samchain/econo-pairs-v1 huggingface dataset:
CPIF with uncertainty bands Annual percentage change 4  4  90% 75% 50% Outcome Forecast  3  3  2  2  1  1  0  0 05  06  07  08  09  10  11  12  13  14  Sources: Statistics Sweden and the Riksbank  Figure 6. Forecasting performance for GDP and CPI 1-RMSE/SD, number of quarters ahead in time 1  1 GDP CPI  0.8  0.8  0.6  0.6  0.4  0.4  0.2  0.2  0  0 1  2  3  4  5  6  7  8  9  10  11  12  Note. Prior to the vertical line, the forecasts partly contain outcomes. Sources: The Riksbank and own calculations  BIS central bankers’ speeches  13  Figure 7. Forecasting performance for GDP, CPI and unemployment 1-RMSE/SD, number of quarters ahead in time 1  1 GDP CPI Unemployment  0.8  0.8  0.6  0.6  0.4  0.4  0.2  0.2  0  0 1  2  3  4  5  6  7  8  9  10  11  12  Note. Prior to the vertical line, the forecasts partly contain outcomes. Sources: The Riksbank and own calculations  Figure 8.

For example, more standard risks can be insured in the traditional market while more specific and bespoke risks can be tailored and underwritten by the captive. The benefits go both ways. Captives can, and should, also contribute significantly to the development of the industries they serve. Insuring with captives enables businesses and economies to better weather insurance market cycles. Especially for smaller and mid-sized companies, captives can be a powerful catalyst for more mature risk management practices and culture. This comes from putting control of a company’s insurance needs in its own hands and encouraging a longer-term and more sophisticated view of risk. The effects also accrue to the wider insurance industry. The captive can act as a ‘risk incubator’ by recording and accumulating data and information about lesser known risks. In time, this will promote conditions for the development of new products and markets as businesses and solution providers continuously seek out more efficient ways to manage risks. Future trends – opportunities and changing norms for captives What the future holds for captives. Three trends are worth noting. First, captives are poised to move beyond the predominant focus on the single parent-captive 2/4  BIS central bankers' speeches  model and the exclusive domain of large corporates. In fact, many non-profits entities in the US, and an increasing number of SMEs are accessing captives via group captive models that pool assets and share risks across its members. Parallels can be drawn with the mutual, which also shares similarities to takaful (Islamic insurance).
In the labour markets, reforms which have made possible greater labour flexibility, and competitive pressures which have stimulated firms to adapt more quickly to changes in their business environment, may underlie the more benign performance of real earnings growth. More widely, the greater stability the economy has enjoyed in recent years from the medium-term framework that governs both fiscal and monetary decisions may, by stabilising inflationary expectations at a low level, have made it less attractive, and more risky, to try to raise prices even when demand is strong, and may also have enabled industry and commerce to plan their business activities on a sounder and more forward-looking basis. There is plenty of evidence that all these factors are, in varying degrees, at work in the UK; and they offer the prospect of genuine improvements in the functioning of the economy. But the question is - on what scale, and are the improvements temporary or here to stay? We take considerable care to try to factor these developments into our decisions on interest rates, but the difficult judgment is to assess how much faster the economy can grow as a result without jeopardising our inflation target. My own view is that supply-side improvements are delivering benefits, but the process is a gradual and progressive one, rather than any sudden leap forward. Miracles in the real world are pedestrian affairs, arriving step by step.

An improvement in the balance of the economy was also achieved last year from another source - a welcome easing in the strength of sterling which itself had been a reflection of the persistent weakness of the euro. As the euro has recovered somewhat over the past year, and sterling has moved back from its peak levels, this has, at least in degree, eased some of the pressures faced by exporters and by businesses most exposed to import competition. The result is a better balance between the externally-exposed sectors of the economy and domestically-orientated businesses, between manufacturing and services, and between different regions of the country. Two other clouds that had threatened the sustainability of our growth performance also receded somewhat last year. One was the impact throughout the economy emanating from the steep rise in oil prices, which abated as oil prices fell back from their peak levels. The other concern was that share prices had risen to levels which many felt were not sustainable in terms of reasonable expectations of future corporate profits. The fall in share prices during last year was not a comfortable experience falling asset prices rarely are - but it removed some of the sense of unreality.
So when it comes to making assessments of what risks becoming a bubble, I believe that we must continue to make use of our experience combined with a dose of the sort of conclusion referred to in English-speaking circles as a “duck test”; if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck. Of course what we are talking about here is much more difficult to identify than a duck. But if there are sufficiently strong indications that developments are untenable, then there is a good probability that this is the case. And if this is expected to affect inflation and developments in the real economy, I consider the interest rate to be a possible weapon if others are not available or not sufficient – if not to prevent a bubble, then at least to tone down the bubble and its consequences. House prices today and in the coming period So what does this reasoning entail for my views on developments in house prices and lending today? Firstly, the crisis has meant that the repo rate has long been adjusted to try to alleviate the effects of the financial crisis on inflation, production and employment and to give support to the economic recovery.

Fluctuations in house prices and lending can in this way reinforce fluctuations in production and employment. In short, rising property prices often go hand in hand with an increase in lending. This means that problems in the property market often have greater effects on the financial system and the economy as a whole than do problems in, for instance, the stock market. And it is therefore important to be particularly vigilant with regard to the property market when discussing monetary policy and asset prices. I should also add that it is mainly commercial property, and not residential property, that usually causes this type of problem. “Lean or clean” – act sooner rather than just later? Let us say that property prices and credit volumes are increasing at a rate that does not appear sustainable. How should a central bank react? This is an “old” debate that has been given new life by the recent crisis. And it mainly concerns how the central bank should act when asset prices rise. In these situations it is often difficult to assess whether the current developments are reasonable or whether they are the result of over-optimistic expectations and speculation. It is also difficult to estimate the effects on the real economy and inflation. Moreover, it is difficult to judge when a potential bubble might burst. When property prices fall heavily, the real economy is often weaker and inflation lower. In this type of situation it is more obvious how the central bank should react.
The main concern is the problems in the banking system, and the need for capital injections from the public sector has been highlighted. This type of support measure is complicated by the need to address the budget deficit. The outcome of the election in Greece and the uncertainty over whether a government can be formed, and if it would then be able to present the savings needed for the next payment of the support loan from the EU and the IMF, have also sent shockwaves through the financial markets. This means that the unease on the financial markets has increased once again. With regard to the statistics reflecting real economic developments in the euro area, the confidence indicator showed weaker confidence for the euro area as a whole. The purchasing managers’ index for Germany has also weakened, but at the same time other German statistics have been stronger than expected. This applies, for instance, to the IFO indicator, as well as to production in industry. It is natural for us to focus on the parts of the world that are facing major problems regarding growth. But it is also important to remember that the situation is not as gloomy in all of the euro area countries, as illustrated by Germany. It is also important to note that the US economy has continued to strengthen, albeit at a slow rate. The situation on the labour market is improving slowly but surely and this has contributed to increased confidence among US households.

However, the Treasury bills have to be exchanged every six months. Norges Bank has proposed that banks be supplied with government bonds at floating rates and a maturity equivalent to the duration of the swap agreement. This may simplify the arrangement. Norges Bank has also expanded its use of its ordinary instruments. We have supplied additional liquidity through our loan facilities and made arrrangements for banks to furnish a greater range of securities as collateral for the loans. We have also provided loans with longer-than-usual maturities. 89 banks signed up for a two-year fixed rate F-loan, and two days ago 100 banks signed up for a three-year floating rate F-loan. These F-loans are geared to small banks. As shown in the chart, more than half of the bids have been below NOK 100 million. Norges Bank has also supplied NOK through currency swaps and offered USD loans to Norwegian banks. In all, these measures have provided banks with good access to short and long-term funding. However, the interbank market is still not functioning satisfactorily. We have now moved into a phase where the main challenge may be banks’ financial strength. This is partly due to the downturn in the global and Norwegian economies, which over time will result in higher losses, but also because higher capital adequacy is now being required in the markets. The same view has been expressed by the Norwegian supervisory authority. We see that many banks abroad are raising new capital, with or without assistance from the authorities.
BIS central bankers’ speeches  17  Appendix Figure 1: The OECD Better Life Index  Source: http://www.oecdbetterlifeindex.org/  Figure 2: OECD Better Life Index – UK Summary  Source: http://www.oecdbetterlifeindex.org/  18  BIS central bankers’ speeches  Figure 3: Examples of activities which do and do not count as volunteering under the definition given by the International Labour Organisation Classed as “volunteering” Working in a soup kitchen cooking meals for the homeless Serving on a neighbourhood clean-up committee Serving as an usher or otherwise working on behalf of a religious organisation Providing unpaid legal advice at a legal services agency Providing marginally paid foster-care services on a short-term basis Sewing a blanket for a sick neighbour  Lies outside the boundary of “volunteering” Cooking meals for one’s own children Cleaning one’s own house or yard Attending a religious service Receiving payment for legal advice or assistance Providing foster-care services on a long-term basis Sewing a blanket for a sick household member  Source: ILO (2011), Manual on the measurement of volunteer work (adapted). Figure 4: Estimates of the extent of formal volunteering in the UK in 2012  Hours (billions per year) Proportion of the sample  Total (at least once per year)  Of which frequent (at least once per month)  2.29  2.12  44%  29%  Source: ONS (2013), “Household Satellite Accounts: Valuing Voluntary Activity in the UK”. Underlying data from the Community Life Survey.

Given the growth in world population over the period since, the number of global volunteers may well now top the one billion mark. To put that in context, imagine if these volunteers comprised a single country – “Volunteerland”. It would have the second largest working age population of any country in the world, behind only China (Figure 5). The Charities Aid Foundation calculates a World Giving Index each year which ranks the generosity of people in different countries with their money and time. For volunteering, top of the league are the unlikely trio of Turkmenistan, Sri Lanka and the United States; bottom of the pack are Yemen, China and Greece. The UK ranks 26th out of 131 countries. This is respectable, if outside an automatic Champions League place (Figure 6). Of course, cross-country comparisons can be quite difficult. For example, the high rates of volunteering in ex-Soviet states, like Turkmenistan and Uzbekistan, are in part down to the authorities having national days of volunteering – “subbotniks”. As these are more or less compulsory, they stretch to breaking point the definition of volunteering. 8 Third, the volunteer army is a diverse one. Volunteering is slightly more prevalent among older people and slightly less prevalent among people of child-rearing age (Figure 7). But all age groups make a significant contribution. Women and men are broadly equally likely to volunteer. And there do not appear to be major differences in volunteering across ethnic minority or socio-economic groups. 9 Fourth, numbers of volunteers appear to be stable (Figure 8).
And heightened uncertainty can add to market volatility, resulting in diminished market liquidity. But these debates about trade-offs expose a basic problem. Everyone is familiar with the idea of a "jack of all trades." Using monetary policy to mitigate financial stability vulnerabilities can lead to unfavorable outcomes for the economy. Monetary policy should not try to be a jack of all trades and a master of none. There must be a better way. Fortunately, there is. Instead of looking at this as a problem of choosing the point on an unfavorable trade-off curve, we must look for ways to shift the curve by enhancing the resilience of the financial system. The value of this approach to building resilience was demonstrated by the global efforts to strengthen the banking system following the global financial crisis. Despite the economic disruptions caused by COVID-19 and Russia's war on Ukraine, the banking system has functioned well, serving as a source of strength for the economy, not a weak link. Alternative Solutions, Prudent Results As monetary policymakers, we need to count on well-functioning markets that promote financial stability as we pursue our price stability and maximum employment goals. So, what can be done to enhance financial stability? At the Federal Reserve, we have instituted changes over the past few years that support market functioning in times of stress.

This should, in time, ultimately lead to a situation where it is simple and cost effective for any eligible participant to become a direct participant in CHAPS. Improved governance In bringing CHAPS in-house it has been important to develop a strong and robust governance framework and retain the strong ‘user voice’ that CHAPS Co facilitated. At the heart of this was the establishment of the RTGS/CHAPS Board (the Board) chaired by the Bank’s Deputy Governor for Markets & Banking and comprising four non-executive members selected for their experience and expertise, together with a number of the executive, myself included.9 The Board provides a strategic focus with particular attention to the Bank’s role as a systemic risk manager to the CHAPS system, broader financial stability remit and other public interests. The Bank’s operation of CHAPS is subject to the Bank’s full ‘three lines of defence’ risk management model and close engagement and oversight on relevant matters from the Governors, the Bank’s Court of Directors and the Financial Policy Committee. In its capacity as Payment System Operator, the Bank’s delivery of CHAPS is supervised by the Bank’s Financial Market Infrastructure Directorate10 to the same standards as other systemically important payment systems. It is also essential to understand the views of industry, and we have established forums to facilitate an open dialogue with a variety of key stakeholders. This includes the CHAPS Strategic Advisory Forum (SAF) and the RTGS Renewal Programme’s External Advisory Body (EAB).
In the summer of 2014, the persistence of disinflationary forces could be clearly identified: first, measures of underlying inflation had been drifting down in synch with headline inflation for more than a year, and had reached historical lows.7 Second, for the first time since the inception of Monetary Union, longerterm inflation expectations had started to fall as well. Such fundamental risks to price stability required a forceful monetary policy response. Accordingly, the ECB deployed a series of unconventional monetary policy measures to ensure price stability. The comprehensive package of June 2014 comprised targeted long-term refinancing operations (TLTROs) and a cut of the deposit facility rate, moving it into negative territory. This package was combined with a, to start with, small asset purchase programme initially involving only private sector securities, which was later expanded to include public sector securities (becoming known as the public sector purchase programme – PSPP) and then scaled up over time. These measures were accompanied by further cuts in the deposit facility rate and further TLTROs; moreover, they have been complemented by our forward guidance.

Amund Holmsen: The theoretical background for macroprudential policy Speech by Mr Amund Holmsen, Executive Director of Norges Bank (Central Bank of Norway), at Norges Bank’s Finance Workshop, Oslo, 9 October 2014. *  *  *  Thanks to Henrik Borchgrevink. This speech does not contain any assessments of the current economic situation or policy-related statements. Songs about financial stability are few and far between. But Odd Nordstoga has written a song about just that, entitled Lykkeliten (Happy Times) 1: “Happiness is a time without debt, and reading the end of a book when in bed”. That financial stability can be so directly associated with a feeling of happiness is an encouraging point of departure for macroprudential policy. Nordstoga has actually turned economic theory upside down. Happiness – or utility as we economists tend to call it – is usually associated with consumption. We can borrow to finance consumption. Credit provides an opportunity to advance consumption in time. In that respect, more credit engenders more happiness – not the opposite. But after the goods have been consumed, the loan still exists. Debt creates risk in the financial system. Nordstoga may then prove to be right. A time without debt may be a happier one. The business of banking is such that it can trigger or amplify an economic downturn. Subsequent to the financial crisis, macroprudential policy has evolved into a supplement to both traditional banking regulation and stabilisation policy.
After the privatization process of the former Savings Bank was over and a 100% of its stock was transferred to the Raiffeisen International Bank Holding AG in August, the capital ownership structure during that period underwent significant changes, having the share of “domestic government capital” estimated at 6% from 32.1% at end of 2003, and the “domestic capital” at 12.75 from 35.15% it was in the same period of the previous year. 2  BIS Review 115/2006  Figure1: Banking system capital ownership structure in years 1  Recently, the improved climate for the development of business and the economy, the Savings Bank’s privatization from the Raiffeisen Bank, the macroeconomic stability, and the low inflation, have all led to rapid development of the banking system. Hence, we can highlight that: •  1  During 2005 and onwards, considerable developments have occurred. The system was more oriented towards the lending activity. The latter one constituted 26% of the portfolio, from 16% in the same previous year period. In 2005, the outstanding credit of the banking system increased by ALL 57.6 billion 2 or 82%, from ALL 19.3 billion or 38% in the previous year. In the meantime, the significant growth rate of the outstanding credit compared to end of 2004 has been reflected even in the changed credit structure by terms.

BIS Review 115/2006  5  Hence, the Albanian banking system is presented as safe, sound, under a constant reformation and consolidation process, passing into a qualitatively new stage, which will provide the business and bank customers with a modern banking service that aims at achieving the levels and standards of Western banks. 6  BIS Review 115/2006
7/9  Steps towards a more integrated financial system at European level have already been taken since the crisis, with the Banking Union and the Capital Markets Union projects. These projects need to be further developed and implemented. The Banking Union, which was set up to put an end to the link between sovereign risk and banking risk, is now operational. What remains to be done in order to finalise it includes completing the resolution pillar by implementing a backstop and adopting a common framework to enhance the provision of liquidity and putting in place a European deposit insurance scheme. Finalising the Banking Union is of prime importance for the development of pan-European banks, and will make it possible to achieve a better balance of risks, economies of scale, a better allocation of savings towards productive investments and increased competitiveness of European banks at the international level. The other major initiative at the European level to strengthen financial integration is the Capital Markets Union project which aims to boost investment in the EU. Speeding up this Union will not only foster growth but will also enhance risk-sharing across European countries and mitigate the procyclicality of bank financing. We, at the Banque of France, support in particular three initiatives which should have a decisive impact on cross-border investment: First, the harmonisation of the insolvency procedures framework and its implementation by companies to promote investment in equity across Europe.

If incumbents depend on Bigtechs for key infrastructure such as cloud computing, if they rely on the same Bigtech to distribute their products through their platforms and then compete with Bigtechs on certain segments, they see their strategic independence challenged in the same way as hotels and retailers did. This process of commoditisation of incumbents may lower credit standards to compensate for higher pressure on margins and exacerbate their funding gap because of lower customer stickiness. Second, the question of cyber-risk. With greater interconnections between technologies and the financial system, the Banque de France observed in its Financial Stability Report of December 2017 that cyber-risk is moving from an idiosyncratic risk to a potential source of systemic risk which need to be addressed. This perspective is widely shared among public and private decision markers and it should not come as a surprise that cyber-security will be one of the priorities of the French presidency of the G7 next year. Third, the question of market structure and private monopolies, in particular as regards clearing services. In Europe, this topic has a specific dimension that results from the Brexit 6/9  outlook. The clearing of interest rate derivatives deserves in particular attention since the UK clearing houses have a virtual monopoly in the sector. Beyond handling transition issues in case of a “hard Brexit” we must ensure that critical key players do not become “too big to fail”. Of course, by its very nature clearing is an activity that generates major economies of scale, and thus encourages concentration.