samchain/econo-pairs-v1 huggingface dataset:
We would then have had to reduce the interest rate sharply this summer. This would have amplified the pressures in the Norwegian economy, which are so clearly reflected in wage developments and household credit demand. It is more than likely that this would have required substantial increases in the interest rate in a year to eighteen months. Strict inflation targeting of this type would thus have resulted in more pronounced fluctuations in the interest rate and in aggregate demand and production. Information obtained via the regional network established last autumn was used when preparing the October Inflation Report. We will have six rounds of talks each year with business and community representatives concerning financial developments in their enterprises and industries. There will be a total of about 200 visits in each round. We have divided the country into 7 regions and established links with regional research institutions in six of them. These institutions will hold meetings with the representatives on behalf of Norges Bank. The private service sector is by far the largest in the Central Norway region, accounting for over 40 percent of total employment in the region. The private service and retail sales sectors together account for over half of the number employed, while a good tenth are employed in manufacturing. The share of manufacturing industry that is exposed to international competition in Trøndelag is relatively limited. Companies in the Central Norway region report small changes in prices and costs, except for export companies.

If inflation is low and stable, an appreciation of the krone will lead to a scaling back of business and industry to increase the room for more activity in the sheltered sector. Such exchange rate movements will typically come in waves. As petroleum revenues are being phased in, real interest rates will tend to rise. There will be a tendency for the krone to show a real appreciation, accompanied by a deterioration in competitiveness. The real krone exchange rate may move more in the short term than is necessary in the long term. The krone may be expected to depreciate at a later stage because higher real interest rates, combined with expectations of a depreciation of the krone, contribute to convergence between the expected real return on capital invested in Norway and in other countries. Moreover, there may be additional fluctuations in the krone exchange rate if market expectations concerning the use of petroleum revenues deviate from what is actually the case. Given today's exchange rate, it would appear that foreign exchange operators have already priced in an increase in the use of petroleum revenues. The cyclical divergence between Norway and other countries is reflected in forward rates in Norway, the US and Germany. Forward rates are expected short-term interest rates that can be derived from long-term bond yields. Market expectations point to interest rates of about 6½ per cent in Norway in the long term. Interest rates above 6 per cent are expected in the US, and a little below 6 per cent in Germany.
The objective is to prevent severe damage to the Swiss economy from a very substantial and possibly longlasting overvaluation of the Swiss franc. Accordingly, the SNB has set the minimum exchange rate at a level where the value of the Swiss franc remains high. Impact and risks When evaluating the accommodative monetary policy and unconventional measures, we need to take account of effects as well as risks. What can we say about the effects? The way I read the available data, conventional and unconventional measures taken by central banks have made a decisive contribution to preventing the global economy from drifting into deflation and depression. However, the slow recovery reminds us that monetary policy is not omnipotent and is not in a position to solve all problems. Fiscal consolidation and the structural reforms required for the improvement of growth potential in many countries cannot be replaced by monetary policy measures. An evaluation of the impact of the individual unconventional measures is more difficult. The simplest to assess is the minimum exchange rate. This instrument has made a decisive contribution to stabilising the Swiss economy. The export industry is gaining ground again, and the deflationary expectations that were threatening to take hold were checked. It is more difficult to assess the impact of forward guidance and quantitative easing. Certainly, longterm interest rates have fallen to record lows this year in some areas. However, it is likely that the deterioration in the economic outlook and the flight to safe investments also played a role in this development.

In addition, those central banks that were not yet independent were given independence, while their duty of accountability was extended. This consensus with regard to the mandate and constitution of central banks led to a long period of low inflation for the global economy, and at the same time demonstrated that a focus on price stability did not result in greater cyclical fluctuations, as had been feared by some. On the contrary: The low inflation rates were accompanied by a very stable real economy, by historical standards. The focus on price stability remains essential, even against the background of the experiences of the financial and economic crisis. Central banks could not have implemented  4  Cf. speech by Fritz Zurbrügg, “Challenges posed by the growth in the SNB’s foreign exchange reserves”, SNB Money Market Event, Geneva, 8 November 2012. 4  BIS central bankers’ speeches  their unconventional measures for stabilising the economy in the crisis if they had not acquired a high level of credibility in the preceding years. Long-term interest rates can only be influenced by a central bank if market participants are convinced that price stability will prevail in the long term. For monetary policy, it remains essential that price stability be ensured, even – and most particularly – in difficult situations like the one we are experiencing at the moment. After the beginning of the financial and economic crisis, the question of what central banks could contribute to financial stability became more important.
Third, the UK authorities are improving the procedures and information needed to manage systemwide risks should they crystallise. The Bank, the FSA and HMT now conduct regular crisis management exercises to develop the coordination needed to handle operational disruptions and financial crises. Market-wide testing of business continuity arrangements takes place annually. It involved some 70 firms and utilities in 2005 and another test is about to start. Finally, the changing financial landscape has increased the importance of international crisis cooperation. An MoU to develop such coordination in the EU amongst central banks, finance ministries, and regulators has been established and tested. We need to build on that to reach beyond Europe and to test crisis management arrangements especially with US authorities. Taken together, these measures should help reduce the likelihood of systemic instability in the UK. I hope that my remarks today help make clear that the private sector – through sound individual and collective risk management – has its part to play in lengthening those odds still further. 6  Recent work at the Bank has been exploring this issue. See, for example, the analysis in Wells, S (2002), UK Interbank Exposures: Systemic Risk Implications, Financial Stability Review, December, pages 175-182, and Cifuentes, R, Ferrucci, G and H S Shin (2005), Liquidity Risk and Contagion, Bank of England Working Paper No. 264. 7  See Tucker, P (2004), Managing the central bank’s balance sheet: where monetary policy meets financial stability, lecture to mark the fifteenth anniversary of Lombard Street Research, 28 July.

Urban Bäckström: The current situation for monetary policy  Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, before the Standing Committee on Finance, Stockholm, on 10 October 2000. *  *  *  It is gratifying to be able to note, as on so many of my previous appearances here, that economic developments in Sweden are impressive. Having achieved a growth rate in the past six years that averages 3%, it seems that our economy is now expanding at an annual rate of around 3 to 4%. Employment has really taken off. To date this year the number of people in work is 70,000 higher than in the same period of 1999. I can also note, once again, that notwithstanding the rapid economic growth, the rate of inflation has remained moderate. But these favourable developments do not mean that the Riksbank can sit back and relax. The path ahead contains a number of risks to which we must be alert. What lies behind the favourable economic trend? A basic factor behind the Swedish economy’s favourable path is, in my opinion, the economic policy realignment that has been carried out in the past decade and a half. Credit and currency markets have been deregulated, the tax system has been reformed, components of the transfers system have been modified and competitive pressure has increased. All this has helped improve the workings of our economy.
But the high exposure of banks to their domestic sovereign – in fact, Japanese banks hold about 20% of their assets in domestic sovereign bonds – is not without risks,  4  Fiscal deficits in the euro area reached 6.4% of GDP in 2009 and 6.2% in 2010 (according to Eurostat). The European Commission forecasts –2.9% in its Spring 2013 European Economic Forecast. 5  See Eggertsson, G. and Krugman, P., “Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach”, Quarterly Journal of Economics, 127 (3), 2012, pp. 1469–1513, and Guerrieri, V. and Lorenzoni, G., “Credit Crises, Precautionary Savings, and the Liquidity Trap”, NBER Working Papers, No 17583, 2011. 6  See also the series on deleveraging by Martin Wolf in the Financial Times, initiated with the comment “We still have that sinking feeling”, Financial Times, 10 July 2012, and the comment “Ways to accelerate private-sector deleveraging”, 30 July 2012. BIS central bankers’ speeches  3  especially in the event of sudden reversals in market confidence. Maintaining financial and economic stability therefore requires a clear and long-term fiscal strategy to avoid disruptions. This is true for Japan and Europe alike. Debt consolidation is not limited to the public sector, however; it also applies to areas of the private sector with excess leverage. Let me focus on the euro area financial sector.

As witnessed in Japan, protracted and large-scale balance sheet adjustments can weaken economic activity over a protracted period of time. Repairing the financial sector was an important element in improving the Japanese economy. The lesson for the euro area appears to be clear: the overhaul of the financial architecture – including the establishment of a procedure for resolving failing banks – needs to be accomplished in its entirety; selective mending will not be enough. In my view, we should make use of the momentum offered by the crisis to turn these challenges into opportunities – opportunities to put our economies on a sounder footing. To underscore why I think that we need to address today’s challenges in a comprehensive manner and why institutions are crucial in achieving this, I will first briefly review the build-up and adjustment of financial imbalances both in Japan and in Europe. Then I will elaborate on how to manage the deleveraging process and the institutional changes to be implemented, before touching upon the role monetary policy has to play. Imbalances in Japan and the euro area The Japanese experience provides important lessons as it demonstrates the difficulties of emerging from a “balance sheet recession”.1 With the euro area still battling the impact of the financial crisis, an important question is: how does the current euro area economy compare with the dynamics in Japan during the 1990s?2  1  Termed by Richard Koo in Koo, R., The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession, Wiley, 2009.
Moreover, our new forecast, which as always takes account of today’s decision, shows that a further tightening of monetary policy cannot be ruled out in the coming quarters. However, the environment continues to be subject to a high degree of uncertainty. Let me now say a few words about the exchange rate. The Swiss franc has appreciated in trade-weighted terms by around 7% since the monetary policy assessment in June. This appreciation helps to tighten monetary conditions and dampen inflationary pressure. In order to set appropriate monetary conditions, we remain willing to be active in the foreign exchange market as necessary. If there were to be an excessive appreciation of the Swiss franc, we would purchase foreign currency. If the Swiss franc were to weaken, however, we would consider selling foreign currency. Period of negative interest rates comes to an end  With today’s decision, an extended period of a negative SNB policy rate comes to an end. Negative interest was introduced at the beginning of 2015 to counter upward pressure on the Swiss franc associated with the discontinuation of the minimum exchange rate. Over the past years, negative interest has helped to dampen the appreciation of the Swiss franc and to ensure price stability. At the same time, we were always aware that negative interest can have undesirable sideeffects and presents challenges for many economic agents. On the whole, however, negative interest has proved its worth.

News conference  22 September 2022, 10.00 am  Introductory remarks by Thomas Jordan Ladies and gentlemen It is my pleasure to welcome you to the news conference of the Swiss National Bank. Our news conferences will now be held after every monetary policy assessment. The introductory remarks will be shorter overall. This will give us more time to take your questions afterwards. Monetary policy decision  I will begin with our monetary policy decision. We have decided to tighten our monetary policy further and to raise the SNB policy rate by 0.75 percentage points to 0.5%. In doing so, we are countering the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected. It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term. To provide appropriate monetary conditions, we are also willing to be active in the foreign exchange market as necessary. The SNB policy rate change applies from tomorrow, 23 September 2022. Moreover, we are adjusting the implementation of our monetary policy to the positive interest rate environment. This ensures that the secured short-term Swiss franc money market rates remain close to the SNB policy rate. Banks’ sight deposits held at the SNB are remunerated at the SNB policy rate up to a certain threshold. Sight deposits above this threshold are remunerated at an interest rate of zero percent. We will also use liquidity-absorbing measures.
The macro and micro prudential policies of EMEs in the previous decades have succeeded in lowering levels of leverage, not only in financial sectors, but also in nonfinancial and household sectors. This, in turn, lowered levels of maturity and currency mismatches. This gave rise to high capital adequacy ratios and low non-performing loan rations in banking sectors of many EMEs. Moreover, in relative terms fiscal positions of EMEs have further strengthened while those of AEs have worsened in the aftermath of the GFC due to sizeable fiscal stimulus policies. Keeping this systemically important sector free from solvency risk has helped EMEs gain business confidence (Figure 9). Lower deficit and debt levels imply ample policy spaces for EMEs in cases of economic downturn. Creditworthiness together with policy spaces on the EM fiscal fronts have contained upward pressures on interest rates and have kept the effectiveness of other policies intact. It is fair to say that they now look strong enough to render the adverse effects of external financial shocks manageable.8 Policy actions in EMEs However, the current unconventional monetary policies of AEs in the form of low or even negative nominal policy rates as well as quantitative easing and unintended consequences of the financial sector reforms across the world pose new challenges to EMEs. Until recently, because of better growth prospects and lower levels of leveraging, EMEs attracted capital inflows with their nonfinancial corporates having lion shares.

23.05.2018  25th Financial Sector Meeting: Innovation, Transformation and Reputation Deloitte, Sociedad de Tasación and ABC Luis M. Linde Governor  Let me begin by thanking the organisers – Deloitte, Sociedad de Tasación and ABC – for their invitation to me to participate in this session of the 25th Financial Sector Meeting, which on this occasion turns on three ideas: innovation, transformation and reputation. In my opinion, these three concepts accurately encapsulate the main challenges currently faced by the financial sector. The new technologies are enabling financial institutions to transform their systems and their business models, but this transformation should not lead us to forget that the keystone of any market, and all the more so financial markets, is customer confidence. The financial sector is faced with a singularly complex setting and this conference provides an opportunity to confer with institutions’ key decision-makers on the different ways in which changes are being addressed at this time of transformation, which will be crucial for the future of the industry. The new technologies, which have already significantly impacted various sectors, now have the potential also to substantially change the way in which financial services will be provided in the not-too-distant future. I would thus like to take this opportunity to offer my view on the opportunities and risks these new technologies pose.
I would like to end my comments on the work of the Basel Committee by touching briefly on another regulatory matter currently under review, the treatment of large exposures. This falls within the field of prudential measures additional to the solvency ratio, which aim to ensure the survival of banks in extreme situations. The review focuses on the treatment of exposures to third parties, since that of intra-group exposures has been postponed for the time being. The general principle is that exposures to all counterparties should be subject to limits based on the capital of the bank. That limit has been set generally at 25% of tier 1 capital, although for certain exposures, such as those between systemic banks, it is stricter. Notably, provision is made for the possibility, after an observation period, of limiting exposures to central counterparties (CCPs), although this matter is open and first requires an assessment of the effects of other rules governing relationships between banks and CCPs. Let me now say a few words on some of the main regulatory projects on which the Financial Stability Board (FSB) is currently working, particularly that to promote a new regulatory framework for the treatment of systemically important institutions, i.e. those whose complexity, size and interconnectedness are such that their failure could cause serious problems to the global financial system. This new framework rests on four pillars: additional loss absorbency, effective resolution mechanisms, increased supervisory intensity and more resilient financial market infrastructure. Unquestionable progress has been made in implementing this framework.

Luis M Linde: Reflections on the road and challenges ahead – regulatory changes affecting banking activity Closing address by Mr Luis M Linde, Governor of the Bank of Spain, at the IX IESE (Instituto de Estudios Superiores de la Empresa/Business School of the University of Navarra) Banking Sector Meeting “Banks – beyond the crisis”, Madrid, 12 December 2013. *  *  *  Firstly, let me thank Professor Juan José Toribio, the president of the Centro Internacional de Finanzas, for inviting me to participate in this IESE Banking Sector Meeting. And allow me to congratulate the IESE on this ninth edition of a forum that has become a classic and has consistently been of the greatest interest and highest calibre. I am not going to address certain matters that are very important and topical, such as the signs of recovery in the Spanish economy, the initial steps of the launch of the Single Supervisory Mechanism, or the asset quality review or stress tests for those banks that are to be supervised by the Single Mechanism. I would hardly have anything novel to say there. Rather, I wish to review some aspects of the regulatory changes which, once the crisis has been overcome, are going to significantly affect banking activity.
But if the suitor got any one of the three riddles wrong, then he would be put to death, as indeed dozens of her suitors already had been. But as I sat there enjoying the opera, it slowly began to dawn on me that it isn't really a love story at all - it is an allegory about the state of the global economy. Turandot clearly represents the present international situation - potentially very attractive but immediately somewhat chilling. And her unfortunate suitors are obviously the world's woefully misunderstood and under-appreciated central bankers! Turandot's first riddle was "What is the ghost, which all the world invokes and is constantly renewed?" As I sat there it seemed obvious to me that the answer must be the US economy. For some years in the late 1990's "all the world" has looked to the US to keep it afloat - through the Asia crisis, then Russia and Long-Term Capital Management, with Latin America intermittently thrown in. And the US did a great job. But then two years or so ago the US began to fade - or give up the "ghost" if you like - with an investment-driven slowdown associated with the bursting of the ICT bubble and correction of over-exuberance in equity markets. But the ghost has shown clear signs of renewal over the past year; in fact US output in the third quarter was 3% up on a year earlier.

There is a risk that unemployment will become entrenched, perhaps particularly in Europe. It appears that the upturn in advanced economies will only be moderate. The economies of many countries will continue to be marked by considerable spare output capacity. Spare capacity and high unemployment will contribute to low inflation among trading partners in the coming years. Oil prices are just below USD 80 per barrel. Our projections are based on an oil price in line futures prices. Futures prices indicate that oil prices will rise ahead. Emerging market economies are making a growing contribution to global oil demand. These economies are expected to continue to record solid growth. In addition, OPEC is steadily gaining market power because growth in oil supply from non-OPEC countries is gradually stagnating. Oil prices may nevertheless edge down if the recovery in the world economy loses momentum, particularly since OECD oil stocks are still at elevated levels and OPEC spare production capacity is relatively high. Gas prices are under pressure owing to increased availability of shale gas in the US, a higher supply of LNG and low demand in Europe. Futures prices indicate some rise in other commodity prices. Metal prices have risen as a result of improved global growth prospects, but they are still somewhat lower than in summer 2008. Key rates are close to zero in many countries. A number of central banks have signalled that key rates will be kept low for an extended period, and key rate expectations abroad fell through autumn and winter.