samchain/econo-pairs-v1 huggingface dataset:
So higher relative growth is often associated with a higher price level and a stronger real exchange rate. The reverse provides an important partial explanation for the krona's long-term real depreciation: Sweden's growth trend in recent decades has been weaker than in our most important competitor countries (Diagram 1). BIS Review 65/2002  3  Diagram 1. Real exchange rate and relative GDP against the euro area Index 1992:Q4=100 130 Relative GDP  120  110  100  90 Real exchange rate  80 1970  1974  1978  1982  1986  1990  1994  1998  2002  Source: Sveriges Riksbank  Another important explanatory variable for the real exchange rate is terms of trade, which is also a relative price for groups of goods. Here, however, the categories of goods in the comparison is more limited than in the case of the real exchange rate. More specifically, terms of trade represent the price of imported goods expressed in terms of the price of goods that are exported. In Sweden's case, shifts in terms of trade often stem from changes abroad; in our small and open economy, changes in domestic supply and demand are of secondary importance for the long-term development of our terms of trade. A look at Sweden's terms of trade in recent decades reveals a number of episodes where major changes in terms of trade have led to sizeable movements in the real exchange rate.

2  BIS Review 65/2002  What determines the real exchange rate in the longer run? Table 1. Nominal and real depreciation, and inflation differential against the euro area 1970- 2001 Percent, annual averages Period  Nominal depreciation  Inflation differential (Sweden – euro area)  Real depreciation  1970 – 1982  2,60  0,75  1,84  1983 – 1992  1,50  2,52  -1,02  1993 – 2001  1,88  -0,56  2,45  W hole period  2,05  0,94  1,11  Remark: Prior to 1999 the SEK/EUR rate is a geometric mean of the nominal exchange rates between the krona and each euro-country currency. The weights are relative TCW weights. Source: Sveriges Riksbank. I have already talked about the real exchange rate and tried to explain that it is this rate, rather than the nominal exchange rate, which is most pertinent for economic decisions and for resource allocation within and between economies. An understanding of the real exchange rate's development, above all in the somewhat longer term, is needed in order to appreciate why nominal exchange rates fluctuate as they do. Here I shall use the Swedish krona relative to the euro as a specific example. Since 1970 the krona has depreciated by about 90 per cent against the euro currencies. What lies behind this?
Figure 6 a) Investment (index, 3T.19= 100, deseasonalized series) GFCF  160  C&W  b) Amounts invested (CBC) 2022Q3 (billions of dollars) M&E  16  Non-mining  c) Economic uncertainty (Depuc) (*) (index)  Mining  500  140  400  12  120  300 8  100  200  80  4  60 15  16  17  Source: Central Bank of Chile. 18  19  20  21  22  100 0  0 2021  2022  2023  Source: Capital Goods Corporation (CBC). 2024  2025  19  20  Source: Central Bank of Chile. 12  21  22  (*) Moving 30-day average. From December 2021 on, the index includes an update of the dictionary of words used for its construction, as a way of incorporating new elements that afect local conditions. Figure 7 Consumption (index, 3T.19=100, deseasonalized series)  180  Private consumption non-durable goods  Durable goods Services  160 140 120 100 80 60 15  16  17  18  19  20  21  22  Source: Central Bank of Chile.

Reinhart and Rogoff document the substantially detrimental effects that financial crises typically impose on the subsequent economic recovery. As we all know, the recent recession was accompanied by a large financial crisis. When I look at the U.S. economy today, I see it tracking Reinhart and Rogoff’s observation that such recoveries are usually painfully slow – and are so for reasons that have little to do with structural impediments in the labor market and the like. Liquidity traps are rare and difficult events to manage. They present a clear and present danger that we risk repeating the experience of the U.S. in the 1930s or that of Japan over  1  See Christiano, Eichenmbaum and Evans (2005), Smets and Wouters (2007) and Chung et al. (2010). 2  Federal Open Market Committee (2011). 3  Reinhart and Rogoff (2009). BIS central bankers’ speeches  3  the past 20 years. However, liquidity traps have been studied over the years in rigorous analytical models by a number of prominent economists, including Paul Krugman, Gauti Eggertsson, Michael Woodford and Ivan Werning.4 Variants of these models have successfully explained business cycle developments in the United States. The lesson drawn from this literature is that the performance of economies stuck in a liquidity trap can be vastly improved by lowering real interest rates and lifting economic activity using an appropriately prolonged and forward-looking period of accommodative monetary policy. Of course, such monetary accommodation is the antithesis of the policy prescription for the structural impediments scenario.
In comparison with other countries, this is particularly the case for banks and other service sectors, reducing their production costs. The business sector has been quick to adapt and change, and to make use of new technology that is available in an international market. This is probably due to the 1980s and 1990s’ modernisation of the way the economy functions, which resulted in more efficient markets. In addition, growth in labour productivity reflected a marked fall in sickness absence in 2004. The latest figures nonetheless indicate that productivity growth is falling back. Although we do not have satisfactory current statistics for central government and local government productivity, government agencies have probably also become more efficient. New technology and new organisational structures have certainly provided opportunities to increase efficiency. Wage-earners and enterprises have both fared well. Low import prices have resulted in a slow rise in consumer prices and a solid increase in wage-earners’ real wages. High export prices have contributed to holding down the rise in real wages. Combined with high productivity growth, this has resulted in high corporate earnings and solid growth in employment. It remains to be seen whether the combination of low unemployment and a low wage share is sustainable. This partly depends on whether positive supply-side conditions persist. There is probably symmetry here. First, should Norway’s terms of trade deteriorate, productivity growth slacken and foreign workers return to their home country, the wage share will increase, profits fall and  4  BIS Review 139/2007  unemployment will rise.

The key policy rate influences interest rates on interbank loans. Banks’ deposit and lending rates and bond yields depend on the current key policy rate and expectations as to future changes in this rate. Lending rates in state banks are also linked to the interest rate on interbank loans and bond yields. The aim of preventing inflation expectations from becoming entrenched below the operational target of 2.5 per cent was one of the main reasons the interest rate was lowered to a very low level in 2003 and 2004, when inflation receded and approached zero. Low interest rates have stimulated demand and output and gradually led to the prospect of higher inflation, which we are addressing by increasing the interest rate. The labour market is an important factor in how the interest rate functions. A rise in the interest rate curbs aggregate demand for goods, services and labour, and eases the pressure on wages and prices. These effects are amplified by the impact of the interest rate on the krone exchange rate. Higher interest rates contribute in isolation to krone appreciation and to lower profitability in the internationally exposed sector. This can result in lower employment and wage growth in this sector. Expectations with regard to price developments  2  BIS Review 139/2007  also influence wage demands and have an effect when companies adjust their prices. The inflation target can provide an anchor for these expectations.
With short-term expectations just under 1% and longer-term expectations slightly above, inflation expectations are firmly anchored within the range consistent with price stability. Economic actors are confident that the SNB will also be able to keep inflation well under control over the long term. In view of the stable inflation expectations, it is not surprising that long-term rates have changed little since the beginning of the year. The yield on ten-year Confederation bonds has fluctuated between –0.1% and +0.2% since the start of 2018. Andréa Maechler will examine exchange rate and interest rate developments in more detail later. Monetary policy outlook  Let me summarise the key points with regard to monetary policy. We anticipate that our economy has expanded by around 2.5% this year. In line with a gradual slowdown in the global economy and high capacity utilisation in Switzerland, domestic growth is likely to stabilise at around 1.5% next year. The inflation forecast for this year is unchanged; for 2019 and 2020 it is somewhat below our forecast last quarter. The Swiss franc is still highly valued. Given the slightly muted inflation outlook and the continued fragility in the exchange rate situation, our expansionary monetary policy remains appropriate. With the negative interest rate and our willingness to intervene in the foreign exchange market as necessary, we support economic activity and ensure price stability. Ladies and gentlemen, thank you for your attention. It is now my pleasure to give the floor to Fritz Zurbrügg. Page 4/4

All three layers – national, regional and global – must complement and reinforce one another. Well-designed, they can operate as a package, offering a comprehensive suite of financial options to countries in need. AMRO – The focal point of regional surveillance 20. Let me now turn to AMRO, the emerging focal point for regional surveillance underpinning the CMIM. AMRO was set up to perform three important functions:   to conduct surveillance and contribute to the early detection of risks in the region;    to facilitate the implementation of remedial action; and    to inform the decision making of the CMIM. 21. These functions help to ensure that any activation of the CMIM mechanisms will be predicated on informed and independent judgement. 22. AMRO will give ASEAN+3 authorities a new and vital perspective as it considers the impact of global developments on ASEAN+3 as a region. AMRO’s surveillance toolkit will be based on its own in-house capabilities, access to policymakers in ASEAN+3, and regular dialogue and exchange of information with the IMF and other international financial institutions. We envision AMRO emerging over time as an authoritative interpreter of economic and financial developments in the Asian region. 23. AMRO’s progress since its establishment in May 2010 has been remarkable. It commenced operations just a year later, in May 2011. It has since conducted a number of surveillance visits in the region.
And finally, there will be a common chair, the Governor, and overlapping membership. The members common to the two committees – four of us – will be in a minority on both to ensure that our perspective does not dominate either. How will the FPC operate and be accountable? Although separate, the FPC will in many respects operate in much the same way as our Monetary Policy Committee. There will be a schedule of regular policy meetings: four per year. A record of each will be published. And twice a year, the analysis underpinning our Committee’s deliberations and decisions will be set out in the Financial Stability Report. The role of the FSR will, therefore, become more like that of the Bank’s Inflation Report in monetary policy. Put crudely, warnings will carry greater weight under a regime where the  10  BIS central bankers’ speeches  FPC can actually take action. Consistent with that, the FSR will in future be launched via a press conference. We expect, and hope, to be called regularly to give evidence to the Treasury Committee of the House of Commons, and perhaps Committees of the House of Lords too. Public hearings will help to keep financial stability issues in the public eye, and us on our toes, even when stability once again prevails and is expected to last. The Select Committee process, and the debate it sparks, will be a vital bulwark against complacency.

In the UK that will now be enshrined by putting a Financial Policy Committee alongside the Bank of England’s existing Monetary Policy Committee. The Committee has recently been established, on a non-statutory basis for the interim. But that poses a host of questions. How do we define financial stability? What is the FPC and what is its objective? Why should it be separate from the microprudential supervisor, which is also being moved to the Bank? What will be the FPC’s instruments? Are they all directed at banks? Will they conflict with monetary policy? And, more prosaically, how will the FPC operate and be accountable? I shall set the scene with some general reflections on financial stability, including how it might be defined, and how its scope extends to the resilience of capital markets as well as that of banks (and shadow banks). After those more general observations, I shall try to answer some of the key questions about the FPC. What is financial stability? Why financial stability matters Under legislation introduced in the UK in 2009, the governing body of the Bank of England, Court, is required to set out a strategy for the Bank’s financial stability work. We publish it in our Annual Report. We have tried to clarify why society should care about financial instability.
From an international perspective, these fluctuations have not been greater than those experienced by other countries with a floating exchange rate, but they have played a prominent role in the Swedish debate and have probably been discussed here in Finland too, bearing in mind our close trading connections. Let me say here that while the variations in the exchange rate have been larger than we anticipated, the effects of this volatility have been much less than might have been expected. Our central bank and many others with experience of managing a small, open economy with a floating exchange rate have come to the conclusion that exchange rate fluctuations have had less effect on both prices and production; while exchange rates and import prices have varied significantly, the impact in the consumer channel has been limited. What does the Riksbank have to say about a possible Swedish EMU membership? Over the past six months the political temperature has risen with regard to the EMU issue in Sweden. This is possibly a reflection of the fact that the Swedish people now see membership in a slightly more positive way. It is clear that the physical introduction of banknotes and coins has made the EMU project more tangible. The last time the Riksbank as an institution had reason to comment on the issue of whether Sweden should join the EMU or not was at the beginning of 1997 in connection with the presentation of the 1 report by the Swedish EMU commission.

As you discussed this morning, there are a range of new rules and regulations being considered to enhance the regulation of the U.S. operations of foreign banks. Beyond these new rules, though, we are continuing to press ahead to make substantive enhancements to how we carry out supervision of the largest global firms doing business in the U.S. These enhancements largely follow along the work that we are doing to enhance overall supervision of all the firms that we supervise, so they shouldn’t be a surprise to you. These enhancements, many of which reflect lessons we learned through the financial crisis, include deepening our engagement with senior managers, including business line owners and directors of firms; developing a better understanding of firm strategy, revenue and business drivers and vulnerabilities; enhancing our focus on resilience and ensuring that buffers are strong – including stronger capital, liquidity, collateral management and contingency planning, to name a few; and increasing our attention on risk culture and risk appetite within the firms we supervise. BIS central bankers’ speeches  1  What I offer today is two-fold. First, I will identify three things that you – as global firms with a U.S. presence – can do to help remove impediments to our understanding the operations we are supervising and to make it easier to get our jobs done. This should also make it easier for you to understand and follow the rules that are set out for global firms.
In addition, there is the disadvantage of needing to spend the country’s foreign exchange reserves in order to acquire the anchor currency, whereas with negotiated adoption of the euro via EU accession, the ECB would provide the Central Bank of Iceland with euros to replace all outstanding domestic banknotes and coins. Seigniorage revenues would revert in full to the foreign central bank, and when banknotes and coin are lost or destroyed, it would be Iceland’s loss and the anchor country’s gain. With an independent currency or with participation in the euro area, however, such a loss is incurred by the individual concerned and not the economy. As is discussed in Chapter 19, relatively few countries have unilaterally adopted another currency, and most of those that have done so are small in size. Most are former colonies of the anchor country or are European countries with a special status in the region. The few studies available suggest, however, that unilateral adoption of another currency yields little in the way of significant economic advantages. Panama has the longest experience of this arrangement, but it has been forced to apply 17 times to the International Monetary Fund (IMF) for assistance and has suffered its share of banking crises, due in part to lack of fiscal discipline.

And in aggregate, intelligence suggests that LDI funds raised over £ billion in funds and made over £ billion of gilt sales during our operations, both of which have contributed to significantly lower leverage. As a result, LDI funds report that their liquidity buffers can withstand very much larger increases in yields than before, well in excess of the previously unprecedented move in gilt yields. And so the risk of LDI fund behaviour triggering ‘fire sale’ dynamics in the gilt market and self-reinforcing falls in gilt prices is – for now at least – significantly reduced. It is important that it stays that way. Others need to act too. Banks have an important role to play in reducing risks both to themselves and to the wider system from non-bank leverage. That starts with information. As seen with Archegos, imperfect information on overall positions leads to inadequate risk management. So a first step is for lenders to require greater transparency of hidden leverage taken by their counterparties. Prime brokers should have access to data on a fund’s overall leverage, not just the portion to which they have contributed, just as banks ask household borrowers about their student loan repayments and credit card debts when issuing a mortgage. Banks, like their non-bank clients, need also to improve their stress testing to include better understanding of market dynamics and structural shifts that might change correlations and norms.
BIS central bankers’ speeches  5

That said, I accept Hélène’s suggestion that there may be other good alternatives, such as operating with less financial leverage and the increased use of macroprudential policy, including more aggressive stress testing. Also, the current regime—in which countries mostly have to self-insure against external shocks—seems inefficient. I believe that a regime with more risksharing across countries could be beneficial for the global economy. Thank you for your kind attention. 3/4  BIS central bankers' speeches  The Andrew Crockett Memorial Lecture, 2017 1 See “Spillovers from Unwinding Monetary Support in Advanced Economies,” IMF, 2014 Spillover Report, Chapter  2. See also, “On the Receiving End: External Financial Conditions and Emerging Market Growth Before, During and After the Global Financial Crisis,” World Economic Outlook, April 2013, Chapter 4. 2 See FOMC issues addendum to the Policy Normalization Principles and Plans. 4/4  BIS central bankers' speeches
This is done through a process called tokenisation – which involves using a software programme to convert ownership rights over an asset into a digital token. Many items can potentially be tokenised: financial assets like cash and bonds, real assets like artwork and property, even intangible items like carbon credits and computing resources. In other words, anything that has value, when tokenised, becomes a digital asset. Digital assets are typically deployed on distributed ledgers that record the ownership and transfer of ownership of these assets. A blockchain is a type of distributed ledger that organises transaction records into blocks of data which are cryptographically linked together. When deployed on distributed ledgers, digital assets are referred to as crypto assets. It is this innovative combination of tokenisation and distributed ledgers that offers transformative economic potential. It basically allows anything of value to be represented in digital form, and to be stored and exchanged on a ledger that keeps an immutable record of all transactions. It is this crypto or digital asset ecosystem that supports use cases which can potentially facilitate more efficient transactions, enhance financial inclusion, and unlock economic value. This digital asset ecosystem is where MAS sees strong potential and is actively promoting. I have not said anything yet about cryptocurrencies. Let me come to that now. A cryptocurrency is the digital asset issued directly by the distributed ledger protocol.

Institutional investors have been leveraging on Singapore’s strong connectivity and vibrant fund management ecosystem to access regional markets. There are currently some 220 VC and PE managers located in Singapore. VC and PE assets under management in Singapore has grown at an average 28% p.a. over the last 5 years. More than 75% of their investments are across ASEAN, South and North Asia. Third, the Singapore FinTech Festival. This is the largest financial technology event in the world. It drew more than 30,000 participants from more than 100 countries last year. There were 300 FinTech exhibition booths from 30 countries. The FinTech Festival is a platform for the global and Asian FinTech community – to learn new developments, exchange ideas, network and collaborate. The third edition of the Festival will be held in two weeks’ time, 12-16 Nov. A key component of the Festival is the Global Investor Summit, which brings together FinTech start-ups and investors and facilitates deal-making. This year, we have a new deal-making platform - called MATCH – to curate and showcase promising ASEAN start-ups and enterprises to local and global investors. Do check out the Global Investor Summit. To sum up, Asia is undergoing a digital transformation. The Asian FinTech scene in particular is blooming. Opportunities abound for long term investors. And Singapore sits at the centre of this exciting ecosystem of innovation and growth, from which to tap these opportunities. Thank you, and I hope to see you in two weeks’ time at the Singapore FinTech Festival.