samchain/econo-pairs-v1 huggingface dataset:
For instance, the purchasing managers index for the manufacturing sector rose in both the euro area and Japan in October. Recent statistics thus indicate that international economic activity remains strong and that developments are largely in line with the assessment made in the Inflation Report. This also means that there may be less reason for concern over international developments than has sometimes been the case in recent years,” continued Mr Heikensten. ”With regard to the Swedish economy, we observed in October that economic activity had accelerated again after the slowdown at the beginning of the year. Exports were expected to show strong growth. The investment upturn that began last year was expected to continue, but gradually enter a calmer phase. Private consumption was also expected to rise more rapidly given, for example, a good growth in real wages, expansionary fiscal policy and a gradual increase in employment. All in all, we foresaw a fairly good growth rate and a normal economic cycle, where domestic demand would become more of a driving force. Given this background, we were assuming there would be a turnaround for the better in the labour market," said Mr Heikensten. "New data also largely confirm the earlier picture with regard to economic activity in Sweden. The most recent business tendency survey paints a bright picture of the situation in most sectors included in the survey, and foreign trade statistics indicate stronger growth in exports.

Mainland fixed investment has gradually become an important driving force behind the upturn. Investment has picked up in most industries and growth was stronger than expected towards the end of 2004. Norges Bank’s regional network has registered rising investment in all industries. Petroleum investment in particular appears to be growing at a faster pace than projected. This may continue to boost mainland output. High wage growth in Norway relative to other countries and a periodically high krone have weakened the profitability of Norwegian export companies and dampened export growth. Growth in traditional exports has nevertheless picked up in the past two years. Prices for many of our main export goods have risen as a result of strong growth in new markets. However, growth in Norway’s total exports, excluding oil and gas, is lower than import growth among our trading partners. The fall in interest rates has pushed up house prices. Turnover in the housing market has been high. High resale home prices have made it more profitable to build new homes, and residential construction is rising. Higher housing wealth provides increased borrowing opportunities and thereby also boosts demand for consumer durables. Household debt has risen by around 11 per cent over the past year. Credit demand in the enterprise sector remains low. Despite the strong upturn in the mainland economy, the rise in the number of employed has been fairly modest. Productivity rose sharply in the first few quarters after economic growth picked up. Normally, strong productivity growth is gradually followed by an increase in employment.
Chart 3b uses slightly different measures for the same things – the average policy vote on the MPC and a survey measure of growth6 – but the conclusion is the same. Policy is tightened when growth is strong and loosened when it’s weak. It’s no surprise to find that the government balance is similarly cyclical (3c) – or, therefore, that it’s also well correlated with the behaviour of monetary policy. Furthermore, the responsiveness of policy rates to economic growth seems to be necessary to stabilise inflation. Certainly inflation has been very stable under inflation targeting (more stable, in fact, than in any 25-year period in the 800-year history of the estimated UK series). And you have to go back all the way to 6 A weighted average of the composite PMI and (to cover the distribution sector) the headline balance from the CBI distributive trades survey. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  the pre-WWI classical gold standard, the last time the UK had something akin to a “target” for domestic prices7, to find a period when short-term interest rates were reasonably well correlated with economic growth – or in which inflation was well controlled (Chart 4). Chart 3a: Monetary policy and economic activity correlated under inflation targeting  Chart 3b: Also apparent using MPC votes and survey measure of growth  Sources: De Rezende and Ristiniemi (2020), ONS and Bank calculations. 6-month averages, combined IHS Markit/CIPS and CBI distributive trades lagged one month.

John C Williams: Reading the recovery Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Council on Foreign Relations, 14 January 2022. * * * As prepared for delivery Good morning, everyone, and Happy New Year. Thank you, Charles, for that introduction. And thanks to Richard Haass for the opportunity to speak with the members of the Council on Foreign Relations once again. For the past two years, I’ve begun my remarks by saying how much I wish we could meet together in person. This time, I really was hoping for a chance to rewrite the script. After seeing so much progress on vaccinations over the past year and a moderation in COVID-19 infections during the fall, just a short time ago many of us had expected that we’d soon be turning the page. The story of the pandemic is a complicated one. It is writing itself as we live it, and the storyline has been far from predictable. This is, first and foremost, a health crisis. The unusual and extraordinary nature of the situation means that circumstances are constantly evolving. For the economy, this has meant that what we’ve experienced is unlike any recession or recovery we’ve seen—or read about—in the past. While there have been significant improvements in the overall economy, setbacks persist in some areas, and new challenges have appeared.
Operating income continues to be the primary contributor to the profitability of banks, which fell from the end of 2014, to 16 percent of equity in March. This was due to the reversal of the temporary impact of inflation on the indexation margin and a reduction in interest rate spreads. Bond issues by the banks contribute to the diversification of funding sources, but medium-sized banks remain highly dependent on wholesale funding. Stress tests yield that the levels of capitalization permit to absorb the materialization of a scenario of severe conditions (figure 14). In short, the internal and external scenarios are virtually unchanged from the last Report, although the persistence of very favorable global financing conditions can incubate vulnerabilities that would emerge if and when such conditions disappear. This would have a  BIS central bankers’ speeches  5  significant impact on global financial markets, particularly in emerging economies, whose growth prospects have been on a downward trend. In this context, the increasing indebtedness of domestic credit users (firms and households) translates into lower resilience to possible financial stress events, or to a deterioration of the macroeconomic environment. Chile maintains adequate solvency and external liquidity to confront international financial stress scenarios. However, this does not insulate the country from such developments and their effects. I would like to finish with some final thoughts. Final thoughts The macroeconomic outlook has not changed much with respect to projections in March.

Financial cohesion, in turn, ensures that the monetary policy signals are properly and evenly transmitted to all jurisdictions of the monetary union, without, however, levelling out the premiums for different credit and liquidity risks. In fact, during the crisis, the divergence of bank funding conditions at national level has led to cross-country differences in both the costs of financing and the availability of loans. The retrenchment of credit supply within national borders, coupled with funding pressures, has impaired the transmission of monetary policy. The need to counter these adverse developments has been a key rationale behind the extraordinary monetary policy actions undertaken by the ECB in the wake of the crisis, such as the full allotment, the longer-term refinancing operations (LTROs) or the relaxation of the collateral framework. At the same time, the emergency liquidity assistance (ELA) provided by the national central banks was used more intensively. Although this is carried out by the national central banks at their own risk and for their own account, it might lead to tensions between the national and European levels of monetary policy, which would not be sustainable. A renationalisation of the monetary architecture would not be effective. Our non-standard measures can and should only provide temporary support for two reasons. First, keeping our non-standard measures in place for too long can adversely affect agents’ incentives in the economy at large and lead to moral hazard.
This is again to be expected as one of the main objectives of the RBC2 review is to improve risk sensitivity of the capital framework so as to more accurately reflect the different risk profiles of insurers. 25. MAS will continue to review and study the QIS results and take on board many of your feedback and suggestions. 26. As examples, we are going through comments from some industry participants relating to widening the eligibility criteria for the matching adjustment feature of RBC2, the possibility of giving some credit to the illiquid nature of some other liabilities that do not qualify for the matching adjustment, the calibration of risk charges for equities and long-dated corporate bonds, and the calibration of the operational risk charge, which has also been discussed with the industry. 27. Let me emphasize that we will implement RBC2 only after we have done a thorough calibration and assessment. We want the new capital framework to be more risk-sensitive and robust, but it should also be fit-for-purpose and not hamper well managed insurance businesses unduly. At individual firm level, the new framework does not seek to make it  BIS central bankers’ speeches  3  better or worse for you compared to the current RBC, but only that how much capital that you will hold in future be more sensitive to your risk profile. 28. The MAS will embark on another stage of consultation and we are also targeting an additional QIS in Q2 2015.

All direct life and composite insurers had participated in QIS1. I would like to thank the LIA and its members for the active participation and feedback. Indeed, many of you have expressed understanding and support for many of the proposed enhancements in the RBC2 framework. 21. Let me share a couple of high level observations from the QIS1 results with you. 22. First, there is an increase in risk requirements compared to the existing RBC framework. This is to be expected, given the more comprehensive risk coverage and higher target confidence level under RBC2. RBC2 targets a 99.5% confidence level over a one-year period, which is increasingly seen as the benchmark for insurers globally. From the results that I have seen, most of our insurers are able to maintain capital adequacy ratio or CAR of well above 100% under the preliminary set of RBC2 proposals. 23. Some industry players are naturally anxious if they will still have to maintain the same high buffers of way above 100% CAR or FSR under RBC2, as they do currently for RBC. This is not our expectation, given that the risk requirements under RBC2 are designed to be more risk sensitive, comprehensive and calibrated to a higher target confidence level. 24. A second observation is the greater differentiation in CAR between firms with different risk profiles.
I would like to dwell now on another argument, which relates to the current crisis, but also has significant potential for development if identified and addressed in due time. In addition to the negative effects, the global crisis provides some opportunities which I believe time is ripe to identify promptly and get the most benefit from them. Let me state a fact from last year, which I think illustrates my observation better. There is an observation that the Arab Spring is one of the factors that led to the increase of the re-export industry in Albania. Not only wasn’t it hit by the crisis, but it also grew its activity further. One could rightly say that the Arab Spring comes only once in a lifetime. This is true but what I see as a comparative advantage of our economy in relation to the economies of many countries that traditionally make the active processing of the orderer’s materials (re-export industry) is the cheap labour force. Countries like China, Turkey, Vietnam etc, have raised the labour cost, while it has to be admitted that they have a high level of productivity. Hence, what we need to do is to qualify the labour force of these sectors in order to increase productivity. I think that the qualification of the labour force, the increase of human capital and the formulation of more stimulating policies to support these sectors represent a resource and potential we have to rely on to create competitive advantages.

The creation of these indicators, their calculation and rating in the relevant markets would create the conditions for the real assessment of the competitive advantages that this district has to offer. The help that the local authorities can give in identifying the competitive advantages and the provision of local statistics are perhaps the best investment they can make for the regional and national development. Today, more than ever before, all the attention of global economy is oriented towards the markets, as the best estimators of the competitive advantages in the global economy. The developments in these markets are bringing about the reconfiguration of the economic powers at a global level. The new commercial and financial trends appear to be in favour of the utilization of natural resources and competitive advantages, through investments in emerging economies, to later import them in the form of final products, ready for consumption. These are advantages for the Albanian economy, which, with the major structural reforms taking place (privatizations, natural and human resources, creativity and the entrepreneurship spirit), enjoys all the opportunities and should play an active role in the regional market and beyond, in the global market. I am optimistic and I do believe in our economy and its potentials. Thanking you for your attention, I welcome any comments. BIS central bankers’ speeches  5
There are already many ongoing initiatives, for instance, promoting the usage of local currency in the region, the ASEAN Banking Integration Framework, the Asian Payment Network, and the Asian bond and capital market initiatives. Despite progress made thus far, financial institutions and policymakers in the region could step up our joint efforts in various ways. Let me now turn to immunity, which is equally important under the increasingly volatile, uncertain, complex, and ambiguous world in order to keep the financial system resilient throughout and thus be able to continue to support their clients and the real economy. 4  As the financial system is the blood vessel of the economy, immunity needs to start from safeguarding against blood infection. We will need to ensure that banks have adequate capital and provisioning cushion to be able to withstand swings of economic cycle and financial volatility. The Bank of Thailand welcomed the post GFC’s regulatory reform addressing concerns on systemic risks including the conservation buffer, the countercyclical buffer, G-SIBs and D-SIBs, as well as the recovery and resolution plan to further strengthen financial safety net. To complement these rules, and build a better immune system that is strong and resilient through any cyclical or structural shocks, I believe we need to target the underlying factor contributing to immunity, namely, the culture and behaviour of banks. Fundamentally, an organisation is predominantly defined by its behaviour and culture.

Looking forward, roles of Asian banks as intermediary could be diminished on the back of the growing capital markets and shadow banking, which includes not only traditional ones like asset management companies and savings cooperatives, but also more modern ones like crowd-funding and peer-to-peer lending. Capital account liberalization will also lead to asset diversification abroad. Banks’ funding sources are likely prone to be more vulnerable and volatile, with the increasing interconnectedness between banks, non-banks and capital markets. After many years of consolidating our financial systems after the Asian financial crisis, technology could fragment our financial systems in an unprecedented way. Regulatory arbitrage could lead to pockets of vulnerability, particularly in the less-regulated or unregulated areas of shadow banking. Ladies and gentlemen, the need for rapid transformation in Asia is not limited to only banks and financial institutions. Changing technology, changing demographic structure, and changing global operating environment also necessitate that Asian businesses transform themselves to be able to compete in the new environment, where productivity is key. In addition, they need to improve their risk management and immunity to be able to cope with increasing volatility and uncertainties of the modern world. It is also crucial that Asian banks and businesses understand developments in the society at large that could affect their operating environment, chief among these is income inequality.
3 / 15  BIS central bankers' speeches  On the domestic front, cost pressures from the labour market are expected to ease as firms pause their hiring plans and retrenchments rise. The property market has remained stable, thanks in part to the macroprudential measures in place and new temporary relief measures in response to COVID-19. The property cooling measures — progressively implemented over the last 10 years — have helped to temper price increases and bring prices more in line with underlying economic fundamentals. The stabilisation of the property market has substantially reduced its vulnerability to the COVID-19 shock. If property prices had been rising rapidly as we entered the COVID-19 crisis, we could have seen a sharp and painful correction. As it has turned out, the adjustment of the property market has been modest. Property prices have moderated in an orderly manner in recent months. At this point, there is no need to adjust the existing cooling measures. Instead, to help promote market stability, the government has provided temporary relief measures for buyers and property developers by extending regulatory and tax deadlines. These reliefs do not alter the existing cooling measures. MAS, together with the Ministry of Finance, the Ministry of National Development and the Urban Redevelopment Authority, will continue to watch the market closely to ensure that prices for private residential properties remain broadly in line with economic fundamentals. GOVERNMENT’S RESPONSE TO THE COVID-19 ECONOMIC CRISIS Fiscal policy has been the centrepiece of the government’s support for the economy.

Fiscal policies have supported jobs directly and buffered businesses and households from income shocks. Central banks eased monetary policies through interest rate cuts and financial asset purchases and provided sufficient liquidity for the smooth operation of financial markets. There is substantial uncertainty over the global economic outlook – largely because there is substantial uncertainty over the trajectory of the COVID-19 pandemic. If there are new waves of infection, it could lead to a return of containment measures that drag down economic activity again. Even if subsequent waves of infection are more limited, it is not clear if confidence in resuming normal economic activities will return fully. It is also not clear to what extent the destruction unleashed by the pandemic in the first half of this year has damaged the productive capacity of economies. The recovery will be uneven – across countries, across industries, and across time. 1 / 15  BIS central bankers' speeches  There is wide dispersion in projected growth rates across countries. Those countries that are more successful in containing COVID-19 and have put in place strong policy support are likely to stage stronger recoveries. China is expected to grow by about 1% this year, which would make it the only large economy to record an expansion. At the other end of the spectrum, the Eurozone is expected to contract by about 9% this year, weighed down by the significant disruptions caused by the high rates of infection; and the global trade slowdown. The outlook for the US is mixed.
Given this combination of immediate physical risks and prospective transition risks, the Bank of England has become increasingly active consistent with our financial stability and prudential mandates. In 2015, we examined the impact of climate change on the UK insurance industry.6 General insurers and reinsurers are on the front line of managing the physical risks from climate change, and they have responded by developing their modelling and forecasting capabilities, improving exposure management, and then adapting coverage and pricing accordingly. One of the lessons they have taken on board is that yesterday’s tail risk is closer to today’s central scenario. Sadly, with respect to climate, history repeats not as farce but as tragedy, with growing frequency. Despite the sophistication of insurers, there are some gaps in their risk management. The Bank is increasingly focused on cognitive dissonance in some insurers whose careful management of climate risks on the liability side of their balance sheets is not always matched by similar considerations on the asset side. With that in mind, we expect firms to consider stress testing and scenario analysis as part of their assessment of the impact of climate risk on their balance sheet and broader business strategy. This will also be reflected in our own market-wide insurance stress test exercises. For banks, the financial risks from climate change have tended to be beyond their planning horizons.

Parallel to this development, the upward trend in unemployment rates reversed. In the mentioned period, unemployment rates increased in annual terms while they decreased compared to the second quarter in seasonally adjusted terms (Figure 30). Indicators such as capacity utilization rates and per capita hours worked suggest that resource utilization remains low throughout the economy. Given that ample slack would continue to be an obstacle to investment and employment, recent signs of improvement in employment data is not expected to turn into a significant recovery, suggesting that unemployment is likely to remain elevated for an extended period of time. Therefore, unit labor costs and domestic demand would continue to support disinflation. Figure 30: Unemployment Rates (Seasonally Adjusted, Percent) 19 Nonfarm Unemployment Rate 17  Unemployment Rate  15 13 11  0709  0509  0309  0109  1108  0908  0708  0508  0308  0108  1107  0907  0707  0507  0307  0107  9  Source: TURKSTAT, CBRT. BIS Review 143/2009  13  As I have mentioned before, the tightness in credit conditions has been on an easing trend. Accordingly, developments in the credit market would begin to support domestic economic activity as of the fourth quarter of the year and the impact of monetary policy is expected to be more visible in the medium term. However, the rising domestic borrowing requirement of the government, ongoing problems in the global economy, and elevated levels of unemployment would continue restraining credit expansion.