samchain/econo-pairs-v1 huggingface dataset:
Employment, total hours worked and unemployment all tend to be highly persistent, so a rise in unemployment means – based on history – that it will be higher a year from now. That said, the UK labour market has adjusted relatively quickly to large shocks in the past (Broadbent, 2012). In normal times, around 9% of workers change jobs every year, but the tendency to persistence provides evidence from the past of the effects of a mismatch between the skills of job seekers and those required by hiring firms. As I noted earlier, some of the sectors hardest hit by the pandemic employ more young and low-skilled workers, who may find it hard to move between sectors (Haldane, 2020). That difficulty will be amplified if the jobs involve different tasks. Bank staff have analysed the task content of different jobs to quantify the extent of task reallocation required in various scenarios. In a relatively extreme scenario where the pattern of consumer spending is unchanged from 2020 Q3, staff estimate that the extent of the task reallocation over coming years would be higher than in the recent past, but much less than occurred during the 1980s and early 1990s. That was a period of 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  significant structural change during which the share of employees working in the manufacturing sector fell from 26% to 16%. There are two important points I would emphasise here.

This recognition of the uncertainty and risks around the recovery has been backed up by separate decisions the MPC took in February on the toolbox measures we can employ. We have been quite clear these toolkit 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  decisions should not be interpreted as a signal about the future path of monetary policy. We decided to ask the banks to make preparations within the next six months, in case we need to use negative interest rates to provide further support. This implies nothing about our intentions in that direction, and nor does it imply that negative rates are our chosen marginal policy tool, something that in my view is state contingent at all times. We also signalled that the Bank will do work on the approach it would take to tightening policy, should that be needed, again recognising that it has more than one tool to do so. These decisions are detached from our current or likely future policy decisions, but do recognise the increasingly two-sided nature of the risks we face, as we hope and expect to see the economy get over Covid.
Joseph Yam: Hong Kong Institute of Bankers Beijing Representative Office Address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the inaugural ceremony and dinner, Beijing Representative Office of the Hong Kong Institute of Bankers, Beijing, 10 June 2005. *  *  *  Chairman Liu, Vice Governor Xiang, Mr Sullivan, Ms Li, ladies and gentlemen, I would like to thank the Institute of Bankers for inviting me to attend this inaugural ceremony of its Beijing Representative Office. On behalf of the Hong Kong Monetary Authority, I would like to extend our warmest congratulations to the Institute for making a major step in its development. As we all know, the savings rate in Mainland China is among the world’s highest, accounting for more than 40% of its GDP. The effective channelling of private-sector savings into fixed-assets investments is a major function of the financial system. Such is also an important responsibility of the many employees engaged in the normal workings of the financial system. The proper functioning of the financial sector, with effectiveness in financial intermediation, is crucial for the promotion of economic growth and development. Mr Deng Xiaoping once said, “Finance is very important; it is the core of modern economics.” Presently Mainland China relies preponderantly on the banking system in intermediating funds. Last year bank financing remained the most important channel for raising new funds for the non-government non-financial sector, accounting for over 90% of total funds raised.

This requires not only the development of innovative technology-based deterrents and pro-active detection systems, but also effective cooperation between the public and private sector, law enforcement domestically and across borders. We stand ready to work alongside all key stakeholders, in both the public and private sectors, local and abroad, to ensure our financial sector is resilient to face the threat of terrorism financing within the country and in the region. 3/3  BIS central bankers' speeches
A recent study analysing the experience of the Spanish labour market confirms this view: over time job finding rates become less and less responsive to improvements in the aggregate labour market.14 I would even go one step further, namely to question whether allowing inflation to overshoot would help address the more subtle forms of hysteresis in the economy linked to uncertainty and 7/9  BIS central bankers' speeches  investment. I have no doubt that investment would have been much lower today were it not for the impulse generated by our policies. But central banks cannot address all of the underlying causes of weak capital formation. For example, if it is true that investment is being affected to some extent by weak long-term growth expectations, then monetary policy cannot be the whole answer – unless one believes in a very hard form of “reverse hysteresis”. The truth is that should weak long-term growth expectations indeed become self-fulfilling, then we would also see signs of hysteresis in the natural rate of interest, which economists frequently call "r-star". A lower r-star, in turn, would push the interest rate level at which policy becomes expansionary even lower – feeding concerns about the ability of monetary policy to address advanced cases of hysteresis. We don't want the central bank itself to fall into the “anxiety trap”. The answer therefore has to address the structural causes of low trend growth and long-term unemployment through policies supporting productivity and minimising both dualities in the labour market and social exclusion.

This is confirmed by Phillips curve estimates. As you can see from the right-hand side chart on slide 3, ECB in-house estimates using a variety of slack and inflation expectations measures suggest that core inflation today is well below what historical regularities would suggest. Of course, a number of factors – such as changes in the slope, weak productivity growth or second-round effects of past low inflation – might be at work here. But in the current context this is unlikely to be the whole story. For one, there is considerable uncertainty around the slope of the Phillips curve. As we heard this morning, some estimates show that the curve has flattened in recent years. ECB research, by contrast, found evidence that inflation has become more responsive to slack lately, but with notable heterogeneity across euro area Member States.7 Blanchard, Cerutti and Summers have not found much change at all during the crisis.8 Second, our Phillips curve estimates show that even once we control for past low inflation and weak productivity growth, there is still a considerable part that cannot be explained by the model. These analyses therefore do offer one useful conclusion: that slack may be larger and that structural unemployment may perhaps not have risen by as much as some estimates suggest. This also means that policymakers should be careful in attaching too much weight to notoriously unreliable and hard-to-estimate measures such as the NAIRU.
An important point to observe is that the rate for which the FOMC sets a target, the overnight federal funds rate, represents an unsecured lending rate between banks. But the Desk conducted its operations with its primary dealer counterparties – government securities dealers that have an established trading relationship with the New York Fed – in the secured financing market for general collateral repurchase agreements, or GC repos. This market serves as a hub in which broker-dealers and other market participants finance their  3  See my November 27, 2012, Remarks on the Role of Central Bank Interactions with Financial Markets. 4  The Federal Reserve also established a baseline demand for reserves through reserve requirements. Since the expansion of the Federal Reserve’s balance sheet and resultant increase in reserve levels, however, these requirements have been so far below the level of actual reserves that they can be met without any additional Desk actions. 2  BIS central bankers’ speeches  inventories of securities, frequently borrowing from cash-rich investors, such as money market funds. These financing arrangements are structured as repos, in which the security is technically sold with an agreement to repurchase at an agreed-upon later date. The transaction can be thought of in most respects as economically similar to a collateralized loan.

Zeti Akhtar Aziz: The global Islamic financial services industry Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Launch of Kuwait Finance House Research, Dubai, 14 May 2007. *  *  *  Let me first of all congratulate Kuwait Finance House on the establishment of the Kuwait Finance House Research. It is my great pleasure and honour to officiate its launch. The establishment of this research entity is timely to meet the more intense demands of operating in a dynamic and highly competitive environment where new challenges and opportunities are continuously emerging in this era of globalisation and change. In the recent five years, there has been a rapid evolution and expansion of the global Islamic financial services industry. Islamic finance has now been accepted as a viable and competitive mode of financial intermediation, not only in Muslim countries but also beyond the Muslim world, which offers a wide range of financial products and services to meet the highly differentiated demands of the new economy. The continued progression in the economic and financial landscape has presented many opportunities for new products, services and innovations. With the accelerating pace of financial integration, financial institutions are presented with prospects to expand beyond domestic borders to capture opportunities from regional and global markets. Nevertheless, these opportunities cannot be fully realised without sound research and development efforts. Successful financial services players must leverage on expertise and knowledge to deliver superior products and services.
On 29 October, the Federal Reserve reduced its key rate by a further 0.5 percentage point. On 6 November, the European Central Bank and the Bank of England reduced their key rates by 0.5 percentage point and 1.5 percentage points, respectively. Market participants expect key rates to be reduced further among most of our trading partners. Norges Bank reduced its key policy rate by a total of 1 percentage point to 4.75 per cent. Norwegian money market rates increased markedly as a result of risk premiums abroad spilling over into the Norwegian market. The eurodollar market has been a widely used source of financing for Norwegian banks. Dollars in this market are used to procure NOK liquidity and to redistribute liquidity among banks. Banks borrow in US dollars and then swap them for NOK. The conditions in financial markets have improved somewhat recently, but access to credit is still limited and risk premiums are high. Premiums are expected to edge down in the coming quarters, but market participants believe that it will take time to restore confidence in banks. Monetary policy influences the economy through several channels, often referred to as the monetary policy transmission mechanism. The relationship between Norges Bank’s key policy rate and the effects on activity and inflation has been impaired by money market conditions. The transmission mechanism is not functioning as previously. Money markets have become highly segmented. There is limited turnover and at times it is difficult for foreign operators to satisfy their need for NOK liquidity.

But the different steps that have been gradually taken on a political level should, as I see it, be able to alleviate a confidence crisis that is largely political. This would point to an orderly resolution of the euro crisis. It then remains to be seen whether the crisis flaring up around Greece now can have more farreaching consequences. In a worried, nervous climate even a problem that only affects one small country can have contagion effects. Could things go better than we are forecasting? I have earlier listed various downside risks. Are there any conditions under which growth might be better than we are forecasting? My assessment is that this is the case, although things look uncertain right now and we cannot expect any rapid improvements. I think it is worth pointing out that we only expect a cautious recovery in growth in the euro area from the end of 2012 and onwards. What we are now seeing is a confidence crisis of gigantic proportions, but it also means that if political measures can build up confidence step by step, the economy in the euro area can recover with greater force than we are predicting. As I mentioned earlier, there are countries in the euro area with good fundamental conditions for a stronger recovery. In the United States there are good conditions for a better outcome. In this situation growth can be somewhat stronger than the fairly modest growth we are predicting. Particularly if housing construction picks up again, after several years of adjustment.
The wider use of credit information can make an important contribution to prudent financial management, not just among borrowers by minimising incidences of excessive borrowings, but also among lenders by encouraging greater discipline during periods of exuberance when lenders may be tempted by rapid rises in asset prices and perverse incentives, to throw caution to the wind. It also has an important role in promoting access to financing for various segments of the society. Borrowers who maintain a good credit history and demonstrate strong financial discipline are able to leverage on such “reputational collateral” to secure borrowings at more favourable terms and rates. Credit registries have also been used extensively to support enhanced banking and financial market supervision. There can be little doubt, particularly after the events of the sub-prime mortgage crisis, that the accumulation of credit that is premised on informed credit decisions, whether taken at an individual, institutional or system-wide level, will contribute to the stability of the overall financial system. While the collection of credit information on borrowers in Malaysia started many years ago, it was not until the aftermath of the Asian Financial Crisis that a centralised credit information registry was realised. The crisis proved to be a defining moment for Malaysia on several fronts and was instrumental in advancing critical reforms in the development of our financial infrastructure.

The architectural concept of Sasana Kijang is inspired from the shape of the Cowrie shell, a popular form of money in the Malay Peninsula during the 3rd century with its building facade derived from the geometric patterns of traditional Malaysian songket motifs, reflecting the hand woven fabric designs. Sasana Kijang hosts a learning centre with state-of-the-art training facilities for local and foreign participants and provides opportunities for the exchange of views and experience towards promoting capacity building in central banking. In addition to training facilities, offices and conference halls, Sasana Kijang also houses the Bank Negara Malaysia Knowledge Management Centre and the Bank Negara Malaysia’s Museum and Art Gallery which is open to the public. I hope all of you will take the opportunity to explore the Bank’s collection displayed at the Museum and Art Gallery and to enjoy the activities in the Knowledge Management Centre. As visitors to Malaysia, your stay here is not complete unless you have treated yourself to the variety of food, traditional and modern, that the country has to offer. On that note, I wish you all a productive engagement and a pleasant stay in Kuala Lumpur. BIS central bankers’ speeches  3
This was perhaps the response to rising income inequality, as emphasized by Rajan (2010), and the lack of other policies to correct this problem in a fast and efficient way. Ironically, the crisis affected more intensely precisely those that were supposed to benefit from “financial inclusion.” There are many other cases in which well intentioned developments are implemented through weak policies. Take the case of interest rate ceilings. In order to promote fairness, many countries introduce limits on the interest rate on loans. This policy attempts principally to protect people with disadvantages and allow them to participate in the financial system. If this ceiling is set low enough, it may end up generating exclusion rather than lower financial costs for households, who may end up paying much higher interest rates in informal credit markets. This is not the place to analyze all the causes and culprits of the crisis, but it is worth discussing certain aspects that are frequently singled out by the general public. First and foremost, the crisis was caused by the irresponsible behavior of the financial industry. The structure of incentives was unsuitable. It led to excessive risk-taking without proper risk management. Compensation was heavily biased towards deal-making, regardless of the quality of the deals. Commissions and fees were a very important component of the compensation scheme. In the end, all that mattered was granting credit indiscriminately, maximizing packaging and selling securities, etc. This was at the foundation of the originate-and-distribute model of financial services, and served to increase leverage to unsustainable levels.

865–934, New York: Elsevier North-Holland. Micco, Alejandro and Ugo Panizza (2006), “Bank Ownership and Lending Behavior,” Economic Letters, Vol. 93, Issue 2, pp. 248–254. Micco, Alejandro, Ugo Panizza and Monica Yanez (2007) “Bank Ownership and Performance. Does Politics Matter?,” Journal of Banking and Finance, Vol. 31, No. 1, pp. 219–241. Rajan, Raghuram (2010), Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton, NJ: Princeton University Press. Reddy, Y.V. (2012), “Society, Economic Policies and the Financial Sector,” Per-Jacobsson Lecture, BIS. www.bis.org/events/agm2012/sp120624.htm. 4
It should prompt them to make adequate planning, to retain sufficient own funds and to issue MREL-eligible debt, and to take any opportunity that may present itself to comply with the requirements within the period established for the purpose. 5/7  Challenges remaining on the resolution front in Europe Despite the tremendous efforts made on the resolution front in Europe, there are clearly important challenges remaining. First, the details of the backstop for the Single Resolution Fund (SRF) must be outlined. Recently it was agreed that the European Stability Mechanism (ESM) would assume this financial backstop, which would take the form of a credit line, to be used to address exceptional situations where the SRF’s own resources prove insufficient for resolution of certain credit institutions. The backstop will have a limit of 1% of the deposits guaranteed in the banking union. It will come into force in 2024 at the latest and must be fiscally neutral in the medium term, so the resources committed will subsequently be recovered through banking sector contributions. In addition, the introduction of the financial backstop will eliminate the ESM’s tool for direct recapitalisation of banks. In this setting, it is vital to ensure that the backstop is sufficient to meet all the potential challenges that the SRF may have to face. Second, the question of provision of liquidity in bank resolution has to be addressed. If a bank under resolution is sold, the purchaser assumes any liquidity commitments that may arise when the bank opens its doors the next day.

Spain had an oversized banking system, excessively concentrated on lending to the residential property sector and highly dependent on international wholesale financing. In 2008, the consolidated assets of the banking system amounted to 304% of GDP, bank lending to the property sector (in the broad sense of the term) reached 99% of GDP and bank debt held by non-residents accounted for 24% of GDP. Moreover a significant number of deposit-taking institutions suffered from institutional and governance shortcomings. Over the last decade many of these vulnerabilities have been resolved; in particular, those relating to the high level of non-financial private sector debt, which is now at levels similar to those in the rest of the euro area (having fallen by almost 70 percentage points of GDP from its peak in 2010). The weight of lending to property and construction activities has decreased by 47 percentage points of GDP. This reduction in non-financial private sector debt has been reflected in a decrease in the size of the financial sector and, in particular, in bank balance sheets in Spain, since business abroad has proved to be one of the main determinants of the resilience of some institutions. Thus, over the last ten years, the total assets of business in Spain have contracted by 20% (a fall of 72 percentage points of GDP) and employment in the sector has fallen by 32%.