samchain/econo-pairs-v1 huggingface dataset:
Consequently, the young may not have access to the credit they need to even out consumption to the extent they would like. A pledge of assets—collateral—can help to solve this problem, since it can be claimed by the lender in the event of a loan default. For most households, the main form of wealth is human capital—the value of the wages that the household members can earn over the course of their lifetimes. But human capital cannot always be credibly pledged as collateral. For funding of educational investments, government intervention in the form of the federally-guaranteed student loan program helps address this problem. While private student loans exist, they typically require a co-signer with a strong credit record. Moreover, these borrowing sources are broadly restricted to education-related spending 1/5  BIS central bankers' speeches  only. The second most important asset on the balance sheet of many households is housing equity. So, in addition to being a source of shelter, housing can be a major form of collateral for borrowing for many households. In fact, for those households that have collateral available to secure loans, housing equity is by far the most important form of collateral. What this tells us is that the performance of the housing and mortgage markets are important to the retail business. When home prices are rising and housing equity can easily be converted into cash, we can expect to see relatively high levels of consumption, all else equal.

William C Dudley: Evolving consumer behavior Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the National Retail Federation Annual Convention, New York City, 17 January 2017. * * * Andrew Haughwout, Joseph Tracy and Wilbert van der Klaauw assisted in preparing these remarks. Good morning. It is a pleasure to have the opportunity to speak at this year’s gathering of the National Retail Federation. Retail activity plays a key role in the U.S. economy, with consumption comprising about two-thirds of total gross domestic product. As such, understanding what is happening in your sector is critical in assessing the economic outlook—and, with that, the outlook for employment, inflation and interest rates. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System This morning, I will be focusing on retail spending—an important element of household consumption. But, I will do so in a way that’s perhaps somewhat different from the usual approach, focusing in particular on the connections between housing and retail sales. I will argue that there have been some dramatic changes that have taken place in the way that households finance their consumption. I believe—and hope to convince you—that changes in the housing and mortgage markets have affected the willingness and ability of households to borrow, and that this, in turn, has had important consequences for the dynamics of consumption over the last decade.
But we cannot ignore the broader challenges. The fallout of this crisis and the near-term imperative to tackle energy security issues has reduced bandwidth to address other issues. This is a good segue to my third challenge. The third challenge is that it is difficult, but essential, for real economy and financial firms to make transition-driven business decisions in the absence of complete clarity on our pathway to net zero. It is easy for me to stand here and tell you that you should be making decisions now that stretch many years into the future, to manage the risks and seize the opportunities of net zero, without full clarity on the policy path to get there. But we need to recognise that setting clear and comprehensive policy will take time, likely years. The recent Green Finance Strategy takes us forward in a significant way, but the extent of policy making is formidable. We should also not be in any doubt that the transition is already building, creating opportunities and crystallising risks, and that its speed will only accelerate. Within the UK, policies on energy efficiency in buildings are driving changes now.4 And transition policies elsewhere such as the US Inflation Reduction Act will have on-shored impacts for the UK. So firms cannot, and should not, delay taking action to better understand how transition might impact their businesses. As I mentioned earlier, the CBES revealed a significant gap in the understanding of real economy firms on what the transition to net zero means for them.

Progress on climate related disclosures Third, in 2020, the quantity and quality of climate disclosures was in its infancy. We had recognised the need for it to move from the static to the strategic, for it to be forwardlooking and for it to be comparable across firms. Now, mandatory disclosures for large corporates under the TCFD are a reality in the UK, and are driving the right conversations around board tables. Here at the Bank we are soon to publish our fourth TCFD-aligned report, overcoming challenges with each new report. And internationally the ISSB is due to build on the work of the TCFD by publishing its first global standards on climate later this year – in a fraction of the time usually taken. I have very little doubt that in the future we will look back at the ISSB's work as a fundamental building block of comparable global green markets. The growth of green finance Fourth, we have seen and continue to see growth in the green finance market. The share of green finance in total finance has steadily increased, reflecting burgeoning investor demand and the financial system's ability to innovate.3 That poses new challenges, including greenwashing, and markets regulators like the FCA are responding accordingly. But it's not only green products we need to see growth in. More fundamentally, we need to see an increase in transition finance projects that help business deliver long-term emissions reductions – greening our future economy, not just investing in the currently green.
However, in view of the coincidence between this event and the ongoing saga, I will not do so today. Page | 5 Document Classification: Public

Chart 3: Consumer confidence and spending 10 Percentage change on 19Q4 5 Retail Sales (LHS) 0 -5  Headline Consumer Confidence (RHS)  Percentage point difference on 19Q4  Chart 4: UK Misery Index  10 5  Misery index  16  Forecast  14  0  12  -5  10  -10  -10  -15  -15  8 6 4  2022  2020  2018  2016  2014  2012  2010  2008  0  2006  -25  2004  -25  2  2002  -20  2000  -20  Sources: GfK/EC, ONS. Sources: ONS and Bank calculations  Notes: Headline consumer confidence is based on the  Notes: Index is summation of the unemployment rate and  average of five survey balances: general macroeconomic  inflation rate. Forecast is based on projections in Aug 2020  situation over the past 12 months and expectations for the  Monetary Policy Report. next 12  If the public do have an exaggerated sense of the risks they face, what might be its source? Psychological studies suggest it may reflect behavioural biases inherited from our hunter-gatherer past. Humans tend to over-estimate systematically risks that are systemic or existential to lives and livelihoods.4 This “dread risk” causes excessively cautious behaviour, sometimes with harmful side-effects – as when the exaggerated fear of flying after 9/11 caused more people to drive.5 These exaggerated risk perceptions are often amplified by others’ words and actions. Caution is contagious.
Interpreting movements in market rates is, however, complicated by the fact that other factors influencing yields have not been constant. First, the recent run of UK data has been unusually strong relative to market expectations. That should generate upward pressure on market interest rates as, other things equal, a reduction in the degree of monetary stimulus would indeed become appropriate sooner if growth turns out stronger than expected. Bank staff have constructed a time series for the news in the incoming data by calculating, for 14 different data series, the deviation of the outcome from the market’s expectations (as recorded by the median expectation of economists polled by Bloomberg), normalised by its standard deviation. An aggregate timeseries measure can then be obtained by taking an (unweighted) average across the most recent observations for each series. Chart 6 shows such a measure back to 2006, together with analogous series for the United States and the euro area. The series for the United Kingdom recently reached its highest level over this period, emphasising just how much upside news there has been here recently. Moreover, although both the United States and euro area have also generally seen upside news of late, it has been nowhere near as strong as in this country. Market interest rates should therefore have been expected to rise, and by more here than in the other two jurisdictions.

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I therefore wish to thank, from the outset, Celpay for organising this timely conference and to welcome most warmly our foreign participants who I’m sure will bring a rare insight to this conference with their own experiences. It is widely acknowledged that expanding access to financial services for Zambia’s unbanked population remains one of the biggest challenges confronting the financial sector in this country. Findings from the last FinScope Zambia Survey which was conducted in 2009 showed that 62.7% of Zambian adults still remained financially excluded compared to 66.3% reported in 2005. This slight increase in access to financial services, however, fails to match the significant increase in the number of banking and non-banking institutions which over the same period increased from 14 to the current 19 banks and to over 90 in the case of the nonbank sector. The mismatch in growth between the supply side and the demand tells us a story that the physical increase in the number of the traditional financial service providers does not necessarily translate into a corresponding increase in access to financial services among the population. I believe it is this mismatch that calls for the need to examine the role that the non traditional platforms, such the mobile phones, can play in enhancing greater access to financial services.

Emphasis on communication has also been boosted by central bankers becoming increasingly aware that effective communication facilitates the transmission of monetary policy decisions to the economy, thereby making their jobs easier. Nonetheless, the Eurosystem’s strategy has some differences when compared with the inflation targeting strategies. Let me focus my comments in this respect on two particular issues: the relevant horizon for policy and the role of macroeconomic forecasts in policymaking and in communication. The relevant horizon for policy Inflation targeting is often described as a framework where monetary policy responds to deviations between a conditional inflation forecast at a specific time horizon, typically of around two years, and the inflation objective. From a welfare perspective, however, focus on an ex-ante fixed horizon is problematic for a number of reasons. In particular, economic theory suggests that the relevant horizon for monetary policy depends in a significant way on the size and nature of shocks affecting the economy, as well as on the prevailing circumstances (i.e. the initial state of the economy). Moreover, taken at face value, this approach neglects the implications of policy for price stability at longer horizons. BIS Review 132/2007  3  In connection with this last point, a number of researchers (and notably research at the BIS 5 ) have been arguing quite convincingly that that short-term inflation control is not enough to prevent the emergence of imbalances, which may lead later on to costly episodes of macroeconomic instability.
In a recent article in the Financial Times, Mohamed El-Erian observes that: “Central bankers now operate in a world where monetary policy influences only a small part of the fluctuations in overall liquidity in the economy. Endogenous liquidity, or the extent to which the market itself expands and contracts liquidity, has taken over as the main driver.” 13 This may well be so but it is far from obvious why abundant liquidity, which is necessarily short-term, and low short-term interest rates should keep long-term rates very low over protracted periods of time. There might have been elements of both a saving glut and a liquidity glut in recent years. It seems fair to conclude, however, that in the global economy there is limited scope for the individual central bank to influence long-term real interest rates. In a Wicksellian sense this might be awkward. In a way we can argue that the root cause of these challenges to monetary policy is the global macroeconomic imbalances. While improved monetary policy and the globalisation process have contributed to lower inflation and lower output volatility, asset price and exchange rate volatility seem to have been unaffected. 14 In fact, some argue that with a credible nominal anchor and stable inflation expectations, low interest rates and hence higher liquidity first and foremost translate into higher asset prices – not higher inflation as measured in the conventional way. 15 Rapidly rising property prices and debt over long periods can be a source of future instability in the real economy.

As shown in Chart 3, 2008 stands out as one of the worst years in this period. Ten years ago, on 25 November 2008, Norges Bank presented the GPFG’s results for the third quarter. Lehman Brothers had gone bankrupt. The world’s central banks were making large and frequent cuts in policy rates. In the course of autumn 2008, the US stock exchange fell more than five percent on as many as ten separate days. Norges Bank wrote in its press release that “The third quarter of 2008 was an unusually demanding quarter for the management of the Government Pension Fund – Global.” And it was to get worse. The GPFG posted a return for 2008 of minus 23 percent, measured in terms of the fund’s currency basket. Chart 4: Post-crisis paths have differed Chart 4 shows developments in the US equity market from 2008 onwards. The rapid reversal in equity markets, shown in the chart, also affected the GPFG’s results. In 2009, the fund posted a positive return of 26 percent, largely thanks to a 34 percent return on the equity portfolio. The return continued to rise in 2010. While the fall in the fund’s value as a result of the financial crisis in 2008 was historically large, the fund’s recovery in 2009 was stronger and faster than had generally been expected. Owing to a weakened krone, the GPFG’s return was less negative in terms of NOK than in terms of the fund’s currency basket.
As part of this process, in 2021 and in accordance with the definitions of the General Banking Law, a policy framework was published by the Central Bank to implement the Countercyclical Capital Requirement. The CCyB is the main macroprudential policy tool under BCCh authority, and BCCh-CMF coordination. As applied, the objective of this bank capital requirement is to increase banks’ resilience in the face of severe stress scenarios, resulting from systemic risks, thus contributing to reduce the impact of these events on financial stability, avoiding restricting essential banking services, such as credit supply, hence protecting the economy. The BCCh has so far not activated this requirement. As indicated in our latest Financial Stability Report, the banking system shows resilience, with contained risks and high levels of provisions, liquidity and capital that constitute sufficient buffers to withstand severe stress scenarios. Moving forward, it is necessary to advance in the coordination processes between the Central Bank, the CMF, and the Financial Stability Council to consolidate over time the implementation of these new tools within a framework of macroprudential regulation that follows international guidelines. 14  As we continue to observe the experience of jurisdictions that started the implementation of Basel standards before we did, we believe that the challenging last 3 years will provide extremely valuable information regarding the effectiveness of capital and liquidity measures implemented by Basel III and international standards.

In our latest Financial Stability Report and Monetary Policy Report we conveyed clear messages, as to the need to prioritize initiatives that contribute to strengthening the functioning of the financial system and avoid those that could harm it. The Chilean economy is in the process of resolving macroeconomic imbalances and has the task of repairing the buffers that have allowed it to mitigate the impacts of external shocks in the past. For this reason, it is particularly important to prioritize those aimed at promoting savings, strengthening the resilience of financial systems, promoting innovation and financial inclusion. A properly regulated financial system contributes to financial stability and inclusion and is also critical to support economic development and the population’s well-being. 17
The United States regained strength in the second quarter, thanks to the good performance of private consumption and investment, and better expectations. In Latin America, the growth forecast has been lowered for this year and next in most countries, although with some heterogeneity. In China, government policies have managed to stabilize growth. Our baseline scenario assumes that our trading partners will grow an average 3.6 percent in 2014 and 2015, two tenths of a point less than foreseen in June (table 1). The baseline scenario assumes that the slowdown in the domestic economy will be more persistent than previously expected. Thus, as anticipated, the GDP growth forecast for this  BIS central bankers’ speeches  5  year is adjusted to between 1.75 and 2.25 percent, below the June estimate. In 2015, consistently with the low basis of comparison and limited economic dynamism, we expect GDP to grow between 3.0 and 4.0 percent annually. The recovery, though moderate, is based on a greater monetary stimulus and lower market interest rates; stronger fiscal stimulus; increased trading partners’ growth; a real depreciation of the peso; and improved private expectations. As already noted, for this projection, the Board assumes that the medium-term growth of the Chilean economy is between 4 and 4.5 percent. The domestic demand growth forecast for 2014 has also been corrected downward, particularly for investment. This change responds to actual second-quarter indicators that fell short of the forecast, and to the Capital Goods Corporation’s investment projects that were revised downward in the last survey.

We must not forget that copper, our main export, traded at nearly 4 dollars per pound for an extended period, and now it is closer to 3 dollars and may fall further in the long term. Moreover, during the last decade, coincidentally with higher prices and supply shortages, investments in mining have increased significantly around the world. BIS central bankers’ speeches  1  Chile was no exception. During the 1990s and early 2000s, mining investment averaged 2 to 3 points of the country’s GDP. Between 2006 and 2013, this figure rose to 5 points of GDP, peaking in 2012 at 6.5 percent of GDP. This phenomenon not only allowed the country to enlarge its mining capacity, but also created major productive linkages toward other sectors, including construction, trade, and manufacturing industries. The north of our country, especially cities such as Iquique, Antofagasta, and La Serena, has seen strong development and growth thanks to the positive impact of this phenomenon. However, this investment cycle, as has been noted on numerous occasions, has entered a matured stage, resulting in a decline in the number of projects under way. This is also true of other metal-exporting economies like Australia and Peru, although differing in intensity and timing, and is symptomatic of this phenomenon. However, the aforementioned maturation of the global cycle of copper investment is not the only reason behind the slowdown in mining investment.
Obtaining and retaining the staff resources capable of dealing with Year 2000 issues will be another increasingly difficult problem. There is a limited pool of skilled technical staff to make needed changes, and demands on this pool are growing as the time draws closer. In the short run, the ability to add to this pool significantly through training is limited. Qualified outside consultants already are heavily committed and will become even more scarce over time. Obtaining equipment on which to conduct tests also often requires significant lead time. All of this suggests that controlling the cost of Year 2000 projects will be a problem for many institutions as resource prices are bid up. Already, we have seen many institutions increase their Year 2000 budgets several times, and by significant amounts, as they develop their detailed plans. Security also is likely to be of increasing concern as we move forward. As time pressures mount, there is a risk that shortcuts will be taken. The checking of credentials for new staff or outside contractors or consultants may be rushed and less rigorous. Date-dependent security applications may be turned off to facilitate testing. In an industry like ours, with so much interconnectivity, any compromise of security simply cannot be tolerated. BIS Review 87/1997  -3-  Every financial institution needs its own comprehensive project plan to address the Year 2000 problem. In the United States, bank supervisors have suggested an approach that includes a number of phases.

About overall economy, a more sustainable development should be ensured, relating mainly to better control on trade deficit, supporting the sectors that actually contribute or may contribute to increasing exports in the country. Public authorities should strengthen their commitment to developing the non-bank financial market, which gradually leads to reduction of economic dependence on the banking sector condition and improves access to financing of a higher number of private entities. In this way, a greater opportunity would be provided to the financial system to finance projects in the agricultural sector, which has a high potential for ensuring competitive advantages in the Albanian economy. Allow me to conclude by emphasizing the Bank of Albania’s willingness to contribute, through its policies on monetary and financial stability, to maintaining a better climate of sound development of the financial and banking activity, as a condition for a greater financial support to business development in the country. I think that this forum will make a valuable contribution to setting some concrete development policies and projects, about which, I believe that the Black Sea Trade and Development Bank will offer its own support and expertise. Wishing success to the proceedings of this forum, I thank you for your attention! 2  BIS central bankers’ speeches