samchain/econo-pairs-v1 huggingface dataset:
Mr. Heikensten answers eight questions on monetary policy in Sweden Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, at The Economics Association in Umeå on 19/2/98. Introduction During the 1990s monetary policy has been the subject of intensive discussion. This is not surprising, given the serious crisis in the Swedish economy at the beginning of the decade and the role that monetary policy played both then and as the crisis was building up. Since that time, monetary policy has had an explicit role to safeguard independently the value of money – a role that is new in Sweden in the post-war period. With a floating exchange rate, the decisions currently made by the Riksbank on its instrumental rate are very real and important to the behaviour of households and businesses and to economic growth. The monetary policy discussion has evolved over time. Questions and statements about monetary policy’s basic objective of price stability that were very frequent a couple of years ago are less so today. Understanding of the Riksbank’s actions seems to have increased. We are presently trying to evaluate this by asking the public how it views the Riksbank’s work and by following the media and newsletters written by the market’s players. It is also possible to form an opinion based on the market’s reactions to changes in the instrumental rates as to whether the policy is understandable.

In spite of the fact that knowledge and understanding of the Riksbank’s policy have gradually increased, I believe that from time to time there is a need to explain the basis for the policy and some of the principles that guide it today. The purpose of today’s speech is just that. I will endeavour to answer seven of the questions that I have encountered most often in recent years at meetings and in editorials and commentaries and that seem to permeate the discussion of monetary policy continually. By way of conclusion I will comment on an eighth question. Question 1: Why is low inflation good? The experiences of previous decades in Sweden and a number of international examples show that high inflation is associated with economic costs. Moreover significant costs ensue when one is compelled to gear down from high to low inflation – something that sooner or later always happens. It has been shown that high inflation is often associated with sharp fluctuations in the relative prices of goods. Rapid and abrupt price changes create uncertainty about the future for all the actors in the economy. It simply becomes more difficult to make long-range decisions. Households and businesses are compelled in practice to take greater risks and both then demand higher interest and profits. This reasoning is supported by research, which indicates that the growth rate of the economy may be lower, because the increased uncertainty reduces investment activity. In addition the risk of making erroneous investments increases. (Diagram 1.
These enhancements could reduce barriers to trade: cutting transaction costs on international trade just by one percentage point would save firms $ in Africa alone. And with a focus on remittances as well as wholesale and retail payments, ultimately improve financial inclusion and help to alleviate poverty. That is what I call a worthwhile vision! Enhancing cross-border payments has been an objective for many decades. What is different now is that we have a clear vision, targets and a holistic approach on how to address the disparate set of underlying frictions. And the work is taking place at a time of rapid innovation in the payments industry and national payment systems, creating an opportunity to build on existing change programmes. Cross-border payments are high on the agenda for public policymakers and financial institutions. A lot has been achieved recently through the collaborative effort of authorities worldwide, including of many of you here today. We have developed frameworks on operating hours and access policies to support public authorities to enhance their domestic systems and increase interoperability. We have consulted on harmonisation requirements to ensure that the  Page 3  new ISO20022 standards are used consistently around the globe. We have identified specific regulatory and legal barriers to seamless payment processing and proposed solutions. CPMI has recently published a set of recommendations[4] to improve adoption of risk-free PvP settlement in foreign exchange markets. Central banks and the private sector have successfully tested cuttingedge technologies for cross-border payments through BIS Innovation Hubs.

Mohd Razif bin Abd Kadir: Further development of the Islamic financial services industry in Malaysia Speech by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the official launch of HSBC Amanah Takaful (Malaysia) Sdn. Bhd., Kuala Lumpur, 12 September 2006. *  *  *  Bismillahir Rahmanir Rahim It is indeed an honour to be here this morning to commemorate the launching of HSBC Amanah Takaful (Malaysia) Sdn. Bhd. This occasion chalks up another accomplishment in the takaful industry in Malaysia, as we position ourselves towards achieving a dynamic, competitive and efficient Islamic financial system that is able to contribute to the overall development of our economy, and to enhance the integration of our Islamic financial system with the global market. The launching of HSBC Amanah Takaful (Malaysia) Sdn. Bhd. marks another significant milestone in terms of our strategy towards developing a progressive takaful industry, that is able to adapt to the increasingly challenging and competitive environment as well as adjust to the forces of change that has redefined the domestic and international financial landscape. Ladies and gentlemen, Over the past two decades, the takaful industry in Malaysia has grown progressively, underpinned by the holistic and pragmatic approach in the development of the Islamic financial industry. Indeed, we have witnessed an orderly development of the takaful industry.
A reliance on third-party capacity The second area is the use of third-party capital and asset origination capacity, known as funded reinsurance, to support these large new business transactions that are both capital-intensive and put a strain on in house asset origination capabilities. In principle, attracting new capital to support BPA liabilities is positive – so long as the capital is aligned with the long-term risks it is intended to support. I spoke in September[11] on the emerging appetite for funded reinsurance to support new BPA business and the resulting counterparty risk. I explained that we would be engaging with insurers and other stakeholders to enhance our understanding of these risks and the most appropriate ways to address them. Our work so far has focussed on the evolving contract and collateral structuring, the counterparty risk management frameworks, internal model approaches and firms’ stress and scenario testing. Page 5  We are exploring these aspects carefully and are increasingly focussed on four key elements: 1. Recapture events: We have looked at the circumstances under which the risks that insurers have ceded might end up back on their own balance sheets. Default of the reinsurer is only one of them. Voluntary and automatic contractual termination triggers linked to solvency coverage ratios, credit ratings, or legal and regulatory environments bring material uncertainty to the recapture triggers. 2. Wrong way risk: We have observed the emergence of reinsurers with newer business models narrowly focused on credit markets where diversification benefits might be less evident[12].

The Minister of Finance was decisive, and after a single “one-on-one” discussion with me, he gave the approval for the Central Bank to proceed with implementation of the intervention plan. The rest is history. The newly appointed directors and the managing agents, with the Central Bank in the background, were able to stabilize the bank within a short period of about 2 weeks. Thereafter, within a few months, the bank was able to infuse new capital and thereby qualify to exit from the close monitoring system of the Central Bank, in less than a year. This episode will be an important lesson for those who wish to study the way Governments and Central Banks should cooperate to bring stability, in the face of any instability in the banking sector. It also confirmed the validity of an important annotation in Exter’s Report. Let me quote once again from the first Chapter of his Report: “Many of its (Central Bank’s) powers may go unused for long periods, because they are designed for particular situations, some of which may never arise. Others are intended for use only in crises or to forestall a crisis, but prudence dictates that they be included now, so that they will be at hand in case of need. …”.
Durmuş Yilmaz: Economic outlook for Turkey Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Bursa Chamber of Commerce and Industry, Bursa, 11 January 2007. *  *  *  Distinguished industrialists, businessmen, dear guests and members of the press, This is the first of the series of meetings planned for 2007, which has become a traditional platform aiming at bringing the representatives of the real sector together directly. Firstly, I wish to thank Dünya Newspaper and Bursa Chamber of Commerce and Industry for organizing this meeting and thereby giving me the opportunity to exchange information and views about the economic outlook with the distinguished industrialists and businessmen like you. In the first part of my speech, I would like to present a general evaluation of the year 2006 with a special emphasis on inflation, and to explain our policy implementations and to share our forecasts regarding 2007 in the light of the current data available. Then, I would like, once more, to mention about growth, employment and current account deficit that we have shared with the public many times, constituting the major items on the economic agenda. I will then elaborate on what should be done in this regard in the medium and long term. Distinguished Guests, The primary objective of the Bank is to achieve and maintain price stability, as laid down in the Central Bank law.

The rising expenditures, especially the investment spending increase the demand for machinery and equipment; and this demand can be met by imports due to the structural peculiarities of the Turkish economy. This process leads to the enlargement of the difference between the domestic savings and investments, which is an indicator of the current account deficit and causes the need for foreign resources to arise. With the help of the macroeconomic stability and the inflow of foreign capital, Turkish currency is appreciated and the process is reiterated giving way to an increase in the current account deficit in the environments where this resource can be provided and foreign borrowing becomes an option. A similar process was experienced due to the improvements recorded in the macroeconomic stability in the last five years and remarkable increases were observed in the current account deficit owing to the effect of high speed of growth. The current account deficit reached 34.4 billion USD in October per annum and the ratio of the current account deficit to national income in the third quarter of 2006 became 8.5 percent. However, the reasons besides the financing method should be examined in order to determine the extent of the risk that the current account deficit poses with regard to the macroeconomic balances. Current account deficit today basically originates from the faster increase of investments in comparison with the savings. Additionally, high increases observed in energy prices and especially crude oil prices influenced the increase in current account deficit in a vast amount.
Benoît Cœuré: Interview in Corriere della Sera Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, in Corriere della Sera, conducted by Mr Danilo Taino on 27 January 2015. *  *  *  In the last few days you have said that Tsipras must “continue to pay”. I said that there’s dual responsibility. Greece must continue to abide by the rules of the game: we are a community of purpose. On the other hand, Europe has to accept the democratic change in Athens, even if it is based on policies that are different from the ones before. No renegotiation of Athen’s debt, then. Not even an extension of maturities? Greece’s debt is made up of various components. As regards the government bonds purchased by the ECB as part of the Securities Markets Programme launched in 2010, we cannot grant even an extension of maturities: it would be like granting a loan to the country and that is prohibited by the treaties. As regards loans given to Athens by European countries, that’s not for us to decide. You’re indifferent? No, I’m saying that any decision that is made must have a goal, namely for the reforms in Greece to continue. There will probably be different reforms from the ones expected, given that there’s now a new government. But we have to be consistent: the country still needs reforms. Tspiras says that the troika is now finished in Greece.

The reality is that many Asian governments and corporations receive credit ratings that are lower than the minimum thresholds acceptable to institutional investors, including the managers of official reserves. There is certainly merit in strengthening the dialogue between the Asian issuers and the international credit agencies to facilitate a better understanding of the Asian situation by the rating agencies and improve the transparency and accountability of the rating process. There is also a case for considering whether it is advisable or viable to establish national or regional credit rating agencies, with or without support from the authorities. On top of these, I think there is a need to consider the introduction of market-based mechanisms for credit enhancement or guarantees. In Asia, I am aware of problems encountered by private sector initiatives in this field. It has proved difficult objectively to assess and manage the risks involved in such operations. Indeed, one feature of the recent explosion of international finance is market volatility that has been much higher than had been thought possible in the light of historical experience. But I think we have learnt from the recent years of financial turmoil and I hope we are now in a better position to identify and therefore properly price the risks involved in the provision of credit enhancements or guarantees.
The serious consequences of overheating at the end of the 1980s also seem to have created a general insight that sacrifices were necessary for a time to bring the Swedish economy into a state where the conditions for sustainable growth and high and stable employment could be created. The problems after the high inflation years have probably also contributed to creating a broad support for the inflation targets of monetary policy. Laboriously won improvements must be safeguarded It is important now both for macroeconomic policymakers and otherwise in Sweden to avoid as far as possible the reappearance of the problems that were overcome with great effort in the 1990s and to avoid new imbalances being built up. The role of the Riksbank here is to ensure that price stability is maintained and to ensure the stability of the payment systems. After the financial crises that affected the world economy during the 1990s, a number of proposed measures aiming at preventing new crises have been discussed in various international contexts. Many measures have aimed at increasing the so-called transparency of the financial systems so that the agents in the markets were able to base their decisions on realistic assessments. My intention here is primarily to discuss the role that monetary  1  BIS Review 33/2000  policy can have to counteract financial imbalances being created as a consequence of rising asset prices. Let me first briefly describe the role of monetary policy in an economy that is in balance.

However, attention should still be paid to the downward pressure on prices stemming from weak demand, although the pressure has weakened given some recovery in private demand. In the financial market, the overnight call rate has generally stayed near zero, and financial institutions have been confident about the availability of overnight funds. The amount outstanding of funds in the call money market increased slightly in late March, and decreased thereafter. Interest rates on term instruments rose slightly toward end-March, the end of the fiscal year, but have weakened somewhat since the beginning of April. The Japan premium remains negligible. Yields on long-term government bonds rose marginally in mid-March and stayed above 1.8%, but declined somewhat from late March and are recently back in the range of 1.7-1.8%. The yield spread between private bonds (bank debentures and corporate bonds) and government bonds continues narrowing, primarily that between private bonds with relatively low credit ratings and government bonds. Stock prices weakened almost to 19,000 yen in mid-March, but then rebounded and are currently moving between 20,000 and 21,000 yen. In the foreign exchange market, the yen strengthened against the US dollar toward the end of March. However, it weakened at the beginning of April and has been traded at around 105 yen since then. With regard to corporate finance, private banks have basically retained their cautious lending attitude. However, constraint that had been caused by severe fund-raising conditions and insufficient capital base has eased considerably.
Sharing the burden, as the cost of addressing the current crisis is more than a single party could bear on their own. The state shall not compensate parties for lost opportunities for profit, nor for losses due to preventative measures imposed to fight Covid-19; it is not possible to avoid losses or damages completely. Financial support is extended with the limited goal of surviving this current period and is only extended to economic entities and companies that enjoyed a strong position, ran with efficiency, and were contributing to the economy prior to this crisis. Ensuring that the economic cycle keeps running, so that companies that had suspended business may resume their activity as soon as life goes back to normal. Protecting the different segments of the national economy against damage sustained due to interdependence of economic sectors. Solutions and remedies provided through the stimulus package are based on currently available data and present conditions. Should the crisis stretch much longer into the future, other remedies would be presented that better correspond to new data and conditions. To come up with a balanced and comprehensive approach, the committee specified the issues that must be addressed and for which stimulus is needed within four main segments: the household, business, banking, and government sectors. Twenty-two measures had been presented to stimulate the economy, 11 of which were included in Council of Ministers Resolution (455).

We plan these trips so I can meet with a diverse array of representatives. This allows me to get a comprehensive picture of economic conditions in the region and a fuller understanding of the major issues and concerns. This is our fifth trip to Upstate New York in the past few years. Other recent trips have taken us to Northern New Jersey, the boroughs of New York City, Long Island and Fairfield County, Connecticut. My outreach trips complement the ongoing efforts of the New York Fed to assess conditions in the Upstate New York economy and throughout our District. We monitor economic performance on a monthly basis through special indexes we have created and through our monthly surveys of New York State manufacturers and business leaders in the nonmanufacturing sector. We also get important input on economic conditions from our Upstate Advisory Board, whose members play important roles in the Upstate economy. We conduct a biannual poll of small businesses to understand their credit needs and availability. The results of one particular poll led us to develop a series of clinics for small businesses to help them take the next step to access capital and identify new sources of funding. We have constructed a consumer credit panel that allows us to better understand the financial condition of U.S. households and students. More recently, we extended this national analysis to include more detail about the states in our district, including a profile of households in New York State and the Albany area.
Investors probably bore in mind Iceland’s high sovereign rating in their decisions but ignored the risk that the króna might still depreciate, given that the real exchange rate was far above the average for the past quarter-century. At least, this risk was obscured by high interest rates. In the turmoil in early 2006, various investors in glacier bonds, institutional investors in particular, are likely to have closed their positions from autumn 2005 and thereby contributed to the depreciation of the króna, losing sizeable funds in the process. Glacier bond issuance has gone in waves, largely in line with global movements in carry trades. It was substantial in autumn 2005, dropped sharply in the first half of 2006, then picked up in the autumn and has been fairly large since then. Currently the outstanding amount of glacier bonds is equivalent to roughly a third of GDP. The first issues matured in autumn 2006 and several others since then. Maturities have not sent tremors through the FX market, even when relatively large issues mature. This is consistent with the experience of countries such as New Zealand, where “kiwi bonds” denominated in the New Zealand dollar have been issued for much longer than glacier bonds. Large issues of glacier bonds will mature shortly and it cannot be ruled out that they will cause some unease. There have been a number of effects from the glacier bond issuance.

Now I would like to review recent developments in the Puerto Rico economy and then outline for consideration and discussion several steps to help put the Island on a path toward fiscal health. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Economic conditions in Puerto Rico Let me turn to economic conditions in Puerto Rico. As you are well aware, the news has not been good. Puerto Rico’s economy has been in a slump for nearly a decade. After declining for five straight years, real (inflation-adjusted) gross national product (GNP) rose 0.9 percent in fiscal year 2012 and only 0.3 percent in 2013, rates considerably below the respective U.S. mainland growth rates. A monthly index produced by the Government Development Bank for Puerto Rico paints a similar picture of an economy that has stabilized but at a depressed level. We are finally beginning to see some signs of improvement in economic activity on the Island, though there is little evidence to suggest that the strong recovery that we seek has yet taken hold. Puerto Rico’s labor market remains weak. Overall payroll employment fell by about 10 percent between 2006 and 2010 and has leveled off since then.