samchain/econo-pairs-v1 huggingface dataset:
As I said, shocks of this type can raise the general price level and lead, as in these cases, to a transitory increase in the rate of inflation. But even if one disregards these price increases, inflation has risen. As we discussed in a number of Inflation Reports last year, this probably has a number of interacting explanations. One is that resource utilisation in the Swedish economy has probably been somewhat higher than envisaged earlier. This in turn no doubt explains why wage increases, particularly in domestic sectors, have been higher than expected. As this has been accompanied by weak productivity growth, mainly it seems for cyclical reasons, it has led to upward pressure on prices. A general contraction of profit shares in the economy as a whole has presumably helped to modify price increases in recent years. But this has also left firms with less room to “absorb” further additions to costs and weak underlying productivity growth. All this naturally raises questions about potential growth resource utilisation, inflationary pressure, competition in various markets and the workings of the economy. Resource utilisation higher than expected Ever since inflation expectations closed onto the target some time after the mid 1990s, a very important consideration for inflation forecasts and thereby for the formation of monetary policy has been resource utilisation. This indicator concerns the relationship between actual demand and what the economy is capable of producing in the longer run without price and wage increases accelerating.

Since last May, the risk of higher domestic inflation has been weighted into our decisions. Whereas the  BIS Review 19/2002  3  Swedish repo rate at the beginning of last year was lower than its counterparts in the euro area and the United States, it is now higher. Looking ahead, we have as usual not committed ourselves. What we do or refrain from doing with the repo rate will depend on the new information that becomes available and on how we assess and analyse it. What happened last year is a good illustration of the appropriateness of this approach. Neither positive nor negative surprises can be ruled out. We have to be ready to cope with that. That said, we have inflation that is relatively high, even though we count on it becoming a good deal lower in the coming six months. Resource utilisation is probably relatively high, too. The path of the interest rate will then depend – as long as inflation expectations remain in place – on how economic activity develops. If activity continues to strengthen as expected and there is no reason to reappraise the economy’s inflation propensity, it is reasonable to assume that the repo rate in Sweden will be adjusted successively upwards. This does not come as a surprise to participants in financial markets.
An economic or financial policymaker without credibility, history tells us, ceases to be a functioning policymaker. Removal of the veil, breaches of the social contract, leaves the economy and financial system vulnerable. There is no single measure, nor quick fix, for closing these twin deficits with the general public. The supply chain for secret sauce, of building and restoring trust and understanding, is long and arduous. Nonetheless, it seems clear that increased engagement between policymakers and wider society is a necessary ingredient for its manufacture. From other spheres, such as medicine, we know that trust and understanding are built on everyday engagement. For the Bank of England, with the scars of the financial crisis still healing, the case for continuing to build those foundations is strong. 2  Haldane (2017a). The RSA call these benefits improved “agency” among citizens. Tetlock and Gardner (2016). The RSA call these benefits improved “efficacy” of policymaking. Botsman (2017). 5 See, for example, the Edelman Trust Barometer. The RSA call these benefits improved “legitimacy” of policymaking. 3 4  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The Means  If the case is strong, how best is this citizen engagement to be achieved? The RSA report provides a nice framework for addressing this question. This is based on the “ladder of participation” model, devised 6  originally by Sherry Arnstein in the late 1960s. The rungs of the engagement ladder are, in ascending order: inform; consult; involve; collaborate; and empower.

6 The projected reduction in the workingage population will translate into slower economic growth and will, therefore, negatively impact tax revenues, at the same time as the fiscal burden of a larger population of elderly people increases. The Commission calculates that by 2015 the share of age-related spending in GDP is expected to reach 20.1 per cent, two percentage points up from 2007, mainly due to the increased cost of pensions and healthcare, and will continue to rise thereafter. The fiscal correction required to bridge the implied sustainability gap clearly cannot be achieved without a culture change regarding the welfare state. Put simply, it needs to be understood that you cannot give away what you do not have. We must, therefore, adopt a more cost-efficient approach to the provision of public goods and services, whereby only those demonstrably in need would benefit. Access to social benefits, healthcare and subsidies should be streamlined through a combination of means testing and market-based mechanisms. In addition, the benefits structure could be further refined beyond the recent Budget measures with a view to making work pay and reducing the disincentives to enter the labour market. Conclusion The Maltese economy is experiencing its first major test since it adopted the euro. While membership of the euro area has provided a degree of protection during the crisis, in particular exchange rate stability, the road ahead is still fraught with challenges.
Surveys of manufacturing and services firms rebounded significantly in June, following record lows in April and May, and revenues of small businesses in New York have gradually picked up as well.5 In contrast to these positive signs, we are seeing some indications of a slowing in the pace of recovery in states that are currently experiencing large-scale outbreaks. This is a valuable reminder that the economy's fate is inextricably linked to the path of the virus. A strong economic recovery depends on effective and sustained containment of COVID-19. Turning to the question of what the goals for recovery are: one measure of success is a return to the sustained growth and historically low unemployment that we had attained before the pandemic. I know this seems a long way from where we are today and may seem unreachable during these darkest days of the recession. But history teaches us that the economy can get back to full strength, even after deep downturns. Policy Responses The unique nature of this recession and the uncertainty that comes with it mean that the policy responses—public health, fiscal, and by the Fed—need to be designed to reflect the nature of the pandemic and the challenges it poses to the economy. Although I will focus on events in the United States, it is important to stress that this is a global health and economic crisis. Most other countries are facing similar challenges and are likewise engaged in a range of policy actions.

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Supervisory practices must be revamped so that supervision is also horizontal – looking broadly across banks, nonbanks, markets and geographies. This also means that regulatory standards need to be harmonized  BIS Review 14/2010  2  across different regions. Without harmonization, there will inevitably be a “race to the bottom” and regulatory arbitrage will be encouraged, rather than inhibited. Many steps are needed to make financial institutions and infrastructure more robust. For example, we need to strengthen bank capital requirements, improve liquidity buffers and make financial market infrastructures more resilient to shocks when individual firms get into trouble. In terms of capital requirements, many changes are needed, including global capital standards that put more emphasis on common equity, establish an overall leverage limit and better capture all of the sources of risk in the capital assessment process. Improved risk capture, for example, includes the trading accounts of banks. Some institutions had clearly not set aside adequate levels of capital given the risks that were embedded in their trading positions. It would also be very desirable to develop a mechanism to bolster the amount of common equity available to absorb losses in adverse economic environments. This might be done most efficiently by allowing the issuance of debt instruments that would automatically convert to common equity in stress environments, under certain pre-specified conditions. Such “contingent capital” instruments might have proven very helpful had they been in place before and during this crisis.

Second, we need to reduce the likelihood that systemically important institutions will come close to failure in the first place. This can be done by mandating higher capital requirements, improving the risk capture of those requirements and by requiring greater liquidity buffers for such firms. Although the raging crisis appears to be over, our work is not close to being complete. Making sure this work keeps moving forward and is coordinated internationally is hugely important. Differences in views across countries and regions should not divert the international community from the more important prize – taking the actions collectively that will ensure a robust and resilient financial system. BIS Review 14/2010  4
One example is when the Japanese central bank committed itself during a deflation crisis to keeping the policy rate at a low level during a certain period. For another example, see the press release from the Federal Reserve Board of Governors on 12 August 2003. 4  BIS Review 40/2007  levels we foresee two years ahead. And the focus should be on not only current interest rates, but also expectations of future interest rate changes 6 . …to market expectations… We left most of these problems behind us when we changed over in October 2005 to making forecasts based on market expectations of the future development of the policy rate. Compared with the assumption of an unchanged repo rate, market expectations normally provide a much more realistic forecast. This was one thing that made it easier to evaluate us. However, an assumption that the policy rate will develop in accordance with expectations in the financial markets has its disadvantages. This perhaps applies above all to the difficulties in communicating the interest rate path when market agents’ assessments differ substantially from those of the Riksbank. Another problem that could lead to a lack of clarity in communication is how market expectations of the development of the policy rate should actually be measured. It may be difficult to estimate and adjust for different premiums – the compensation for differences between securities with regard to the maturity, credit risk and degree of liquidity required by an investor. There are also different ways of doing it.

We are also aided by the fact that we are more reliant on traditional banking rather than the capital markets for our debt financing. Beyond the direct impact on banks, the general reduction in risk capital and financial deleveraging will be felt in Asia, through higher costs of capital. This is the downside that many companies and investors will have to confront. On the upside, this should further spur the efforts of Asian countries to make their own financial intermediation process more efficient. This can be done through a lowering of barriers to global capital and the building of channels to facilitate the growth of this capital. Global investors will increasingly look to Asia for investments as Asia remains an attractive area for growth in the long term. On the other hand, Asian companies will continue to require funds as they extend their global footprint. In this regard, lessons from the subprime crisis are timely. As Asian capital markets evolve, investors and risk managers alike will need to understand the innovations and the products as they develop. I believe that some key issues in the securitization markets will also have to be addressed, such as in origination standards. How investor confidence is restored will shape the ability of companies to tap capital market solutions in the near future. US recession and Asia’s growth story Let me now turn to the third issue, which is the impact of the US recession on Asia.
Sam Woods: Adapting to Solvency Speech by Mr Sam Woods, Executive Director of Insurance Supervision of the Bank of England, to the Association of British Insurers, London, 9 July 2015. *  *  *  It is a great pleasure to speak to you today. I plan to give another speech in a few months’ time, focussed on the history of insurance regulation and supervision here in the UK. But today I will talk about my immediate priority, which is getting Solvency II over the line for go-live on 1 January 2016. The industry has made a tremendous effort to make the transition a successful one. The circumstances have been difficult, with a delay to political agreement on important aspects of the new regime compressing the time that the industry has had to prepare. The delay has also added to the costs of implementation. However, the time has not been wasted and firms have used it to make important improvements to their Own Risk and Solvency Assessments, as well as their internal model applications. Today I want to make sure that investors and insurance firms understand the approach the Bank of England will take to capital under Solvency II.

We believe in the importance of this outreach effort not only because the public has a right to an informed participation in their financial dealings, but also because it is also an important part of our collective and combined efforts that will determine the success of our endeavours. Tuan-Tuan dan Puan-puan, Akhir sekali, saya ingin mengucapkan berbanyak-banyak terima kasih kepada Yang Amat Berhormat Perdana Menteri atas kesudian beliau melancarkan Bank Negara Malaysia LINK. Sekian, terima kasih. 2  BIS Review 12/2005
Its assessment of the Swiss approach was positive, considering it appropriate in an international comparison. 21 At the same time, the Federal Council concluded that further action was needed in relation to certain parameters. In particular, it stressed that, due to the special significance of ‘too big to fail’ in our country, Switzerland should be at the forefront when it comes to setting resilience requirements. Consequently, it prescribed an increase in capital requirements. These changes have been criticised in some quarters. Concerns were voiced that some of the adjustments were unreasonable and would put banks at a competitive disadvantage internationally. 22 How justified is this criticism? c) … and are designed to be cost-effective  All regulations inevitably meet with resistance because they create added costs for the regulated institutions. But it is often the only way to bring about the desired change in conduct. In any discussion of the costs of regulation, it is important to weigh the private costs incurred by those subject to the regulations against the costs to the economy as a whole. As long as the private costs are less than the macroeconomic benefit, then the regulations make economic sense. Yet such a cost/benefit analysis is complex and fraught with uncertainty. The literature is unambiguous on the macroeconomic costs and benefits of the post-crisis increase in capital requirements. 23 The benefits far exceed the costs involved. The benefits of the higher capital requirements are that they reduce the likelihood and the severity of a banking crisis.

The fact that we were obliged to burden the state and the taxpayers with an exposure worth billions to stabilise a big bank made a lasting impression on me. The lack of resilience in the banking system forced governments across the world to plough huge sums into bank bail-outs. It was the only way to protect their economies from the enormous damage that a banking system collapse would have wrought. The financial crisis demonstrated in no uncertain terms that the banking system was not sufficiently ‘weatherproof’. The financial crisis also showed clearly that particular risks stem from large, highly interconnected banks. Owing to their size and market position, such banks cannot exit the market without severe consequences for the banking system and the real economy. In industry jargon, they are ‘systemically important’. Thus, they enjoy an implicit guarantee that the state will intervene in an emergency. This form of market failure is now known the world over as the ‘too big to fail’ issue. In my speech today, I will be looking into this issue, one that is particularly relevant to Switzerland. I will start by discussing the causes and effects of ‘too big to fail’, and how it manifests itself in Switzerland, before moving on to the reasons why banking regulation before the crisis did not sufficiently address the risks posed by ‘too big to fail’ banks.
In an economy with a developed banking system such as ours, financing for the internationalisation of the Spanish economy is largely conditional on developments at the international level. The best policy for promoting the financing of the international expansion of our companies is to ensure the financial stability and soundness of the Spanish financial and banking system. 6  BIS central bankers’ speeches

We created the Tracker Fund in a little under 6 months, from the time the EFIL Board recommended on 21st June 1999 that this was the way to launch the disposal programme. We did this at a time when market sentiment in Asia was just beginning to become less negative. If this were not enough of a challenge, we also had the shadow of Y2K hanging over us! By some miracle or rather due to the sheer hard work, long hours and perseverance on the part of the project team, we overcame countless operational, IT, legal and regulatory challenges thrown at us. Just to add to the degree of difficulty, we had to work in the full glare of the public eye, knowing that any miscommunication (however slight) could have a severely negative effect not only on our stock market but also on the international perception of Hong Kong. I have to tell you that making the decision to use an ETF as the disposal strategy was not an easy one. The strategy was then unorthodox and unproven in Asia, as was the investment appetite for such a product. The investment banking community was perplexed that we should launch an ETF when a block trade or a convertible bond option was so much more “familiar” or “safer”. Our legal advisers were perplexed that we should launch a fund through an IPO.
That regional network has grown out of the Bank’s branches that were established in 1826 to deal with problems caused by the failure of local banknote-issuing banks. (The nearest branch to North Wales would have been in Liverpool, and like several of the sixteen branches which the Bank opened at that time it was located on land previously occupied by licensed premises - the old Queen’s Arms in Castle Street. Indeed the guiding principle seems to have been “If it works as a pub it will work as a bank”. The Licensed Victuallers Association has taken its revenge in recent decades, as old banks have been turned into pubs). Within the branches, the Bank appointed an Agent to liaise with local industry and commerce, and since 1930 they have been sending regular reports on their economies to Threadneedle Street. During the 1980s and 1990s, most of the branches were closed as different schemes for guaranteeing the supply of bank notes were established. But the Agents remained, and the network was extended to its current line-up of twelve - including a new Welsh Agency located in Cardiff, now run by Adrian Piper. Between them, the Agents are in regular contact with some 8000 firms. This provides the basis for the Agents’ monthly reports and presentations to the MPC; the Committee also commissions special surveys and asks for Agents’ help in understanding puzzles in the data. This information is currently published in summary form each quarter, alongside the Inflation Report.

Twenty-five years from now, I am confident that one of my successors will be able to look back and explain in his or her Mais Lecture the great improvements that took place between 2005 and 2030. But I like to think that the inflation target framework has the ability to serve us well over that period. Thirty years ago the theory of monetary policy was ahead of its practice, at least in the United Kingdom. Now I hope that the practice has given the theorists something to think about. Table 1: Inflation targeting countries Country New Zealand Chile Canada Israel U.K. Sweden Finland Australia Spain Czech Republic Korea Poland Mexico Brazil Colombia South Africa Thailand Iceland Norway Hungary Peru Philippines  Adoption of Inflation Targeting Dec. 1989 Jan. 1991 Feb. 1991 Jan. 1992 Oct. 1992 Jan. 1993 Feb. 1993 Mar. 1993 Jan. 1995 Apr. 1998 Apr. 1998 Oct. 1998 Jan. 1999 Jun. 1999 Sep. 1999 Feb. 2000 May 2000 Mar. 2001 Mar. 2001 July 2001 Jan. 2002 Jan. 2002  Source: Truman, Edwin (2003), Inflation Targeting in the World Economy, Institute for International Economics, Washington DC. The table not only includes current inflation targeting countries, but also Spain and Finland, which have since joined EMU.