samchain/econo-pairs-v1 huggingface dataset:
In other words: the same target but our way of attaining it – which is to say the tools at our disposal and also how we can be expected to act and react to events in the economy – has had to change. The international changes I have described affect most other central banks. Looking abroad, we can also see great similarities at various central banks in how monetary policy has changed. 4 In other words, the Riksbank is part of an international development. Monetary policy – then, now and in the future Until the financial crisis, it was most common to analyse and discuss monetary policy on the basis of a relatively simple model with a small number of variables. Inflation was primarily assumed, in a fairly simple way, to be affected by real economic activity (which was usually described in terms of measures of resource utilisation, unemployment or some other measure of capacity utilisation). One tool that the central bank had perfect control over, the policy rate, was assumed to have a clear effect on inflation via real economic activity. The transmission mechanism, which is to say the chain of events from changes in the tool (the policy rate) to the final effect on the target variable (inflation), was assumed to be stable and to have few details. And monetary policy worked in that when the interest rate was cut, demand was stimulated, meaning that capacity utilisation rose and thus so too did inflation.

I am thinking specifically of how the financial sector has developed in recent decades, both globally and in Sweden, and of the fact that global real interest rates have fallen. This has tangibly affected Sweden, which is a consequence of the Swedish economy being increasingly integrated with the global economy. I will then present my view of what these changes have entailed, both for how Swedish monetary policy is conducted, and for how we need to develop how we discuss and perceive monetary policy in general. Crises affect monetary policy The three unusually large crises we have experienced over the last decade or so can be added to these long-term structural and global changes. Over ten years ago, the global financial crisis started in the financial sector, when the excessive risk-taking that had built up over many years finally came to the surface. Shortly thereafter, the sovereign debt crisis broke out in Europe. The pandemic in the midst of which we currently find ourselves is another kind of crisis. It started as a health crisis before developing into an economic crisis. During these crises, central banks around the world implemented different kinds of measure to stabilise the situation. But the episodes remind us that the future is always uncertain and that preparedness for crises needs to be a central element of monetary policy. Twenty years ago, a different view prevailed and the approach developed then, which continues to set the tone in today’s discussions of monetary policy, was based on a fairly stable macroeconomic environment.
I reiterate that these are not proposals of the Banco de España; the aim of my institution is to help this Committee in its work by setting out the measures applied in other countries. Taking first some of the measures that affect pension spending, some countries have opted to raise the legal retirement age. Measures here have been on three fronts. Firstly, early retirement conditions have tended to be tightened. And this is where the complement to the aforementioned structural reforms is greatest: pension system rules should generate the right incentives to remain in the labour market, and it should also be sought to maximise this permanence through continuous employee training and wage flexibility, tailoring wage rises to productivity. There have also been incentives to continue working beyond the legal retirement age. And finally, decisions have been made to put back the legal retirement age, although only a small number of countries have admittedly adopted this measure. This is so in Germany, where a gradual increase in the retirement age from 65 to 67 has recently been approved. The various simulations available indicate that this is a measure with a strong effect in terms of reducing pension spending. Secondly, and continuing on the expenditure side, other countries have opted to raise significantly the number of years of contributions used to calculate the amount of the pension (the "regulatory base"). Here, the application of a similar measure in Spain would draw us closer to other European countries.

•  For inflation to go down, back to our definition of price stability it is essential that we do not have prices and labour costs spiralling taking into account the present level of inflation and giving rise to what we call “second round effects”. All decision-makers whether private or public, including entrepreneurs and social partners should have that in mind all over the euro area. 4  BIS Review 6/2008  •  Decisions of augmentation of prices and costs that would depart from this recommendation would do nothing but contributing to higher inflation, diminishing purchasing power in the medium run, diminishing competitiveness and therefore hampering durably the job creation process which is presently a major success of the euro area. I thank you for your attention. BIS Review 6/2008  5
Separately, in November 2014, the FSB announced an international agreement on the minimum amount of Total Loss Absorbing Capital (TLAC) to be held, covering all globally significant banks. The motivation and concept of TLAC are very similar to MREL. As the details of the TLAC proposals are finalised, the two should become consistent, with MREL being the mechanism by which European resolution authorities ensure that their Global Systemically Important Banks (GSIBs) all meet the TLAC standards7. More generally, as the PRA develops its detailed rules to implement regulatory reforms, resolvability is a key consideration at each stage. In many cases the precise formulation of a rule will reflect the effects it has on the ease of resolvability. A particular example of this is the rules on ring-fencing which we will now come on to. Structural reform Structural reform is the general term for the changes being pursued to implement ringfencing as originally proposed by the Independent Commission on Banking in (2011). What structural reform intends to achieve is basically to separate out and “ring-fence” into different legal entities, the activities of retail banking from the activities of investment banking. The distinction is set with some flexibility to reflect different business models: retail deposits and payments must be inside the ring fence, and any active trading units must be outside, whereas corporate lending, for example, could be in either. The rules will only apply to banks with core deposits over £ (broadly those from individuals and small businesses).

Zdeněk Tůma: Challenges of free capital movement and the role of international standards (focusing on money laundering prevention) Introductory remarks by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the IFex Training Course: Fraud, Terrorist Financing And Money Laundering Prevention, Prague, 15 September 2003. *  *  *  Ladies and gentlemen, dear colleagues, It is my great pleasure and honour to give an opening address to this high-level training course. For my introductory remarks today I have chosen a topic related to the questions you are going to discuss during your seminar. I would like to focus on the issues stemming from free international mobility of capital and on the international standards that have been broadened and deepened in recent years to address underlying challenges. I will also come to the anti-money-laundering standards that form an important part of the new financial architecture. The last few decades have seen substantial growth in global capital flows. In the emerging market economies alone, the net inflows of foreign capital have now reached about USD 150 billion a year, despite a contraction following the wave of emerging market crises in 1997-1998. The financial flows between the advanced market economies are of an even higher order, of course. Moreover, the turnover in the international markets is substantially higher than the net flows, exceeding global real economic activity many times over.
Chart 19: Ratio of job-to-job transition rate to V/U Per cent 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1990  1993  1996  1999  2002  2005  2008  2011  2014  2017  Sources: ONS, Bank of England Millennium of Data and Bank of England calculations. What explains these subdued rates of job transition? A strong candidate is that 21st century scourge, income insecurity. The crisis scarred risk appetite. Risk-aversion discourages workers from moving to reach higher rungs up the jobs ladder.19 It also discourages companies from offering workers those higher-rung positions. Risk scarring slows the velocity of circulation in the jobs market and hence pay and productivity growth. One rationale for risk-aversion in moving to higher paid jobs at a different firm could be so-called “last-in-first-out” whereby new workers are mostly likely to lose their jobs in the event of redundancies. 19  17  All speeches are available online at www.bankofengland.co.uk/speeches  17  This risk-aversion has not been confined to those switching jobs; it has also affected those staying put. A reluctance to move reduces these workers’ bargaining power, weighing on their pay. Put differently, if companies are less fearful of workers being poached, for a given degree of the strength in the jobs market, they will feel less need to pay-up to retain those workers. There is evidence of this behaviour in the differential pay growth of stickers and switchers recently (Chart 20).

Chart 16: Okun’s Law Annual change in unemployment rate (percentage points)  4 1972-2009  3  2010-2018  2 1 0 -1 -2 -3 -6  -4  -2  0  2  4  6  8  Calendar year GDP growth (per cent) Sources: ONS and Bank of England calculations. Notes: Chart shows calendar year GDP growth plotted against annual percentage point change in calendar year average unemployment rate. A different way still of illustrating, and explaining, these developments comes from looking at job moves. As the crisis struck, job-to-job movements fell. Instead of moving between jobs, workers instead transitioned into unemployment. But these transition rates into unemployment rose by less than in previous recessions. Workers and their employers bargained to remain on the jobs ladder rather than jumping-off. Remaining on the ladder did, however, come at a cost in terms of pay. For workers staying in the same job this meant accepting pay freezes, with the fraction of workers accepting these rising sharply during the crisis (Chart 17a). For workers moving, this meant moving down the jobs ladder by accepting lower-paying jobs at lower-productivity firms: the fraction of switchers taking pay cuts spiked during the crisis (Chart 17b). Median wage growth for switchers fell from over 9% in 2007 to 4 ½% by 2010 (Chart 18).
But the sharp increases in a range of credit spreads from the onset of the crisis in August 2007, and especially after the collapse of Lehman Brothers in the Autumn of 2008, meant that policy rates had to fall sharply merely to  3  8  Though in any case, the Bank of England’s asset purchases are indemnified against loss by HM Treasury. BIS Review 111/2010  maintain the pre-existing levels of key borrowing rates, 4 let alone lowering them in order to stimulate aggregate demand to counteract the substantial contraction over 2008 Q4 and 2009 Q1. As a result, many monetary policymakers soon found themselves with policy rates at, or near, the zero interest rate lower bound (ZLB) and were forced to turn to other means to inject further monetary stimulus. There are two 5 main options facing a central bank when it nears the ZLB, both of which seek to depress longer-term interest rates and raise asset prices: committing to keep future policy rates low; and reducing the spreads of longer-term interest rates over expected policy rates through asset purchases financed by money creation. In the canonical New Keynesian/New Classical DSGE model, being able to commit to keep policy rates low for a sustained period is the only way of further stimulating the economy at the ZLB, as the impact of monetary policy is completely summarised by the current and future path of the policy rate.

He does this difficult job with immense grace and diplomatic skill. He is also the "sports captain", among central bankers, and organises the annual Governor’s Cup at a very fine golf course close to the Franco-Swiss border. In addition, Andrew doubles up as our gastronomic and oenological consultant at the informal social events that are an important part of any international gathering. Andrew has been a staunch supporter of Hong Kong and the HKMA for a very long time – indeed, formerly as an Executive Director of the Bank of England, he played an instrumental role in the conception of the HKMA. Since he became General Manager of the BIS in 1994, the HKMA’s ties with the BIS have gone from strength to strength. We joined the BIS as a shareholder in 1996. In 1998, Hong Kong became the location of the BIS’s first overseas office – an office which has become extremely active in this region, with its most recent event being the organisation in Hong Kong of a major BIS Governors’ meeting, held just this last weekend. In 1999, Hong Kong was invited, as one of the four non-G10 economies, to join the Financial Stability Forum, which Andrew chairs: this forum has the job of proposing reforms to the international financial architecture, and it is making good progress in this herculean task.
2  4  Of course, if the economy were to weaken, we still have plenty of tools. Not only could we cut short-term interest rates, but we also could extend the maturity of our Treasury and agency MBS portfolio, purchase additional Treasury and agency mortgage-backed securities and engage in forward guidance with respect to the future path of short-term interest rates. BIS central bankers’ speeches  It’s a two-way street The U.S. economy plays a large role in the global economy. Most significantly, the U.S. economy represents a sizable share of world GDP – roughly 25 percent at current exchange rates – and the U.S. dollar is the most important international reserve currency. More than 60 percent of central bank reserve assets are denominated in dollars, and that share has been stable to rising in recent years. Most foreign trade is denominated in dollars and most of the foreign currency debt issued by corporations abroad is denominated in dollars. Thus, what happens to the U.S. economy, U.S. financial asset prices and the exchange value of the dollar has important implications for the global economy. At the same time, prosperity is very much a two-way street. Developments outside the United States affect our domestic economic outlook through their impact on trade and financial market conditions, and we have to take such developments into consideration in our monetary policy decision-making. In many ways, international linkages have become more important over time.

BIS central bankers’ speeches  1  Approval of the internal audit policy The approved internal audit policy, followed by the revision of the Regulation on the Functioning of the Control Department, defines clearly the position of the activity of the internal audit within the organisational structure of the Bank of Albania. This document provides for the implementation of the Standards for the Professional Practice of Internal Auditing and the Code of Ethics, and specifies the line of reporting of the Inspector General to the Audit Committee, Supervisory Council and Assembly of the Republic of Albania. Approval of the new Statute of the Bank of Albania The new Statute provides for the compliance of many of the provisions for the organisation and functioning of the Bank of Albania with the best practices of the European System of Central Banks. Among others, I would like to mention: -  specification of duties and responsibilities of the Administrators of the Bank of Albania;  -  specification of procedures for the replacement of the administrators, during their absence or when they are unable to act;  -  reformulation of provisions that stipulate the administrative and financial independence of the Bank of Albania by approximating them to the provisions stipulated in the Statute of the European Central Bank. Approval of the Medium-Term Development Strategy and Budget for 2016–18 The medium-term strategy summarises key objectives and major ambitions of the Bank of Albania for the next three years.
It is only one year ago that we witnessed the steepest fall in global capital markets in our time. By maintaining the fund’s risk profile it is fairly probable that the average return will gradually approach 4 per cent again. The government can choose the composition, required rate of return and risk profile for its investments without taking into account the funding needs of Norwegian enterprises. Norwegian enterprises can choose their debt and equity capital structure independently of the government’s financial investments. There is a capital market between the government as investor and corporate capital needs. The government’s foreign savings plans do not therefore influence Norwegian companies’ access to capital and required rate of return on their investments. The profitability of government investments is based on a discount rate of 4 per cent. This secures the same required rate of return as the government expects to achieve on its wealth fund investments over time. One question that nevertheless arises is whether there is a queue of sound and profitable projects that have to wait because of an excessively tight fiscal policy. It is difficult to find support for this. In the National Transport Plan for 2010–2019, which can perhaps be considered representative of government spending, spending on road investments is set at around NOK 140 billion. 10 The profitability of about two-thirds of the investments has been evaluated. The calculations capture time saved and reduced costs related to accidents and the environment. Investment costs and future operating expenses are deducted.

Times will become more demanding for the clusters of oil suppliers in Sørlandet, Nord-Jæren, Haugalandet and Stord and for manufacturing in Kongsberg, Grenland, Helgeland, Salten and Ofoten. 8  16  The historical figures are based on trend calculations. The figures for these years are therefore based on economic developments later in the 1990s. The degree of tightening may therefore also appear greater in retrospect. BIS Review 15/2010  Fortunately, manufacturing districts have shown the ability to adapt. Research shows that the degree of geographical and occupational mobility is high for the Norwegian labour force. Few people remain permanently outside the labour force after a period of restructuring. 9 But the communities are small and vulnerable and may disappear if the industry structure becomes too narrow. And as mentioned, the most important, perhaps the only, instrument available to the authorities in addressing this challenge is to restrain petroleum revenue spending in the Norwegian economy. The management of petroleum revenues It took a generation from the time the first oil field was discovered in the North Sea until the government began to set aside economic rent. The Government Petroleum Fund was established in 1990 and the first transfer to the wealth fund was made in 1996. Each year since that time, as a savings plan, the government has transferred a portion of current income from petroleum activities as deposits in the fund. Today, the value of the fund is around NOK 2.6 trillion, or slightly higher than annual GDP in Norway.
The increase in margins may reflect banks’ efforts to build up their capital. Household debt is rising in Norway, but household income is growing at a solid pace. Given the present economic situation, households can tolerate higher interest rate margins in the  4  BIS central bankers’ speeches  banking system. Banks’ owners must also make a contribution, which they can do by participating in equity issues or by accepting that a smaller share of profits is distributed as dividends. In addition to raising more capital, banks must base their lending on more stable funding sources. Improved capital adequacy and more stable funding will be an advantage for banks, and not a disadvantage, in an environment of intensified global competition. Although growth in our part of the world is weak and real interest rates are low, many banks are still operating with high return targets, which could lead to excessive short-term risk taking. Banks and their owners should accept that return on equity will be lower, but also safer, in the years ahead. A more robust financial system will benefit us all. The forthcoming regulatory framework for banks in the EEA includes a countercyclical buffer – a capital requirement that can be increased in upturns and turned off in downturns. When banks are required to build up an additional buffer, they are better equipped to cope with periods of rising losses. Banks will be less likely to reduce lending in order to comply with the minimum capital requirements.

Through 2012, the European Central Bank (ECB) intervened with resolute measures to calm the markets. The banking system was offered large amounts of long-term funding. In summer 2012, the ECB declared that it was prepared to make unlimited purchases of debt securities from governments which fulfil the conditions for borrowing from the European Stability Fund. These measures seem to be working. 2  BIS central bankers’ speeches  Borrowing rates for debt-burdened countries have fallen markedly. Other risk premiums have also decreased. Fears of a euro-area breakup and the collapse of the European economy are no longer dominant. The European monetary union – after being established – cannot be dissolved without serious consequences for Europe and the world economy. There is little point in discussing whether the original idea was a good one or not. The child was born and is now a teenager. As expected, puberty has presented problems. These problems must now be dealt with by the European authorities. Budget deficits in Europe are being reduced, despite strong headwinds from the slowdown that follows in the footsteps of austerity. Structural reforms are being implemented to increase growth capacity over time. Business sector costs are falling and competitiveness is improving in the countries hardest hit by the crisis. Steps have been taken in the direction of closer cooperation and coordination of economic policy. However, the path ahead is long. We may have to wait until the next decade before growth gains a firm footing in Europe.