samchain/econo-pairs-v1 huggingface dataset:
However difficult the  consequences might be for the economy, the MPC must stay the course and set monetary policy to return inflation to achieve the 2% target sustainably in the medium term, consistent with the remit given to us. With thanks to Rupal Patel for her assistance in preparing these remarks, and to my fellow MPC members and numerous Bank colleagues, including Callum Ashworth, Fabrizio Cadamagnani, Alan Castle, Grace Greer, Thomas Jennings, Josh Martin, Maggie Illingworth, Harry Rigg, Andrea Rosen, May Rostom, Martin Seneca, Bradley Speigner, Boromeus Wanengkirtyo for their many helpful contributions. 1. There is a huge literature on techniques for and applications of the identification of shocks. Different categorisations have been used for a variety of policy purposes. For example whether shocks are common or idiosyncratic was a key consideration for HM Treasury’s 2003 Five Tests assessment of whether the UK should join the Euro. Other common categorisations include are they exogenous or endogenous, are they temporary or permanent and are they positive or negative. 2. I am grateful to my MPC colleague Jonathan Haskel for this international comparison. 3. The latest of a series of puzzles about the structural behaviour of the UK economy. The most well-known is the productivity puzzle which has spawned a huge literature including my own contribution, see The UK’s productivity growth challenge - speech by Dave Ramsden (bankofengland.co.uk). 4.

Chart 8: Financial market medium term inflation compensation (5y2y forward swap)  Sources: Barclays live and Bank calculations. The Monetary Policy Response Let me conclude by setting out how in response to these developments the MPC is setting monetary policy to ensure that CPI inflation will return to the 2% target in the medium term. Monetary policy is also acting to ensure that longer-term inflation expectations are anchored at the 2% target. The MPC started to tighten monetary policy in December 2021, raising Bank rate from 0.1% to 0.25%. So much has happened since but it is worth recalling that last December was less than three months after the end of the furlough scheme here in the UK and was when the rapid emergence of the Omicron variant was a major concern. It was also three months before the Fed started to tighten policy in the US and almost seven months before the ECB began the tightening cycle in the euro area. Bank rate has been increased at every MPC meeting since December 2021 and was increased by 0.5% at both the August and September meetings, to its current level of 2.25%[9]. Along with two of my MPC colleagues I voted for a larger 0.75% increase in Bank Rate, to 2.5% at the September 2022 meeting. At the time the three of us highlighted that the recent data outturns had already registered more persistent inflationary pressures and that mediumterm measures of inflation expectations remained high.
In early 2009, the effect of the global crisis on world economies deepened, world trade volume fell to historic lows, almost all countries suffered economic contraction, unemployment rates soared; in brief, the world had faced the possibility of an economic depression of such dimensions for the first time since 1929 – as a result of which the fears of a global and prolonged depression peaked. 2  BIS Review 79/2010  In order to recoup the significant contraction in demand that emerged due to the decrease in the private sector’s total investment and consumption expenditures, governments and central banks have prepared historically extensive and comprehensive stimulus packages. The scope of the crisis and the economic contraction became worldwide in a short while, which necessitated the timely implementation of measures in coordination with other countries. Public resources that were allocated to the financial sector and the stimulus packages that were put into effect during the crisis have brought significant burden on public budgets. Research conducted by the International Monetary Fund indicates that the total amount of capital transferred to the financial sector was USD 4 trillion; state purchases to prop up securities markets amounted to USD 6 trillion; state guarantees to financial institutions and the corporate sector became USD 14 trillion; and fiscal measures such as tax rebates and new public spending reached USD 6 trillion. As of the second half of 2009, we entered the fourth and last stage of the crisis.

Putting the structural reforms that would remedy chronic problems in the labor market into practice immediately would prevent unemployment rates, which climbed during the crises, from becoming permanent and support potential economic growth. The lending appetite of banks significantly decreased due to the decline in risk appetite accompanied by the erosion of confidence and elevated uncertainties during the crisis. However, we can assert that there are favorable developments thanks to policy rate cuts made since November 2008 and the improvement in global risk perceptions. Especially the most recent developments suggest that there is an apparent improvement in Commercial Loans. The rise in loans extended to SMEs, which have an important share in the labor market, indicates that there is moderate recovery in economic activity. The NPL ratios, which saw all time highs during the crisis, started to decrease, albeit slowly and gradually. To sum up, the upward trend in bank loans, which started in the second quarter of 2009, continues on a stable course. As you all know, the impact of the global economic crisis on financial markets was terribly severe in the last quarter of 2008: countries’ risk premia saw record-high levels and excessive volatilities occurred in the currencies of many developing countries. Despite having been volatile at historically high levels and extremely sensitive to the global risk appetite, the Turkish lira displayed a relatively stable course, which lasted through the first quarter of 2010 following the peak of the crisis.
This goes to a more general point: a variety of aspects of the UK’s monetary policy framework – including our open letters, our new MPR and greater clarity over forecast assumptions and sensitivities – are designed 20  All speeches are available online at www.bankofengland.co.uk/news/speeches  20  to help market participants, businesses and households understand the MPC’s reaction function and thereby anticipate how monetary policy will evolve with the economy. This makes policy both easier to predict and more effective. Second, monetary policy is also more effective when it is combined with vigilant macro- and micro-prudential policies. A frequently expressed concern is that low policy rates are generating risks to financial stability – often linked to undesirable “search for yield” behaviour. 24 While vigilance is required, it is essential to leverage the synergies of monetary and macro-prudential policies. In many situations monetary policy actions are complementary to financial stability. After all, stimulating more risk taking is one of the goals of low policy rates, whereas recessions emerge when demand shifts away from risky assets and towards safe assets. Easing monetary policy changes people’s incentives in order to mitigate that shift. 25 Low interest rates can also benefit financial stability by making debts more serviceable. More fundamentally, risks to financial stability should primarily be addressed by (macro and micro) prudential policy, with monetary policy as the last – not the first – line of defence.

Unusually during an expansion, business investment has contracted in four out of the past seven quarters and is currently estimated to be just 1½% higher than at the time of the referendum, with cumulative growth more than 20 percentage points less than forecast in the MPC’s May 2016 projections. Household spending growth has remained more resilient, supported by strength in employment and pay, but over the past year it too has slowed as uncertainty about the overall economic outlook has become more entrenched. 18  All speeches are available online at www.bankofengland.co.uk/news/speeches  18  Chart 12: More recent deterioration in global and domestic growth a) Global GDP growth Percentage changes on a year earlier 4  EU referendum  3.5 PPP-weighted world GDP 3 2.5 2  UK- weighted world GDP  1.5 2014  2015  2016  2017  2018  2019  Sources: Datastream from Refinitiv, IMF October 2019 WEO and Bank calculations. b) UK GDP growth Quarterly growth (%) 0.5 GDP growth  Potential GDP growth  0.4 0.3 0.2 0.1 0.0  2017-18 average  2019 average  In the MPC’s most recent projections, we expected these negative trends to reverse. Overall, UK GDP growth was projected to pick up from current below-potential rates, supported by the reduction of Brexitrelated uncertainties, an easing of fiscal policy and a modest recovery in global growth. This rebound is not, of course, assured. The economy has been sluggish, slack has been growing, and inflation is below target.
Workplaces are being relocated in search for employees – outsourcing and off-shoring For the purpose of this speech, a simplified definition may be adopted, under which outsourcing means relocating orders, services, production, employment or, in broader terms, a business process to another company (irrespective of its location), whereas off-shoring means relocating a business process abroad (irrespective whether to another company, or within the same enterprise). 9 There are, however, not too many hard data which would allow for an assessment of the scale of outsourcing/off-shoring. Until now, there have been only estimates and fragmentary research results available on this subject, limited to some countries only. However, the data on global trade in goods and services and foreign investment proves the growing scale of this phenomenon. Over the past 15 years, there were significant changes in the share of particular regions in the global trade, with the decline of the UE share accompanied by increasing shares of the developing countries, including Asian countries. In global terms, foreign trade as percentage of the GDP increased from the average 19% of the GDP in the period from 1980 to 1989, to 25% between 2000 and 2004. 9  6  Where off-shoring takes place within the same company, the English name captive o ff -s h o ri ng is used. BIS Review 64/2006  Table 3. Shares of individual regions in global trade.

According to a simulation by the World Bank, if the number of immigrants in wealthy countries keeps growing by 2025 at a pace slightly lower than the average over the past three decades (which, being a very prudent assumption, means that over 14 million people will move from the developing to the developed countries, and even more taking into consideration their family members), the global income will increase by 0.6%, of which by 1.8% in the developing countries and by 0.4% in wealthy countries. Migration should also be analysed by central banks, as it may influence relative price developments and the general level of prices. According to estimates by the World Bank, migration causes a slight decline in the general level of prices in the developed countries, whereas the decline is larger in services (such as health services, services in the construction industry, and leisure), and the largest – in the economy sector for which no data is typically available, i.e. the domestic help (babysitting, cleaning, etc.). As opposed to other world regions, the flow of persons across the countries of the EU has been stable. Annual net migration to the EU15 has remained at a level below 5 persons per 1000 inhabitants over the past 40 years. Ca. 9% of the UE population was born in countries other than those in which they currently live, whereas in the US this figure stood at 12% and in Canada and Australia at 20%.
We need to do this in order to rebuild confidence and to ensure that we do not repeat the type of financial boom and bust that has characterized this cycle. Thank you very much for your kind attention, I would be happy to take questions. BIS Review 28/2009  7

The flipside of digital services is that more activities that were previously part of the market economy can now be produced at home. A person wanting to arrange a holiday, for example, no longer needs to visit or phone a travel agent, but can research and book the whole trip herself online. The sales of hotels and flights still contribute to GDP. But the work formerly done by the travel agent, which has now effectively been outsourced to the consumer, disappears. This also raises questions for how we measure productive activity. These examples highlight the difficulties of understanding how the economy is developing – let alone estimating its potential growth rate. To be sure, we should aim to rise to that challenge and update our statistics to capture such changes. But clearly, as policymakers, we also have to be humble about what can know. And in that context, imagining that we can reliably hold the output gap around zero is simply hubris. 2  See: Olivier Blanchard, Eugenio Cerutti and Lawrence Summers, Inflation and Activity – Two Explorations and their Monetary Policy Implications”, IMF Working Paper WP/15/230 (November 2015). 3  See: Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (W. W. Norton & Company, 2014), especially Chapter 8. 4  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/481452/ Bean_review__Interim_Report_web.pdf. 5  See Erik Brynjolfsson and Joo Hee Oh, “The Attention Economy: Measuring the Value of Free Digital Services on the Internet”, Thirty Third International Conference on Information Systems (Orlando: 2012).
Therefore, it is necessary the society itself and international institutions support the establishment and strengthening of internal anchors. Which would be an efficient internal anchor? I think that the best internal anchor is a technician who thinks independently, proud of what he does, conscious for the results and the consequences of the proper actions. In other words, this implies the establishment of professional capacities as one of the cornerstones of long-term successful polices. The scientific education and research in this direction have an important and inalienable role. All the issues mentioned so far, as:   The new strategic model of economic growth;    The effective, efficient and consistent monetary policies with the economic growth;    The necessity for coordinated structural reforms in the region;    The challenges to European integration;    The common political economy of the region in the future;    The importance of internal anchors and the study and research of external ones, and;    The need for establishing capacities;  are included in the research work’s agenda of the Bank of Albania. It is a great pleasure that we already have the possibility to cooperate with a remarkable partner as Oxford University, a distinguished institution for the high-level research in political and economic sciences. For this collaboration, I hope and I believe that many issues I discussed above would have an answer, partial or a complete one.

Given a small-sized and open economy, the increase and stability of exports is of outmost importance. Therefore, the research work, the reforms and the strategic decisions should be adopted in line with this target. In this respect, the role of banking systems acquires a particular importance, which should carefully identify the primary and profitable sectors and should provide their ongoing financing. Banking credit has been and remains one of the main instruments which shall provide the sustainable performance of the economic and financial activity at home. For this strategy to be successful, it must include as one of its substantial constituents the philosophy and priorities of the Western Balkan regional development. This need does not only derive upon the competition requirements and the achieving of the economy of scale, but also upon our common target for the European integration. During the recent years, I have continuously highlighted that the key of the successful integration in the European Union is the regional cooperation. There are many reasons backing the conclusion that our models of growth must be seen as complementary and not competitive to each-other. It is indispensable that the complete process of structural reforms takes place quickly and in a coordinated way, which precedes the membership to the European Union. Only in this way the whole region will converge naturally, avoiding episodes of misbalances within the bosom of the European family upon the membership. This will be a real contribution to the long-term sustainability of the European developments.
Several regulators have introduced variants of the regulatory sandbox over the past year. In fact, I would say the sandbox is itself an experiment for regulators. There is much we can learn by sharing experiences and lessons from our different approaches. And ASIC is one regulator that we admire and watch closely on this front. Ta k e registration requirements. Most sandboxes require applicants to register prior to experimentation. The UK FCA has two fixed cohorts of applicants a year, while the MAS sandbox is always open for application. ASIC has an interesting approach. It has a class-exemption for firms testing a specific set of services for 12 months and up to 100 clients. Interested firms are required to notify ASIC before commencing business, provided they also meet certain consumer protection conditions. MAS opted for an application-based approach because we wanted to closely engage each applicant, understand the innovation, business model, and risks so as to customise the sandbox conditions. But each application is turning out to be quite time-consuming and we are mindful that our process does not get in the way of speed-to-market. So, we are keen to study ASIC’s experience with the class-exemption approach and see how our own approach can be improved. There are also interesting differences in the qualifying entities. HKMA’s sandbox is restricted to authorised institutions, while ASIC’s sandbox is restricted to FinTech start-ups. The MAS and UK FCA are open to both regulated entities and FinTech start-ups.

It is expected to begin operations soon. Conclusion Let me conclude. Financial regulation remains work-in-progress. We must press on with the reform agenda and see it through to full, timely, and consistent implementation. At the same time, we must evaluate the effects of the reforms put in place and make adjustments where appropriate, to maximise their effectiveness and minimise their costs. We must strengthen the foundations for sound risk management and good conduct by working with the industry to embed deeply a culture of responsible risk-taking and ethical conduct. 6/7  BIS central bankers' speeches  We must prepare our regulatory and supervisory frameworks for the technological changes sweeping the industry - addressing new risks while promoting innovation, harnessing the benefits of technology, and promoting growth and opportunity in our societies. Thank you. 7/7  BIS central bankers' speeches
John Gieve: Learning from the financial crisis Speech by Sir John Gieve, Deputy Governor of the Bank of England, 2008 Europe in the World Lecture Panel Discussion, at the European Business School, London, 19 November 2008. *  *  *  The years after sterling left the ERM were the most successful and stable in my lifetime. In early 2007, for example, inflation had not moved by more than a single percentage point away from target in the previous 10 years, the output of the economy had grown in every quarter since 1992 Q3 (Chart 1), unemployment had fallen by 5 percentage points from its peak in the early 1990s and living standards had steadily increased. Interest rates had been low and stable. However as we know now, that was the end of “the Great Stability”. The summer ushered in a period of extraordinary turmoil in Western financial markets which we are still trying to calm. And this year has seen the onset of recession not just in Europe but throughout the advanced economies. Despite the dramatic policy measures of the last months, the outlook for 2009 is bleak and the prospects beyond are uncertain. That move – in the space of only 12 months – from the policy maker’s dream of steady noninflationary growth to the biggest banking crisis since the outbreak of World War I and the onset of recession sets the questions for this evening. First, how did we get into this position? Second, what are the immediate challenges for policy?

But clearly that is not true of the global economy as whole. Of course we have a great deal of experience in the EU of establishing common rules and policies. We know it is a painstaking process among 27 countries. But on finance and the economy we need to go wider than the EU and wider than the G7 to engage the new economies which account for so much of world growth. That is why it was so important and welcome that the recent meeting in Washington was of the G20 rather than the G7. Alongside the IMF it is going to play a key role in global macroeconomic coordination. 2. Better ground rules for cross-border financial crises  The failure of Lehman Brothers has confirmed that cross-border failures of large and complex firms are just as damaging and difficult to manage as we had feared. We need to ensure that proper contingency plans are prepared between the authorities most concerned for failures not just within the EU, where a lot of work is in hand, but on a global basis. As a start I hope we can establish a robust and predictable framework of rules and conventions that ensure that home authorities will co-ordinate a cross-border response better. The Financial Stability Forum is working on these urgently. This is not easy. In particular emergencies there are often different national interests at stake and the sheer pressure of events can limit cross-border consultation.