samchain/econo-pairs-v1 huggingface dataset:
In my book, this is not only bad for the needed cyclical recovery in aggregate demand. I suspect that it will impede the rebalancing of the economy’s productive capacity. Firms wishing to enter or expand export markets, or compete against importers, often need credit. Finance is the oil that lubricates the allocation – and so, in current circumstances, reallocation – of capital in our economy. This is manifestly affecting SMEs. My hunch is that housing market conditions are a factor too. As long as anyone can remember, a crucial element of SME finance has been the capacity of entrepreneurs to pledge their home at the outset of a loan or, contingently, if and when their business hits choppy waters. Uncertainties about the path of house prices do not make that a comfortable backdrop for lenders in current conditions. 2  BIS central bankers’ speeches  Rebalancing will affect labour market conditions too. Perhaps the greatest surprise to the MPC over the past few years has been subdued productivity growth. One could think of this as firms maintaining employment at higher levels than would have been predicted given the fall in the level of output. Labour hoarding. That squares with business managers explaining that they worry about “structural” skill shortages and so are loathe to lose employees who they will need when their markets recover. But it does not really square with surveys of business conditions reporting that firms say they are carrying relatively little spare capacity. We have scratched our heads about this.

In the meantime, inflation is uncomfortably high, and an absolute precondition for maintaining our support to demand is the credibility of monetary policy. Over the next few quarters, the Committee’s most important judgment call will be put to the test. We will all discover whether inflation declines rapidly from 5% towards 3% as the effects of the price level shocks wane. Finally, let me stress that the gloom should not be overdone. The record is that flexible economies with sound macroeconomic regimes recover from almost any crisis. The UK will recover. Meanwhile the MPC will continue to underpin demand, consistent with getting back to the 2% inflation target and so with sound money. BIS central bankers’ speeches  3
Brad Delong has speculated that, just as “peak horse” was reached in the early part of the 20th century, perhaps “peak human” could be reached during this century (Delong (2014)). In the words of Marc Andresen, in future there could be two types of worker – those who own the robots and those who work for them. If these visions were to be realised, however futuristic this sounds, the labour market patterns of the past three centuries would shift to warp speed. If the option of skilling-up is no longer available, this increases the risk of large scale un- or under-employment. The wage premium for those occupying skilled positions could explode, further widening wage differentials. And labour’s share of the pie could fall even more dramatically than in the past. On this view, the tree could become hollowed-out to the point that it may no longer be able to support itself. This too may sound like science fiction. Yet in a survey of almost 2,000 (admittedly selfselecting) technologists and economists in 2014, the Pew Research Center found that almost half thought AI and robots would cause a significant and persistent displacement of labour in future (Pew Research Center (2014)). Maybe Ricardo and the Luddites had a point after all, albeit two hundred years too early. Public policy implications If one of these scenarios were to play out, its implications for the economy and society, for industries and individuals, would be massive.

•  Five of the top 10 primary growth markets will be in the Asia-Pacific; this includes China, India, and Indonesia. There are three structural factors driving demand for insurance in Emerging Asia. First, Asia is getting richer. Projections by the IMF show that Emerging Asia will remain the fastest growing region in the world over the next decade. As incomes rise in Asia, governments, corporates, and individuals will increasingly seek insurance to protect their growing economic assets. •  Burgeoning urbanisation, infrastructure development, and cross-border trade will drive demand for commercial and specialty insurance. •  A growing middle class and rising affluence will underpin a steady increase in life and health insurance penetration rates. Second, Asia is getting older. Asia is facing declining fertility rates, increasing life expectancy, and a rapidly ageing population. •  The United Nations projects that, by 2030, Asia’s old age dependency ratio will be 16%, up from today’s 11%. •  Against this demographic backdrop, public retirement and pension systems in Asia remain inadequate. The retirement gap between savings and retirement needs can be as high as 13 years. •  This will spur greater demand for private health insurance, annuity and other retirement security products. Third, Asia is becoming more aware of catastrophic risk. •  Over the last 30 years, Asia has borne the brunt of natural catastrophe losses, accounting for almost half of the world’s estimated economic losses from natural disasters. Yet less than 5% of the losses were insured, compared to 40% in advanced economies.
I think there is very broad agreement in the Governing Council of the ECB that a high degree of monetary accommodation will remain needed and that's irrespective of the trade war or anything we've seen recently. That's because the economy and in particular the inflation in the eurozone is not yet where we want to see it. Monetary accommodation will remain needed but we'll see a change in the mix of our instruments. In particular as we come closer to the point where our medium-term inflation objective is met, I would expect the role of rate guidance to be strengthened. We've been clear on that. In terms of the models which you must be running that a trade war could affect as well and could affect Europe as well, those models would've been run at the ECB, I'm sure. What are they saying? 1/3  BIS central bankers' speeches  They clearly say that a trade war would have a damaging impact on the global economy, more so in the US and more so in economies which are either very closely related to the US or are deeply integrated in global value chains. The impact on the eurozone would be less and it all depends on how this conversation on trade will evolve and we don't know yet. That's why I'm saying we should look through it. Does the ECB have the tools, though, to negate the effects of a trade war if indeed the worst ramifications do happen?

And of course, as we have found ourselves needing more data to do our job, banks have found themselves having to report not only more data, but also more granular data. We try at all times to be mindful of the 2/4  BIS central bankers' speeches  reporting burden that banks have to bear. Regular merit and cost procedures are applied to new data collections. More recently, we have started to hold public consultations on proposed new statistical reporting requirements. This will help to ensure all stakeholders have the chance to express their views. Cooperation also helps us to make reporting more efficient, which in turn reduces the burden on banks. And here, we have worked on two fronts. With the ESCB Integrated Reporting Framework, we aim to aggregate and harmonise banks’ reporting requirements. With the Banks’ Integrated Reporting Dictionary, the BIRD, we support banks in organising their data with a view to reporting it more efficiently. Towards this end, experts from national central banks work with experts from commercial banks to define the data and data transformations needed to comply with the reporting requirements for AnaCredit and the Securities Holdings Statistics. So, banks that choose to participate are being helped to do a job they would otherwise have had to do on their own. Cooperation with institutions beyond the ESCB has also been vital. The members of the ESCB and the European Statistical System partnership have worked closely to ensure the production of complete and coherent European statistics.
While the focus of debate so far has been on the costs of this disruption, largely in the form of disintermediation of existing agents, there are significant potential benefits to be had too. Specifically, this could lead to a closer alignment of risk for those institutions, new and old, offering these services - narrow banking for payments (money backed by safe assets) and limited purpose banking for lending (risky assets backed by risky liabilities). This radically different topology, while not costless, would reduce at source the fragilities in the banking model that have been causing financial crises for over 800 years. Given the costs of those crises – large and rising – this is a benefit that needs to be weighed. On monetary policy, the most important constraint facing policymakers today is the (close to) zero lower bound (ZLB) on interest rates. At root, the ZLB arises from a technological constraint – the inability to pay or receive interest on physical cash. This is a technological constraint that every form of money, other than  28  For more information on the work the Bank of England is doing, see two discussion papers here and here. Haldane (2007). 30 Bank of England (2021) 29  17  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  17  cash, has long since side-stepped.

Recently, a debate has begun on direct restrictions on some banking activities – in other words, prohibition. This is recognition of the social costs of systemic risk. Bankers are in uproar. This paper examines the costs of banking pollution and the role of regulation and restrictions in tackling it. In light of the crisis, this is the $ billion question. The last time such a debate was had in earnest followed the Great Depression. Evidence from then, from past crises and from other industries helps define the contours of today’s debate. This debate is still in its infancy. While it would be premature to be reaching policy conclusions, it is not too early to begin sifting the evidence. What does it suggest? Counting the systemic cost One important dimension of the debate concerns the social costs of systemic risk. Determining the scale of these social costs provides a measure of the task ahead. It helps calibrate the intervention necessary to tackle systemic risk, whether through regulation or restrictions. So how big a pollutant is banking? There is a large literature measuring the costs of past financial crises. 1 This is typically done by evaluating either the fiscal or the foregone output costs of crisis. On either measure, the costs of past financial crises appear to be large and long-lived, often in excess of 10% of pre-crisis GDP. What about the present crisis?
Chart 12: Real effective exchange rates(a)  United Kingdom Japan  Indices: January 2007 = 100 140 Euro area 130  United States China  120 110 100 90 80 70 60 2007  2008  2009  2010  2011  2012  2013  Source: Bank for International Settlements. (a) Deflated using consumer price indices. 12  BIS central bankers’ speeches

This will offset the impetus to consumption and investment provided by the near-zero interest rates. 7. Some academics believe that the effectiveness of the quantitative easing policy in the US is also undermined by the fact that the US property market has not yet bottomed out and US households need to continue to de-leverage. Many policy measures introduced in the US recently aim to reduce the pain of households in a falling property market and slow down the process of foreclosures. Even though property prices have already fallen significantly, more than 50% in some places according to anecdotal reports, potential buyers still prefer to wait as they fear that prices may fall further once the huge stock of foreclosed properties are put back to the market or when interest rates return to more normal levels. In other words, while measures to slow the downward adjustment of the property market are well-intentioned and have their political merits, they could prolong the time needed for the market to reach a new equilibrium or find the so-called clearing price. In my view, this may delay a true recovery of the property market and create a negative drag on the repair of US  2  BIS central bankers’ speeches  households’ balance sheets, making the recovery of consumer confidence farther and farther away. 8. Finally I would like to share with you a few policy lessons learnt from the latest crisis:  (a)  Households, companies and governments alike must avoid excessive leverage or borrowing.
As the 2008 financial crisis highlighted, through institutions like some of the Icelandic Banks or Lehman Brothers, groups can be a source of both risk and support to UK branches and subsidiaries. Therefore, access to proportionate and timely information on the risks posed by a firm’s group is critical to the PRA’s approach to supervising international banks. Our expectations are set out in two parts. Firstly, a clear baseline of information we want on all international banks. This concerns: the nature of the firm and group’s business model; the resilience of the firm and its parent from both an operational and financial perspective; material risks to the firm’s strategy; and resolution planning. Then, on top of that, a proportionate and tailored set of data that reflects a firm’s business model, its scale and potential impact on UK financial stability. Proportionality is key here. We need more detail on a firm’s group where it is larger, more systemic and where its business model is highly integrated globally e.g. trading and custody. This is because the more highly integrated UK operations are within the group, so the more readily losses or disruption can be transmitted to the UK operations. 6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  For highly-integrated businesses such as the trading activity of GSIBs, we expect access to regular profitand-loss and risk data for key trading business lines.

66 former European Economic Area (EEA) passported branches have entered the Temporary Permissions Regime (TPR) and are applying for authorisation as third country branches (TCBs)2 ;  b. A small number of former EEA branches have been authorised as subsidiaries as they have material retail deposit taking activity; and c.  Many UK banks and large international groups who have subsidiaries here have established and built out their EU subsidiaries, meaning changes in their structure and the nature of their booking models. The fundamental philosophy underpinning the statement is responsible openness A good place to start is with the guiding philosophy underpinning the PRA’s approach to international supervision – responsible openness. The UK has long been a vibrant financial centre, with banks from around the world coming here to contribute to, and benefit from, the efficiencies and diversification provided by international trade. Our banking system is characterised by: a. the scale of international business undertaken here - around one fifth of global banking activity is undertaken in the UK with overseas banks playing an important part. They account for almost half of the banking assets held in the UK; b. the range and diversity of participants - approximately 150 branches and 90 subsidiaries from 50 countries and all of the Globally Systemically Important Banks (GSIBs) have entities operating in the UK; and c.  its global interconnectedness – with significant amounts of business booked cross border into and out of the UK.
Without stability in the financial system it becomes more difficult to conduct monetary policy, and price stability is part of an effective payment system. Practically and organisationally, however, these are two separate fields of work. You could say that we normally use two different toolboxes to perform these two tasks. First, we have a monetary policy toolbox, parts of which I have already described. The monetary policy measures, for example the setting of the repo rate, have a clear objective: to influence economic activity with the aim of maintaining price stability. This in turn is an important component of our efforts to achieve stable development in the real economy. Second, we have a box of tools for promoting stability in the financial system. Financial stability is a basic prerequisite for a safe and efficient payment system. The Riksbank normally uses tools other than the repo rate to promote financial stability. Our analyses of the risks in the financial system that we produce and publish every six months in our "Financial Stability Report" represent the primary tool in this toolbox. If nothing else, this and other feedback that we provide to the banks makes them more aware of potential vulnerabilities and, in the best case, gets them to take preventive measures. This is usually referred to as "moral suasion". But this toolbox also contains more concrete tools. These include the possibility to quickly add liquidity to the banking system.

This is a difficult question that requires more detailed analysis, but it is unlikely that it will be easy to reach a general policy conclusion. I am convinced, on the other hand, that many central banks will review their macroeconomic models and more precisely define the role of asset prices in the transmission mechanism. I do not believe, however, that we should exaggerate the ability of monetary policy to prevent crises from arising. Even if excessively expansionary monetary policy can contribute to the build-up of a bubble, it is less clear to what extent monetary policy can entirely prevent this from happening. It is probable that it would require fairly substantial interest rate increases, something that may not be received sympathetically when the reasons for the increases are not crystal clear. But more moderate interest rate increases could, of course, contribute somewhat. If nothing else, it  14  BIS Review 41/2009  would provide a signal from the central bank that it envisages certain development problems. I also believe that risk scenarios with a longer forecast horizon may be an option for clarifying what the risks may be in the longer term. It is conceivable that the price of housing or some other asset may be driven by factors that are difficult to explain or which may be assumed to give rise to inefficient risk allocation and large fluctuations in economic activity and inflation.
Total factor productivity Logarithmed levels -3.3  -3.3 Actual TFP  -3.4  -3.4  TFP, forecast Potential TFP  -3.5  -3.5  -3.6  -3.6  -3.7  -3.7  -3.8  -3.8  -3.9  -3.9 80  85  90  95  00  05  10  15  20  Source: The Riksbank  10  BIS central bankers’ speeches  5. Capital stock Logarithmed level 29.2  29.2  29.0  29.0  28.8  28.8  28.6  28.6  28.4  28.4  28.2  28.2  28.0  28.0  27.8  27.8 80  85  90  95  00  05  10  15  20  Note. Capital services Sources: The OECD and the Riksbank  6. Number of hours worked Logarithmed levels 12.2  12.2  Hours Hours, forecast Hours, potential  12.2  12.2  Hours, HP trend  12.1  12.1  12.1  12.1  12.0  12.0  12.0  12.0  11.9  11.9 80  85  90  95  00  05  10  15  20  Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  11  7.

Cyborg supervision – the application of advanced analytics in prudential supervision Speech given by James Proudman Executive Director, UK Deposit Takers Supervision  Workshop on research on bank supervision Bank of England 19 November 2018  I am grateful to Sian Besley, David Bholat, Charlotte Bull, Stephen Denby, Ryan Lovelock, Clair Mills, Philip Sellar, Pete Thomas and Sam Woods for their assistance in preparing these remarks and conducting background research and analysis. 1  All speeches are available online at www.bankofengland.co.uk/speeches  I. INTRODUCTION  Recognising faces comes instinctively to humans. Until fairly recently, however, it proved beyond the ability of computers. Advances in artificial intelligence (AI) - the use of a machine to simulate human behaviour – and its subset, machine learning (ML) – in which a machine teaches itself to perform tasks – are now making facial recognition software much more widely available. You might even use it to access your bank account. Because it is so easy for us but so hard for computers, facial recognition is a good illustration of the challenges faced in developing AI. Enabling a machine to teach itself to recognise a face requires sophisticated algorithms that can learn from data. Advances in computational power and algorithmic techniques are helping machines become more human and super-human like. ML also requires lots of data from which to learn: data are the fuel that powers it – the more data used to train the algorithms, the more accurate their predictions typically become.
Már Guðmundsson: The Icelandic pension system and the financial crisis Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the opening dinner of the European Pension Convention 2010, Reykjavík, 2 May 2010. *  *  *  Chairman, ladies and gentlemen, It gives me great pleasure to address you here tonight, and I would like to thank the organisers for inviting me to do so. This is due not least to my past interest in and work on the Icelandic pension system and, more generally, my interest in the optimal design of pension systems. During my tenure as Chief Economist of the Central Bank of Iceland from 1994–2004, I was convinced that the pension system that had developed in Iceland, partly by historical accident, was one of the strengths of Iceland’s economy. This conviction had taken root earlier, when I was involved with pension reform and served for a while as the chairman of the board of a pension fund that has long been among the top ten in Iceland in terms of size. However, this view was reinforced around the turn of the century, when I made an in-depth study of the Icelandic pension system and tried to analyse its effects on the economy and the financial sector. 1 I subsequently tried to propagate the virtues of the system abroad.

The conditions for opening up that access are rapidly being created in the wake of the Second Review of the IMF programme, as is witnessed by the development of the credit default swap spread of the Icelandic sovereign and the fact that the rating outlook has improved. But what about the pension funds? They were hit very badly, of course, as their equity stakes in the fallen banks became worthless overnight, the value of bank bonds collapsed, and asset prices of all kinds tumbled. The result was that the real rate of return on the funds was negative to the tune of 22% in 2008, and their assets as a share of GDP fell from 134% in 2007 to 119% last year. But let us remember that part of this is a correction. The asset values of the boom and the associated rates of return on pension funds, as well as banks, had a significant element of froth. To some extent, they were never real. 4  BIS Review 63/2010  We always knew that this kind of shock was the major risk facing fully funded pension systems. But the system is still here. It took a hit, but it withstood the shock. So my basic belief in the strengths of the Icelandic pension system and similar systems around the world is still intact. But that is provided that we learn the lessons of the financial crisis and make it a once-in-a-lifetime event. We need to learn the lessons on incentives and risk management.