samchain/econo-pairs-v1 huggingface dataset:
The fact that Sweden has a surplus thus means that saving in Sweden is higher than the level needed to fund Swedish investments. An important reason why saving has been relatively high in Sweden since the mid-1990s is the relatively high level of financial saving in the public sector since the budget consolidation process carried out in connection with the crisis of the 1990s. Another reason is that the Swedish households also increased their saving in connection with this crisis. At the same time, the level of investment in Sweden has been relatively low compared to that in other countries (see Figure 5). This is largely due to relatively low investments in housing.2  2  See for example Chapter 3 in Vredin et al. (2012), Report of the Economic Policy Group 2012, “Simple rules, difficult times: does stabilisation policy need to be changed?”  4  BIS central bankers’ speeches  Figure 5. Total investment as a share of GDP Per cent 30  30 2001-2007  25  2008-2011  25  20  20  15  15  10  10  5  5  0  0  Note. Average value 2001–2007 and 2008–2010. Source: IMF WEO, October 2012. The current account surplus has in fact decreased somewhat in recent years. It was approximately 9 per cent of GDP in 2008 and approximately 7 per cent of GDP in 2011. However, it is still high in historical terms and in comparison with other countries.

European Systemic Risk Board (2011), Recommendation of the European Systemic Risk Board of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3). Financial Crisis Commission, Preventing and managing financial crises, interim report, SOU 2013:6, 23 January 2013 Fiscal Policy Council (2011), Swedish Fiscal Policy, Report of the Fiscal Policy Council 2011. IMF, World Economic Outlook, October 2009. IMF, World Economic Outlook, October 2012. National Institute of Economic Research, “A Longer Term View of General Government Finances – Developments Will Require More Hours Worked”, The Swedish Economy, December 2005. National Institute of Economic Research, Wage Formation Report 2012. Kuttner, Kenneth (2012), “Low Interest Rates and Housing Bubbles: Still No Smoking Gun”, under publication in Douglas Evanoff (ed. ),The Role of Central Banks in Financial Stability: How Has it Changed?, World Scientific (Hackensack, NJ). Kydland, Finn and Prescott Edward (1977), “Rules rather than discretion: The inconsistency of optimal plans”, Journal of Political Economy, vol. 85, pp. 473–490. OECD Economic Outlook, November 2012. Bill 2007/08: 100, “Spring Fiscal policy Bill 2008”. Bill 2012/13: 1, “Budget Bill 2013”. Sveriges Riksbank, Monetary Policy Report, February 2012. Sveriges Riksbank, Monetary Policy Report, July 2012. Sveriges Riksbank, Minutes of the monetary policy meeting, July 2012. Sveriges Riksbank Monetary Policy Update, December 2012. Statistics Sweden, 2012 “Housing construction low for a long time”, SCB Economic Indicator, no. 2012:92. Svensson, Lars E.O. (2012), “The possible unemployment cost of average inflation below a credible target”, Working Paper, available at http://people.su.se/~leosven/papers/ Phillipsa.pdf. 16  BIS central bankers’ speeches  Svensson, Lars E.O.
14  BIS central bankers’ speeches  Chart 7 Projected global GDP shares (2000–2050) 2000  2010  China  India  China  India  Other emerging G20  US  Other emerging G20  US  Other advanced G20  Non-G20  Other advanced G20  Non-G20  2020  2030  China  India  Other emerging G20  US  Other advanced G20  Non-G20  China  India  Other emerging G20  US  Other advanced G20  Non-G20  2040  2050  China  India  China  India  Other emerging G20  US  Other emerging G20  US  Other advanced G20  Non-G20  Other advanced G20  Non-G20  Source: IMF, US Census Bureau, Penn World Tables and Bank calculations. See Haldane (2010) for more details. Measured at market exchange rates. e  BIS central bankers’ speeches  15  Chart 8  Chart 9  Equity home bias to GDP per capita in 2005  Equity financial depth versus log GDP per capita in 2005 for G20 economies  Source: IMF International Financial Statistics, IMF World Economic Outlook October 2010, S&P Global Stock Markets Factbook (2010), updated and extended version of dataset constructed by Lane and Milesi-Ferretti (2007) and Bank calculations. Source: IMF World Economic Outlook and Thomson Reuters Datastream.

Home bias is measured here as an index lying between zero and one.2 So a value of unity indicates complete home bias – that is, a country holds no foreign equity in its investment portfolio. A value of zero, meanwhile, suggests home bias has been completely eliminated, with a country investing in proportion to the world market portfolio. Intermediate values tell us the proportion a country is underweight foreign assets relative to a world portfolio benchmark. The following points are noteworthy:   Equity home bias remains very significant across every country in the world. The unweighted average home bias across the G20 in 2007 was around 0.78. Weighted by market capitalisation, average home bias was 0.66. So, in weighted terms, G20 countries’ holdings of foreign equity are around a third of the value they would be in the theoretically optimum market portfolio.   This home bias is lower among advanced than emerging market economies. The un-weighted home bias index in 2007 was 0.63 for advanced countries, while for emerging market G20 economies it was 0.90. For those emerging economies which maintain capital restrictions, such as India and China, home bias remains almost complete.   On average, there has been a decline in equity home bias across G20 countries over time. Among advanced G20 economies, the un-weighted home bias index has fallen from 0.75 in 1995 to 0.63 in 2007. Weighted by market capitalisation, it has fallen from 0.79 to 0.61 over the same period.
Two weeks after each meeting, the Bank publishes minutes, which make it clear whether there was a lack of consensus in the Committee. Publication of the minutes is required by law. An account of the implementation of monetary policy is provided in the Annual Report. All committee members are free to express their personal views on economic issues and monetary policy. In Sweden, too, interest rate decisions are made by a board of experts – the Executive Board. The members work full time, and participate in the daily operations of the central bank. An inflation report expressing the Executive Board’s collective view of the inflation outlook is published four times a year. As in the UK, special emphasis is placed on the individual responsibility of the Executive Board members. The individual members’ voting and assessments are disclosed. Any lack of consensus regarding the inflation outlook and setting of interest rates emerges from the minutes that are published from two to four weeks after each monetary policy meeting. Grounds are given for decisions on interest rates, but no press conference is held immediately after monetary policy meetings. The Executive Board does not directly announce its stance regarding interest rate movements in the period ahead, but this is implicit from the uncertainty associated with the projection, which Sweden’s Riksbank also illustrates by means of a fan surrounding the inflation projection. The Executive Board reports twice a year to the Swedish parliament, the Riksdagen.

Churchill himself said that “a nation that forgets its past has no future.” Our banknotes are testaments to the outstanding achievements of the nation’s greatest individuals; they are repositories of the United Kingdom’s collective memory. That contribution will continue with the new £ which brings together the future, in the form of polymer and the most advanced security features yet, and Britain’s glorious history, in the achievements of Sir Winston Leonard Spencer Churchill. BIS central bankers’ speeches  3
The view that the central bank should only react if the forecasts indicate problems may appear reasonable, but there are some uncertainties in this, particularly with regard to how this should be translated into practical policy. In situations where house prices and lending are rising very quickly, the central bank can see risks in this development, even if it cannot be sure whether a bubble is building up. It may then be difficult and even inappropriate to remain completely passive, even if the main line of the forecasts is that developments will be balanced. If house prices were then to plummet and pull down demand and inflation, the consequences could be very severe, which is clearly illustrated by the current financial crisis. The conclusion the Riksbank has reached with regard to monetary policy is therefore that this type of risk may need to be taken into consideration in a different way than the normal procedure, via the forecasts for inflation and the real economy. As indicated in the policy document "Monetary Policy in Sweden", this could be done by beginning a phase of interest rate increases slightly earlier than would otherwise have been the case, or by postponing a phase of interest rate increases. In addition, we highlight and warn against various types of risk, for instance in our speeches and reports. This was how we acted for instance in 2006.

It also becomes easier to work on prevention and in various ways to counteract a serious crisis from arising. The developments include methods regarding what are known as stress tests, which analyse what happens to the banks during various sequences of events and crisis scenarios. Such models are of course important tools when it comes to crisis exercises and to adapting our preparedness for managing real crisis situations efficiently. Challenges along the way A lot has changed, both compared with when I first began at the Riksbank and over the past six years. We have better conditions for managing various challenges so that we can attain our inflation target and safeguard financial stability in the best possible manner. It is also largely a case of learning by doing. I would therefore like to take up some of the challenges  BIS Review 155/2008  3  that we and other central banks have had to deal with in recent years. These are challenges we have learnt from when we were forced to deal with them. They are also challenges that in one way or another will stimulate future developments. Rising commodity prices,… In May of this year I held a speech on the upward pressure on international commodity prices that had been exerted for some time. This applied to both traditional commodities, such as oil and metals, and to foodstuffs, such as grain. The boom in commodity prices had pushed up inflation both here and abroad, and inflation was clearly overshooting our target.
John C Williams: Ever upward Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at St. Lawrence University, 8 September 2021. * * * As prepared for delivery Good afternoon, everyone. Thank you to St. Lawrence University for hosting today’s event. It’s especially exciting to be here at the start of an academic year, and I hope you all have a safe and successful fall semester. The motto for New York State is “Excelsior,” meaning “ever upward.” What better way to get the full New York experience than by spending time—even virtually—in the North Country. These visits around the Federal Reserve’s Second District are one of the highlights of my job, and something I very much look forward to doing again in person when it’s safe to do so. It’s now been about a year and a half since the pandemic took hold. Over that time, there’s been much change: phases and stages, highs and lows, shifts and swings, downturns and reversals. The virus and its effects on the economy are ever evolving. On top of that, the unusual and extraordinary nature of this crisis means circumstances are far beyond the norm for typical economic recessions and recoveries. Even while there are significant improvements in some areas, setbacks persist in many others. And now, the emergence and rapid spread of the Delta variant in parts of the country and around the world has introduced a new layer of uncertainty.

Recent data show core inflation, which excludes volatile food and energy prices, running at about 3-1/2 percent, which is well above the Federal Reserve’s longer-term 2 percent goal. Taking a closer look at the data, it’s clear that this spike in inflation largely reflects the transitory effects of the rapid reopening of the economy, which is pushing supply and demand in extreme ways. As the economy gets through these unusual dynamics, I expect inflation to come back down to around 2 percent next year. Given the complexity of this topic, I’ll go into this in more detail. I find it helpful to view recent developments in terms of three categories. The first is related to prices for goods and services that underwent huge declines during the pandemic but are now rebounding as the economy reopens. For example, in the first year of the pandemic, prices for airfare and lodging fell sharply as people cut back on travel. Since then, we’ve seen these rebound toward their pre-pandemic trends, pushing the inflation rate up. One simple way to get a better read of inflation that is not overly influenced by these big swings in prices is to take the average inflation rate from the start of the pandemic. That calculation shows that core inflation has averaged 2-3/4 percent since February of last year. But even that number is heavily influenced by the effects of the pandemic on the second category: used vehicles.
Mario Draghi: ECB press conference – introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Vítor Constâncio, Vice-President of the European Central Bank, Frankfurt am Main, 6 December 2012. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Rehn. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. Owing to high energy prices and increases in indirect taxes in some euro area countries, HICP inflation rates have been elevated for some time. More recently they have declined, as anticipated, and are expected to fall below 2% in 2013. Over the policy-relevant horizon, inflation rates should remain in line with price stability. The underlying pace of monetary expansion continues to be subdued. Inflation expectations for the euro area remain firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. The economic weakness in the euro area is expected to extend into next year. In particular, necessary balance sheet adjustments in financial and non-financial sectors and persistent uncertainty will continue to weigh on economic activity.

At the same time, deposits from households and non-financial corporations also rose in October. Overall, more observations are needed to distinguish between shorter-term volatility and more lasting factors. Unlike in the case of monetary developments, there has been little change in credit growth. The annual growth rate of loans to the private sector (adjusted for loan sales and securitisation) remained at –0.4% in October, unchanged from September. But this development reflects further net redemptions in loans to non-financial corporations, which led to an annual rate of decline in these loans of –1.5%, down from –1.2% in September. The annual growth in MFI lending to households remained unchanged at 0.8% in October. To a large extent, subdued loan dynamics reflect the weak outlook for GDP, heightened risk aversion and the ongoing adjustment in the balance sheets of households and enterprises, all of which weigh on credit demand. Furthermore, in a number of euro area countries, capital constraints, risk perception and the segmentation of financial markets restrict credit supply. In order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential to continue strengthening the resilience of banks where needed. The soundness of banks’ balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of all funding channels. Decisive steps for establishing an integrated financial framework will help to accomplish this objective. A single supervisory mechanism (SSM) is one of the main building blocks.
Just as important, we want to generate ideas for how to better assess the effectiveness of supervisory activities. In a world of limited resources, how do we deploy our people and technology in the most effective way to limit disruption and distress at individual firms and to the financial system, while still fostering an efficient and innovative financial system? In considering these questions, a good starting point is to understand more fully what supervisors do and how they do it in the current environment. The papers that are being presented here today are largely aimed at achieving this goal. As described in the first paper – “Supervising Large, Complex Financial Institutions: What do Supervisors Do?” – bank supervision has long been an integral component of the Federal Reserve’s  1  Beverly Hirtle, David Lucca and Joseph Tracy assisted in preparing these remarks. BIS central bankers’ speeches  1  responsibilities. At a broad level, Federal Reserve supervision of large financial institutions is guided by two key objectives: “enhancing the resiliency of a firm to lower the probability of its failure or inability to serve as a financial intermediary [and] reducing the impact on the financial system and the broader economy in the event of a firm’s failure or material weakness.” 2 In addressing these objectives, bank supervisors enforce laws and regulations, but there is much more to supervision than just enforcement.

While these evaluations form the core of the supervisory program for large, complex banking companies, they are far from the only important activities pursued by supervisors. Day-to-day oversight of individual firms is a critical complement to these cross-firm, horizontal evaluations. There are three key channels that generate insight on firms: 1) continuous monitoring through meetings with bank senior management, business line management, risk managers, auditors and others; 2) review and analysis of internal reports; and 3) independent analysis by supervisory teams. These insights guide supervisory assessments and supervisory actions for individual institutions, as well as contributing to the assessments made as part of CCAR, CLAR and other horizontal exercises. We have come a long way since the financial crisis, and the financial sector today is much more resilient as a result of the evolving supervisory framework. However, more work still lies ahead. A key challenge in assessing the effectiveness of supervision is that much of what supervisors do, by necessity, is confidential. This reliance on confidential information and confidential actions can make supervision seem mysterious to outsiders, which complicates the evaluation of what policies may be effective or ineffective. For example, if a bank fails, is this evidence of poor supervision, or instead evidence that even good supervision can’t prevent all bank failures? Improving our ability to do this diagnosis is critical. I am confident that today’s panels and paper discussions will help us move forward in this direction. Thank you for participating in this conference. BIS central bankers’ speeches  3
But I nevertheless believe that it illustrates the importance of formulating the authorities’ mandate and powers of authority wisely. It also shows that monetary policy and regulation are connected. Each regulation creates a form of “shadow interest rate”. So how can we avoid policy “drifting away” in this unfortunate manner? One possibility is to try to formulate the tasks of the central bank and the financial supervisory authority so that they make a unanimous assessment of what needs to be done. In the figure this would correspond to the green and red curves coinciding. If the curves lie exactly on top of one another, there will not be any interaction that leads to the two means of control being used too aggressively. Another possibility might be to give the central bank the responsibility for both tools – it is not possible to give the financial supervisory authority responsibility for monetary policy. In the figure, the adjustment would then come to a halt after the first interest rate cut. How close this is to the socially optimal point depends on how well the central bank’s loss function agrees with the socially optimal one. But it is almost certainly closer than the policy mix that results from the policies drifting away. A third possibility is that the central bank and the financial supervisory authority coordinate, or negotiate on the policy. It is not clear what this would result in, but it would in any case avoid the inferior policy mix in the alternative without any coordination.

As the saying goes: “two – or rather more – heads are better than one”. And in order to have something to “pool”, the people on the committee should not be too alike. If they all are cast in the same mould and think in the same way, one might just as well have one single policymaker. If there are so many different wills and ways of thinking, how can we actually manage to agree on a detailed, quantified forecast and an exactly determined repo rate path? Also here we can receive guidance from the survey I mentioned earlier. One question in the survey was whether the members had refrained from entering a reservation against one or more monetary policy decisions, despite considering that another decision than the majority view would have been better. Seven of the members, that is, more than half of them, replied that they had. The most important motivation given for this was that they said there was some “bargaining margin” in the repo rate decisions and that the decision reached was sufficiently close to what they would have advocated. In terms of the mean squared gap analysis, one could express this as the members actually preferring different dots, but given that the main scenario dot was sufficiently close to their own, they accepted the main scenario. I believe that this is a fairly important insight: The forecasts we present are often a compromise and an approximation.