or in other countries. The simple reason for this is that the economic circumstances that precipitated the policy were also not typical. There are likely to be times when incoming data deviates substantially and persistently from our forecasts. In those situations, policymakers have to examine whether they have significantly misestimated certain fundamental features of the economy, such as the NAIRU or the trend productivity growth rate, that might alter the appropriate course of monetary policy. Central banks everywhere conduct policy in a state of limited knowledge about the economy and how best to achieve their objectives. The sources of uncertainty they confront are many and varied. Sometimes, what we think we know about how the economy works turns out to be wrong, either because certain features of the economy have changed, or because our understanding was not right in the first place.