samchain/econo-pairs-v1 huggingface dataset:
But one can often nevertheless have some suspicion of what might happen, even if it may be difficult to quantify. My impression is that there are risks on the domestic side that are not conspicuous or visible yet but may build up. Although resource utilisation is low and unemployment is high at present, the labour market is constantly improving and we have had to revise our forecast for employment up several times. The shortage figures are also rising. The levels may not be alarming, but an upward trend is clear. And there is a clear risk that labour shortages may arise further ahead. During the previous economic upturn a labour shortage arose fairly early, despite relatively high unemployment, and it is easy to forget that the major theme before the crisis was the severe problems in obtaining skilled labour. Although structural reforms have been made, it is difficult to say how great an effect they will have, and at what range. If monetary policy is too expansionary for too long, and the wheels are allowed to spin too fast, this could create problems with bottlenecks, if not during the forecast period then immediately thereafter. Household borrowing is also a risk factor, and perhaps an even larger one, in the slightly longer run. A lower repo rate means there is a risk that the debt ratio will continue to build up from already high levels.

Niklaus Blattner: A look behind the scenes of system oversight Introductory remarks by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2004. *  *  *  It is the task of the Swiss National Bank (SNB) to contribute to the stability of the financial system. Implementation rests on three pillars: macroprudential oversight of the banking sector (Financial Stability Report), oversight of systemically important payment and securities settlement systems (system oversight) and crisis management measures. This is what I talked about at the last press conference. Today, I would like to give you a look behind the scenes of system oversight. Then I will turn to the regulatory environment, which we are also obliged to critically monitor and shape. System oversight: a look behind the scenes In the last few months, we had to define which payment and securities settlement systems are systemically important. Only these systems have to comply with the minimum requirements stipulated in the National Bank Ordinance. To be classed as systemically important, it is not sufficient that a system is significant to the national economy, ie we do not merely consider the number and volume of transactions settled through a system. Rather, we focus on whether the failure of a system jeopardises the economy’s supply of liquidity. This is the case particularly if participants in a flawed payment or securities settlement system have no other alternatives.
A recent paper by Michael Woodford 13 concluded that information from money and credit quantities could not add anything to spreads; and, what is more, that they were not as useful as spreads because the quantity effects of a tightening become apparent only with lags. The set up in Woodford’s paper does not, however, involve quantity rationing. When such rationing occurs, data on the quantity of lending and money may be more useful, even with a lag, than the shadow prices that cannot be observed! Of course, I absolutely do not want a reversion to oversimplified Monetary Conditions Indices, which set a trap for policymakers by ignoring the nature of the shocks that shift credit supply and other financial variables. But we do need to have a better quantitive understanding of how the equilibrium real rate (r star) shifts with shocks to the financial parts of the economy. For UK policymakers, overall, the sharp slowing in corporate and household credit and money growth signals that monetary conditions are quite tight. Tighter bank lending conditions will make it harder for households to maintain their spending during this testing period – when the rise in energy and food prices has squeezed disposable incomes; and when the savings rate was already low. Similarly, with less easy access to credit, it will be harder for firms to bridge to the expected recovery without cutting costs. On the whole, the corporate sector probably entered this episode with stronger balance sheets, leveraged buyouts aside, than the household sector.

In the modern literature, these risk premia are taken to be determined by how useful a financial asset is in helping households to smooth the path of their consumption. Assets that deliver low returns during bad times don’t contribute much to helping households sustain consumption, and so carry a higher risk premium. So risk premia might vary with the volatility of the asset return; the volatility of consumption; and with the correlation between asset returns and consumption. 16  See Dooley, M.P, Folkerts-Landau, D and Garber, P (2003), “An essay on the revised Bretton Woods System”, NBER Working Paper 9971. “System” is not quite the right word, because it is not the product of collective international thought and planning. 17  See Tucker, PMWT (2006) “Uncertainty, the implementation of monetary policy and the management of risk”, Bank of England Quarterly Bulletin 2006 Q2 pp 202-211. BIS Review 112/2008  9  Like other economic variables, such premia may change as their underlying determinants change, and given the nature of the “shocks” affecting the macroeconomy. All that is familiar, fairly orthodox stuff these days. Indeed, an extraordinary amount of work at the macro/financial frontier has been going on over recent years. But as John Cochrane has commented, “work has barely begun”. 18 From a policymakers’ perspective, that does seem to be the case.
Már Guðmundsson: Capital flows and fragmentation of the international financial system Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, in Session I in the conference “Fragmentation in the international financial system – can the global economy become one again?”, organised by the Central Bank of the Republic of Turkey and the Reinventing Bretton Woods Committee, Cappadocia, Turkey, 14 July 2012. *  *  *  For the most part, I will discuss some flaws in the international monetary and financial system(s) (IMFS) and in the European Union (EU) framework for cross-border banking and financial stability as they relate to both net capital flows and vulnerabilities in gross capital positions. My perspective on these issues is that of a policy-maker from a very small, open, and what used to be financially integrated economy, but it is also informed by the work I was involved in during my tenure at the Bank for International Settlements. The current international and monetary and financial system is in some sense a non-system, a hybrid of miscellaneous exchange rate regimes and diverse rules on cross-border capital flows and activities of financial institutions. This opens the door to country choices that, in the aggregate, cause and perpetuate global current account imbalances. This problem and its solution have been discussed extensively, and I will not dwell on that topic here.

Instead, I want to pose this question: Supposing that all countries had free capital movements, freely floating exchange rates, and first-rate macroeconomic policies aimed at internal balance, would everything then be fine, at both the national and global level? I think there are strong indications that it would not be. There are a few reasons for this. First of them is the tendency of exchange rates to move away from equilibrium values for extended periods, with sharp corrections at the end of the process and with excess volatility throughout. The research on this phenomenon is still ongoing, but there are strong indications a number of factors suggest that the process is related at least partly to how asset markets function and how expectations are formed, and would not disappear even if macroeconomic policies were perfect. There will be net capital flows associated with this process, as well as swings in current accounts and effects on domestic financial systems that can ultimately lead to serious financial instability. In a small, open, and increasingly financially integrated economy, the process runs as follows: Domestic interest rates at the longer end of the maturity spectrum tend to become more closely correlated with the global rate, or the rate of the largest trading partner, and less correlated with the domestic policy rate. This means that monetary transmission tends to go increasingly through the exchange rate channel, which is only a problem, however, if the exchange rate behaves badly. Unfortunately, there is copious evidence to suggest that it is a problem.
[12] The non-life sector would also see a material capital release. Some insurers strongly question whether our proposals do in fact loosen the regime overall in this way, and we will need to look at this carefully as the consultation closes. Part of this is about transitional arrangements, which we think we could come to in any discussions about implementation. But another important area of difference appears to be what assumptions should be made about how much longevity risk is re-insured off-shore into other jurisdictions in the future. [13] We have assumed that roughly half of longevity risk is off-shored in this way, consistent with the current stock on the balance sheets of the sector. Some insurers argue that we should assume something much higher, such as 90%. Although this is the current practice for some insurers for new business, in steady state we are not convinced that we should build a regime that bakes in such very high levels of off-shoring across the industry. Baking in such an approach sector-wide could create concentration risks around a few reinsurers and an excessive dependence on other countries’ regimes which are not designed with UK policyholders primarily in mind. Page 9  However, this debate on capital impacts is clearly an important one and we will study carefully the evidence and data which insurers provide in response to the consultation, in order to inform our view. Second, the current structure does not particularly incentivise insurers to invest in the sorts of productive assets the government wishes to encourage.

Stefan Ingves: The Riksbank and monetary policy Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the School of Business, Economics and Law, Göteborg University, Göteborg, 23 May 2006. *  *  *  Let me begin by thanking you for the invitation. It is always a pleasure to have the opportunity to come and talk about monetary policy and our work at the Riksbank - but I shall refrain from commenting on whether it is always a pleasure for the listeners. I hope that you will in any case get a picture of our view of the economy and inflation prospects and of our method of how we conduct monetary policy. I shall begin with a rough outline of what I intend to discuss in my speech and the main conclusions: First, I shall describe my view of the current monetary policy situation. A brief summary of my conclusions is: •  The upswing in the international economy appears to have been slightly stronger than we envisaged in the February Inflation Report. •  With regard to Sweden, the statistics received since the Inflation Report was published indicate that the economy has developed approximately in line with our assessment, although inflation temporarily rose more rapidly than anticipated as a result of developments in energy prices. •  Our earlier monetary policy considerations from February and April still apply to a large extent. Monetary policy will need to be less expansionary in future.
Various investment activity and business sentiment indicators show mixed dynamics. In particular, new (especially, export) order expectations in industry remain low. This reflects a slowdown in global economic growth, continuing global trade tensions and geopolitical risks. These are all restraining factors for our economy. Regarding the three-year forecast horizon, our expectations here have not changed overall since October. We expect that the GDP growth rate will gradually increase to 1.5–2.0% in 2020 and to 2–3% in 2022. Successful implementation of national projects should provide the largest contribution to the increase in growth rates. This will support internal demand while external conditions remain a factor of uncertainty in the forecast. As regards oil prices. Last week, the OPEC+ countries reached a deal to extend oil production cuts until the end of March 2020.As of now, we stick to a conservative assumption for oil prices in our forecast: their reduction to 55 US dollars per barrel in 2020 and to 50 US dollars per barrel in 2021 and further on. We will adjust this opinion depending on, among other factors, future changes in the OPEC+ agreements and global demand for energy commodities. As to the balance of payments, we have slightly adjusted some indicators for this year, taking into account the actual data available. Let me remind you that the current account balance will 2/3  BIS central bankers' speeches  gradually decrease over the forecast horizon remaining sustainably positive: approximately to 3% of GDP in 2020 and to 1–2% of GDP in 2021.

In the light of higher price and cost inflation in Norway than in other countries, it has been appropriate to maintain higher interest rates in Norway than in most comparable countries. Norges Bank increased the sight deposit rate - which is our key rate - by a total of 1½ percentage points last year. So far this year, the key rate has remained  1  2  The relationship between wage growth and price inflation was also discussed in the Annual Address in February this year. BIS Review 72/2001  unchanged. As a result, the difference between short-term rates in Norway and other countries has increased. The economic outlook The Bank last analysed the outlook for the Norwegian economy in the June 2001 Inflation Report. Price inflation is projected to fall to 2½ per cent by next year already. The risk picture is mixed. The Norwegian economy is still characterised by high capacity utilisation. The labour market is tight. There is a risk that domestic pressures may gradually translate into a stronger price impetus than we have projected. The consumer price index has risen by 2.7 per cent since July 2000. The consumer price index excluding the direct effects of changes in excise duties and energy prices (CPIXE) has risen by 2.6 per cent since July last year, as calculated by Norges Bank. Statistics Norway publishes a consumer price index excluding electricity prices and a consumer price index excluding energy prices. They have a broader definition of energy prices than we use in our calculations.
In 2015, the last year for which full information is available, the external sector posted a positive balance of 2.4% of GDP, a figure that might improve in 2016, despite the lower growth recorded in 2016 in world trade. The competitive gains have spurred firms’ investment and hiring decisions, which have also been boosted by the decline in borrowing costs since mid-2012, to which both the efforts to clean up and restructure our banking system and the ECB’s monetary policy have contributed. Job creation, observable since the onset of this expansionary phase, has been conducive to a pick-up in household confidence and income levels which, in turn, has driven the recovery in consumption spending. As a result, private domestic demand has become the main engine of the recovery, underpinned also by certain transitory factors, such as lower oil prices and the marginally expansionary stance of budgetary policy in the two-year period spanning 2015 and 2016. The fallout from the crisis and the challenges outstanding Yet it should be stressed that, after more than three years of growth, some of the main scars of the crisis remain present. The high unemployment and public debt levels and the heavy dependence on external financing are areas of vulnerability for our economy that should not be underestimated. For the euro area as a whole, the current environment remains one of moderate and fragile growth. In the current circumstances, the sustained recovery in activity, investment and employment in the euro area requires that other economic policies should complement monetary policy measures.

But I believe that today the risks are high because political repudiation – attributable in part to the crisis, but not only to the crisis – is on the agenda, and this was non-existent or insubstantial only a decade ago. For the first time since the signing of the European Union Treaty in 1992, political currents and popular movements have arisen in the EU openly contrary to the integration so far achieved and, of course, to potential further steps towards greater integration; contrary to European institutions and their current remits; and contrary to the continuity of the single currency. The announced departure by the United Kingdom, whatever its final form, is going to encourage these movements. In this situation, national governments, European Union authorities and legislators all have a responsibility to come up with the appropriate response and to pursue the reforms that may first contain misgivings and then restore support, relatively seamlessly, for the grand European Union project. To conclude, allow me to return to monetary policy and central bank action. As we approach the twentieth anniversary of the launching of the euro, we can have no doubts about the crucial importance of preserving and strengthening the Monetary Union and the single currency in order to sustain and give continuity to the European Union project. Many thanks, once more, to Fomento de Trabajo Nacional for this celebratory event and to all of you for your attention. . 7/7
This has been achieved by sales of large nonperforming and foreclosed asset portfolios, partly as a consequence of regulatory and supervisory pressure. These latest developments have occurred in a favourable macro-financial setting characterised by growing economic activity, falling unemployment and lower interest rates. This has boosted borrowers’ ability to repay their loans, driven up asset values and has also been compatible with substantial deleveraging in the non-financial private sector and with a major consolidation process in the banking sector. 7/13  Spanish banking system earnings are highly cyclical, essentially on account of business in Spain. Banks that are more exposed to business abroad were comparatively less hard hit by the crisis, as they were able to offset the losses on their Spanish business with earnings from their activities in other economies that were less adversely affected by cyclical patterns. Naturally, these international exposures also entail other risks. For example, banks with exposure to the United Kingdom could be affected by the possible negative impact of Brexit and the effects it may have on the UK economy. In addition, the problems facing certain emerging market economies, such as Turkey or Argentina, may affect banks that have exposure to those countries. However, despite these risks, international diversification of the banking business offers important advantages overall and especially, as was apparent in the last crisis, when it is focused on retail banking and is organised on a decentralised basis.

The natural resources sector reduced its annual growth rate by more than two points compared with the previous quarter, primarily related to lower mine production early in the quarter, but also to the significant drop in fishery. Sectors other than natural resources performed below trend in the second quarter. Growth was mainly driven by trade and construction, while other areas linked to investment slowed. Installed capacity utilization has declined accordingly. Domestic demand slowed down further in the second quarter. Final demand, however, which excludes inventories, continued to grow at the same pace of the first quarter. Gross fixed capital formation posted y-o-y expansion flat from the first quarter of this year, but below the figures of the second half of 2012. As has been noted before, this slowdown owes mainly to the maturing of mining investments after three years largely outperforming GDP. Also in an external context where the copper price has dropped and moderating expectations for growth around the world but especially in China, which call for more caution when evaluating investment decisions. On the other hand, private consumption was more dynamic, especially in its non-durable component, while durables remained high. Labor market conditions have continued to tighten, but are still the main driver of this component. Nominal and real wages have moderated their annual variation, while the unemployment rate remains near all-time lows. Again, unlike previous cycles, credit growth has accompanied private income, but has not been the main determinant of household spending.
Dimitar Bogov: Improving education and access for children and youth to financial services Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the 3rd Annual Regional Meeting for Europe and Central Asia (ECA), Skopje, 2–3 October 2014. *  *  *  Dear Ministers, Esteemed guests, Dear ladies and gentlemen, It is my honor and privilege to welcome you all here in Skopje, Macedonia to this important event for the region of Europe and Central Asia. The aim of this meeting is to gather together in one place the regional leading policy-makers, financial institutions and experts that are engaged in the issues of children and youth access to financial services, financial inclusion and financial education, employability and entrepreneurship opportunities, to share success stories and challenges. There has been some progress made in these fields because of the existence of international movements such as Child and Youth Finance International that are keen to develop a generation that will be better prepared to prevent future financial crisis by increasing the financial education, access to finance, employability and entrepreneurship skills of children and youth. On a global level, significant progress has been achieved in advancing the mentioned priorities. Important steps have already been made in the area of improving access to financial services in the previous years. Access needs to be complemented by the quality of the financial services. The quality of financial services and the participation in the financial system is equally important for all participants in the system.

In the case of Albania, as in many other developing countries, remittances enter the country by either formal or informal means. The most recent surveys show that only 22.6 percent of emigrants prefer to use official means, whereas 77.4 percent turn to unofficial channels – in most cases by themselves. The official network includes the commercial banks and money transfer companies, the activity of which is regulated and supervised by BoA. Money transfer companies (Western Union and Money Gram) have played a significant role in transferring remittances from the beginning of their activity in the 90s. Their wide geographical extension throughout the country covering also many rural areas has complemented adequately the rather slow expansion of the banking sector in facilitating money transfers. Lately, the official network has gained considerable grounds over the informal ways in terms of total transfers carried out. The volume of remittances channelled via official means in 2004 is estimated to have been around 46 percent of the total, as opposed to just 12 percent - the average for the period 1994-1996. It seems the official network has earned Albanian emigrants’ trust for transferring their money. The development of the financial system in Albania it’s a key factor in explaining the movement of transfers toward official means. Thus, only during 2004, there have been 30 new branches and banking agencies opened throughout the country. Nevertheless, the unofficial flows remain still high, accounting for more than half of the total volume.