samchain/econo-pairs-v1 huggingface dataset:
12 Today, medium-term unemployment is down a good deal, but the involuntary part-time work force is still very high. According to their model estimates, if labor  8  See Dice Hiring Indicators (2014). 9  Daly and Hobijn (2014). 10  Krueger, Cramer and Cho (2014). This same result appears for the price Phillips curve, as shown, for example, by Gordon (2013). 11  Kiley (2014). 12  Aaronson and Jordan (2014). The medium-term unemployed are those unemployed five to 26 weeks. Persons employed part time involuntarily for economic reasons (such as slack work or unfavorable business conditions) are those who want and are available for full-time work but have had to settle for a part-time job. 4  BIS central bankers’ speeches  market conditions were at their 2005–07 levels, average real wage growth would be roughly 1/2 to 1 percentage point higher over the past year – another sign of the cyclical shortfall in labor market health. To sum up, with many important measures of labor market activity still well short of our estimates of cyclical norms, I believe it is a bit premature to say that we are close to our full employment target. That said, while it has taken longer than anyone would like, our progress has been good. And there is good reason to anticipate that we will achieve full employment and price stability within the FOMC’s current forecast horizon.

4  Specifically, the trends generated by Chicago Fed economists’ preferred models are very close whether they are estimated using data through 2002, 2007 or 2014. 5  See, for example, Acemoglu and Autor (2011) and Charles, Hurst and Notowidigdo (2013). See Shierholz, Mishel and Schmitt (2013) for a skeptical view. An alternative explanation is based on changes in the use of social safety net programs, especially disability insurance (DI), that are partly cyclical in nature. The DI rolls have been increasing throughout this business cycle, although they have been on the rise, more or less uninterrupted, since the 1990s (Autor, 2011; and Burkhauser and Daly, 2011). The DI program tends to be cyclical partly because eligibility standards ease amid deteriorating labor market conditions (Mueller, Rothstein and von Wachter, 2013). That is, people with moderate disabilities are more likely to qualify for the DI program when there are fewer suitable jobs available. 6  The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. 7  The hiring rate stood at 4.0 percent at its 2006 peak and fell to as low as 2.8 percent in 2009. Today, it is 3.5 percent. BIS central bankers’ speeches  3  University of Maryland, estimate that the overall effort that firms actually are putting into filling a job vacancy fell by over 20 percent during the recession.
Stronger than expected pipeline pressures or higher than anticipated increases in wages or profits could drive up inflation, while financial market  2/4  BIS - Central bankers' speeches  tensions and falling energy prices could lead to faster disinflation. At the same time, most measures of longer-term inflation expectations currently stand at around two per cent, although they warrant continued monitoring. Euro area banking sector, non-bank financial sector and financial stability Euro area banks remain resilient in the current market environment thanks to strong capital and liquidity positions. Since the start of the ECB's policy rate hiking cycle, euro area bank profitability has been boosted by higher interest margins, while the change in impairments and provisions has been rather muted so far. However, in the current environment of tightening financing conditions including for banks, credit risks have increased, and lending dynamics have substantially weakened, which may weigh on future bank profitability. The decrease in bank lending to firms has, in general, not been offset by an increased recourse of firms to market-based financing, despite a bout of corporate bond issuance in the fourth quarter of 2022. Looking ahead, the decline in the asset purchase programme portfolio will increase the share of debt issuance that needs to be absorbed by investors. Based on their past behaviour, investment funds appear able to absorb part of such an increase. At the same time, in spite of some reduction in exposure to higher-risk assets, structural vulnerabilities in the non-bank financial sector remain elevated.

Starting with the analysis under the first pillar of our monetary policy strategy, the three-month average of the annual growth rates of M3 stood at 8.0% in the period from November 2001 to January 2002, compared with 7.8% in the period from October to December 2001. The high level of the annual growth rates of M3 is very much related to portfolio shifts to liquid positions, most of which occurred in the autumn of 2001 in an economic and financial environment characterised by high uncertainty. While many investors still seemed to be "parking" some of their assets in M3 in early 2002, some moderation in the short-term dynamics of M3 could be observed around the turn of the year. The Governing Council continues to hold the view that the information from the first pillar thus far does not indicate risks to price stability, as the portfolio reallocations which drove M3 growth in 2001 should remain temporary. In addition, the slowdown in the rate of growth of loans to the private sector has been continuing over the past few months. However, we will need to analyse monetary developments closely in the coming months. As regards the second pillar, there are further signs that the trough in economic activity may have been reached at the end of last year. Coincident and forward-looking indicators increasingly point to improvements in economic conditions. A similar picture is reflected in financial market expectations, especially those embedded in bond yields.
In seasonally adjusted terms, the quarterly upward trend continued in the third quarter, albeit slower compared to the second quarter during which the impact of the fiscal stimulus package was substantial (Figure 23). BIS Review 31/2010  9  On the spending side, inventory change became the demand component that made the largest contribution to quarterly growth (Figure 24). Nevertheless, private consumption demand slowed down slightly after the tax cuts were phased out (Figure 25). Meanwhile, although private sector investments displayed a quarterly rise after a long time, investment expenditures are not expected to display a significant acceleration in the short term given the current uncertainty about demand and low capacity utilization rates, and it is obvious that it would take some time for investments to return to the pre-crisis level. Data pertaining to the last quarter of 2009 indicate that the moderate recovery in aggregate demand continues (Figure 26). Although inventory de-stocking, which started with the sudden contraction in demand in the last quarter of 2008 and remained strong throughout the first half of 2009, grew significantly weaker, demand for consumer goods continued to support disinflation (Figure 27). 10  BIS Review 31/2010  The significant decline in external demand has been one of the main factors driving the sharp contraction in economic activity during the last quarter of 2008 and the first quarter of 2009.

This is an impressive outcome, made possible only by commitment, enthusiasm and exceptional cooperation that has been shown by the project team and all our partners who are here today throughout these last two years. I am well aware of the numerous logistical and communication challenges that had to be overcome by the team and the industry, and the persistence that it took to break long-held perceptions before we were able to build momentum in our outreach efforts to deliver these results. So let me on behalf of Bank Negara Malaysia, join Faris in extending my congratulations to all who contributed to this important initiative. We are especially grateful to the World Bank for working with us to bring the Greenback Project to Johor Bahru – the first champion city in Asia, and for providing technical support in the project’s design and implementation strategies. It goes without saying that we could not have done this without the exceptional support of Yang Berhormat Datuk Bandar and your team at Majlis Bandaraya Johor Bahru. The city of Johor Bahru has been an exemplary host for the first Greenback Project in Malaysia. Johor Bahru can be proud of serving as a role model for promoting transparent, efficient and affordable remittance services that are contributing to more inclusive financial services for all individuals and businesses.
Many large banks continued to pay dividends well into 2008, even after government support was provided to the banking industry via the Troubled Asset Relief Program (TARP), something noted in the press at the time.2 Some have argued that these continued dividend payments reflected intentional risk-shifting from equity to debt holders,3 though many institutions had stopped making share repurchases months before,4 which does not seem consistent with risk-shifting behavior. Alternatively, in an environment of considerable uncertainty, banks may have been concerned with the negative market signal that a dividend reduction might send, hesitating to be the first to take this step. Supervisory stress testing emerged as a policy solution to address both backward-looking regulatory capital ratios and possible first-mover problems facing banks during periods of stress. 1/8  BIS central bankers' speeches  By their nature, stress tests are designed to ask “what if” in a forward-looking way. Stress tests aren’t a prediction of future events but rather hypothetical exercises intended to assess the robustness of a bank’s resources against various potential future bad outcomes. In this way, they provide additional insight into the true degree of capital adequacy inherent in a bank’s current capital position and the risks embedded in its balance sheet, including its ability to continue to make capital distributions in both baseline and stressed economic conditions.

Bank-specific elements – which, as noted above, are critical to the microprudential policy objectives of the CCAR and DFAST programs – are introduced by using detailed data provided by each participating institution. Thus, results for individual banks vary based on the characteristics of their balance sheet and business focus, but not due to differences in the way particular net income or capital elements are modeled. Other choices are possible, of course, principally the choice to make greater use of bankgenerated stress test results as a way of capturing institution-specific factors, as is done in supervisory stress testing programs in some other jurisdictions. The European stress tests, for instance, are based on estimates made by the participating banks, subject to a variety of constraints on modeling assumptions and detailed review by supervisors.16 What I hope you take away from this review of the what and the how of stress testing is that the SCAP, CCAR and DFAST programs have involved a series of inter-connected design choices, most of which were intended to address the objectives of the stress test exercises, but none of which were inevitable or pre-ordained. Collectively, these design choices have implications for what the stress tests capture, as well as what they miss. I want to share a few thoughts about 4/8  BIS central bankers' speeches  the latter before turning to some suggestions for how additional research could help.
But as Andrew Crockett of the BIS observed back in 2000, “actions that may seem desirable or reasonable from the perspective of individual institutions may result in unwelcome system outcomes”. 30  That system outcome could be a feedback loop from falling asset prices to pressures on one side of the market to sell and pressures on the other side not to buy; a loop that magnifies asset price falls. Asset prices are not our concern per se. The question for macroprudential policy is whether these loops mean that smaller economic shocks can overwhelm the financial system, amplifying the damage to the real economy. To get at this, macroprudential policy must move – and is moving – beyond the core banking system. Our focus is increasingly on these loops, working in partnership with the LSE Systemic Risk Centre and others. In partnership with other countries, we must – and are – developing system-wide simulations to examine how the different entities – funds, insurers, dealers – combine to shape how the system responds to stresses. And my second call to arms for researchers in academia is to push out the frontiers of knowledge and understanding of these feedback loops. 4) An ounce of prevention can be worth a pound of cure  31  Having calibrated the economic stress and applied it to the system, it’s a question of building the necessary resilience into it. And the guiding principle here is that an ounce of prevention can be worth a pound of cure.

We exercise our voting rights at companies’ annual general meetings, and we engage in dialogue with a large number of portfolio companies. Recurrent topics in our dialogue with banks include financing palm oil producers and following up TCFD recommendations. Topics related to climate change have also been an important part of the dialogue with companies that buy and sell meat in Brazil. The third pillar is related to the composition of the GPFG’s investment portfolio. Our management mandate requires parts of the fund to be invested in environment-related mandates. The environment-related mandates were first introduced in 2011. The purpose of the investments does not differ from that of the rest of the GPFG. The environment-related mandates are required to contribute to diversification and to improving the return on the GPFG. Chart: Environment-related mandates The Ministry of Finance is in the process of adjusting the guidelines for these mandates. Investments are to be focused on climate-friendly energy, improving energy efficiency, carbon capture and storage, water technology and the management of waste and pollution. The upper limit for the environment-related mandates will be increased from NOK 60 billion to NOK 120 billion, as the mandates will be expanded in 2020 to include unlisted renewable energy infrastructure investments. Primarily, these will be investments in wind and solar power production. In the Bank’s strategy for the management of the GPFG in the period to 2022, our target is an allocation of around one percent of the GPFG towards the end of the three-year period.
By then, the financial conditions for households and firms had normalised to a significant extent, our economy had resumed a growth rate above 3%, significant increases in employment were posted, the recapitalisation and restructuring of our credit institutions ceased to exert any further significant impact on the increase in the deficit and public debt, and the Single Supervisory Mechanism – incorporated into the ECB – commenced operating. The Report, in which several directorates general of the Bank participated and which was coordinated by the council member Fernando Eguidazu, covers the span of the crisis in the macroeconomic, financial, regulatory and supervisory areas, including national and European reforms. I shall address, first, the aims behind the drafting of the Report; second, the macroeconomic environment in which the crisis unfolded, with the build-up of strong imbalances linked to private-sector debt; third, the restructuring and recapitalisation strategy for a series of credit institutions, essentially savings banks; and, finally, I shall take stock of this process, as far as we can currently consider it. The aim of the Report Firstly, I would like to set out our aims in drafting the Report. On 21 February, the Executive Commission of the Banco de España adopted the resolution to prepare, and I quote, “a detailed report on the financial and banking crisis that broke in Spain as from 2008, addressing its causes, unfolding and resolution, with particular attention to the Bank’s conduct in the crisis”.

Depending on the development of the political situation, the global economy may thus recover at a faster or slower pace than we anticipated, and the exchange rates might be subject to major fluctuations. In this case, the National Bank would have to review its monetary policy. In the short run, the price of oil will also have a considerable influence on inflation. If it continues to erode, measured inflation might fall below zero for a few months. Should this situation arise, it is important to bear in mind that it cannot be equated with sustained - and thus economically dangerous - deflation. On the contrary, a low oil price level would create a positive supply shock and, under the current circumstances, would impact favourably on production. Inflation would be dampened temporarily. We also keep a close watch on the development of the money supply M3 in order to assess the medium-term inflationary risks. Following a phase of low, or even negative, growth rates, M3 is now expanding at a somewhat faster pace. So far, however, there has been no excess supply of liquidity in the economy, and the money stock M3, therefore, does not point towards inflationary risks at present. Finally, I would like to make some closing remarks about the imminent introduction of euro notes and coins. For about three years now, the euro has existed as deposit money. It has led to fixed exchange rates and a uniform interest rate level in the euro area countries.
With this strict definition in mind, I will make four main observations. An asymmetric world First, the current world is highly asymmetric. Two major currencies – the US dollar and the Euro – account for most of the foreign exchange reserves. One of them, the dollar, clearly dominates in financial markets and payment systems. This asymmetry has many well-known and self-reinforcing consequences. US monetary policy has significant effects well beyond the US economy. Those monetary spillovers may be especially important when unconventional monetary policies are implemented. They cast new doubts on the insulating properties of floating exchange rates. BIS central bankers’ speeches  1  They create new incentives, for many emerging economies, to manage their exchange rate and, for that purpose, accumulate dollar-denominated foreign exchange reserves. As a consequence, most, but not all, of the official liquidity provided through multilateral mechanisms is denominated in dollars. The rise of the euro The major innovation of the last decade has been the rise of the euro. It offers some interesting insights and lessons. Most economic models and historical examples suggest that the appearance of new world currencies would trigger huge portfolio adjustments and create major turbulences. Economists also hypothesized that, in a multicurrency world, portfolio shifts would create permanent exchange rate instability. None of this has happened. In fact, the euro has neither stabilized nor disrupted the international monetary system. Exchange rates have moved significantly but, most of the time, in an orderly fashion and have followed low periodicity cycles.

This may be, for the future, an interesting precedent: a new global currency can emerge without destabilizing the system. It is also worth noticing that the euro crisis had no major effect on its international role. In particular, the share of foreign reserves invested in Euro securities has barely moved. And, when the Swiss authorities decided to peg their currency, they chose the euro as an anchor. Does the euro have a “sphere of influence”? As you know, we have taken a very neutral stance on this issue and neither encouraged or discouraged the use of the euro as a reserve currency. In fact, the euro is increasingly used in international transactions and accepted for payments (including retail ones) in many countries – as European tourists can experience every day. Recently, the Eurozone seems to exert a stronger influence on global monetary conditions. For the first time in many decades, long-term rates in Europe have significantly decoupled from those of the US. Also, there is some evidence of “reverse causality” with Euro long term rates increasingly impacting US rates, creating new channels for monetary spillovers and feedbacks. However, the euro is not yet widely used as a unit of account: most global transactions – especially in commodities – are denominated in dollar. A majority of new securities issuances are also denominated in dollars. New global currencies? As the geography of the world economy changes, so will the shape of the international monetary system.
In order to avoid the negative impacts of such a situation, the Central Bank could lower its borrowing and lending interest rates – provided that the inflation outlook is stable – so as to encounter the pressure created by liquidity shortage on overnight interest rates. However, such an interest rate cut would only mean a technical arrangement stemming from the change in liquidity conditions. Therefore, such a move should not be perceived as loosening of monetary policy. The Central Bank does not foresee any significant changes in the general framework of the liquidity management for 2008. Accordingly, 2008 liquidity management strategy will be as follows: i)  The Central Bank will continue to announce overnight borrowing and lending rates between 10:00-12:00 and 13:00-16:00 in the Interbank Money Market within the CBRT. In case of a liquidity shortage during the day, banks will be able to borrow at the Central Bank’s lending rate against collateral within their limits. In the event of a fall in interest rates due to increasing liquidity, banks will be able to lend New Turkish Lira to the Central Bank at the Central Bank’s borrowing rate without any limit. ii)  The Central Bank extended the transaction hours of Late Liquidity Window Facility from 16:00-16:30 to 16:00-17:00 and on the last working day of the required reserve provision to 16:00-17:15 as of July 9, 2007 in order to increase the flexibility and effectiveness of the liquidity management of banks.

Furthermore, volatile ISK assets held by non-residents currently total perhaps a fifth of GDP and could rise to almost half of GDP if the failed banks’ ISK assets are recovered in full and paid out to creditors. Iceland has no excess foreign exchange revenues with which to unwind these ISK positions, however. The solution lies in spreading out repayments of foreign loans, solving the ISK problem related to the settlement of the failed banks’ estates in a manner that does not exacerbate the balance of payments problem, and opening up market access to resident entities. A number of possible scenarios that could achieve this are under scrutiny at this time, but there is no need to discuss them in detail here. But if such measures generate the results we are aiming at, it is important to ensure that the impact on foreign debt service, whether in domestic or foreign currency, is manageable; to safeguard Iceland’s public debt position, sovereign credit ratings, and access to capital markets; and ultimately, to provide domestic entities with access to foreign credit on acceptable terms. Some of these goals may conflict with one another, and this should be considered when a course of action is chosen.