samchain/econo-pairs-v1 huggingface dataset:
But, as a citizen, I cannot help and feel proud of having one the two main currencies in the world. In sum, benefits of the euro include a high degree of credibility of monetary policy reflected in the level of long-term interest rates; diminished exchange rate volatility; completion of the single market and encouragement to cross-border trade. None of this, of course, can be taken for granted. Benign conditions currently prevailing on financial markets can be reversed. External or internal shocks may be coming, which would impact negatively European economies. The American economy could for example slow down more sharply than anticipated. Fuelled by an excessive expansion of credit, some internal imbalances, although in no way comparable to those in some other developed economies, could also develop in the euro area, especially in the housing sector. But I have the strong conviction that we are fully equipped to deal with any contingency, and, provided the necessary structural reforms are undertaken, keep the economy on a path of growth and stability. BIS Review 3/2007  1  2)  How have those successes been achieved? A lot comes, in my view, from the institutional and operational framework in which monetary policy is developed and implemented. The independence of the ECB and of the 12, very soon 13, participating NCBs is enshrined in the Treaty. They are institutionally, operationally and financially independent from European Community institutions and national governments. We have a clear and transparent definition of price stability: inflation below but close to 2% over the medium-term.

The portion used by oil companies in Norway, partly to finance investment, also has an effect on the mainland economy. We can say that oil revenues enter the Norwegian economy through an external and an internal circular flow. The distinction between the external and internal circular flow is important for exchange rate stability. This means, among other things, that short-term changes in oil prices shall not influence the orientation of economic policy. If the distinction between the two circular flows were to break down, and the use of oil revenues were to fluctuate more in step with oil prices, we would have an unstable economy, and hence an unstable exchange rate. The Government Petroleum Fund thus has two objectives. It serves as a buffer for the mainland economy against fluctuations in oil revenues, and it manages a considerable portion of the government’s financial wealth. In addition to capital outflow from the Petroleum Fund, in recent years there have also been considerable capital outflows from various non-oil sectors. As in other Nordic countries, large asset managers such as life insurance companies and securities funds accumulated substantial holdings of foreign equities and bonds in the latter half of the 1990s. These portfolio investments abroad reflect a desire to diversify risk. The substantial net outflow of long-term capital from the private sector may partly reflect a thin Norwegian capital market. The Norwegian bond market is not very developed and the total value of equities in the Norwegian market in relation to GDP is very low.
The reduction in the basket of real goods she is now getting as a result of inflation is similar to a tax she has paid to the government. In this case, the tax is equivalent to four hours of her time. It is not different from a rule requiring the teacher to work four hours a day for the government for nothing! That rule obviously reduces her welfare. She undergoes this reduction of her welfare not on her own accord, but involuntarily. Such involuntary reduction of welfare in favor of the government has been caused by inflation and, therefore, known as inflation tax. BIS Review 64/2007  1  How is the inflation tax imposed? Governments have appointed either central banks or currency boards as their agents for producing and supplying currency. Unlike currency boards which have to maintain a hundred percent reserve of valuable assets (gold and hard foreign currencies such as Dollars, Euros or Sterling Pounds) for issuing currency, central banks are peculiar animals. They do not have to have a reserve of an equivalent amount and can issue currency simply by making book entries. In other words, they can acquire any asset by assuming a liability on account of the currency they have issued. For instance, if a central bank has to acquire a building, all it has to do is to open its vault and issue the required amount of currency to the seller of the building.

But, borrowing from the central bank is just a single transaction and the Treasury could use it immediately for making payments. Second, because of the limitations of the tax bases in developing countries, there is resource paucity for governments to undertake much needed infrastructure projects. Hence, it has been argued that the governments in developing countries could initiate the development efforts by mobilizing resources through inflation. The initial inflation so created would get reversed once the new economic development increases the production of goods and services and raises the market supply. So, inflation would become a self-destroying process and, therefore, it is argued that there is no danger of using inflation for economic development. Third, taxes are mandatory payments and therefore, there is resistance on the part of tax payers to pay the taxes. Because of the pressure coming from the lobbying groups, political authorities too sometimes are unwilling to raise the tax rates to generate higher tax revenue. However, the resistance of the citizens to inflation tax is virtually nonexistent. This is because no one realizes that they are paying a tax to the government, when the prices move up. Any resistance by them is not against the  2  BIS Review 64/2007  inflation tax per se, but against the inflation. That again takes place after sometime when they have been very badly hit by inflation. Fourth, inflation is said to be bringing about some salutary effects to an economy from the point of view of its long term growth.
This should also result in risk being priced into these loans to banks. Creditors have been written down while a bank was kept open. On 5 February 2011, the Danish resolution authority Finansiel Stabilitet A/S took control of Amagerbanken, a midsized Danish bank. 13 All equity was written down to zero, and non-guaranteed deposits and wholesale funding were initially written down by nearly half of their original value. This was done over a weekend. On Monday morning, the online banking service was open and all  10  The Bank Recovery and Resolution content/EN/TXT/?uri=celex:32014L0059. 11  A more detailed description of the rules for bail-in and how it works is found in Vale, Bent (2014), “Kriseløsing av banker ved hjelp av bail-in – momenter ved innføring i Norge” [Bank resolution with the aid of bail-ins – factors associated with introduction in Norway], Norges Bank Staff Memo 12/2014 (in Norwegian). 12  In addition, a number of other types of liabilities are exempted, such as covered bonds, accrued but unpaid salary, taxes payable and liabilities to ordinary commercial suppliers of goods and services necessary for the daily functioning of the bank. 13  A detailed description of the resolution of Amagerbanken is found in the Finansiel Stabilitet A/S Annual Report for 2011 (in Danish). 6  Directive  may  be  found  at  http://eur-lex.europa.eu/legal-  BIS central bankers’ speeches  depositors obtained access to their remaining deposits. The bank was kept open as a subsidiary of Finansiel Stabilitet A/S.

The bank’s critical functions were kept running. Shareholders and unsecured creditors were not bailed out. Over time, the creditors who were not covered by the deposit guarantee were paid back around 85 percent of the value of their original claims. The value of the bank’s assets was preserved to a larger extent than if the bank had been wound up. Danish banks’ funding costs rose following the resolution of Amagerbanken. However, it did not trigger a systemic crisis in the Danish banking sector, despite its occurrence in the middle of the European debt crisis. What the Danes got was a pricing of the true risk in their banks. Over time, this provides a basis for a less risky financial system. Bail-in may nevertheless be difficult to implement. Bail-in of a large bank, that is a bank with substantial liabilities, will inflict losses on a large number of creditors. That is the intention. But if these liabilities are owned by institutions that are critical to the functioning of the financial system, the problems in one bank can spread quickly. If the losses are substantial, the authorities run the risk of triggering a systemic crisis. Moreover, bail-in of creditors may make funding more expensive for other banks, particularly in turbulent times. For large, systemically important banks, the time-inconsistency problem remains. This weakens the credibility of the bail-in regime. Therefore, the Bank Recovery and Resolution Directive also provides for measures intended to bolster credibility. An important measure is that national authorities are to prepare resolution plans for individual banks.
Our assessment was that there is a need to continue to raise the repo rate in order to stabilise inflation at a level close to the inflation target of 2 per cent and to avoid too high a level of resource utilisation in the future (see Figure 11). However, as usual, we would like to add that uncertainty concerning the future is great and the interest rate path we have calculated is a forecast, not a promise. Wage formation will probably continue to work well in the years ahead The conditions are good for wage formation to continue to work well in the years ahead, just as it has since the mid-1990s. This is also the assumption made in the Riksbank’s forecasts from April. The rapid improvement of the labour market means that the central agreements concluded in the autumn and next year are expected to reach higher levels than the agreements concluded last year. Wage increases over and above the central agreements (“wage drift”) are also expected to contribute towards slightly faster wage increases. The Riksbank’s assessment is that overall hourly wages will increase by about 3.5 per cent per year in 2012–2013, which is compatible with a CPIF inflation rate (inflation excluding interest rate changes) of close to 2 per cent at the end of the forecast period.3 But all forecasts are uncertain. This also applies to wage forecasts. It is normally easier to make good forecasts for the development of wages than it is for inflation.

Inflation expectations and the conduct of monetary policy, Speech at an event organised by the SAFE Policy center, 11 july 2019  6  Figure 3. Recent divergence between the evolution of household inflation expectations and market based-measures  Sources: ECB, European Commission  7
The financial crisis was a searing experience that damaged household and business confidence in a profound way – with a more lasting effect than the typical economic downturn. The housing bust created both a large housing supply overhang and a large number of households that were underwater on their mortgages. Households needed to repair their balance sheets and bring down their debt service burdens to more manageable levels. Higher levels of unemployment further depressed demand. Credit availability contracted. The tightening of credit standards occurred quite broadly – in housing credit, consumer credit cards and business lending. Some of the credit supply restrictions were imposed by banks that needed to repair their balance sheets, deleveraging by building up capital and working down their bad assets. Fiscal outlays were not high enough to compensate for the contractionary impulse from these first three sources. The crisis led to a significant deterioration in the U.S. federal budget deficit and put pressure on state and local budgets. After the federal budget deficit reached around 10 percent of GDP at the peak, fiscal consolidation occurred at the federal level, as well as at state and local levels, restraining economic activity instead of supporting growth. Productivity growth has also been quite low. In the period before the crisis (2003 to 2008), U.S. nonfarm productivity growth averaged 2 percent per year. Since 2010, productivity has been closer to 1 percent. While some of this decline can be explained by lower capital spending, the decline is difficult to fully explain.

William C Dudley: Panel remarks at Bank Indonesia-Federal Reserve Bank of New York Joint International Seminar Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bank Indonesia-Federal Reserve Bank of New York Joint International Seminar, Bali, 31 July 2016. *  *  *  Linda Goldberg, Jonathan McCarthy and Joseph Tracy assisted in preparing these remarks. In my remarks today, I will focus on why global growth has been so anemic following the financial crisis and what we can do about it. I think it is fair to say that the global recovery following the financial crisis has been disappointing. Growth is below pre-crisis levels for the United States, Europe, Japan and China. For example, in the U.S., real GDP growth has averaged only about 2.2 percent per year over the period from 2010 to 2015, below the pre-crisis average of 2.4 percent from 2003 to 2008. This slower growth performance has been accompanied by relatively low inflation rates – persistently below the objectives of the monetary policy authorities in the United States, Europe and Japan. As I see it, there are many causes for these persistent shortfalls in growth, and they vary across regions and countries. Let me focus on the reasons for the United States in the post crisis period. Growth has been weaker than expected for many reasons.
•  Limited capacity of trained personnel, logistics and finance to combat Money Laundering, among others. The Anti-Money Laundering Act was passed in June 2005 and this appoints the Governor as the Anti-Money Laundering Authority. This Act was passed mainly as a preventive measure against Money Laundering and to provide for a sound financial system. To discharge the responsibilities of the Authority, the Bank of Sierra Leone must establish a FIU to analyse and process reports relating to suspicious transactions from Financial Institutions. A committee of stakeholders in the  BIS Review 79/2006  1  implementation of the Act was established and is chaired by the Governor of the Central Bank. This committee comprises, the Ministry of Finance, Attorney General and Minister of Justice, Ministry of Foreign Affairs and International Co-operation, Ministry of Mineral Resources, the Ombudsman, National Revenue Authority (NRA), Inspector General of Police (IGP), Criminal Intelligence and Security Unit (CISU), National Drug and Control Agency NDCA), Anti-Corruption Commission, and The Association of Commercial Banks. Since the establishment of this committee several positive measures have been taken in the implementation of the Act: currency declaration forms for passengers travelling to and from Sierra Leone will now be administered by the National Revenue Authority (NRA). Financial Institutions are also implementing Customer Due Diligence and Know Your Customer principles. Technical assistance was sought from the UNODC by the Bank of Sierra Leone for the establishment of the FIU.

But monetary policy cannot solve deeper structural problems or lift growth potential of the economy. That needs to come from real progresses that increase productivity and relax supply-side constraints. Sure, demand stimulating can buy time by cushioning the economy from short-term economic shocks. But this may possibly delay necessary adjustments of the economy to longer-term challenges. For example, keeping interest rate too low for too long and keeping exchange rate undervalued, beside encouraging risk taking and storing up financial instability problems for the future, may also temper incentives for businesses to improve efficiencies, and may slow the reallocation of capital and labor to more productive uses. In the context of Thailand, one of the most important structural issues facing the Thai economy at the moment is that of the labor shortage. Through our business contact and recent surveys, the labor shortage has scored one of the top concerns by both domestic and foreign businesses operating in Thailand. Underlying causes of labor shortage include the demographic change and education and skill mismatch. Clearly, there is little monetary policy can do to solve this supply bottleneck. It can help foster macroeconomic stability conducive to business investment, but most of the efforts to address supply-side impediments still need to come from a broader and more balanced set of economic policies including fiscal, industrial, technology, and labor market policies.
One needs to go back to the Bretton Woods era to get volatility levels as low as at present. 2  BIS Review 124/2006  BIS Review 124/2006  3  Of course the reduction in the volatility of returns – and the lower compensation for future volatility embedded in risk premia – is responding to some real changes in the world. You might break down sources of uncertainty about future returns into three components: macroeconomic risks, financial risks and risks in the broader environment. Macroeconomic volatility has fallen considerably over the last decade in many economies [Chart 5]. In the real economy, greater flexibility in labour and product markets, especially openness to foreign competition through trade and immigration, has enabled smoother adjustment to shocks. On the price side, central bank independence and inflation targeting have contributed to greater price stability. There is also greater depth and sophistication and fewer rigidities in financial markets. Innovation has created a variety of products enabling more and better risk transfer by financial market players and greater choice for end-investors. Greater financial market flexibility can support macroeconomic stability by keeping credit and liquidity available during periods of stress. But risks in the broader environment haven’t gone away. Threats from ecological or biological disasters, fraud, political conflict and terrorism seem as high as ever. And these are risks we have identified. As ever there may be some significant “unknown unknowns”.

Because the contribution to growth from inventory investment can be quite volatile on a quarter-to-quarter basis, the growth in real final sales probably provides a better sense of the state of economic activity than does the GDP figure. Moreover, when one digs deeper, the fundamentals supporting domestic demand look quite sturdy. For example, consumer spending has been well-supported by real income gains and rising household net worth. Household balance sheets do not appear over-extended. The household debt service burden is low, the household saving rate is not low relative to household net worth, and household credit growth has been slow. Housing fundamentals are solid as well. Decent payroll gains have supported household formation over the past year and mortgage rates remain low. Housing prices are rising and the constraint on growth in residential investment now appears to be more on the supply side, as building contractors struggle to mobilize the resources needed to construct more homes. The National Association of Home Builders’ index rose in October to the highest level  BIS central bankers’ speeches  1  since late 2005. While the housing indicators will likely continue to be volatile on a month-to-month basis, I expect the gradual improvement in the housing sector to continue. Also, the international outlook appears less problematic than it did just a few months ago. Although substantial questions remain about the Chinese growth outlook and the consequences of lower commodity prices for major commodity-exporting countries, we have seen two important positive developments.
For these reasons alone, the use of petroleum revenues may in periods deviate from the 4 per cent rule. Spending was also increased in response to the economic downturn in 2003. We can therefore safely affirm that the fiscal rule has been normative for fiscal policy. Nevertheless, over the last years more oil money has flowed into the Norwegian economy than earlier. Petroleum investment shows a pronounced increase this year. Moreover, government petroleum revenue spending has increased in recent years. The fiscal rule is part of a set of economic policy guidelines. The various components of economic policy have varying effects. This is why they have different functions: •  Monetary policy steers inflation in the medium and long term and can also contribute to smoothing swings in output and employment. •  The central government budget – growth in public spending – influences the krone and the size of the internationally exposed business sector in the medium term. Government expenditure and revenues must be in balance in the long term. •  Wage formation, the structure of the economy and incentives determine how efficiently we use our labour resources and other economic resources. There is also an interaction. To give you an example: •  In its budget resolutions, the government authorities will attach importance to the effects of the budget on the Norwegian economy and will therefore take account of interest rate effects.

The background material for the Act relating to the Petroleum Fund clearly indicates that the Fund shall not be a second central government budget and, by implication, shall not be used for investment or spending that have not received priority in the budget. The chart shows the share of the central government’s annual net cash flow from petroleum activities that has been transferred from the Fund to the fiscal budget. Since 1996, a considerable portion of the petroleum revenues has been retained in the Fund. In 2000 and 2001, there were almost no transfers from the Fund to the fiscal budget while in the past two years the share transferred to the fiscal budget represented about one-third of the cash flow. 1  See Act relating to the Government Petroleum Fund, adopted on 22 June 1990 and amended by Act no. 2 of 16 January 2004. The Petroleum Fund has become large. At the end of the second quarter of 2005, the market value of the Petroleum Fund’s portfolio was nearly NOK 1 200 billion or approximately EUR 150 billion, or roughly 65 per cent of GDP. The Ministry of Finance has defined a clear mandate for Norges Bank’s management of the Petroleum Fund. Norges Bank shall seek to achieve an excess return in relation to a benchmark portfolio by means of active management within a certain risk limit. The chart shows developments in both the average annual net real return and the real return without the contribution from active management.