samchain/econo-pairs-v1 huggingface dataset:
Sweden also tops the United States in the domain of mobile Internet, as witness both Microsoft’s decision to locate the development of such systems here and the first WAP phones in Swedish shops. Internet use in Sweden is also well in line with the United States. Market surveys by IT consultants admittedly indicate that in relation to total retailing, Internet shopping for goods is somewhat higher in the United States but Sweden is ahead of many other countries in Europe. Most of the portals and e-commerce sites are also American. But a considerably higher proportion of Swedish banking is done on the Internet and Sweden has been an early starter with models for Internet business-to-business transactions. We also know that in the latter part of the 1990s, IT-related sectors, including the successful telecom industry, accounted for almost a tenth of manufacturing output in Sweden. Figures from the Association of Swedish Engineering Industries show a remarkable increase during the decade, from a share of just over 2% in 1993 to more than 12% in 1999. According to the same source, one fifth of Sweden’s GDP growth from 1995 to 1998 came from the IT and telecom sector. Comparing statistics can be difficult but a similar indicator - from the Department of Commerce - of the IT and telecom sector’s share of GDP growth in the United States shows that in the same period this sector made approximately the same contribution there. 3.2 Another important aspect in America has been efficient markets and strong competition.

Some improvement in the euro area Developments in the euro area have been relatively calm over the summer, despite some political uncertainty in Portugal, Spain and Italy. Moreover, there have been assessments of Ireland and Greece, for instance, that indicate the on-going reform work is progressing well. The reform work in both countries has been approved, which has paved the way for continuing aid payments. But the problems remain, and during the summer both Italy and France had their credit ratings downgraded because of poor growth prospects. Perhaps the most important thing is that new statistics show that the euro area GDP has begun to grow again. After being negative for six quarters in a row, GDP growth was 1.1 per cent in the second quarter of this year, according to preliminary figures and calculated as an annual rate. In Germany, which is very important to Swedish exports, GDP growth was clearly above the average for the euro area as a whole. At the same time, indicators for the  6  BIS central bankers’ speeches  start of the third quarter point to a continued improvement. The aggregate purchasing managers’ index rose in July to just over 50, for the first time since the start of 2012, and consumer confidence also began to rise. New labour market statistics also show that unemployment in the region has stabilised, albeit at a very high level. All in all, the new information confirms the picture that the recovery in the euro area has begun.
Turning to life insurance, a potential concern is that the shift towards direct investments might in future lead to a concentration of exposure to UK property. Excluding unit-linked business, UK insurers’ property-related 9  exposures grew significantly over the course of 2016 to stand at 11% of non-linked assets. The most rapid growth has been in mortgages and loans secured on property, particularly equity release mortgages. Our analysis of insurers’ equity release exposures suggests that a stress roughly aligned to the FPC’s banking system stress test (a 30% fall in house prices and 0-0.5% growth per annum thereafter) could lead to industry-wide losses of £ billion (see table and chart below). 10  The Prudent Person Principle in Solvency II is an important safeguard against concentration risk . It requires insurers to invest only in assets whose risks they can “properly identify, measure, monitor, manage, control and report”. Moreover, assets must be “properly diversified” so as “to avoid excessive reliance on any particular asset, issuer or group of undertakings or geographical area and excessive accumulation of risk in the portfolio as a whole”. Assets not admitted to trading on a regulated financial market are required to be kept to “prudent” levels. The illiquid direct investments I described earlier would typically fall into this category. Later this year, we plan to set out in a supervisory statement our expectations of how UK insurers should invest their assets in accordance with the Prudent Person Principle.

First, such a facility should enable the Federal Reserve to improve its control over the level of money market rates. By offering a new, essentially risk-free investment, one would expect that anyone with access to such a facility would generally be unwilling to lend instead to someone else at a rate below that posted for the facility. This should help to establish a floor on the level of overnight rates. Right now, most short-term rates trade between 0 and 25 basis points, but occasionally T-bill and repo rates go negative, for example at quarter-end or when financial stresses increase the demand for very safe assets. The full allotment element of the reverse repo facility would increase the availability of a risk-free asset, satisfying the demand when the appetite for safe assets increases. This should help tighten the relationship between these and other money market rates. These reverse repos would be available to an expanded set of counterparties that includes many of the money market lenders who are ineligible to earn the interest on excess reserves (IOER), such as GSEs and a number of money market funds. Depending on the facility rate, these lenders who cannot earn the IOER rate might get a better rate by investing in the overnight RRPs compared to lending to banks or to broker dealers. This competitive effect could, in and of itself, put a stronger floor on money market rates. Second, this new facility is also likely to reduce the volatility of short-term interest rates.
Graph 1 shows the progress that has been made so far with fiscal consolidation and the plans embedded in the fiscal budget for 2011. Provided the plans are carried out, the consolidation involved will be impressive in both historical and international comparison, with a roughly 9 percentage point improvement in the non-cyclically adjusted fiscal balance from 2009 to 2012, even though there will be a significant slack in the economy for most of the period. Although it has been delayed and has faced obstacles on the way, the reconstruction of the domestic financial sector is far advanced. The three major commercial banks have been recapitalised, with foreign creditors taking a majority stake in two of them and the State  BIS Review 139/2010  3  holding a majority in the third. At the end of June, all three had capital ratios above 16%, most of it common equity. As a result, Iceland’s banks meet Basel III requirements more than two times over. The recapitalisation of the savings banks is in its final stages. In June of this year, however, question marks were raised about the capital position of the banking system when the Supreme Court of Iceland ruled that linking ISK loans to exchange rates was illegal. The banking system had a large number of such contracts on its books. The precise scope of the problem was uncertain, but more importantly, it was not clear what interest rates these loans should carry when they were no longer exchange rate-linked.

BIS central bankers’ speeches  1  Is France condemned to undergo a period of prolonged austerity? France must be extremely rigorous in the management of its public finances. A balanced budget must rapidly be restored, which presupposes in particular a structural reduction in government spending. Like many other countries, we have been living above our means for too many years. We need to stop accumulating debt. Growth will return if confidence does. And to reinstate confidence, we must guarantee that our public finances will be consolidated. 2  BIS central bankers’ speeches
A more even distribution of the Fund’s ownership will provide us with the opportunity to take part in the value creation in regions with strong growth. This implies a reduction in the allocation to European equities and an increase in the allocation to the Americas and emerging economies. High economic growth in Asia can provide sound returns on investments in that region even though today’s equity prices already reflect expectations of higher growth in eastern than in western regions. A more even distribution will nonetheless improve the trade-off between risk and expected rewards. The currency composition of the bond portfolio should also be adjusted. According to the guidelines, the distribution in the bond portfolio should be based on the volume of sovereign debt issued by each country. This has resulted in rising loans to countries that have issued  BIS central bankers’ speeches  3  new debt. The risk linked to that strategy came into evidence in the wake of the financial crisis. A distribution of government bonds that is based on GDP will reduce this risk. Moreover, it has been proposed that government debt issued by emerging countries also be included in the portfolio. The consequence of this is the same as for the equity portfolio, that is to say a reduction in the Fund’s European holdings. The financial crisis showed that many securities move in tandem. The number of bonds in the portfolio has been more than halved over the past few years.

In June, the Riksdag supported the proposal and called on the government to appoint as soon as possible an inquiry into the consequences for the payment market of digitalisation and the declining use of cash, and the roles of the state and the private sector on this market. The Government Offices are currently in the process of drafting the inquiry’s terms of reference and reviewing its staffing. The inquiry will probably be able to start work in early 2020. So far, there are perhaps not so many lessons to be learnt from this as we are very much in the middle of an ongoing process. One possible lesson is that it is not just crises and macroeconomic paradigm shifts that require analysis, innovation and adaptability at a central bank. Changes in the payment system can also do so, even if they occur less frequently. Another lesson is that the payment habits of the general public can change very quickly once the prerequisites are in place. In just under ten years, dramatic developments have taken place in the way Swedish people pay for things. Between 2010 and 2018, the proportion of Swedes who used cash for their last transaction decreased from about 40 per cent to 13 per cent, and it will probably continue to fall. My vision of the Swedish payment system in the future Before I round off, allow me to elaborate on an issue that I am particularly passionate about.
Lorenzo Bini Smaghi: Monetary policy, credit flows and small and medium-sized enterprises Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, San Casciano Val di Pesa, 18 October 2009. *  *  *  I would like first of all to thank the organisers of this event for their invitation, which allows me to speak about monetary policy, credit developments and the situation of small and mediumsized enterprises (SMEs) in the euro area. I will structure my comments as follows: after briefly outlining the importance of SMEs in the euro area, I will examine the situation in the banking sector and discuss some aspects of the process of bank restructuring in the euro area. I will look at bank lending developments in the euro area, before analysing some of the evidence on SMEs’ access to finance which emerged from a recent survey conducted by the ECB. I will conclude with some observations concerning the economic outlook and the role that monetary policy can play in this context. In brief the main conclusions are as follows: first of all, the situation in the euro area banking sector improved in the first half of 2009. Nevertheless, a number of considerable risks remain, some of which might even have increased. Second, the volume of bank loans to the non-financial private sector has been modest in recent months.

In addition, trading income recovered strongly as financial markets rebounded after the first quarter of 2009. Finally, revenues from fees and commissions held up remarkably well throughout the financial turmoil. At the same time, a number of significant risks remain and some may have even increased. First, the slowdown in the growth of assets held by euro area banks limits their future earning capacity in terms of interest and investment income. Second, a deterioration in the credit quality of borrowers may put a drag on banks’ future earning capacity. In fact, while large and complex banking groups seem to be gradually absorbing the losses they suffered on their securities holdings, driven in part by the reclassification of assets, they have reported sharply higher provisions for loan losses. Let me now turn to capital ratios. The recovery in the earnings of large and complex banking groups in the euro area, together with a slowdown in the growth rate of both risk-weighted and total assets and an increase in capital, from both public and private sources, has meant that the capital ratio of the average banking institution has typically been relatively stable. There is, however, considerable divergence between groups. A somewhat reassuring finding is that the institutions which reported the largest increases in loan loss provisions also seem to have the highest capital buffers. This may mitigate the solvency risks originating from deteriorating asset quality in the future.
Here is it very important that the forecasts central banks consider in making monetary policy decisions are explicit about assumptions for future asset price movements, the uncertainty that surrounds them, the sensitivity of the forecast to alternative assumptions, and the costs and consequences of alternative paths for monetary policy. Even in circumstances where asset prices may appear to have moved away from fundamentals, and it seems reasonable to consider the implications of some deceleration in the pace of future increase or some decline, central banks need to be very cautious about adjusting policy in anticipation of that event, much less directing policy at inducing it. The substantial uncertainty about the path of asset price movements going forward necessarily reduces the case for altering policy in advance of the move. Consider the case in which it seems prudent for the central bank to incorporate an assumption for a significant move in the rate of change in future asset prices into its forecasts for output and inflation. If the central bank’s assumption is that asset prices are likely to fall over the forecast horizon, perhaps in the wake of a sustained rise in those prices, then it might in turn forecast a softer path for aggregate demand. These changes in the outlook might imply a lower expected path for the target rate than would have been implied by a different assumed path for the behavior of asset prices.

3  Part of the problem is that because of its unfamiliarity, economics can seem unappealing. The Royal Economics Society suggests people’s lack of enthusiasm for the dismal science is based on a narrow (and dry) perception of the subject and its masters. 4  As you might expect, I disagree. And so do most students, once we meet them. They are usually surprised by the breadth of topics that economists consider. For example, colleagues are currently working on issues such as the impact of Artificial Intelligence on the future of work, the role of the financial system in combatting climate change, and the value of diversity in decision making .A quick visit to our Bank Underground blog will reveal articles on the impact of mental health, crypto currencies and driverless cars on jobs, growth, inflation and wellbeing. A more disturbing impediment to the study of economics is the imposter syndrome. There is a perception that economics is “not for people like me” not least because the profession lacks diverse role models. And this challenge is reinforced by the limited opportunities available for students to study economics. 3  Joint Council for Qualifications, 2017 GCSE and A-Level results, available at: https://www.jcq.org.uk/examinationresults/gcses/2017/gcse-full-course-results-summer-2017/gcse-full-course-results-summer-2017 and Joint Council of Qualifications, 2017 A-level results, available at: https://www.jcq.org.uk/examination-results/a-levels/2017/main-results-tables/a-as-and-aea-resultssummer-2017 4 Royal Economic Society Newsletter, issue 180, January 2018 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  As a consequence, the economics profession is not as diverse as it should be.
José De Gregorio: Policy responses to the global crisis Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, at the conference “Monetary Policy and Central Banking in the Post Crisis Environment”, Santiago, 17 January 2011. *  *  *  In the last years economic policymakers have had to deal with many unprecedented challenges. The severe inflationary shock that began in 2007 was followed by the worst financial crisis since the Great Depression and the deepest worldwide economic recession in the postwar period. Currently, even though recovery is underway, the rebound in economic activity has been characterized by a dichotomy: whereas emerging countries are posting strong growth rates, in the developed world activity is sluggish, with high unemployment rates and excess capacity. This bifurcated economic scenario has brought many tensions to the global economy. In Chile, to the shocks that have affected the world economy in this period, one has to add the earthquake and tsunami that hit our country almost a year ago and that had both short and medium-term effects on our economy. One of the main lessons we have learned these years is the importance of having a robust policy framework. In the case of Chile, institutional developments, low level of public debt and high availability of liquidity allowed unusual vigor in monetary and fiscal policy to confront the negative effects on demand and output of all the shocks that have affected us.

As I will explain later, the Treasury Market Practices Group has updated its best practices to emphasize the importance of supporting market liquidity as well as avoiding automated trading strategies that create a false impression of market price, depth, or liquidity. In conjunction with those best practices, the TMPG also released a white paper on automated trading that reviews several categories of associated risk, including operational risk, potential systemic counterparty risk, market manipulation risk, and transmission risk. October 15 Let me now turn to the unusual events of October 15. On that day, Treasury yields exhibited extreme volatility, with the benchmark ten-year yield trading in a range of about 35 basis points between the market open and close. This included a sharp decline in yields following the U.S. retail sales report at 8:30 ET that morning, and a highly unusual round-trip in yields just after 9:33 a.m. At that time, the ten-year yield fell about 15 basis points in a five-minute period, before nearly fully retracing that move in roughly the same increment of time. That very short “event window” was a remarkable occurrence in one of the world’s most liquid markets, and likely reflected a unique dynamic on what was already an unusual day. Indeed, the net change on the session as a whole was less than 10 basis points – a small fraction of the extraordinary intraday range that we are still discussing today (see the chart).
The second major program for disinflation was the exchange rate based stabilization program of 2000 under the IMF support. This program collapsed for known reasons in February 2001. At this juncture, one might wonder why Turkey was not successful in her disinflation attempts. I believe the answer lies, as already mentioned, in the lax fiscal policies. As I have already mentioned the very  2  BIS Review 57/2007  first law of the Central Bank did not have any provision for financing the government. However the amendment made to the law just before the Second World War to extend temporary short-term advance facility to the government, in order to smooth out the difference between timing of taxes and expenditures, was firmly incorporated in its Law in 1970. The provision stipulated that the government had the access to the Central Bank financing to the tune of 15 % of the total budget spending. Although this facility was phased out after the 1994 crisis, it was one of the reasons of fiscal indiscipline and high and persistent inflation in Turkey. As we all know, tough times call for tough decisions. The collapse of exchange rate-based stabilization program in 2001 was, in one sense, an opportunity for Turkey to “put her house in order”. The fiscal cost of the crises brought every individual in the economy to his senses. Fiscal discipline and tight monetary policy were the immediate answers to the chronic problems of Turkey. But how would this discipline be achieved?

1/5  BIS central bankers' speeches  Indeed, the various measures that were implemented have been instrumental in accelerating the e-payment agenda forward, only because of the cooperation of the industry, sometimes with a bit of nudging. But truth be told, we have been able to achieve so much. Today, the payments industry is no longer the exclusive domain of banks. The advent of FinTech driven by the increasingly inexpensive and pervasive internet and mobile technology has encouraged the entry of more agile non-bank players as potential disruptors or collaborators of the incumbent players. This has set the stage for an exciting new era in payments, an era in which the industry is expected to take on a larger role in delivering a more robust and efficient payments system for Malaysia. The Bank will facilitate this in three key ways: i. First, through policy initiatives to encourage collaborative competition or ‘co-opetition’; ii. Second, by further strengthening industry alignment; and iii. Third, by supporting more inclusive governance arrangements for the development of the payment system. Policies to promote co-opetition as a key enabler for greater efficiency, competition and innovation Network effects are critical to an efficient payment system. The larger the network of a payment system, the more valuable it is to users of the payment system.