samchain/econo-pairs-v1 huggingface dataset:
In recent years, house prices and household borrowing have increased rapidly, partly as a result of low interest rates. We have stated that we feel some concern that this development may go too far, with a risk of severe adjustments in the future. One risk is that a sharp brake in house prices could lead to households perceiving their debt burden to be too high, and that they would therefore quickly increase their saving. This could lead to a severe decline in demand in the economy and in inflation. In the considerations behind our decision on the interest rate at the beginning of the year, we considered these risks to be one reason for not postponing an increase by a few months - which I otherwise believe would have been fully possible given the forecasts we otherwise make and the precision of these forecasts. I would not like to claim that this is necessarily always the optimum means of managing this type of risk in monetary policy considerations. The relationship between credit volume and asset prices on the one hand and monetary policy and the real economy on the other hand has not yet been sufficiently mapped to be able to draw any clear policy conclusions. In addition, our experience of deregulated financial markets is still limited to a small number of economic cycles. At the same time, we cannot ignore the risks to future inflation and economic activity with which we believe that developments in the housing market are connected.

Private savings for financing higher education should increase considerably. Finally, in addition to openness and the culture of risk-taking, a competitive society needs responsible macroeconomic and financial management. Indeed, stable money, low and predictable inflation, and fiscal responsibility are probably the most essential public goods governments and central banks can provide over a short term to support innovation. It is equally well known that market-based access to finance enables to quickly mobilise necessary funds for innovation. Single financial market supported by common infrastructure plays an essential role in increasing the competitiveness of the European Union. Ladies and Gentlemen, let me once more welcome you to Tallinn. I wish you a successful and thought provoking conference. 2  BIS Review 63/2007
We have been able to observe that it is a broad-based decline in inflation, to the extent that all major components are affected.6 Low inflation has come to be a widespread phenomenon and many countries and regions have recently reported inflation rates clearly below their targets. Inflation has fallen particularly sharply in the euro area. The fact that this happens in a situation where there is plenty of spare capacity – which is the case in large parts of the euro area – is not particularly surprising. However, the downturn in Swedish inflation is larger and has been going on for longer than in other countries. And the question is why... One possible reason, which was also discussed in an article in the latest Monetary Policy Report in February, is that Swedish companies have not been passing on their cost increases to consumers as much as is normal.7 They have thus not increased their prices to the extent that one might expect, given the historical relationships with unit labour costs and import prices faced by producers. There may be several reasons for this, but one is that margins may decline when economic activity is weak, which is also noted in the article. Current research using US data implies that price mark-ups vary positively with the business cycle.8 Another reason may be that the weak development in the euro area has hit Swedish exports hard and that this has contributed to resource utilisation being lower than normal over a long period of time.

And to offer a very practical suggestion as to how each of you might be able to do more in your organisations too. Why diversity and inclusion matters The Bank’s approach is to consider all aspects of diversity as part of a broad strategy to deliver an inclusive working environment for all our colleagues. And I can tell you from speaking with senior leaders throughout the City that diversity and inclusion are no longer seen as HR buzzwords, but as critical ingredients to running a successful organisation. A workforce that lacks diversity will never be as effective as it could be. That should be obvious. If we look the same, think the same, and come from the same backgrounds, then we are bound to make the same mistakes. Strangely enough, I have found an analogy to this issue in my day job as the supervisor of UK banks. If a bank has substantial exposures in one sector or geography, it is running significant risk. On the other hand, a bank with a diversified portfolio is less exposed to something going wrong in any one area, and so will likely find itself better positioned, in most states of the world, to weather bad times. Launched in 2011, “The Network of Networks” (TNON) serves as both a forum for sharing best practice and a support community for the leaders of employee networks.
Let me discuss each in 9  turn . Distributed ledger technology (DLT) (3 PoCs)  DLT has in many respects been the poster-child for FinTech. Thrown into prominence by the advent of bitcoin and other cryptocurrencies, the attraction of DLT to central banks really lies in the potentially highly attractive resilience characteristics of the underlying technology. In its purest form, a DLT network operates with no centre, and every node in the network holds a full copy of the ledger. So the failure of a node has no impact on the overall resilience of the system, with transactions simply rerouting elsewhere. A single ledger could also eliminate the need for costly reconciliations between market participants, increasing efficiency and reducing operational risk. For central banks currently operating centralised payments and settlements systems with only limited redundancy and facing growing cyber and operational threats, such a model has obvious attractions. Our first DLT PoC, undertaken with PwC, proved it was possible to build a multi-node scalable DLT environment enabling the transfer of ownership of a fictitious asset. But it also demonstrated that the technology was some way from being sufficiently robust or scaleable to form the core of live central bank infrastructure such as the Bank’s Real-Time Gross Settlement (RTGS) service – a conclusion that helped inform the Bank’s plans for its RTGS renewal programme. PoCs by other central banks have reached 10  broadly similar conclusions . 9  More detailed write-ups of completed PoCs can be found at: http://www.bankofengland.co.uk/Pages/fintech/default.aspx.

BIS Review 105/2009  5  Figure 5 Volatility and risk premium (basis points, percent)  Quarterly survey on banking credit (balance of responses, percent) Credit approval standards (*)  900  115  800  Demand for new credits (*)  75  75  75  75  100  50  50  50  50  700  85  25  25  25  25  600  70  0  0  0  0  500  55  -25  -25  -25  -25  400  40  -50  -50  -50  -50  300  25  -75  -75  -75  -75  200  10  -100  -100  -100  Jan.08  Jul.08  EMBI  Jan.09  VIX  Jul.09  Jun.05  Jun.06  Jun.07  Jun.08  SMEs  Jun.09  Consumer  -100  Jun.05  Jun.06  Jun.07  Jun.08  Jun.09  Housing mortgages  (*) Average responses per quarter. Negative figures denote tigher conditions than in the previous quarter. Fuentes: Central Bank of Chile, Bank Lending Survey; Bloomberg. 6  BIS Review 105/2009
8 The further countries are located from one another, the less likely it is that their banks will be active in one another’s markets. Many of the banks operating in Central and Eastern Europe originate in Western Europe. Right after the fall of the Soviet Union and the opening up of strictly regulated markets, the presence of foreign banks from Western Europe exploded. Today, many of the countries in the region report foreign ownership in excess of 80 per cent of total banking assets. Also here we see a strong geographical component. A large share of the foreign banking assets in  3  By the end of 2009 these countries accounted for nearly half of the global banking system measured in terms of gross global cross-border banking assets. 4  Other advanced economies include the US, Canada, Japan, Australia, New Zealand, and Switzerland. 5  See Table 1 in Barba Navaretti et al. 2010. 6  Inside the euro zone, cross-border loans have more than doubled from € 152 billion in 1999 to € 361 billion in 2006, while cross-border deposits have increased from € 221 billion to € 316 billion, respectively (see Heuchemer, Kleimeier and Sander (2008)). 7  The regional dimension of cross border banking activities was also emphasised in a speech given by José Manuel González-Páramo (24 February 2006).

As of 2012, euro area inflation started falling again, and has continued to do so to date. Since October 2013, the year-on-year rate of growth of the headline HICP has oscillated between 1% and 0.5%, in spite of the slowly consolidating economic recovery. A situation of low inflation is now common to many advanced economies, creating a moral general puzzle. All in all, the lack of a tight relationship between inflation developments and estimates of slack in economic activity, such as the output gap, is not surprising from the point of view of modern monetary theories. The new Keynesian Phillips curve suggests that, net of erratic factors, inflation is determined by the whole path of expected future output gaps, not just its current level. Hence, economic slack at any given point in time need not be associated with a deflationary episode, if it is accompanied by expectations that the output gap will eventually turn sufficiently positive. In turn, expectations of the future stance of monetary policy play a key role in determining expected future output gaps. The absence of persistent disinflation in 2009 may thus be ascribed to the monetary accommodation imparted by many central banks between the end of 2008 and 2009 through both standard and non-standard tools. The monetary policy easing was commensurate to the size of the shock, i.e.
Niklaus Blattner: Economics is what economists do Speech by Professor Niklaus Blattner, Vice Chairman of the Governing Board of the Swiss National Bank, at the Opening Session of the Integrated Master Programme, Faculty of Economics and Behavioral Sciences, Department of Economics, Albert-Ludwigs-Universität, Freiburg im Breisgau, 22 October 2004. * 1. *  *  Introduction  This is an important moment in the professional life of all of you who have chosen to participate in one of the three Master Programmes starting today and offered by the University of Freiburg. Your choice was either the Master of Economics and Politics, the Master of Finance or the Master of Internet Economics. A common denominator of all these programmes is economics. I felt it might be worthwhile, right at the beginning of your undertaking, to draw your attention to what economics stands for. This begs the question of what economics is. Jacob Viner (an eminent international trade theorist, 1892-1970) gave a slightly disturbing answer: “Economics is what economists do”. This sounds less scientific than you might have wished. But Viner has a point: when talking about a subject that has a history of constant change and development, why not simply look at the empirical facts and take instruction from what one observes? This is exactly what I propose to do. - I base on my own experience and observation.

He would lose his contract and a different forecasting firm would be hired. In this way, the blame was externalised elegantly. It is not surprising that under such circumstances the young economist had to reassess his professional situation and to look for other fields to develop his skills. But he kept many valuable souvenirs. Don’t forget that he acquired first-hand knowledge of what a powerful giant multinational company can be, but also how fragile it can become when the growth of its organisation is not sufficiently controlled. - Incidentally, this same company is still prospering, but over the decades it has been thoroughly reorganised many times. Restructuring has become a habit. If the former young economist revisited “his” company today, he would not recognise it anymore. The complicated matrix organisation, including the central staff of economics, has disappeared. Responsibility is structured in much simpler ways. The hierarchy is considerably flatter. The game of externalising blame can no longer be played as easily as in former times. Even the quality of food and wine served at the visitors’  2  4  http://www.bls.gov/oco/ocos055.htm. BIS Review 62/2004  restaurant is more modest. One might still be offered a cigar after lunch, but the selection would most likely be narrower than in the ‘good old days’. With respect to the disappearance of economics units in business corporations, John J. Casson writes: “During the past two decades, several corporations, including IBM, Citibank, American Express and General Electric, eliminated their economists units.
First, the NPL ratio dropped from above 20 percent at end-2014 to almost 6 percent presently, making it the largest adjustment in the EU over a relatively short time period. At the core of this adjustment were conservative requirements for provisioning NPLs, our hands-on supervisory approach, and a fiscal facility that was conducive to the development of the secondary market for NPLs. Second, the share of leu-denominated loans in the total stock of loans has increased from one third prior to the crisis to two thirds nowadays, with the benefit of reducing contagion risk and improving the transmission mechanism of the monetary policy. However, it would be risky to press ahead too fast. In the case of the ECB, while the tapering of its QE has already started, an upward move in the interest rate is not likely to happen soon. As for peer countries such as Poland and Hungary, their macroeconomic conditions do not seem to 2/3  BIS central bankers' speeches  warrant a start of the tightening cycle this year either, with still below-target inflation. As long as real interest rates remain negative all over Europe, straying too far away from our regional peers in terms of policy rate would invite disproportionate appreciation pressures, which – while helpful in terms of inflation – would not be a welcome development, given Romania’s increasingly negative external imbalance.

First, because financial markets are so highly integrated, central banks need to cooperate closely in order to master the problems. Second, incentive schemes in banks that have given particular priority to rewards for risky behaviour should be changed, and the instruments for measuring risks need to be reassessed. The way in which the Swiss National Bank steers the Swiss franc money market, however, has proved its worth, with the three-month Libor being successfully held inside the target range. In this way, the real economy has been protected from the upheaval on the interbank market. BIS Review 31/2008  1
Countries with a ceiling for inflation have the ceiling as a mark. The broken column for Sweden refers to the CPIF (the CPIF is the CPI with a fixed mortgage rate). Sources: The OECD and each country’s central bank  Figure 5. KIX-weighted nominal exchange rate Index, 18 November 1992 = 100  Note. Outcomes are daily rates and forecasts refer to quarterly averages. KIX is an aggregate of the countries that are important to Sweden’s international transactions. Source: The Riksbank  BIS central bankers’ speeches  11  Figure 6. The Riksbank’s and markets’ short-term forecasts for inflation Annual percentage change 1,4  1,4  1,2  1,2  1,0  1,0  0,8  0,8  0,6  0,6  0,4  0,4 Outcome  0,2  0,2  Market expectations (mean excluding the Riksbank) The Riksbank  0,0  0,0  -0,2 Jan-13  -0,2 Apr-13  Jul-13  Jan-14  Oct-13  Apr-14  Note. The Riksbank’s forecasts according to the most recently-published assessment and market expectations, compared with outcomes. The Riksbank’s figures are not entirely comparable with market participants’ expectations, as the Riksbank’s forecasts are often older. Sources: Bloomberg, Statistics Sweden and the Riksbank  Figure 7.

We will return with this information on 4 September, when we present our next repo-rate decision. Concluding thoughts The Riksbank has two main tasks: price stability and financial stability. On this basis, it is worrying that inflation is too low and below our target, at the same time as household indebtedness is very high, which creates risks for developments in the long run. In my speech today I have discussed how we can manage this challenge. It was necessary to cut the repo rate in July to attain the inflation target, but at the same time it is even more essential to take macroprudential policy measures to deal with household indebtedness. So far the new framework for macroprudential policy has mainly resulted in sharper capital adequacy requirements for the banks, which increase the resilience of the banking system. As I see it, one important piece of the puzzle still remains, however; namely measures aimed at directly limiting household indebtedness. However, to create a development that is sustainable in the long run, it may also be necessary to take measure in other policy areas, such as a review of tax deductions for interest paid and measures to increase housing construction. 8  BIS central bankers’ speeches  Figures Figure 1. Inflation in various countries and regions Annual percentage change  Note. KIX is an aggregate of the countries that are important to Sweden’s international transactions. When calculating KIX-weighted inflation, the HICP is used for the euro area and the CPI for other countries.
Lars Heikensten: Monetary policy in Sweden  Speech by Mr Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, at the Autumn Conference of the Centre for Business and Policy Studies, held in Stockholm on 17 November 2000. *  *  *  Thank you for the invitation to talk about monetary policy. If my memory serves me right, this is the fifth autumn conference I have addressed as deputy central bank governor. For me, the annual opportunity of discussing monetary policy with some of our country’s leading economists and economic observers has become a very enjoyable tradition. I shall begin, as usual, with a brief account of the past year, taking 1999’s October assessment as my starting point. Even though our appraisal of inflation at that time was relatively optimistic, the outcome has been better than we foresaw. Developments in the past year raise questions about the economy’s inflation propensity. That topic was already up for discussion at last year’s conference, though the reason then was that several leading observers considered the risks of inflation were being underestimated by the Riksbank. A third matter I shall be talking about is our monetary policy guidelines. In the past year we have been criticised for basing repo rate decisions on appraisals that are too narrow. Finally, I shall be looking ahead and commenting on our view of inflation in the coming years.

But even with a growth rate of just over 3%, the Swedish economy would be expanding more rapidly than we believe it is capable of in the longer run. Econometric estimates of the output gap. Per cent of potential GDP 4  4  2  2  0  0  -2  -2  PF HP UC  -4  -4  -6 -8 1980  -6 -8 1984  1988  1992  1996  2000 Source: The Riksbank  Let me conclude by underscoring what I mentioned initially, namely that forecasting inflation proved difficult in the 1990s, in Sweden as well as elsewhere. There have been substantial changes in our economies, partly because policy now focuses on stability and competition has become stronger in various ways. Inflation in Sweden has been a positive surprise in recent years even though activity has been rising strongly, so further positive surprises should naturally not be ruled out. Still, there are now many indications that resource utilisation is relatively high and will go on rising. That implies that, little by little, inflationary pressure will grow. We will be presenting a comprehensive assessment of inflation prospects in the December Inflation Report. In that context we will also be deciding the repo rate. Recent developments have not altered the picture I formed in October. Although it is still too early to specify when, there will presumably be grounds for increasing the repo rate in the future. BIS Review 107/2000  6
In fact, such an EU fund would be better diversified than the national funds are today, which all else equal would enable it to charge lower fees or hold a bigger risk-adjusted buffer. In the event of really large banks or several large banks failing, there could be an established system of committed drawing rights, where the EU fund has the right to raise funds through national governments’ ability to raise tax. Regarding liquidity support, the ECB would be given the role as lender of last resort. To convince national governments to commit such guarantees would of course demand very strict and well thought-out rules governing what actions the EU fund should be allowed to take in the case of a bank failure. These rules could be inspired by the US FDIC’s very strict mandate to always choose the least cost solution. Among other things, this would in some cases mean allowing shareholders as well as uninsured depositors and debt holders to lose their money. Since to my knowledge most EU countries lack the rules on how to handle large bank failures, it would also be very positive from a contingency planning and moral hazard point of view. With a strong legal framework, the EU would be able to let investors in even the biggest banks take full financial responsibility.

In short, more Basel III now, rather than a hypothetical and delayed Basel IV. However, there are two issues to consider: the increased speed of deposit withdrawals connected with digitalisation and social networks - raises new challenges. None of the ideas put forward on this subject are clear-cut, but none should be taboo. Moreover, the lack of liquidity and transparency in the single-issuer CDS market must no longer give rise to systemic risks: as a first step, we must ensure a better understanding of the transactions, the participants and the correlation risk with other financial instruments. Let me now turn to supervision. Why did Credit Suisse fail despite meeting the requirements of Basel III? The answer is clear: good regulation is necessary; but it is never enough. A Highway Code - regulations -, even the best one in the world, will only be effective if the traffic police - supervisors - are efficient. Risks generated by specific business models should lead to stricter requirements. This is precisely the spirit of "Pillar 2" of the Basel framework. Supervision can and must be responsive, intrusive - including with on-site inspections -, exercised by highly qualified professionals, and applied forcefully. This is not wishful thinking: this active supervision is one of the greatest success stories of our European Banking Union. The SSM demonstrates the benefits of bringing all players under one main authority only, rather than regional ones, with clearly defined responsibilities  and  coordination.