samchain/econo-pairs-v1 huggingface dataset:
House prices in Norway have on average risen by 9 per cent annually between 1995 and 2002. House prices have also increased considerably in other countries. A sharp and sustained rise in house prices might contribute to high credit growth even after prices have levelled off. Since only a portion of the housing stock is sold each year, some dwellings will be sold at a higher price than when they were last sold for a long period. This has contributed to sustaining the high level of growth in credit to households in Norway even after the rise in house prices moderated through 2002 and into 2003. It is easiest to sell dwellings in the largest cities and some specific areas are particularly attractive. Residential property is now a fairly liquid and attractive investment. A persistently high rate of increase in house prices may in isolation engender expectations of a further rise and may thus prove to be selfreinforcing for a period. Moreover, there now seems to be a tendency towards investing in property and incurring loans at a more mature age so that younger generations not only inherit dwellings, but debt as well. Both debt and wealth are on the rise for these more mature age groups. Sharp increases in asset prices and debt accumulation may pose a risk to economic stability. With a view to mitigating this risk, it will be appropriate in some situations to apply a somewhat longer-thannormal time horizon than two years to attain the inflation target.

The impact of the interest rate decline on private consumption is likely to be stronger this year than in 2003. It takes time for changes in Norges Bank’s key rate to feed through fully to interest rates for households. Norges Bank’s calculations show that if we look at 2003 and 2004 as a whole, it appears that the impact of interest rate changes will result in an overall reduction of about NOK 15bn in household net interest expenses before tax. However, due to the increase in household net debt, net interest expenses will fall much less than this. The impact of the interest rate decline is also conditioned by the expected duration of the low interest rate level. When the sight deposit rate was reduced last autumn, longer interest rates showed relatively little change. The interest rate reductions in December and January, combined with the decline in inflation, have had a stronger impact on long-term interest rates. This indicates that financial market participants expect interest rates to remain low for a longer period. The fall in the value of the krone over the past year has strengthened Norwegian business and industry. With lower wage growth in Norway and a pick-up global activity, the prospects for Norwegian manufacturing and the business sector are brighter now than they were 12-18 months ago. The business sector is, however, still feeling the effects of a sharp rise in labour costs over a period of several years.
4.11.2019  Digitalisation and investment in intangible capital: the Spanish case within the EU Banco de España-European Investment Bank Pablo Hernández de Cos Governor  Ladies and gentlemen, Let me start by welcoming you to Banco de España for the conference Digitalisation and Investment in Intangible Capital: The Spanish Case within the EU, jointly organised with the European Investment Bank. For the Banco de España it is a great pleasure to collaborate with the European Investment Bank in co-organising a conference for the second time. Before going any further with my intervention, I would like to thank all of you for your attendance here today. The topic of this conference is very timely and appropriate. Digitalisation is a key development that is increasingly affecting all the sectors of the economy with the ability to significantly transform the functioning of companies and markets and the structure of the economy more generally. However, the final impact of digitalisation on various dimensions is highly uncertain. Digitalisation Digitalisation refers to the adoption of digital technologies such as big data, cloud computing, E-commerce, artificial intelligence, robotics, the Internet of Things and 3D printing. The impact of digitalisation on firms and the general economy comes through various factors. First, digitalisation reduces search, transportation and verification costs1. Second, it leads to increased automation of routine operations. Third, it enables new ways of organising production. Fourth, it may change the structure of the market, potentially affecting competitive pressures in some sectors.

The Foundation of Better Payments So while our research on a possible future CBDC will continue, we’re more excited by the opportunities to transform digital payments now. In particular, the combination of the Bank’s overhaul of RTGS and new technologies promises a world where payment systems can better meet societal demands for fully reliable, real-time, distributed peer-to-peer transactions. RTGS is already pretty awesome, settling over £ of payments in real time each day, while eliminating settlement risk and with an extremely high degree of resilience, all at a cost – to direct participants – of less than one ten millionth of the value of the average payment. But RTGS is also the same age as most of you and so we are renewing it. 30  What could this rather technical sounding development mean for you? More than you might think. 29  See Broadbent, B., (2016), “Central Banks and Digital Currencies”, a speech given at the LSE https://www.bankofengland.co.uk/speech/2016/central-banks-and-digital-currencies 30 See “A Blueprint for a new RTGS service for the United Kingdom”, May 2017. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  Currently when you pay for your burger and beer in the pub, or your books in Blackwell’s, you probably use a debit card, a credit card or digital wallet on your phone. These need to be routed through the card provider’s network.
Table 2 Economic growth and current account (annual change, percent) 2007  2008  2009 (f)  GDP National income  4.7 7.1  3.2 3.8  -0.75 to 0.25 -2.8  Domestic demand Gross fixed capital formation Total consumption Goods and services exports Goods and services imports  7.8 12.0 7.1 7.6 14.9  7.4 19.5 4.2 3.1 12.9  -4.7 -14.3 0.2 -1.7 -10.6  Current account (% of GDP)  4.4  -2.0  -1.8  (f) Projection. Source: Central Bank of Chile. BIS Review 65/2009  11  Figure 9 Effective inflation and inflationary outlook Inflation indicators  EES: Inflation expectations  (annual change, percent)  (annual change, percent)  10  10  8  8  6  6  4  4  2  2  0  0  -2  -2 01  02  03  04  05  06  07  08  7  7  6  6  5  5  4  4  3  3 2  2 02  09  CPI CPIX CPIX1 CPI minus foods and energy  03  04  05  06  Two years ahead  07  08  09  One year ahead  Sources: Central Bank of Chile and National Statistics Bureau (INE).

This is particularly visible in the components that are most sensitive to the cycle and to expectations, such as durable consumption, inventories, and gross fixed capital formation in machinery and equipment. The evolution of indicators of consumers and entrepreneurs’ expectations – IPEC and IMCE – despite a recent small rebound, shows levels below those seen in the few months leading to the crisis (Figure 7). The fall in domestic demand also responds, albeit to a lesser extent, to a cyclical adjustment component. Up to the third quarter of 2008, domestic demand grew at annual rates above 10  BIS Review 65/2009  3  percent during several quarters (Figure 8), driven primarily by investment and durable consumption. Output, meanwhile, was showing clearly lower growth rates, because a significant portion of the demand was deviating to imported goods. The worsening of the financial crisis in the developed markets only sped up and deepened this cyclical adjustment. The drop in domestic demand has been most visible in a fall in imports, limiting the extension of the current account deficit forecast for this year. Accordingly, the impulse of the world economy and the response of domestic demand to the worsened expectations and to the prevailing uncertainty will be negative this year, although partly offset by expansionary monetary and fiscal policies. Because of the connection between our economy’s prospects and the external environment, whatever judgment is made regarding the future pace of global recovery is crucial in the evaluation of our economy and its relevant external environment.
Hence the balance of financing sources will eventually have to shift. Policy makers have recognised the need for broader private sector participation. Long-term investors such as insurance companies, pension funds and sovereign wealth funds can be alternative sources of financing, as the life cycles of infrastructure assets match their long-term liabilities. However, these investors are not participating actively enough in the infrastructure space, especially in debt financing. I am sure we all recognise that there are many reasons including a lack of familiarity with the asset class and bespoke nature of infrastructure projects. Some see higher perceived political risks in Asia, and a limited range of investment instruments relating to infrastructure. To catalyse broader private sector participation to complement the traditional bank lending space, a few things could be considered. Firstly, we recognise that investors have varying risk appetites, and that the expertise to evaluate and undertake greenfield project risks still resides mainly with banks. Banks should therefore consider bringing in different types of capital at different stages as the risk profile of a project changes over time. For instance, transactions could be structured such that banks finance the construction stage of projects using their balance sheets, and the bank loan is then refinanced in the bond market post-construction. This way, institutional investors gain exposure to a steady stream of cash flows from operating projects, while banks can recycle capital to lend to new greenfield projects. There have been precedents in other parts of the world.

Financial stability is our common good, and we should also face a more subtle threat to it: debt complacency on a global level, in the context of accommodative monetary policies which will be less warranted in the near future. Global debt was already about 200% of world GDP before the crisis (2007), but is up to 220% today. Sound fiscal policies for public debt, responsible lending by financial actors for private debt and – if needed – macroprudential measures, should react against this debt complacency. 1/3  BIS central bankers' speeches  More broadly on multilateralism, we should continue to work together to preserve the world economic and trade order. We Europeans, shoulder-to-shoulder with Canada, Japan and others, must resolutely defend international economic relations based on commonly respected rules and multilateral institutions: we are all aware that an escalation of protectionist threats from the United States would dampen growth everywhere. The recent uncertainty is probably already having some negative effects on investment: you saw it in the British economy since the Brexit vote in 2016. And real tariffs would hurt more: according to most calculations including ours, a 10% increase in tariffs would diminish world trade by double digit figures, and decrease global GDP by more than 2%, starting in the United States. 2. The finance of tomorrow Let me now turn to my second point: the finance of tomorrow in an interconnected world.
The operational target of monetary policy shall be annual consumer price inflation of approximately 2.5 per cent over time. […]” Section 1 of the regulation states that in addition to sustaining the rate of inflation at approximately 2½ per cent over time, monetary policy shall also contribute to stable developments in output and employment. The mandate therefore establishes a flexible inflation target for monetary policy where variations in both output and employment are given emphasis. Since inflation is a monetary phenomenon over time, the level of the inflation target may be chosen by the authorities. A target for output, however, cannot be chosen in the same way. The economy grows over time. This is a result of positive productivity growth and population growth. The level of output that is consistent with stable inflation over time is discussed in economic theory as potential output. The level of potential output cannot be influenced by monetary policy. When the economy grows more rapidly than this level, inflationary pressures will build up in the economy. When the inflation rate becomes high and unstable, self-regulating mechanisms will tend to curb growth. Experience shows that periods of high inflation are followed by periods of contraction. Over time, it will be impossible to maintain output at a level that is higher than the potential output level. Monetary policy’s contribution to stabilising output will therefore be to curb fluctuations around the potential output level. The potential output level cannot, however, be observed. It is also difficult to capture changes in productivity and technology.

Given that the target of imminent euro adoption is gone, and the large euro zone nations do not provide real leadership on fiscal soundness, there is less incentive for some of the new member states to stick to the consolidation of their public finances from today’s deficits above 5 per cent of GDP. The consolidation plans are already too dependent on a continued upturn. Whether in the old or new member states, there is an additional problem, as we are entering a period of intensifying structural changes. Old industrial patterns in Europe are being changed when confronted with both the boost to productivity from IT, as partly realised since the late 1990s in the US, and globalisation and enlargement, all of which supports this process. These trends will eventually help productivity and growth in Europe to start to catch up with the US again. But in the short term the structural changes will lead to higher frictional unemployment as old industries are more rapidly replaced by new ones. In addition, the recent downturn never led to a dramatic increase in unemployment or decrease in employment in the euro area; hence, the upturn is probably also less likely to lead to rapid job creation. Both factors create new incentives for fiscal policy to focus more on short-term job creation schemes and less on long-term fiscal soundness. So from this perspective, too, the hope that the recovery alone will “fix” the European deficit problem might be too optimistic.
16  20  21  22  23  24  Figure 14 a) World: Forecasts contained in latest MP Reports (annual change, percent)  6  Mar.21 Mar.22  Jun.21 Jun.22  Sep.21 Sep.22  b) Actual and projected prices (*) (dollars per pound)  Dec.21 Dec.22  5  5 4 3 2 1  Copper Sep.22 MP Report Dec.22 MP Report  16 4  17  18  19  20  21  22  23  24  (dollars per barrel)  3.2 3 1.9  2  Oil MP Report Sep.22 MP Report Dec.22  125 100 75 50 25  16 17 18 19 20 21 22 23 24  (index)  1  160 140 120 100 80  0  22  23 (f)  (f) Forecast. Sources: Central Bank of Chile and Bloomberg. FAO index MP Report Sep.22 MP Report Dec.22  16 17 18 19 20 21 22 23 24 (*) Actual price figure is average of each year. Dotted lines denote the 2022-24 forecasts contained in respective MP Report. Sources: Central Bank of Chile and Bloomberg.

Particularly over the past two years we have made a number of changes and this has led to some debate. This often happens in times of change, particularly if it requires a learning process – for all those involved – before everything falls into place. And this is also the case with the changes in the Riksbank’s communication. It is therefore quite natural that some questions have arisen: Why has the Riksbank made these changes? Haven’t you made things unnecessarily complicated – tried to “fix something that isn’t broken”? Have you even gone too far in your openness? These are important questions that I shall try to answer here tonight. Giving the right information at the right time and in the right way is particularly important in times of unease. There has recently been unrest in the financial markets around the world. Sweden has not been affected by the market turbulence to the same extent as several other countries. I would nevertheless like to take the opportunity to say a few words about our views on what is happening right now and on the Riksbank's role in this context. But before I do so, I would first like to discuss the changes in our method of communication made over the past two years and the reasons behind them. What are the reasons behind the increased openness and clarity? Many consider that the Riksbank is currently one of the world’s most open central banks.
William C Dudley: Lessons learned from the financial crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Eighth Annual BIS Conference, Basel, 3 July 2009. *  *  *  In assessing the lessons of the past two years, I will focus on five broad themes that are interrelated: •  Interconnectedness of the financial system  •  System dynamics – How does the system respond to shocks? •  Incentives – Can we improve outcomes by changing incentives? •  Transparency  •  How should central banks respond to asset bubbles? As always, my views are my own and may not necessarily reflect those of the FOMC or the Federal Reserve System. Interconnectedness This financial crisis has exposed how important the interconnections are among the banking system, capital markets, and payment and settlement systems. Focus on only one part of the financial system can obscure vulnerabilities that may prove very important. For example, the disruption of the securitization markets caused by the poor performance of highly-rated debt securities, led to significant problems for major financial institutions. Banks had to take assets back on their books; backstop lines of credit were triggered; and banks could no longer securitize loans, increasing the pressure on their balance sheets. This reduced credit availability, which increased the downward pressure on economic activity, which caused asset values to decline further, increasing the degree of stress in the financial system.

I don’t have any great ideas on how to address this, but it is a problem that needs to be fixed. •  Collateral and haircuts. When volatility rises and that leads to increased haircuts, the result can be a vicious cycle of forced asset sales, higher volatility and still higher haircuts. •  Compensation tied to short-term revenue generation, rather than long-term profitability over the cycle. This causes risk-takers to take on too much risk because they are compensated on the upside. This extends the boom. Incentives Incentives may be very important in determining whether we have a system that is dampening rather than amplifying. I think bad outcomes are not just about bad luck, they are also about bad incentives. The problem with incentives may be due to faulty compensation schemes, poor risk management or the fact that participants do not bear the full costs of their actions. One problem that we had in the U.S. banking system over the past year was a reluctance of banks to raise sufficient capital to be able to withstand bad states of nature. They didn’t want to do this because this might unnecessarily dilute their shareholders. As a result, many banks did not hold sufficient capital and market participants knew this. This led to tighter financial and credit conditions, which made the bad state of the world more likely. This is an example of both bad incentives and an amplifying mechanism.
It is a European financial centre, and by providing competitive trading facilities in the euro London can help provide better facilities for business and industry across the whole single market and bring more business into Europe from the rest of the world. Opportunities in euro for market participants 29. I have talked so far principally about the steps the authorities are taking to help prepare the London markets for the euro. But of course, at the end of the day, the authorities can only facilitate: the real challenge in seizing the opportunities presented by the single currency has to be met by market participants themselves. Let me touch on three areas where the advent of the euro is likely to usher in significant changes -- but, I believe, positive changes, offering new business opportunities -- for financial market participants. 30. First, in the bond markets, monetary union will serve to unify the various national government bond markets of the EMU participants, and the already substantial ECU bond market, into a single market in a single currency with multiple national government issuers. Currency risk will be removed, at a stroke. This does not, of course, mean that all government bonds of the different national issuers will trade at the same price: differences will still remain in trading structures and liquidity, in perceptions of sovereign risk and the scale of supply by different governments, and in investors’ basic preferences.

The upgrade of CGO has been effected utilising CREST software -- deliberately, in order to align those two electronic settlement systems -- CGO for gilts, CREST for equities -- more closely. This was a considerable technical achievement, because the operating processes in the two markets are different -- equities settle on T+5, gilts on T+1 (and in some cases T+0); the equity market comprises a large number of relatively moderate-value deals, the gilt market a smaller number of much higher-value deals; hence delay in settlement in gilts is much more disruptive, and needs to be much less frequent, than in equities. Overcoming these differences has been a considerable challenge to the Bank team and I would like to pay tribute to their dedication and expertise and to their achievement in bringing the CGO upgrade to a successful and so far smooth launch just last week. I say this without immodesty because, though I was closely involved in overseeing the project, it was their technical proficiency that delivered the goods. 37. But this achievement has a wider significance. By utilising CREST software in CGO, we have now achieved for the market much of the benefit sought by those who favour a merger of the two systems. In particular, both utilise the same hardware, and the same software application; they operate on the same networks; and users can access both systems via a single terminal using a common gateway.