samchain/econo-pairs-v1 huggingface dataset:
In March this year, inflation rose to 3.1% and I wrote an open letter to the then Chancellor explaining why and what we were doing about it. Over the past 12 months, we have raised Bank Rate by one percentage point. And, notwithstanding some claims at the time of the open letter, inflation has since fallen back quite sharply, mainly as retail gas and electricity prices have stopped rising and, more recently, fallen. CPI inflation was, in August, a fraction below the 2% target. The challenge now for the Monetary Policy Committee is to keep it there. The current turmoil in financial markets is not over. Conditions have eased a little – share prices have recovered and interbank interest rates have fallen back. Indeed, spreads between interbank rates and anticipated central bank interest rates are now lower in the UK than in the euro area or United States. But for the moment, some markets remain virtually closed. And even as they re-open, there will not be a return, I hope, to the excessive risktaking – and associated rapid expansion of credit – of the past few years. With investors more wary of risks, banks will find it harder to raise funds. So credit will not be so readily or cheaply available to businesses and households. As we said in August, pressures on capacity mean that output growth needs to slow moderately over the next year or so if we are to continue to meet the inflation target.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Northern Ireland Chamber of Commerce and Industry, Belfast, 9 October 2007. *  *  *  Three weeks ago, thousands of depositors queued on the streets outside branches of Northern Rock to take their money out. Those scenes, broadcast around the world, were shocking. How did they come about and how can we prevent them in future? My focus tonight will be on why the incentives facing banks, investors, and depositors led them to behave as they did. Most of what happened can be understood in terms of those incentives. And, if we are to create a structure for our banking system so that such scenes are not repeated, we must ensure that the temporary measures put in place in recent weeks evolve into permanent reforms in the coming months. But I want to start with the story of how these events came about. It begins in the international capital markets. One of the most remarkable changes in the world economy over the past decade has been the fall in interest rates. Some of that stems from the fall in inflation as central banks have regained control after the Great Inflation of the 1970s and 1980s. But even adjusting for inflation, low-risk borrowers have been able to borrow on world capital markets at very low rates. In the UK, the yields on 10-year inflation-protected government bonds have, in the past year, been close to 1%.
ECONOMIC PERSPECTIVES Address by Governor Øystein Olsen to the Supervisory Council of Norges Bank and invited guests on Thursday 13 February 2020  THURSDAY 13 FEBRUARY 2020  Economic perspectives 2020  NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  FROM OIL AND GAS TO FINANCIAL CAPITAL “We are now moving into the final phase of a period where domestic raw materials and energy sources have provided an essential basis for economic expansion. Hereafter, growth must increasingly rely on the production of finished goods in areas where we do not have a natural advantage.”1 The same could be said about the challenges facing the Norwegian economy today. But this quote is from 50 years ago – from the annual address by central bank governor Erik Brofoss on 16 February 1970. The 50th anniversary of the first oil discovery on the Ekofisk field was commemorated in October last year. Aptly enough, this took place on the same day as the Government Pension Fund Global (GPFG) topped NOK 10 000 billion. In the governor’s address on the economic situation, there was no mention of what was to become Norway’s main revenue source over the next half-century. In hindsight, it can be said that what was to be his last annual address may not have been the most prescient. To be sure, it was still highly uncertain at that time how much oil and gas were actually hidden under the ocean floor 320 kilometres southwest of Stavanger.

Perhaps the ability to pay high wages has been more dependent on the oil industry than thought earlier. Going forward, the key to success for Norway will be the same as for other countries: We must make the most of our number one resource - labour. The value of Norway’s human capital is around three times the sum of its natural resources, production capital and financial capital.7 Our future welfare level therefore depends on how many are in work and how productive they are. Employment in Norway is no longer as high as it once was. Today, a smaller share of the population aged between 25 and 54 is employed than 20 years ago (Chart 17), and the share is now higher in a number of countries, not least because female employment abroad has also risen. At the same time, the share of adult men in work in Norway has fallen. 7 See Meld. St. 29 (2016-2017), Long-term perspectives for the Norwegian economy 2017. 16  NORGES BANK  Chart 17a No longer at the top of the employment chart. Employment. Share of population aged 25-54.
As regards information technology, we are well to the fore, although it is first recently that statistics indicate some increase in productivity growth. Expectations for a continued strong increase in productivity in the USA have also been a basis for the strong rise on the American stock exchange. The high share prices and the positive expectations have stimulated demand and the debt ratio in the private sector has increased. It is not possible to write off the risk of financial imbalances being built up in the USA, which risks having negative effects on the macroeconomy. However, many analysts consider that the long-term growth rate has in fact increased in the American economy and that the expectations that have served as the basis for investments and increased indebtedness will therefore be realised. Even if there are some indications that point to the Swedish economy undergoing a similar development to the American, the structural differences cannot be disregarded, which probably create greater inertia in the Swedish economy than in the USA. The labour market is one such area. As I mentioned earlier, considerable barriers to competition also remain in the Swedish economy. Another difference is that the cyclical upswing we are now experiencing is taking place at the same time as growth is increasing in the surrounding world and resource use is increasing. The American upswing could benefit from a surrounding world with a lot of free resources and low price pressure and with few competing investment alternatives for international investors. Should monetary policy counteract financial imbalances?

How shall monetary policy be designed if there is a risk for exaggerated indebtedness and overheating? A decision-making rule the Riksbank sometimes uses to motivate its monetary policy decisions can in simple terms be described as follows: when inflation exceeds the target in a one-to-two year horizon, then the interest rate is increased. Interest rate increases reduce the demand for goods and services, which in turn reduces inflationary pressure. In our simple conceptual framework, inflationary pressure is then assumed to vary with the use of resources in the economy. When there is free capacity, inflationary pressure is low in the absence of so-called shocks. When demand is so high that it exceeds the level that is compatible with the long-term production path, inflation tends instead to exceed the target. The line of reasoning is based on inflationary expectations being established close to the target for monetary policy. Price increases when demand is strong may for instance depend on bottlenecks being created in some part of the production chain. As the company in this situation, cannot improve its profits by increasing its volume of sales, profit margins are increased by price increases. Shortage of labour also increases the risk for excessively high wage increases. The result will be higher inflation. If we strictly apply such a simple rule for decision-making, we shall then disregard the risk of building up of financial imbalances and overheating as long as inflation is not deemed to exceed the target during the forecast period.
However, regarding loans for housing, policy tools such as Loanto-Value or Debt-Service-to-Income (LTV or DSTI) ratios, need to be part of the macroprudential toolkit in order to effectively reign on or, at least, influence real estate asset prices, as these are among the most important drivers of the financial cycle. The announced revision of the CRDIV/CRR should provide an opportunity for the extension of the available instruments, as LTVs and DSTIs are not included in the current EU regulation. Clearly, measures addressing the credit supply side by banks – such as increased capital requirements, counter-cyclical capital buffers or dynamic provisioning – can be easy to activate but have proven to be of modest effectiveness. Furthermore, as non-banks play an increasingly important role in the provision of credit, measures targeting only the banks could just result in shadow-banks taking a considerable size of the mortgage business and fuelling a boom in house-prices. Fourth, stress tests of the banking and financial system must have a macroprudential dimension. Such comprehensive assessments need to be embedded in a macro-financial environment. They entail an assessment of the position of a specific economy in the financial cycle since, for example, the adequate level of capital requirements cannot be dissociated from a country’s position on the cycle. Fifth, macroprudential policy is complementary to monetary policy and should share the same status as a policy area. Central banks must have responsibilities in both policy areas even if they are not involved in microprudential supervision. Several reasons justify this set-up.

See also Ampudia, M., H. van Vlokhoven and D. Żochowski, (2016), “Financial fragility of euro area households”, Journal of Financial Stability, forthcoming; see also: ECB Working Paper Series No. 1737. 17  For details, see the Household Finance and Consumption Network webpage, https://www.ecb.europa.eu/pub/economic-research/research-networks/html/researcher_hfcn.en.html. 6  BIS central bankers’ speeches  remarks. Since March this year, the ECB started publishing a Macroprudential Bulletin 18 that will inform about the analytical work being done, the policy decisions adopted and assessed, as well as analysis of relevant regulatory developments. This will further contribute to enhance transparency in our assessments. We look forward to maintaining a lively dialogue with the community of people in official institutions, in the financial sector and in academia who are interested in the new important field of macroprudential policy. Thank you for your attention. This is the full text of a speech delivered in abridged form at the ECB on 26 April. 18  ECB Macroprudential Bulletin, (2016), Issue 1: http://www.ecb.europa.eu/pub/pdf/other/ecbmpbu201603.en.pdf?f584ec27e20fd378bdca2d6f68d5d7b9. BIS central bankers’ speeches  7
These are the best contributions the Bank of England can make to the good of the people of the United Kingdom. **************************** Ultimately, the prosperity of the UK will reflect not just the final Brexit arrangements but also the government’s fiscal and structural policies. The first speaker at this conference is the best placed to address these topics. It could, however, have been very different. As some of you may know, the Prime Minister began her career as a new graduate at the Bank before leaving after six years to pursue other interests – ultimately politics. Whilst at the Bank, the Prime Minister worked in the Economic Intelligence Department – then the cutting edge of our activities. During her time she accomplished great things and was destined for much more. Just imagine what could have become of your career, Prime Minister, if you had stayed at the Bank: you could have been in Fishmongers Hall…  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Instead you came here by a road less travelled. Theresa May was elected as MP for Maidenhead in 1997, just as the Bank was getting to grips with its newfound monetary policy independence. She held a number of positions in the shadow cabinets of a string of opposition leaders and served as the Chair of the Conservative Party. After the formation of the coalition government in 2010, she would become the longestserving Home Secretary in over 60 years.

The final destination of these transformative efforts, however, will always remain the same – the building, preserving and strengthening of trust between adviser and consumer. That said, I would next like to share and elaborate on what I believe are three core features of a trusted adviser – professionalism, independence and adaptability. Elevating professionalism Professionalism is first and foremost about being customer-centric. Nurturing strong relationships with customers is key. Technology can be leveraged. Digital interfaces can help provide a more seamless customer experience. Big data may yield insights for anticipating customer needs. However, technology is ultimately only an enabler. It should seek to amplify the human touch, not diminish it. In the business of trust, no algorithm can replace a smile, a handshake or a chat over coffee. Professionalism is also about competence. Being qualified is a starting point. But to remain relevant, it is important that financial advisers continuously strive to keep up with the latest developments. In this regard, continuous professional development is critical. Learning events such as today’s conference are certainly useful and I would like to congratulate the Association for organizing these learning events. In addition, professionalism is about character – it embodies the highest standards of integrity, ethics and responsible conduct. This is what I believe differentiates a trusted adviser from a merely reliable one. One way of achieving this is by holding financial advisers accountable to a strong code of ethics.
The ECB is monitoring developments in this area, and I believe that providing clear guidance on this issue is pivotal to improving the confidence in and the comparability of banks’ financial statements. Finally, another area where good progress has been made under the impulse of the FSF concerns the role of credit rating agencies, which is being clarified thanks to new regulation by the SEC and the revision of the IOSCO Code of Conduct. At the same time, in Europe, the European Commission will engage in regulatory initiatives for the credit rating agencies’ authorisation and supervision. Let me now focus on three issues which I believe are especially important in the current context and for which transatlantic cooperation between central banks and financial regulators is warranted, namely risk management, procyclicality and financial stability arrangements. With regard to risk management, it has become clear that the current situation in the financial markets originated for the large part in excessive risk-taking and leverage by financial institutions. A key explanation for this behaviour lies in banks’ risk management systems, which did not appropriately price risks, resulting in the creation of capital and liquidity buffers that (in many cases) proved insufficient to insulate them from the dislocation in the financial markets. Furthermore, liquidity risk did not receive enough attention in banks’ overall risk management. Strengthening risk management techniques and procedures is key in the current context.

These measures, which reflect the increasing intermediation role assumed by the Eurosystem during this period of turbulence, have contributed to the stabilisation of conditions in the euro money market, to containing the volatility in the very short-term rates,  2  BIS Review 123/2008  especially in the overnight rate as measured through the so-called EONIA, and to limiting somewhat the volatility in the three-month Euribor, even if the behaviour of the money market remained extremely tense, as was also the case in New York. Cooperation between central banks in the field of monetary policy It is important to recall that as the financial market turbulence developed , central banks strengthened the already remarkable levels of cooperation, first, through enhanced information exchange and collective monitoring of market developments and, later on, through coordinated steps to provide liquidity. Since December 2007, the ECB, in cooperation with the US Federal Reserve System and the Swiss National Bank, has been conducting term auction facilities – so-called TAF operations – in which it provides USD liquidity on behalf of the US Fed to euro area banks against ECB eligible collateral. These operations do not have a direct impact on euro liquidity conditions and are aimed at improving global funding conditions. In this respect I would like to stress that to my knowledge this was the first joint action of that kind ever taken by central banks to relieve pressures in the short term funding markets.
In fact, now standing at 5.9 percent, the unemployment rate has fallen about 4 percentage points from its high – and a full percentage point over the last year. Other measures of labor market health also suggest significant improvements: Notably, layoff rates are low and job opening rates are back to their prerecession levels. But we still aren’t back to full labor market health. At 5.9 percent, the unemployment rate remains above what most people think of as its long-run neutral level. For example, according to the central tendency in the FOMC’s latest Summary of Economic Projections, 1 the estimate of the neutral unemployment rate is between 5-1/4 to 5-1/2 percent, with my own judgment at the bottom of this range. This leaves a significant gap between our goal and current conditions. Moreover, the labor force participation rate has dropped a good deal. Most of the decline in labor force participation since 2000 is due to demographic trends, such as baby boomers moving into retirement age, and long-running trends, such as reductions in male and teenage labor force participation. These trends are structural in nature, and monetary policy is not the appropriate policy tool to address them. Nonetheless, the labor force participation rate has fallen somewhat more than what would be expected given these structural trends. And it is  1  2  Federal Open Market Committee (2014). BIS central bankers’ speeches  also lower than what would be expected from its historical relationship with the unemployment rate.

I look forward to comments from Robert and Catherine and the audience. Thank you once again for having me here today. 3/3  BIS central bankers' speeches
In view of the high success penetration rate of bancassurance service providers and the fact that bank backed insurance companies have ready pool of the banking customers within the group to tap, they should seriously explore the bancassurance route to exploit the effectiveness of bancassurance to gain new market share. Ladies and Gentlemen, I am confident that the commitment of Axa Affin's foreign partner to introduce its best practices in Malaysia and its strategy to "Think Global Act Local" in terms of product innovation, operational and distribution strategy will go a long way towards ensuring the success of this new business venture, founded on the sound relationship they have nurtured via the general insurance entity, i.e. Axa Affin Assurance Berhad. This would also contribute to the development of the industry through the transfer of expertise, providing leadership in innovation and expanding the range of quality products and services available to Malaysian consumers. Having such strategic partnerships which allows equity participation from international players of up to 49% under BNM new liberalized operating environment would enable insurers to leverage on the experience and financial capabilities of the foreign partner and this would allow them to grow in size. They would also have the capacity to improve their competitiveness and enter into foreign markets, taking more complex risks and expand their product portfolio more significantly.

BIS Review 11/2007  1  Ladies and Gentlemen, On the regulatory front, allow me to share with you what the future holds for the regulatory developments that would predominantly shape the future direction of the life insurance industry. The Bank's future regulatory orientation will be characterized by a heightened focus on, and alignment, with risk; anticipatory, rather than reactionary interventions; a clear goal to promote efficiency, innovation and competition by ensuring that regulation is proportionate in relation to its costs and benefits; greater use of incentive approaches to achieve desired institutional behaviours and outcomes; an expanded regulatory toolkit that leverages more extensively on the inherent checks and balances built into the system; and an increased focus on market conduct and harnessing active consumerism to reinforce prudential regulation and supervision. In this regard, I wish to emphasise that in the course of designing any regulatory framework, the Bank will continue to involve all stakeholders particularly the industry for better appreciation of new policies introduced. The insurance industry is expected to continue its positive growth momentum in the near term. Growth in the life sector should continue to receive support from the encouraging demand for savings and investment-driven products such as endowment and investment-linked insurance. The increasing awareness among the consumers of the importance of risk protection, relatively low penetration level and large mortality protection gap also underpin strong future growth opportunities for life insurers in the more traditional risk product lines such as term (including credit-related term) insurance.