samchain/econo-pairs-v1 huggingface dataset:
The Riksbank is still prepared to do more to ensure that inflation rises towards the target if this is necessary. The exchange rate is floating – and highly volatile In other words, the exchange rate has considerable significance for inflation trends. The Swedish krona has floated since 1992. There are several factors that affect a floating exchange rate. Differences in rates of inflation in Sweden and abroad and differences in interest rates between Sweden and the rest of the world are two such factors. Net trade in goods and services is another. Differences in economic growth and monetary policy are also significant. It is very difficult to predict how the exchange rate will develop. One reason for this is that different factors have different significance at different points in time. Figure 7 shows how the value of the Swedish krona has developed in relation to an index of international currencies, the KIX. The greater the significance a foreign currency has for Swedish foreign trade, the larger the weight it is given in the index. The curves in the figure can be interpreted as showing what the foreign currency costs in Swedish krona. When the krona weakens, the foreign currency costs more and the curve rises. The KIX index is the exchange rate the Riksbank considers most important. The Swedish krona showed an appreciation trend from 2010 until the first part of 2013. However, there were substantial variations. From the beginning of 2014, the trend has turned, and the krona has weakened.

The first concerns the low inflation rate, the second the significance of inflation expectations and the third the expansionary monetary policy. Inflation below target – several reasons for this Let’s start with inflation: Why is it so low now and therefore also far below the target? What are the reasons for this? 2  The Figure shows the period 2010–2012 as a whole, although there were several wage bargaining rounds during this period. 3  For natural reasons, there are no wage data available for 2015 yet. BIS central bankers’ speeches  3  On an overall level, one can say that the low inflation is explained by the weak international demand in recent years and the weak domestic activity. This development reflects the fact that the recovery following the financial crisis has been unexpectedly sluggish – perhaps less so in Sweden than in many other countries. The low inflation is not just a Swedish phenomenon. It has also fallen or developed surprisingly weakly in many other countries in recent years, and other central banks have also found it difficult to attain their inflation targets. In Sweden, companies appear to have found it unusually difficult to pass on their cost increases to prices. There are also signs that inflation may have been held back by increased competition and uncertainty over the development of the economy. Furthermore, electricity prices have been unexpectedly weak over the past year. In addition, the oil price fell heavily during the second half of 2014.
To prevent interbank lending rates from rising too much, a number of central banks have increased their short-term lending to banks. In addition, the Federal Reserve has lowered its key rate by 0.75 percentage point in recent months. A further cut in the key rate in the US is now expected, and the interest rate is also expected to fall in the UK. In the euro area, market participants expect a more stable key rate ahead. But developments are not the same everywhere. The central banks in Sweden, Switzerland, Canada, New Zealand and China have raised their key rates. In Sweden, which has a lower interest rate level than our main trading partners, further interest rate hikes are expected. BIS Review 139/2007  5  The interest rate differential between Norway and other countries can have an impact on the krone exchange rate. In the short term, however, the factors that influence the krone exchange rate vary. High oil prices and krone appreciation appear at times to be related, but there have also been periods when the krone has appreciated while oil prices declined. The krone appreciated when the interest rate differential against other countries was high in 2002, but as interest rates in Norway moved down to the level among our trading partners, the value of the krone fell back. In the past, we have observed that market turbulence has occurred in tandem with a weaker krone.

If we look at the period from the 1970s to today, economic growth has been higher since the 1990s when inflation was low than it was in the 1970s and 1980s when inflation was high. Over time, interest rate setting only has an impact on inflation. Output is determined by real factors such as the supply of labour, capital and technology and by productivity developments. Nevertheless, monetary policy can have an impact on the real economy in the short and medium term. Actual output will normally deviate from trend output, which is determined by developments in real factors. If output is higher than implied by these factors, price and cost inflation will pick up. Stabilising output developments means seeking to influence actual output so that the economy grows at a pace that is consistent with price and cost stability. In line with this, the operational target of monetary policy is low and stable inflation, with annual consumer price inflation of approximately 2.5 per cent over time. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment. A plan for petroleum revenue spending over the central government budget was drawn up in 2001. Government revenues from the sale of oil and gas are invested in the Government Pension Fund – Global (the petroleum fund). The plan is to spend the expected real rate of return on the Fund each year, i.e.
Overcoming this problem requires the implementation of a broad array of measures aimed at stimulating human capital formation, providing for the creation of new companies promoting the development of new products and combating rigidities in the different markets. On the other hand, there has recently been an improvement in the use of the labour factor, suggesting that labour market reforms and wage moderation have yielded some benefits. However, much room remains for further progress, since the unemployment rate is still high and the number of hours worked and the employment rates for specific groups (women, youths and older individuals) are too low. On the fiscal policy front, budget balances have recently seen what was in part an unexpected improvement. This is because the pick-up in activity has given rise to more vigorous growth in certain tax receipts than was foreseen a year ago. The increase in revenue is therefore essentially transitory, therefore the authorities of these countries would be mistaken to become complacent and believe that budgetary consolidation has become a less pressing task. On the contrary, it is necessary to maintain sufficient control of spending in the economic upturn so as to speed up the correction of budgetary imbalances. This objective is vital for creating a stable macroeconomic environment and increasing the headroom available to tackle the challenges posed by population ageing in the future.

This is the most important reason why the implementation of monetary policy has been delegated to central banks. In Norway, the responsibility for interest rate decisions was delegated to Norges Bank in 1986. The differential between Norwegian and German implied forward rates 10 years ahead provides an indication of how successful we have been in creating confidence that we will attain the inflation target. Implied forward rates are calculated using the yield curve and can be interpreted as the expected three-month rate ten years ahead. The forward rate differential can be interpreted as the expected inflation differential in the long term plus a risk premium. In the euro area, the objective is to keep inflation below 2 per cent. If we assume that this gives an average inflation rate of 1½ per cent, the inflation differential against Norway will be about 1 percentage point. This means that an investor that is seeking the same real return must have a one percentage point higher interest rate in Norway than in Germany. After the introduction of the inflation target, the differential between German and Norwegian forward rates remained at about 1 percentage point for a long period. The differential has recently narrowed to about 0.8 percentage point. This indicates that there is confidence that we will attain the inflation target. Monetary policy shall contribute to smoothing fluctuations in the economy that are due to changes in demand.
The 2009 survey also revealed disparities in terms of financial access by gender, with male access at 41% while that of females was at only 34%. This was with regard to access to any financial product, formal or informal. With regard to the formal banking sector, only 14 per cent of Zambian adults were banked. Further broken down, 17 present of Zambian males were banked compared to 12 per cent of females. Distinguished Guests, there are a variety of reasons that have been identified for financial exclusion in our country. In remote and sparsely populated areas with poor infrastructure, physical access itself acts as a deterrent. From the demand side, lack of awareness, low incomes, social exclusion, illiteracy, and lack of collateral among others act as barriers. From the supply side, distance from branches, high transaction costs and cost of borrowing, cumbersome documentation and procedures, as well as unsuitable products, are common reasons for exclusion.

You must aspire to grow from the informal to the formal and from SMEs to large corporations. You must not just wait for the targeted funds (which have a role to play) also seek to access other relevant products in the market. Seek to be informed. Make yourselves visible. Message for banks and other financial service providers •  Explore the women’s market segment as a viable and profitable segment;  •  Create innovate products that respond to the needs and wants of the women’s market segment;  •  Find new ways of mitigating risk;  •  Promote greater workplace diversity and promote more women into senior management positions; and  •  Assist women to be more financially literate. On our part, Bank of Zambia will continue to create an enabling environment through policies, legislation and regulation that facilitate greater financial inclusion of women. Chairperson, once again, allow me to applaud the sponsors, led by ZAFWIB, for successfully organizing this important event on the Month of the Woman Entrepreneur for the 8th consecutive year as well as for holding this year’s annual conference. As Bank of  4  BIS central bankers’ speeches  Zambia, we are delighted to play a positive role as it is a unique opportunity to build relationships amongst various stakeholders.
And competing with the ecosystem itself, which allows users to meet almost all their needs — from managing accounts to telemedicine, independent of a given bank, and that provides banking services, is even more difficult. Another trend that is typical of the Russian market concerns the way ecosystems are formed. What we are seeing is while the global giants such as Amazon or Facebook are developing on the back of partnership agreements with different service providers, in Russia development occurs more often, unfortunately, on the back of the acquisition and merging of such companies, and the establishment of subsidiaries in different areas within an ecosystem of horizontal integration. Using the financial, technological and marketing resources of their ecosystem, these companies can develop and further attract customers faster than their competitors that are not part of these ecosystems. 5/7  BIS central bankers' speeches  What does this mean? This means that it is possible for the perimeter of Russian ecosystems to close very quickly meaning joining them as an independent partner will be increasingly difficult. Of course, the future is in ecosystems. It seems to me that this is undeniable. Ecosystems will create new opportunities for business, for people, and dramatically improve customer experience.

As it happened, the epidemic also clearly showed us that it is an unwillingness to completely move to remote identification that has become the main barrier to fully transitioning all services to a digital mode. You will remember that we made temporary decisions to ease identification requirements. But the systematic solution, in our opinion, is the development of biometrics. We hope that all necessary changes to the legislation will be adopted. On the one hand, it will allow citizens to make greater use of biometrics, and on the other hand, increase banks’ interest in using this tool. On the other hand — and this is certainly the main trend in the Russian market and, in my opinion, the main challenge — is that equal access to infrastructure, even the equal access we are developing, does not mean equal access to customers. Both globally and in the Russian market powerful ecosystems are being formed that unite both financial and non-financial services. For example, according to McKinsey experts, by 2025 — and this is just round the corner — ecosystems may account for about 30% of world GDP (60 trillion US dollars). While ecosystems worldwide are predominantly formed around technology companies, in Russia their core is the major financial players. Competing for a customer who is already inside such an ecosystem is very difficult, which you know very well from your experience.
The increase in the balance sheet was dependent on the demand of primary liquidity by the banks, facilitated however, by the provision of liquidity through a regime of fixed rate full allotment of banks’ demand, introduced in September 2008. The impact on overall monetary conditions was, as before the crisis, dependent on the behaviour of the banks to passthrough the higher monetary base into credit and broad money, which did not happen. What did happen was a justified fulfilment of the role of lender of last resort but not a new type of monetary policy instrument in the sense of aiming at a new transmission channel. The adoption of a fixed-rate full allotment regime of liquidity provision, which has been in place since and was recently extended until December 2016 (at the very least) was indeed an extraordinary unconventional measure. It supported the banking sector and avoided a more detrimental credit crunch. However, the size of our monetary base declined significantly during 2013 when banks decided to start the repayment of their previous high borrowings. On the other hand, as per the following table, total outright purchases of assets by the ECB under two different programmes was not behind the increase of the balance sheet as they represent a relatively small proportion of total assets compared with other central banks.

It thus aims to effectively meet the information requirements of bankers, financiers, statisticians, economists, researchers and prospective investors as well as increasing awareness of both domestic and foreign users. Moving forward, the website will be linked with other markets to serve as a platform for exchanging information and knowledge beyond our own borders. Ekspo Perbankan Islam dan Takaful adalah satu lagi saluran informasi yang menghubungkan institusi kewangan Islam secara langsung dengan pelanggan. Sehubungan ini, saya menggesa institusi kewangan Islam mengambil kesempatan untuk memasar dan menawarkan produk dan perkhidmatan mengikut keperluan mereka. Saya difahamkan, ekspo pada tahun ini turut disertai beberapa buah negara asing. Sesungguhnya penyertaan mereka ini akan memberi kesan positif kepada usaha-usaha kita untuk menjadikan Malaysia sebagai pusat kewangan Islam serantau. Tuan-tuan dan puan-puan, Usaha kita ialah untuk membangunkan sebuah sistem kewangan Islam sebagai satu proses perantaraan yang dapat menyumbang kearah memperkayakan sumber ekonomi secara menyeluruh bagi menjana pertumbuhan dan pembangunan yang lebih besar. Selaras dengan perkembangan semasa, institusi kewangan Islam perlu bersedia untuk menghadapi cabaran dan peluang dalam memenuhi kehendak ekonomi yang sentiasa berubah. Prospek masa depan dan kejayaan industri perkhidmatan kewangan Islam bergantung kepada gandingan usaha semua pihak iaitu pengawalselia, industri, peserta pasaran dan masyarakat umum. Sehubungan ini, saya ingin mengucapkan syabas dan tahniah kepada AIBIM di atas usaha berterusan untuk menganjur Ekspo Perbankan Islam dan Takaful ini sebagai acara tahunan. Dengan lafaz Bismillahirrahmanirrahim, saya dengan sukacitanya merasmikan pelancaran “Ekspo Perbankan Islam dan Takaful 2004”. Terima kasih. 2  BIS Review 56/2004
Exchange rate stability will probably be analysed with respect to the period before as well as during participation in ERM II. The relationship between the krona and the euro1 has been relatively stable since the beginning of 1996. Disregarding the exceptionally turbulent period last autumn, during this period the fluctuations around a krona/euro rate of 8.70 have been largely inside a margin of ±2.25%. 1  The synthetic euro up to the turn of 1998. BIS Review 96/1999  2  How is a reasonable exchange rate decided? When, or if, the time approaches for a Swedish decision to join the monetary union, it will thus be necessary to consider the question of participating in ERM II. Since the beginning of this year, the matter of whether and when the krona is to be included in the Exchange Rate Mechanism is something that the government decides, albeit in consultation with the Riksbank. At the same time, the krona’s central rate with the euro in ERM II and the margin for fluctuations are matters for which the Riksbank is accountable. So in practice, the new allocation of responsibilities means that the government and the Riksbank have to reach a consensus on the terms for the krona’s participation in ERM II. But these terms are not decided by Sweden alone. The central rate and the band width will be negotiated between Sweden, the countries in the monetary union and the non-euro countries that are members of ERM II. The negotiators include finance ministries as well as central banks.

The Treaty states that for two years before the examination the national currency is to have been inside the normal fluctuation margins provided for by the Exchange Rate Mechanism (ERM). The process by which the initial group of participants was selected suggests that the criterion could be interpreted somewhat more freely. Finland and Italy were both approved in May 1998 even though their currencies had then been participating in the ERM for only around eighteen months. The other countries may also have reasons for not insisting too strongly on a strict interpretation of formal participation by outsider countries. Considering the apparent strength of British opposition to a fixed exchange rate arrangement, such an attitude might obstruct a British membership of the euro area. It seems to me that in this respect the United Kingdom is in a more difficult position than Sweden. Our Government and the Riksdag have stated that participation in ERM II can be seen as a direct preparation for joining the monetary union; the Riksbank has noted that we do not see any problems with that. In a future situation where a referendum or a general election has resulted in a positive attitude to the monetary union, it is difficult to envisage Sweden’s participation in ERM II as posing any major political problems. Regardless of the formal requirements that may apply at the time of the examination, the assessments in May 1998 indicate that a central factor in the evaluation will be how the exchange rate has actually developed.
This is reserved for very special situations where financial stability may be threatened. Without financial institutions and financial markets that function smoothly, the effects of interest rate changes on inflation and employment will be unstable and uncertain. Low and stable inflation provides households and enterprises with a clear indication of changes in relative prices. This makes it easier for economic agents to make the right decisions and contributes to price stability in financial and property markets. Low and stable inflation therefore provides the best foundation for financial stability. The two objectives normally underpin each other. Previous financial crises in Norway From history, we know about a number of financial crises in Norway. During the time of the silver and gold standard prior to 1914, banking crises occurred relatively frequently and were mainly regional. This is an indication that banks at that time were small and locally anchored. Therefore, the crises did not spread through the banking system. Many Norwegian banks experienced liquidity and solvency problems in 1857 following the collapse of the US railroad industry, in 1864 in Oppland, in 1886 in Arendal and in Kristiania (now Oslo) in 1899-1905. The Norwegian author Alexander Kielland depicts the local financial bubble in Stavanger in the 1880s in his book Fortuna. There was a surge in credit growth and speculation in commercial bills that did not represent actual values. Speculation formed the basis for quick gains and it all ended in bankruptcies and banks that failed.

The UK has recently put in place an explicit macro-prudential regime. In July of last year, the UK government announced a new Financial Policy Committee (FPC) to execute macro-prudential policy.7 The FPC is housed in the Bank of England and met for the first time in June this year. The FPC’s objective is to protect and enhance the resilience of the UK financial system against risks including “unsustainable levels of leverage, debt or credit growth”. Therein lies a key FPC challenge. There is evidence of unsustainably high levels of leverage in some sectors. But elsewhere, there is evidence of credit growth being unsustainably low. Some companies remain over-leveraged. Yet others are suffering a credit shortage, with bank lending to companies continuing to contract over the past 12 months. 5  For example, Graham and Narasimhan (2004), Malmendier and Nagel (2011). 6  For example, Cogley and Sargent (2008), Barro (2006). 7  HM Treasury (2010). BIS central bankers’ speeches  5  In framing macro-prudential policy today, both these factors need to be weighed: on the one hand, enhancements to the risk-bearing capacity of the financial system to repair balance sheets; on the other, encouragement for the risk-taking capacity of the system to boost credit supply. These factors can sometimes point in subtly different directions. The first might point to higher buffers to boost banks’ risk-bearing capacity, while the second might point to lower buffers to boost their risk-taking capacity.