samchain/econo-pairs-v1 huggingface dataset:
In relative prices, the real exchange rate is now about 3.5 per cent weaker than the average since 1970, whereas it is approximately 2.5 per cent stronger than its historical average measured in terms of relative labour costs. The exchange rate in the long term There has been divergence between cyclical developments in Norway and other countries. This was most pronounced in the 1980s when we had a strong upturn while Europe was in a recession. Although the economic cycles have been somewhat more similar over the years, there is still a time divergence. While the global turnaround took place in 2000, with a subsequent reduction in interest rates abroad, the Norwegian economy continued to show a high level of activity. Towards the end of the upturn, the economy was facing labour shortages, accelerating wage growth and a sharp increase in household consumption and debt. Interest rates in Norway remained high and the interest rate differential gradually widened. There have also been other differences between cyclical developments in Norway and other countries. The expansionary period in Norway led to strong wage growth from 1998 to 2002. The upturn in the global economy at the end of the 1990s was largely driven by business investment and wage growth was moderate. Wage growth in the Norwegian business sector from 1998 to 2002 was higher than the level that over time is consistent with the inflation target and with normal productivity growth.

The purpose of this rigorous exercise is threefold: •  to foster transparency about the condition of the European banking system;  •  to take the needed corrective actions;  •  and finally to restore confidence. Of course, this exercise is a challenge. But I think that it is also a great opportunity for European banks to show that they have cleaned up their balance sheets and that they are trustworthy. As you can see, the SSM is well on track and I am fully confident that it will be operational at the end of this year, as expected. But this good result should not lead to forget that for the banking union to be fully successful, the SSM needs to be completed with the adoption of a Single Resolution Mechanism. Indeed, in line with my colleagues at the ECB, I consider the Single Resolution Mechanism to be another essential pillar of the banking union, alongside the SSM. Ideally, the SRM should consist of three main elements: a single system, a single authority and a single fund. This is why the ECB has constantly been encouraging all the relevant parties to make further progress in adopting the SRM, which should be in place by the time the SSM becomes operational. You know that a political debate is taking place currently between the European Council of Ministers and the European Parliament.
The present adjustments imply that there are less unutilised resources that can be brought into production without this leading to a rising rate of price and wage increases. That in turn affects the prospects for future  2  BIS Review 19/2002  inflation, particularly as economic activity, in Sweden as well as elsewhere, seems to be improving and overall economic policy is expansionary. This analysis has ramifications in the labour market. The general weakening of demand during 2001 did not show up in employment. Unemployment has been more or less stable. Both the economy as a whole and the labour market show signs of a dichotomy; industrial output and employment have fallen, accompanied by an increase in demand and jobs in the services sector. At the same time it is mainly in services that wages and prices have risen. Thus, in the light of what has been happening to prices and wages during the past year, the Riksbank has gradually arrived at a somewhat altered view of the Swedish economy’s inflation propensity. Higher resource utilisation, together with higher wage increases and a weak exchange rate, has led to somewhat stronger inflationary pressure. This affects the forecast we are presenting today. Meanwhile, we are, of course, continuing the work of developing our analysis and interpreting new data as they become available. Rising inflation All in all, in the Inflation Report the Riksbank notes that incoming statistics confirm the impression that activity in Sweden has probably stopped falling.

It is a natural consequence of the Riksbank being in earnest about its task of ensuring a rate of price and wage increases that is in line with the inflation target in a situation where economic activity in Sweden is become gradually stronger. Here I am prompted to refer to what Knut Wicksell, the well-known political economist, pointed out in his day; it is a matter of looking for the “natural” rate of interest at which the economy can expand without prices and wages rising too quickly. 4  BIS Review 19/2002
Toward that end, the Desk presented at the June 2015 FOMC meeting an update on a review of the counterparty framework, and indicated that we anticipate regular reviews of the counterparty framework roughly every three years in the future.14 We look forward to working with our official and private sector partners represented in this room as we pursue these goals. Thank you. 13  For more on policy normalization, see these three earlier speeches: “Interest Rate Control during Normalization,” “Money Markets and Monetary Policy Implementation” and “Implementation of Open Market Operations in a Time of Transition.”  14  See the minutes from the FOMC meeting of June 16–17, 2015. BIS central bankers’ speeches  7

Svein Gjedrem: The conduct of monetary policy Introductory statement by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 22 May 2006. Please note that the text below may differ slightly from the actual presentation. The statement is based on Norges Bank’s Annual Report for 2005, Inflation Report 1/2006 and the Executive Board’s assessments published after the monetary policy meeting on 26 April. The  Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  I would like to thank the Chairman of the Committee and also thank for this opportunity to report and answer questions on monetary policy in connection with the Storting’s deliberations on the Government’s Credit Report. The account is based on the Bank’s Annual Report, but is also updated based on the Executive Board’s assessments for the period to the preceding monetary policy meeting. Economic policy in Norway faces particular challenges. Low prices for imported goods and services, combined with high prices for export goods, have led to substantial terms-of-trade gains for Norway. The Norwegian economy has experienced a strong positive income shock. Such a pronounced improvement in the terms of trade has in fact not been observed since the First World War. Real national disposable income will increase by 25-30 per cent in the period 2003-2006.
18 It is possible that the interval between the reviews could also be slightly longer, as monetary policy objectives probably have quite a long “durability” and perhaps do not need to be reviewed quite so often. Such regular reviews would probably not lead to substantial changes over time, which has not been the case in Canada either. But now and then, the conclusion may be that a change to the monetary policy objective would be preferable, which would of course be entirely appropriate. The important thing is that the remit is formulated via objective and scientific examination and scrutiny and not determined by short-term political motives or subjective opinion moulding in the media. Before any system of regular reviews is introduced, legal aspects must of course be considered. As far as Sweden is concerned, this means, for example, that both the remit and its terms must be compatible with EU law, which states, among other things, that the central bank shall maintain price stability. Although this puts restrictions on the possible remits of central banks, there are nevertheless some degrees of freedom as regards the exact policy formulation. That the central bank should aim at maintaining price stability defined in one way or another is of course only natural. The terms of the reviews must also consider that the central bank shall perform its remit without influence from the Member State’s parliament, government or any other body.

In June, the Riksdag supported the proposal and called on the government to appoint as soon as possible an inquiry into the consequences for the payment market of digitalisation and the declining use of cash, and the roles of the state and the private sector on this market. The Government Offices are currently in the process of drafting the inquiry’s terms of reference and reviewing its staffing. The inquiry will probably be able to start work in early 2020. So far, there are perhaps not so many lessons to be learnt from this as we are very much in the middle of an ongoing process. One possible lesson is that it is not just crises and macroeconomic paradigm shifts that require analysis, innovation and adaptability at a central bank. Changes in the payment system can also do so, even if they occur less frequently. Another lesson is that the payment habits of the general public can change very quickly once the prerequisites are in place. In just under ten years, dramatic developments have taken place in the way Swedish people pay for things. Between 2010 and 2018, the proportion of Swedes who used cash for their last transaction decreased from about 40 per cent to 13 per cent, and it will probably continue to fall. My vision of the Swedish payment system in the future Before I round off, allow me to elaborate on an issue that I am particularly passionate about.
But perhaps not covered in any national media, including here in the UK, as much as one might expect. 4  BIS central bankers’ speeches  •  But there is a deeper question here about the compatibility of domestic and global objectives. In the monetary sphere, it is well known that one cannot combine capital mobility, monetary policy focused on domestic price stability, and fixed exchange rates. Solution in post-Bretton Woods world has been floating exchange rates. This does not mean there are no spillovers. Hence information sharing in Basel meetings etc. •  There is a financial trilemma too. Cannot combine cross-border banking, and an integrated international financial system more generally; financial stability; and national policies focused solely on domestic stability. •  Came home to roost in the crisis: global banks were, as Mervyn King put it, “international in life but national in death”. Financial autarky is not the answer. •  Solution: co-ordination and co-operation on the resolution of global banks. G20 Financial Stability Board has led the way here. Real progress. •  Means foreign countries have a stake in our banks, and vice versa. Means the key policies are unavoidably international, global. As a trading nation we should welcome that. I hope these brief remarks provide the basis for a good discussion. In short, the traditional roles of central banks – for the first time ever reflected in UK legislation – touch every household and business in this country and, in truth, more widely.

Authorities with a mandate in this area must have well-defined roles and responsibilities, including a distinct set of instruments. Current overlaps between instruments should be eliminated, and more flexibility in the macroprudential policy framework should be maintained, so that authorities can implement those measures in a consistent and timely manner, which would require significant changes to Article 458 of the CRR. A more integrated financial market will support the emergence of new types of risk and also require extending the toolkit with new instruments. For the banking sector, this includes complementing the toolkit with borrower-based instruments (such as limits on loan-to-value, or loan-to-income ratios) as well as sectoral buffers and a time-varying leverage ratio add-on so that all aspects of systemic risks can be addressed in the banking union. Finally, the mandatory reciprocity framework needs to be expanded so as to ensure the effective mitigation of crossborder spillover effects and regulatory arbitrage across jurisdictions in the EU. 3/9  BIS central bankers' speeches  The significant progress we have made with our banking union needs to be recognised also from the international regulatory framework perspective. A case in point is the G-SIB 9 framework, which currently penalises cross-border transactions within the banking union by attaching a higher systemic risk score to banks with more transactions of that kind. This goes against the very rationale of the banking union, as it reduces the incentives for cross-border transactions and risk diversification, thus making banks more vulnerable to local shocks.
There is a lot as well that is outside the Fed’s purview that could have been done to make the U.S. economy perform better. This includes tax reform, job retraining programs and infrastructure investment. So, what can we do to bolster global growth in the future? The first is to undertake the necessary structural reforms to make our economies more efficient. Productivity growth is not preordained. The steps we take as countries to eliminate and lessen bottlenecks and improve our human and physical capital are important. The second is to ensure that our financial systems are well-functioning. Tremendous progress has been made globally in 2  BIS central bankers’ speeches  implementing higher capital and liquidity standards post-crisis. But we still see some important banking systems impaired by bad loans, low profitability and inadequate capital. The population aging in the developed world does imply that, purely from the productive factor side, less of the global growth contribution is likely to come from Japan, Europe and the United States. And economies like China are likely to continue to slow as their per capita income increases and they make the transition from investment-to consumption-led growth. But this doesn’t imply a bad outcome. There are many other countries with tremendous potential for growth in areas such as Africa, Asia, and South America. Take, for example, the surge in growth that we are seeing out of India. I am an optimist. To a large degree we do control our destiny. It is up to us to seize those opportunities.

On scale first, a recent estimate put the total number employed in “City” jobs, including supporting professions like lawyers and accountants as well as bankers and asset managers, at around 340,000. That amounts to about 9% of the total in London; significant but still lower than the number in distribution or in government services. And the growth of employment will continue to be the net result from the expansion of activity and from the economies made possible by IT and by the relocation particularly of back office work to cheaper areas elsewhere in the UK or abroad. The jobs figures understate the importance of the sector in the economy because on average pay may be twice as high in the financial sector as in the rest of the economy; 9% of wages and salaries in the year to March compared to 4% of employment. And within London its share is even greater. The average earnings of someone working in London’s financial intermediation sector in 2006 were around £ On that basis, the financial sector might account for around 20% of remuneration in London. However it is still far from the only game in town. For example the Work Foundation’s fascinating new report on the creative industries suggests that their growth has contributed at least as much as the City to London’s overall performance. Moreover, while the trend is upwards, there is a marked cycle in the financial sector.
Moreover, if the weak development of exports and investment during, above all, 2012 had not been counteracted by household consumption, then the latest slowdown in the Swedish economy would have been more pronounced. Households have become more optimistic over the last 12 months and this is reflected in higher housing prices, increased lending and increased consumption. They have been helped by the increase in their disposable incomes over a period of several years. Low interest rates have of course contributed to this development in the household sector. Turning to the labour market, employment has increased but unemployment is nevertheless higher than it was a year ago as the labour force has increased relatively quickly. This is partly due to an increase in those of working age in the population, but also to the government’s labour-market reforms, which are both factors of a structural nature. At the moment unemployment is approximately 8 per cent and with the Riksbank’s current forecast we are approaching the interval of 5 to 7.5 per cent within which the Riksbank believes the long-run sustainable rate of unemployment lies.1 If we look at the situation in different sectors we can see that employment has increased in the service sector while the weak demand for Swedish industrial products is in part responsible for the weak development of employment in the manufacturing industry.

It is true that the opinions on the optimal level and even on the relevance of this factor for successfully joining a currency union are quite diverse. However, to attain a certain degree of per capita income convergence before switching to the euro is essential, as a large convergence gap may complicate business cycle management in the absence of independent monetary policy. But even the countries that are already euro area members should continue to increase their level of real convergence. In my opinion, the direction of the real convergence process and its sustainability and smoothness are just as important as its degree. Romania has certainly come a long way in terms of economic convergence, a process whose inception is tied to the prospects of EU membership, witnessing a significant increase in per capita GDP as a share of the euro area average (based on PPS), from 31.7 percent in 2005 to 58.6 percent in 2017. Peer countries recorded a similar trend: Bulgaria went from about 33 to 47 percent, while the Czech Republic, Hungary and Poland, which started from a more advanced level, added 9 to 20 percentage points to the same indicator during 2005–2017. However, this process is still far from completion in these non-euro New Member States. A smooth convergence path requires a combination of prudent macroeconomic policies (be they monetary, fiscal or macroprudential), even though in practice it is difficult to build support for such policies.
By transitory effects is meant that some particular factors affect the forecast of inflation one to two years ahead, but that the effects are expected to dissipate without the need for any monetary policy action. By large deviations from the target is meant that inflation has deviated so much from the target that there may be reason to bring it back to target over a longer period than the normal two-year horizon. A faster return to target could give rise to undesired fluctuations in output and employment, for example. In practice this approach has often led us to focus our monetary policy analysis and discussion on the inflation measure UND1X, as there is generally always reason to disregard the effects on inflation of indirect taxes and subsidies as well as of changes in interest rates. In some situations we have also decided to study inflation measures from which other price changes have been excluded, e.g. in spring 2001, when the prices of a number of goods such as electricity, heating oil, petrol, telecommunications and different kinds of food rose; and 2003, when it was primarily fluctuations in electricity prices that had a very sharp impact on inflation for a period. Inflation and inflation expectations in line with the target The result of the Bank’s policy can be illustrated in different ways. Let me begin with the most obvious gauge, the inflation outcome.

This might be particularly appropriate for meeting settlement needs in central bank money between financial intermediairies. Indeed, asset tokenization initiatives have proliferated among financial players, with the the risk that such developments may lead to disorderly approaches and heterogeneous adjustments of settlement processes, which are currently mainly handled through market infrastructures. The Eurosystem, as a major provider of critical wholesale clearing and settlement services in euro, should therefore be open to experimenting the conditions under which it makes central bank money available as a settlement asset. To that end, we, at the Banque de France, have started gaining experience with innovative solutions, including in particular recourse to DLT. Experimentation is key in this area and this is why, as already announced by Governor Villeroy de Galhau, the Banque de France will launch a call for projects before the end of the first quarter of 2020. Indeed, we wish to work with industry innovators and 3/4  BIS central bankers' speeches  start running experiments rapidly to possibly integrate a “wholesale” CBDC into innovative procedures for exchanging and settling tokenised financial assets. Another contribution from central banks could be to help address one of the major failings of the current payment systems which is cross-border retail payments. This is one of the drivers of the development of crypto-assets such as stablecoins, and we believe we could help identify and support other concrete, useful and possibly complementary solutions.