samchain/econo-pairs-v1 huggingface dataset:
In this way, they avoid a situation where growth in public spending and the interest rate push the economy in different directions. Norway’s history as an oil nation goes back to the end of the 1960s. At the beginning of the oil age in Norway, the relationship between the use of petroleum revenues and changes in industry structure was highlighted. However, since then, competitiveness in the business sector in Norway has deteriorated both due to high wage growth and in later years an appreciation of the krone against our trading partners. Costs rose sharply from the mid-1960s to the mid-1970s. In subsequent years, costs have varied around this higher level. So far this year, competitiveness in Norway’s manufacturing industry has been about 5.5 per cent weaker than the average for the period 1970-2004. Over the past 30 years, manufacturing has been scaled back in waves. A substantial decline occurred in the period 1977 to 1984 and from 1987 to 1992. The last wave occurred around the turn of the millennium. Manufacturing employment decreased by close to 55 000 persons from 1998 to 2004. There are many studies in international literature2 that point to the pitfalls facing a country that suddenly discovers large natural resources. Certainly, the Norwegian manufacturing sector has undergone substantial changes over the past 30 years. On the other hand, this period has also been marked by substantial productivity gains in parts of the sheltered sector, for example in retail trade and the banking sector.

Consequently, when decisions on the use of petroleum revenues are taken, weight must not only be given to long-term considerations and the distribution of wealth across generations, but also to developments in the real exchange rate and the competitiveness of the exposed sector over the short and medium term. Thank you for your attention. 2  See e.g. J. D. Sachs and A. M. Warner (2001)”The curse of natural resources” in European Economic Review 45, – 838. 3  See Akram, Farooq Q. (2003): “Reell likevektsvalutakurs for Norge” (Real equilibrium exchange rate for Norway), in Norsk Økonomisk Tidsskrift 118, pp 89-112.  pp 827
Another problem is that the difference between rates on different euro countries government bonds has increased, at the same time as one can envisage substantially increasing deficits in public funds and thus an increased supply of government bonds. Concluding remarks My main messages today have thus been that so far Sweden has been able to handle the problems that the global financial crisis has caused the Swedish financial system. However, the negative consequences for the Swedish economy will be considerable over the next two years. And the global financial system needs to be reformed to reduce the likelihood of new financial crises. The new information received since the most recent monetary policy meeting at the beginning of December indicates lower growth and inflation at the end of last year than we had forecast. However, the krona has weakened further, which can lead to some inflationary impulses. But more information will have come in by the time we are to make our next monetary policy decision in early February. Not until then will I take a stance once again on the future direction for monetary policy.

The Icelandic bank Kaupthing experienced problems in Iceland and the Riksbank granted the Swedish subsidiary Kaupthing Bank Sverige AB liquidity assistance in October 2008. Carnegie Investment Bank AB also received liquidity assistance in October when it had problems finding funding. Given the financial market turbulence, the Riksbank’s assessment was that a suspension of payments by one of the banks could entail a risk of a serious disruption in the financial system and could undermine confidence in the payment system. Finansinspektionen (the Swedish financial supervisory authority) later revoked Carnegie’s licence to conduct banking activities. The Swedish National Debt Office took control over Carnegie and Finansinspektionen therefore changed its decision regarding the revocation of the licence to instead giving the bank a warning. The Riksbank’s liquidity assistance has been repaid. The Riksbank has also participated in the international cooperation to strengthen financial stability in Sweden's neighbouring countries. In May 2008, the Riksbank and the central banks in Denmark and Norway entered into a euro/Icelandic kronor swap agreement with the central bank of Iceland. The aim of this swap agreement is to support the Icelandic central bank in its efforts to safeguard macroeconomic and financial stability. Sweden's part of the swap agreement amounts to EUR 500 million. The agreement was extended in December after the IMF had drawn up a programme for financial assistance for Iceland. Latvia has negotiated a support package with the IMF and the EU which will make it possible for the country to retain its fixed exchange rate against the euro.
Ample liquidity: refinancing operations (TLTRO III, PELTROs) Also in keeping with our mandate, I would like to briefly mention that we have been able to rely on the traditional tools we have at our disposal. For example, we have made changes to our existing refinancing operations and introduced new pandemic emergency longer-term refinancing operations (PELTROs) in order to provide credit to the banks and the real economy. As a result, we have seen a surge in the provision of credit in support of the real economy as well as a related knock-on effect on asset prices. Supervisory measures – the need for an innovative approach to tackle the crisis I would now like to look at the supervisory side, where the ECB has had to take an innovative 3/5  BIS central bankers' speeches  approach to tackling the crisis. As I mentioned earlier, what is true for our bold monetary policy response to the pandemic is also true for our supervisory response: our measures are exceptional and temporary and within the regulatory boundaries of the internationally agreed framework. The ECB was one of the first supervisory authorities to recommend that all banks under its supervision restrict their dividend distributions in the light of the impact of the COVID-19 pandemic. Soon after our announcements in March, other supervisory bodies around the world followed suit with similar measures. While not binding, most banks have followed the ECB’s recommendation.

Holdings of liquid assets have trebled. BIS central bankers’ speeches  3  However, two crucial elements of the capital and liquidity regime are still at the design and agreement stage. The first is an international standard on leverage. Though the risk-weighted capital framework provides a system that it is more sensitive to risk, it is reliant on those risk-weights being correctly calculated and, therefore, vulnerable to so-called model risk. The riskweighted approach will fail if the risk-weights are wrongly calculated, either individually or, collectively. And the evidence of the crisis is that this risk can become more pronounced in boom times when asset prices are rising and the pressure to expand balance sheets with cheap funding is greatest. The result is dangerous concentrations in what appear to be lowrisk assets. It is telling that if a minimum leverage standard been in place prior to the crisis, it would have bound more tightly than risk-weighted measures for a number of banks that met their risk weighted capital ratios but that subsequently failed. The debate about the relative merits of risk weighted capital controls versus un-risk-weighted controls like the leverage ratio has in my view become too hung up on the question of backstops and frontstops – on which constraint should bite first. This is an unhelpful way to look at the issue. Risk-weighted and non-risk- weighted measures protect against different risks. The leverage measure is there to manage model risk, which can be very significant.
This means that more and more forms of activity will be generated by international optimisation of business processes. This in turn will force individual countries/regions to increase their attractiveness for the global business, which requires an active attitude of local selfgovernments. For instance, Dubai Outsource Zone is a government initiative, aimed to make Dubai a highly attractive international off-shoring/outsourcing centre. The concept of multi-off-shoring appears, where a decision on globalization of manufacturing entails starting business activity (routing orders) in several locations. There is a lot being said and written on the impact of globalization on the US economy, but there is a lot going on across Europe as well. Off-shoring of manufacturing and services to other countries is not the key reason for restructuring yet; however its significance grows year by year. The European Restructuring Monitor 15 website, at the end of 2005, contained a description of ca. 3500 cases of company restructuring in Europe, which has been announced in the media (international and national) since 2002. In the years 2002 - 2005 there were only 202 cases of company restructuring (i.e. 6% of total) which, as their main reason, reported the transfer of manufacturing or service abroad (that is colloquially called off-shoring), whereas in 47% the reason was internal restructuring, which could have partly resulted from the growing competitive pressure ensuing from globalization. The EU enlargement in 2004 led to significant changes in the off-shoring process across Europe.

Does that imply that the current stance is appropriate, if your staff forecasts are confirmed? Yes. And if there is a further deterioration, then we will react. But for now, our monetary policy stance is fully compatible with both inflation and real activity. The important element is that we are totally ready to react. And I would add another element, if I may: risks are tilted to the downside. Do you mean, in terms of real activity? Both in terms of real activity and in terms of inflation. So if those risks materialise, then we will react. Can you think about different monetary policy tools to address different problems? If the issue is with the exchange rate, official rates are probably the answer; if it’s real activity, then QE; if it’s monetary transmission, then it’s targeted longer-term refinancing operations (TLTRO)… We do not allocate our instruments to different objectives. Something that I think is relevant, but is sometimes a bit overlooked, is that monetary policy is not almighty. If there is a problem with price stability, that’s within our mandate. But this is something everyone has to keep in mind to avoid creating expectations that will not be met: we do not have the philosopher’s stone. Are you implying that having something of a policy mix would be good, in total respect of the ECB’s independence? Sure.
By the time of the Industrial Revolution, it had levelled-off. Rapid social capital accumulation provided a foundation for growth. Sociology nurtured technology. With some interruptions, notably the two World Wars of the 20th century, those trends towards lower levels of violence in society have continued to the present day. For example, war deaths have been falling secularly since the 1940s (Chart 10). This is consistent with a continuing accretion of social capital. 29 Although hard to quantify, this too is likely to have provided a tailwind to growth in the modern era. Infrastructural and institutional capital are widely believed to have supported the growth process. 30 England was the birth place of the Industrial Revolution. Its parents, arguably, were English institutions well into adolescence at the dawn of the Industrial Revolution: a parliamentary system from the 11th and 12th centuries; a legal and judicial system from the 12th and 13th centuries; a central bank, the Bank of England, from the end of 17th century. The government’s role, as an institution in society, also rose rapidly prior to the Industrial Revolution. Chart 11 plots government spending as a fraction of national income in the UK since 1200. Until around 1600, government accounted for only 1–2% of national income. In the subsequent two centuries government came of age: its share of spending rose 10 or  26  For example, Fernald and Jones (2014). 27  Hall and Jones (1999). 28  For example, Pinker (2012). 29  Pinker (2012). 30  For example, Tabellini (2010).

(A) The digitalisation of finance is prospering thanks to cutting-edge technologies (big data analytics, cloud computing, artificial intelligence and blockchain) that beyond the promise of better consumer experiences is lowering the entry barriers to the financial sector for new players, the tech firms, and make it possible to unbundle financial services into an array of distinct core functions such as channelling payments and money, providing financing, sharing risk, and allocating capital. Balance-sheet-light payment services have so far been the main gateway to the financial sector for tech firms, but after doing so tech firms may then expand their business further along the value chain, from payment to retail and commercial banking, wealth management and insurance. Among these tech firms, the Fintechs and the Bigtechs will have a different impact on financial intermediation. Fintech startups have already been a game changer in the financial sector: they have imported from the internet industry a customer-centric culture into the financial sector and they have targeted and called into question many of the long-standing financial rents. However, Fintech start-ups do not have the capital resources to disrupt incumbent banks and their future role is likely to be shaped by two main alternatives: to be acquired by an incumbent bank or to compete on niche segments such as equity crowdfunding or market place lending. It could be different with Bigtechs. The market capitalisation of the GAFA companies Google, Amazon, Facebook, Apple- is 25 times higher than that of the whole Fintech 3/9  universe.
The subdued developments in money and loan growth continue to support the assessment that the underlying pace of monetary expansion is moderate and that inflationary pressures over the medium term are contained. The downward impact of the steep yield curve on monetary growth, which is reflected in the allocation of funds into longer-term deposits and securities outside M3, is gradually waning. Moreover, the impact of the narrow spreads between different short-term interest rates on the growth of the components of M3 is continuing to diminish. As a result, the annual growth  2  BIS Review 113/2010  rate of M1 has continued to moderate from high levels, and stood at 8.1% in July 2010, while the annual growth rate of other short-term deposits has become less negative. The still weak annual growth rate of bank loans to the non-financial private sector continues to conceal positive growth in loans to households and diminishing negative annual growth in loans to non-financial corporations. These developments are consistent with a normal, lagged response of loan developments to economic activity over the business cycle. Given the subdued developments in banks’ overall balance sheets, the challenge remains for banks to expand the availability of credit to the non-financial sector when demand picks up. Where necessary, to address this challenge, banks should retain earnings, turn to the market to strengthen further their capital bases or take full advantage of government support measures for recapitalisation. To sum up, the current key ECB interest rates remain appropriate.

News conference  Berne, 12 December 2019 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  In my remarks today, I will begin with the current assessment of the situation at the big banks and domestically focused banks. I will then go on to discuss the significance of climate change for financial stability. The final part of my speech will focus on the issuance of the new banknote series, which was completed in September. Big banks  I will start with the situation at the big banks. Both Credit Suisse and UBS have made significant progress since the ‘too big to fail’ regulations were introduced almost ten years ago. They have strengthened their capital bases, reduced their risk positions and implemented key organisational measures as regards crisis management.. With respect to resilience, Credit Suisse and UBS have already achieved their targets. Both banks have increased their regulatory capital to the target levels and thus meet all final requirements on a consolidated basis. Compliance with the requirements of the ‘too big to fail’ regulations is necessary to ensure adequate resilience of the two Swiss big banks. This is confirmed by our loss potential analyses of both banks as well as historical loss experience during the last financial crisis. With respect to resolution, the statutory deadline for finalising the Swiss emergency plans is the end of this year. In their plans, Credit Suisse and UBS have to demonstrate that they would be able to maintain their systemically important functions without interruption in a crisis.
This may be due to an interest rate adjustment affecting their disposable income to a greater extent, as I just described. But it may also be due to highly indebted households reacting more to a given change in income than other households. You would expect this to be the case if households with high debt do not have the same opportunity as others to maintain their consumption by borrowing more. 5 See Sveriges Riksbank (2011), The Riksbank’s inquiry into risks on the Swedish housing market, and Hansen, S.  (2013), Explanations of the development of household indebtedness since the mid-1990s, Memorandum 1. Finansinspektionen. 6 See the article “How are households affected by rising interest rates?” in the December 2017 Monetary Policy Report, and Gustafsson, P. et al (2017), How are household cashflows and consumption affected by higher interest rates? Staff memo, Sveriges Riksbank. 7 See, for instance, Flodén, M. et al (2017), “Household Debt and Monetary Policy: Revealing the Cash-Flow Channel”. Sveriges Riksbank Working Paper Series 342. Sveriges Riksbank. 6 [13]  Greater interest-rate sensitivity creates uncertainty about the impact of monetary policy How total consumption will be affected when interest rates are gradually raised towards more normal levels is difficult to know. Interest expenditure will increase, and for some households by a relatively large extent. But the total effect will also depend on what happens in the economy otherwise as regards income from employment, housing prices, expectations, etc.

But there are signs that the matching of job-seekers to vacancies is not working well. The decrease in unemployment in recent years has, above all, been among those born in Sweden. For this group, unemployment is now on a very low level. Unemployment among those born abroad, on the other hand, has not decreased to the same extent and is significantly higher to begin with. A greater supply of foreign-born labour creates the conditions for long-term higher employment, but it is important that the labour market functions efficiently so that the supply of labour can be fully utilised. With a greying population, this will also become increasingly urgent as the demand for labour in areas such as health and social care rises. Despite the economic situation continuing to be strong and both the labour force and employment being expected to increase further in the future, it is the Riksbank’s assessment that unemployment is not expected to fall much more in the years ahead. So, to keep unemployment down – and above all to bring it down significantly below its current level – measures are needed within policy areas other than monetary policy. I do not mean by this that monetary policy has been exhausted. There is scope to make it even more expansionary if need be. But monetary policy cannot be expected to be able to solve structural problems on the labour market.
But national policies across the world must take into account that the policy to take us out of the crisis must support the functioning of market economy, not constraining it. In this light, the growth prospects of the EU are very insecure. In the IMF's opinion GDP in EU countries will decrease 4% in 2009 and may decline by 0.3% next year. Industrial production in the EU has lowered to a level last recorded nearly ten years ago. Such pessimism contrasts rather sharply with the opinion quite widespread in the middle of 2008 – that Europe will not be hit very hard by the crisis. Reality, however, has turned out rather different. The EU has, on the one hand, been affected by loan losses suffered by major banks due to the financial crisis and, on the other hand, by drastic contraction in demand in its main export markets. The European Union is, for instance, much more open than the USA, thus the share of exports in its GDP is larger and its economy is more severely affected by dwindling global trade. In addition, banks in Europe have difficulties with financing enterprises, since on top of the losses suffered in securities markets, asset quality is also expected to deteriorate. To put it more simply, the share of bad loans will increase due to the recession. The economic crisis has affected EU Member States differently.

If we rely on strong macroeconomic policy, the principles of an open economy and future-looking investment, Estonia will continue to have all the possibilities for defeating the crisis. But what are the national economy level measures the government should take and how should they support the financial system? Here I start with a firm standpoint that the fixed exchange rate of the kroon to the euro is the pillar of Estonia's economic policy and the accession to the euro area as soon as possible is its logical continuation. The experience of the past half a year show that monetary policy that is based on the fixed exchange rate and the currency board supports economic stability also in more difficult times. But how does the fixed exchange rate help us overcome the crisis? First of all, it helps stabilise inflation expectations and stop price rises. Price corrections after the accession to the EU were sharper then we expected. The opening of the labour market and price rises of many goods in the global market had a strong impact on Estonia. This stage, which was, in a sense, unavoidable and paradoxically also the result of successful reforms at the start of the century, is now over. The price level is expected to decline somewhat both this and next year. Second of all, the currency board arrangement brought about a relatively fast correction in several sectors of the economy, which displayed clear signs of overheating after the accession to the EU.