samchain/econo-pairs-v1 huggingface dataset:
At that time, there was a lack of confidence in both monetary policy and fiscal policy. The costs proved to be substantial. Unemployment increased more in line with that experienced in some European countries today. However, when the financial crisis reached Norway in 2008, our country was in a particularly favourable position. A long period of substantial petroleum revenues – and a clear savings plan – had provided us with considerable leeway. As a result, fiscal policy could also be put to effective use during the downturn. The guidelines stipulate that the government budget deficit shall over time be equivalent to 4 per cent of the capital in the Government Pension Fund Global, – more in bad times, less in good times. Chart 8: Fiscal policy. Change in the non-oil budget surplus from 2008 till 2010. In billions of NOK A fall in output and employment automatically leads to reduced taxes while unemployment benefits increase. An important aspect of the fiscal rule is that it includes a mechanism whereby these effects also translate into a weaker budget balance. These automatic stabilisers generated strong impulses through 2009 and 2010. The decline in output and employment automatically triggered a reduction in taxes and an increase in transfers of more than NOK 40 billion for the two years as a whole to the benefit of households and firms. The increase in the Government Pension Fund Global provided, under the fiscal rule, room for a NOK 25 billion increase in spending.

That group is being chaired by Stuart Siddall, Chief Executive of the ACT, and is due to issue a report in the next few months. Syndicated loans and asset backed securities A substantial part of lending to larger UK corporates is normally undertaken via syndicated loans. The Bank investigated whether there was a market failure or illiquidity premium in this market which could be addressed by making APF purchases. After a thorough investigation, the Bank concluded that what was needed was more large-scale bank funding, particularly to replace the foreign bank lenders who had been withdrawing from the UK market. But the appropriate way to address that was through the various schemes in place to support the banks. Similarly, the Bank investigated the state of securitisation markets. Here, there were two problems. First, many investors were extremely wary of buying mortgage-backed securities and similar products, because the crisis had raised uncertainty over their underlying risk characteristics. At the same time there was a huge outstanding stock of such assets already issued, which would swamp any operation aimed at improving liquidity. In the United States the authorities have undertaken substantial purchases of mortgage-backed securities, and funded the purchase of other securitised assets. It is not clear yet whether those markets will be self-sustainable once official intervention comes to an end. In the United Kingdom, we have made a range of ABS, including mortgage backed securities, eligible collateral in the Bank’s permanent liquidity insurance facilities as well as in the SLS.
However, new market entrants can provide policyholders with a greater degree of choice of product and coverage options that may be otherwise unavailable, challenge existing business models and practices, and help to ensure that the insurance market remains efficient. An unnecessarily prolonged application process can itself be a barrier to attracting new entrants to the UK market. We are considering ways in which the process of obtaining authorisation for new insurers can be made more efficient whilst still ensuring appropriate prudential standards. One aspect of this work where we have already made progress is ensuring that we are clear on the information we require from applicants. However, to some extent our ability to authorise new insurers remains dependent on the openness of applicants to discussing their proposed business models and the speed and accuracy with which they provide information. We have shown through recent decisions that where an application meets our requirements we are capable of taking a decision quickly, with on average the total time taken to reach a decision now standing at seven months. There are also some specific barriers to entry for small start-up insurers in particular.

I would argue that far from being in conflict, competitiveness and high prudential standards complement each other – you cannot have one without the other. The UK’s status as a pre-eminent, global insurance market depends heavily on the robustness of the infrastructure within which it operates: a reliable legal system, for example, and a robust regulatory regime that allows policyholders, reinsurance cedants, and other counterparties to transact with confidence. I know that different parts of the market have different priorities. For some parts of the UK insurance sector – particularly life insurance – the priority is to address areas of Solvency II that you feel do not work as well as they could, whilst for others of you the primary focus is on maximising international market access. Some of the changes to the prudential regime that we are considering within the review of Solvency II should result in changes across the sector: such as the reform of reporting requirements, and streamlining our approach to approval of internal models, all which should affect a wide range of firms; others, such as reviewing the design of the risk margin and the matching adjustment, will focus more on the life insurance sector. At the same time we remain open to international participation in the UK insurance market, engaged more than ever in international policy making and active supervisory co-operation and fully supportive of the international activity of insurers based here. We are maintaining strong, cooperative working relationships with regulators in other jurisdictions, bilaterally and through colleges.
Green markets remain niche markets: green bonds still account for less than 2% of global debt issuance.xvii The success of the transition will also depend on our ability to broaden the sources of financing: we should not rely solely on green bonds. We also need more green loans, and more green financing in general, accessible to individuals, SMEs and start-ups. Green financing requires an innovation-friendly framework: green securitisation, green covered bonds, green derivatives, green crowdfunding platforms and green private equity should all be promoted. In addition, we have to carefully assess the impact of existing regulations. In the face of strong pressure from the financial industry, we must not however lose sight of our main goal as supervisors, which is financial stability. So far, there is no empirical or theoretical evidence that “green” assets are less risky and could warrant lower risk weights in the form of a “green supporting factor”. We should instead target brown assets with a “brown penalising factor”, because the transition risks will at some point materialise. This could be designed either as a dedicated Systemic Risk Buffer or be integrated into Pillar 2 requirements. The latter would have the advantage of spurring banks to improve their risk management capabilities for climaterelated risk. This leads me to the qualitative challenge. [slide 6] The risk of green washing may undermine the reputation of green markets and impede progress. To me, the prerequisite for an orderly development of the markets is a clear and harmonised taxonomy of green assets and sectors.

As that uncertainty dissipated and households began to feel more confident about the outlook, so the saving rate fell back (Chart 1). There is probably some scope for it to fall a little further, but continued firm consumption growth really depends on us seeing a pickup in household income growth, of which I will say more shortly. There is more scope for housing investment to continue driving growth. Housing starts and the level of housing transactions are still respectively around 25% and 10% below their averages during the pre-crisis decade (Chart 2). But the supply of new housing is not as elastic as one would like, because of planning restrictions and the like. Consequently there is a risk that increased demand for housing ends up mainly in higher house prices rather than more houses. In turn, if associated with excessive expansion in mortgage lending, that may create future financial stability risks. For that reason, the Bank’s Financial Policy Committee, which is charged with maintaining the overall stability of the financial system, is keeping a beady eye on the housing market. BIS central bankers’ speeches  1  For the recovery to be both sustained and sustainable, however, we really want to see three things happen. First, business investment needs to pick up the baton in supporting demand growth. Second, we need to see a revival in productivity growth, which in turn would sustain both higher real wages and higher profits, thus supporting continued household and business spending growth.
That said, unlike some other financial centres, the tax regime has yet to make provisions that are customized for CTC activities. 20. Underscoring the Government’s determination to promote Hong Kong as a CTC hub, and having considered the study’s recommendations, the Financial Secretary in his latest budget speech announced two tax measures that will make Hong Kong’s tax regime even more attractive for MNCs to set up CTCs in Hong Kong. 21. First, the interest deduction rules under the Inland Revenue Ordinance will be amended such that interest expense arising from genuine inter-company borrowing and lending will be deductible. This will resolve the “tax asymmetry” issue currently perceived by some MNCs as an impediment to their establishing or expanding CTC operations in Hong Kong. 22. Second, profits derived from qualifying activities of eligible CTCs will benefit from a half-rate concession. In other words, the applicable tax rate will be reduced from the current 16.5% to 8.25%. We will define the scope of qualifying activities in consultation with the industry later this year. But broadly speaking, the scope will encompass corporate finance, liquidity management and risk management activities typically conducted by CTCs for their overseas associated companies. 23. The HKMA is working closely with the Government to take forward the legislative work with a view to introducing the relevant bill to the Legislative Council in the 2015–16 legislative session. 24.

The idea is to mobilise all employees, in order to bring out the innovations that are most suited to our missions and then have them implemented by “intrapreneurs", who are bestowed with great autonomy, comparable to that of start uppers, for the development of their project. Our first intrapreneurship programme will enable us, I hope, to benefit within 9 months to a year from artificial intelligence tools to conduct our supervisory missions. All of these initiatives are as vital as they are exciting. They are the DNA of our institutions, and I am convinced, the reflection of that of the French and European ecosystem. Thank you for your attention. 4/4  BIS central bankers' speeches
Ambitious, of course, as it involves countries making explicit commitments on measures to be taken and discussing the outcomes with their peers, as part of what is known in G-20 jargon as the Mutual Assessment Process (MAP). Under the Korean presidency, whose efficacy and vision I would like to praise, an initial exercise resulted, in late 2010 in Seoul, in the adoption of a detailed country-by-country action plan and the commitment to tackle more specifically the global imbalances identified by the indicative guidelines. Far from me the idea of underplaying the difficulty of the exercise but the progress made so far is not inconsiderable and in this regard I am happy that the Ministers and Governors meeting in February in Paris resulted in agreement on a set of benchmark indicators. The second component concerns financial regulation. It is very clear that, in this area, we are past the stage of proposals and are now mainly concerned with consolidating the agreements approved by the Heads of State and Government in Seoul, especially the Basel III framework. The agreement that we achieved in 2010 made it possible to reconcile the need for far-reaching reforms with the need to reduce uncertainty relating to regulatory changes. Implementing these reforms in a harmonised framework capable of ensuring a genuine level playing field is now the crucial challenge, both from the point of view of our collective credibility and the overall effectiveness of the new mechanism.

Christian Noyer: Regulation in the face of global imbalances Opening speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the VIth International Symposium of the Banque de France on “Which regulation for global imbalances?”, Paris, 4 March 2011. *  *  *  Ladies and Gentlemen I am very pleased to welcome you here in Paris to the International Symposium of the Banque de France. As you may know, this symposium is a recurrent event – this is the 6th edition – but this year it has taken a particular significance as it coincides with the French Presidency of the G-20. This presidency occurs at a key moment of the reform of governance and regulation of the global economy. Hence, today’s topic “Regulation in the face of global imbalances” was not chosen at random. However, beyond this proximity with the work of the G-20, I hope this symposium will also provide an excellent opportunity for extending discussions beyond this institutional forum, for strengthening relations between central bankers (there are more than 100 in this room), government officials, business managers and leading academics from around the globe who honour us with their presence today and to whom I would like to extend my warmest thanks. The world economy has experienced major developments over the last two decades. These changes have brought progress – strong growth, low inflation, less poverty – but they have also led to crises.
For those with a long enough memory, this time’s recovery is likely to feel quite anaemic, relative to those in the past. A second potential explanation may lie in the fact that aggregate activity measures are sometimes a poor proxy for the average person’s income. GDP is a measure of the size of the economic pie, a pie that has grown substantially larger since 2009. But so too has the number of people eating it. Taking the two together, GDP per head has risen significantly more slowly than aggregate GDP since 2009. Indeed, GDP per head today is only around 1% above its pre-crisis peak (Chart 3). GDP measures income from all UK-based activities. But not all of that income flows to UK citizens. Some flows abroad to foreign owners of UK assets and some income is earned domestically on UK investments abroad. The amount of net income flowing overseas currently stands at around 3% of GDP. This is a record high. If we take net overseas income out of GDP, to give a measure of net national disposable income per head, it has recovered even more slowly than GDP per head. It is currently at levels little different than its pre-crisis peak (Chart 3). National income per head suggests there has scarcely been any recovery. Moreover, not all the income earned nationally flows directly and immediately to households. For example, some accrues to companies who may save it rather than distributing it to households as wages or dividends.

20  16-24 45-54 75-84  25-34 35-44 55-64 65-74 85 and over £ million 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 -500,000  Sources: Sources: Wealth and Asset Survey, ONS, and Bank calculations. BIS central bankers’ speeches  Chart 22 – Proportion of individuals by age that rent 1977  1987  1997-98  2007  Per cent  Chart 23 – Proportion of individuals by age that have a mortgage Per cent  70  70  60  2014  60  50  50  40  20 10 0  40  1977 1987 1997-98 2007 2014  30  25 30 35 40 45 50 55 60 65 70 75  80  30 20 10  25 30 35 40 45 50 55 60 65 70 75  0  Source: ONS. Source: ONS. Chart 24 – Real income before and after housing costs  Chart 25 – Rent as proportion of disposable income in 2014*  Indices 07/08 = 100  104 102 100 98 96  Median real income before housing costs Mean real income before housing costs Median real income after housing costs Mean real income after housing costs  2007/08  2009/10  2011/12  Sources: HBAI and Bank calculations.
Here I should point out, as the Report does on different occasions, that acknowledging the impact of the second recession is crucial, because there is a tendency to ignore it, as though it were an incident without importance when actually it was fundamental to how events unfolded and in terms of its impact on our credit institutions. Fourthly, there were errors of perception as to how the imbalances that built up with the real estate bubble – among others, the imbalances on bank balance sheets – could be corrected. It was thought they could be corrected mildly, in a gradual fashion. Circumstances showed that this expectation was overly optimistic because the correction was rapid, brutal and with consequences that have not yet been entirely overcome. A further reflection – although I should say here that the opinion cannot be construed as forceful, or very certain – is that the attempt to minimise in the short term the cost of the resolution of the banking crisis for public finances by means of a gradual approach, facing problems as and when they emerged, might ultimately have involved committing a greater volume of public resources than, say, a more aggressive or more ambitious approach from the onset of the crisis. I insist, though, that this is a question for which there is no reply exempt from objections and counter-arguments. In any event, the Bank could obviously not act independently of the course of our public finances and of the decisions by other authorities.

In the context of the euro area this is due to the absence of a fiscal union, the different fiscal positions of the individual countries, and the different, but on the whole high, levels of their debt burden. Against this backdrop, Bulgaria's fiscal position continues to be solid, with its second lowest debt-to-GDP ratio in the EU. However, the country's fiscal position faces some serious potential risks arising from the severely disrupted budgeting process over the last two years and the trend, emerging in this period, towards continued loosening of fiscal policy. The issue is not so much the high expenditures which were needed and largely unavoidable, especially during the Covid-19 crisis, but rather their quality. The higher expenditures in that period, which led to a higher deficit, were meant to be targeted and temporary, and this was the right approach. Within the strongly fragmented budgeting process, however, these targeted and temporary expenditures mostly became allencompassing and continuous, and tended to increase further. In this case risks occur along two lines. On the one hand, the persistent and progressive loosening of fiscal policy could bring us back into the long-forgotten times of high deficits, growing debt, and liquidity difficulties of the budget. This would in turn adversely change the internal structure of budget expenditures, with increasing debt service expenditures, especially in the context of rising interest rates, at the expense of investment and social expenditures.
Its adoption so far has in part been due to the push from regulators, but it needs to be used by a wider set of participants – we at the Bank are continuing to support that wider uptake, including for corporates beyond the financial sector. It needs to be included in new areas such as payment messages – we will soon be mandating the use of LEIs in payments through our CHAPS system. More broadly, LEI systems and processes need to continually evolve to ensure they can meet the demands of a digital world. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  The LEI shows that standards take time to be designed, refined and adopted, and so reaping their benefits requires patience and persistence. That will be the case for our collective journey, too. Our approach to developing standards  So how do we plan to go about expanding and improving the use of common data standards in the financial sector? Two key principles underlie our approach to helping develop and adopt data standards. First, this will be no Big Bang event. As the LEI journey shows, developing standards takes time. We, the FCA and industry will need to move forwards step-by-step, use case by use case, delivering value and benefits as we go. That means taking one area of data at a time, with the right specialists participating in the work to develop standards for those data.

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The measures taken in October were successful in preventing a systemic collapse and in the first week of the New Year there were some signs of a more general easing of pressures in financial markets. However there have been many relapses in the last 18 months and yesterday we again saw renewed fears in the markets. On the policy side, it is worth remembering that it is possible to overdo the degree of support. But at present the risks remain clearly to the down side. Therefore, in setting policy, the authorities both here and overseas need to consider whether further action on interest rates (or other monetary measures) or fiscal action is required. They need also to consider whether to do more to underpin the confidence among banks and among investors that is necessary to support the lending the economy needs to emerge from recession.

More generally, the uncertainty over the depth and duration of the recession discourages investment and puts cash flow at a premium. There is every incentive for companies to batten down the hatches. Unsurprisingly then, investment intentions have fallen sharply (Chart 6). The stock cycle is also depressing output. Stocks initially rise as sales falter and those stocks of inputs, work-in-progress and finished output that companies have become more difficult and expensive to finance. But running stocks down involves sharp cuts in production as we are seeing in the motor industry. All these forces develop in any recession. The special features of this one are its global reach, so the contraction at home is compounded by falling demand for exports, and the severity of the pressures on the banks many of whose survival has been at risk. They too face funding and capital pressures to shrink their balance sheets even if it means turning away good business. Successive credit surveys show not just a reduction in demand but a growing constraint on supply. Not only have spreads increased but there is clear evidence of quantity rationing in some markets which is compounding the normal contraction in investment and the squeeze on working capital. I should add that that does not mean that all banks have stopped lending. They have not.