samchain/econo-pairs-v1 huggingface dataset:
Naturally, it will take time for these efforts to bear fruit. But developments in recent months have by no means wiped out the achievements of past decades. On the contrary, the region’s longer term fundamentals -- including its high domestic saving rates, strong fiscal positions, dynamic private sectors, and recent gains in competitiveness -- remain favorable. Moreover, all of these countries still have a long way to go to catch up with advanced economies. Thus, with sound policies, they should be able to sustain high rates of growth for another two decades or more. In the less distant future, growth can be expected to rebound strongly after a relatively short, but sharp, weakening of economic activity, especially in Thailand, and a rapid narrowing of external deficits. In fact, we are already seeing improvements in exports, even though recent exchange rate changes have not had much opportunity yet to generate their effects. And as these adjustments take place, each of these countries will have seized the opportunity to strengthen their economies in fundamental ways. This leads me to agree with those in the region who see this crisis not as a blight on the future, but as a blessing in disguise. Indeed, after this period of adjustment, these economies will emerge stronger than before. BIS Review 111/1997  -4-  In the meantime, I hope that some perspective about the benefits of global markets will be maintained.

We cannot simply assume that people want to work more, even if an increased labour input will result in higher income and greater prosperity. It is natural to use some of the increase in prosperity for leisure. The considerable share of part-time employment may reflect choices that individuals do not necessarily want to change. BIS Review 20/2002  9  On the other hand, if we increase our labour input to the level in Sweden, without reducing productivity, our future income would increase by more than the increase resulting from a doubling of our petroleum wealth. The structure of the tax and pension system influences the choice between work and leisure. Lower tax rates on employment income could boost labour input. The pension system is also of significance to labour input, as it influences employers’ labour investment decisions. The expansion of the labour force is coming to a halt. At the same time, the number of old-age and disability pensioners is rising rapidly. Twenty years ago, there were nearly three persons in the labour force for every pensioner, whereas in 20 years, there will be fewer than two. Although life expectancy is high, the average retirement age in Norway is steadily falling. For men over 50, the average retirement age fell from nearly 67 in 1970 to a little more than 63 at the end of the 1990s. For the entire labour force, including all age groups, the average pension age in the National Insurance Scheme was down to 58.
It should also be noted that the New York Fed’s long experience as the FOMC’s selected bank for 4/8  BIS central bankers' speeches  open market operations on behalf of the Federal Reserve System confers on it a trusted level of competence, experience, and reliability with foreign official account holders. The same New York Fed front office personnel that purchase and sell Treasuries for the Federal Reserve’s own portfolio also execute trades on behalf of foreign official account holders. Moreover, the same New York Fed personnel that perform back office operations for the Federal Reserve’s own portfolio also perform back office operations for the transactions of foreign official account holders. This consolidated transactional platform used by both the Federal Reserve and its foreign official account holders means that the global official community can be assured that the quality of the services it receives from the Federal Reserve meets the same standards as the Federal Reserve sets for the servicing of its own portfolio. Choreographers of central bank operations Let me now spend a moment discussing the people behind our account services. In doing so, I wish to recognize staff past and present who have played and continue to play a vital role every day in processing critical transactions on behalf of the global official community. Your experience in the daily management of the accounts of other central banks produces unique operational knowledge and expertise.

For financial institutions, while cyber threats may have been regarded as a cost of doing business at one point, it is not an exaggeration to say that they are now viewed as potential existential threats, not just for individual firms but also for the broader financial system and critical infrastructures that support it. As central banks with broad mandates for financial stability, this is certainly a concern for us all. We recognize the challenges and complexities in strengthening prevention, detection, and incident response regimes around fraudulent payment instructions. Users of financial messaging services such as SWIFT span the full range of IT sophistication and capacity, and remediating deficiencies in prevention and detection may require a substantial re-orientation of priorities and resources for some institutions. Overcoming these obstacles will be no easy task, but so long as there is a weak link in the cybersecurity chain criminals will seek to exploit it. As we face the common challenges of strengthening our cybersecurity defenses and payment controls, the need for cooperation is greater now than ever. The Federal Reserve stands ready to engage in further dialogue and cooperation with both its foreign official accountholders and fellow central bank service providers in addressing these challenges. 5/8  BIS central bankers' speeches  Conclusion In doing so, we as a community can ensure that the provision of account services among central banks continues to bear the hallmarks of safety, confidentiality, and reliability which are essential to the execution of our public mandates.
Binghamton, on the other hand, has really been struggling with no signs yet of any meaningful recovery. Meanwhile, Northern New Jersey’s economy had been growing fairly steadily until this past winter when activity softened, probably due at least in part to the unusually harsh weather. Now that spring is finally upon us, we hope to see economic conditions improve more significantly. What kinds of jobs have been created during the recovery? Let me turn to the topic of today’s press briefing: how the types of jobs in the region have changed over the last business cycle. Firms often change the way they utilize workers and the mix of skills they employ during recessions and recoveries. The weakening demand during recessions forces firms to look for new ways to be more efficient to cope with hard times. These adjustments do not affect all workers equally. Indeed, it’s what we typically think of as middle-skilled workers – for example, construction workers, machine operators and administrative support personnel – that are hardest hit during recessions. Further, a feature of the Great Recession and indeed the prior two recessions, is that the middle-skill jobs that were lost don’t all come back during the recoveries that follow. Instead, job opportunities have tended to shift toward higher- and lower-skilled workers. As we’ll show, these same trends have played out in our region. While there’s been a good number of both higher-skill and lower-skill jobs created in the region during the recovery, opportunities for middle-skilled workers have continued to shrink.

2/5  BIS central bankers' speeches  Stage 2: Normalization The second stage of normalization followed lift-off and has involved two processes: 1) raising the federal funds target closer to more normal levels, reflecting the ongoing improvement in the economy, and 2) gradually reducing the Fed’s balance sheet as we work to unwind the asset purchase policies put in place during the crisis. Let’s start with interest rate normalization. Since lift-off, we’ve raised interest rates as the economy moved toward maximum employment and our 2 percent longer-run inflation objective. We continued this process with our most recent rate increase this week.4 Throughout, we’ve repeatedly stressed that we foresaw this to be a process of gradual normalization, reflecting the balancing of risks to reaching our goals. In particular, downside risks to the achievement of our employment and inflation goals amid very low interest rates were compelling arguments for a cautious and relatively predictable approach to policy. This approach proved its worth: The economy continued to expand at a healthy pace even as the Fed raised rates numerous times. I’ll now turn briefly to the normalization of the balance sheet. We began this process about a year ago.
This argument reverses the conventional reasoning: Monetary policy would then no longer affect inflation by influencing demand and inflation expectations, but by affecting interest expenditure – the higher the interest rate and interest costs, the higher the inflation rate. I find this way of reasoning unconvincing. It would mean that central banks would in future have to act in a completely new way, which is not supported in either economic theory or practical experience. It can also be noted that this argument was not put forward during the period when inflation was low – that is, that the Riksbank would then have needed to raise the interest rate in order to raise household interest costs and ultimately inflation. Temporary break from the low-inflation environment rather than lasting change? Before continuing, I would like to stress that, although much has happened in a short space of time, this does not change the conclusion in my speech a year ago – that fiscal policy and monetary policy need to interact in a better way than has been the case in recent decades. My reasoning then was based on the fact that the policy rate had for a long time been at, or very close to, its effective lower bound – a bound below which it is not possible to reduce the rate further or where the negative side-effects of doing so risk being very large.

This is why the Banco de España opted, in its publication on 20 April, to prepare several alternative scenarios using different analytical tools.2 In any of the scenarios considered, confinement would translate into a very severe contraction in Spanish GDP in 2020, all the greater the longer the period during which it is necessary to retain the restrictions on economic activity, and with greater risks that the 2  See Banco de España (2020), “Reference macroeconomic scenarios for the Spanish economy after Covid-19”, Analytical Articles, Economic Bulletin, 2/2020. 11  liquidity problems many economic agents are currently facing will lead to situations of insolvency. Looking ahead to next year, these scenarios outline a recovery in activity and employment which, nonetheless, would be insufficient for GDP to attain its pre-COVID-19 trend level. Specifically, in the two scenarios recently published by the Banco de España that seem most realistic at present, having ruled out the third which projected a shorter and more moderate recession, GDP is expected to fall by 9.5% and 12.4%, respectively, in 2020 (and post subsequent increases of 6.1% and 8.5% in 2021).3 The figures in the first of these scenarios do not differ significantly from those reported by other national and supranational institutions, public and private alike. Thus, for example, the Spanish Government, the International Monetary Fund (IMF) and the European Commission have recently projected declines in our economy of 9.2%, 8% and 9.4% for 2020, respectively.
But I think, too, of our relatively stable overall economic performance – despite the devastating effect on many farmers, and on rural communities more generally, of foot and mouth disease; despite the weather and the floods; despite the disruption on the railways; and despite, above all, the pressures on the internationally-exposed sectors of our economy as a result of developments abroad. In this last context, my Lord Mayor, I was struck by a recent newspaper comment to the effect that if we were living on an island we'd be in reasonably good shape. Now I have to confess that I'd always been under the impression that we were living on an island, but I let that pass. What I think the writer was drawing attention to is the fact that despite the recent global economic slowdown – notably in the United States, despite the continuing weakness of the euro, and despite the sharp rise in crude oil prices over the past year, we have in fact, in terms of our own overall economy, enjoyed another year of steady progress. GDP growth in the year to the first quarter – at 2.6% – remained above our longer term trend rate, and was above the rate of inflation, whether measured by the GDP deflator or our target measure of retail price inflation (RPIX), for the sixth time in the past eight years.

The outcome is obviously the major uncertainty affecting us all. The other major external influence on the economic situation in this country is the development of the exchange rate. Depending on who you speak to sterling is variously described as dangerously weak, at a 15-year low, against the dollar, or as unsustainably strong, close to its peak, against the euro. The truth is that sterling's effective exchange rate has been relatively stable for most of the past 2 ½ years – at about 105 on the standard index, plus or minus 5%. The bilateral rates that are frequently quoted in fact tell us very little about sterling: they are essentially a reflection of the persistent general strength of the dollar on the one hand and the persistent general weakness of the euro on the other, resulting from sustained capital inflows to the United States in large part from the Eurozone. It was widely expected that, with the slowdown in the US economy, and associated weakening of US earnings expectations and stock prices, these capital flows would moderate, causing the dollar to weaken and a corresponding recovery in the euro. That clearly has not, yet, occurred, although – given the size of the US external imbalance – it is difficult to see how an exchange rate adjustment can ultimately be avoided. In the meantime, the stronger dollar – and higher oil prices – have added to inflationary pressures elsewhere.
As you will see in slide 5, the share of these investments amounted to more than 70% at the end of 2015. The SNB has a very long investment horizon. In view of this, the criterion of security is taken into account by structuring investments so that at least the real value is preserved over the long term. Thus, after liquidity and security, the criterion of return is also taken into consideration. In order to improve the long-term risk/return profile, certain interest rate, equity, credit and liquidity risks are intentionally entered into, based on the associated risk  4  BIS central bankers’ speeches  premia. These risks are spread as widely as possible by diversifying the investments. For instance, government bonds in the main currencies are supplemented by additional asset classes including corporate bonds and equities. In particular, the share of equities, which currently amounts to 18%, increases the expected return in our portfolio. Challenges when investing high foreign exchange reserves The SNB is one of the world’s major investors. At the end of 2015, our foreign exchange reserves amounted to around CHF 560 billion. The management of large foreign currency investments comes with its own set of challenges. I would like to focus on three of these challenges in particular, and explain briefly how we address them: first, the widening of fluctuations in absolute investment returns; second, non-financial aspects, which have become much more important in our globally diversified equity portfolio; and third, liquidity conditions, which have deteriorated in some markets.

It is therefore not entirely correct to compare the income  3 In the research literature, one often tries to distinguish the independent, “pure” effect of monetary policy from  the effect of the monetary policy that systematically reacts to changed circumstances. This is done by identifying monetary policy “shocks”, that is, changes in monetary policy that are unexpected, given how the central bank normally reacts to changed circumstances. The size of the monetary policy effect will thus depend on, among other things, the assumption of how monetary policy normally reacts. 5 [14]  and wealth distribution after a period of expansionary monetary policy with the distribution prior to these measures being taken. The point of comparison should rather be how the distribution would have looked without the expansionary monetary policy. Another difficulty is what time perspective one should have to determine the effects of monetary policy. I have argued that it is important to take into account the total effect of monetary policy on the economy. Asset prices are affected relatively rapidly, but it takes time before the total effect of monetary policy has an impact on the real economy and ultimately inflation. Moreover, a common starting point when discussing the effects of monetary policy is that in the long term it is neutral with regard to real economic quantities such as growth, unemployment and income distribution. In this perspective, one can therefore argue that monetary policy should only have minor distributional effects, if any at all.
Since the invention of the credit card in the 1950s, almost all payments by households and businesses in advanced economies have been made through one of four routes: cash, cheque, card or bank-to-bank. Most new innovation to date hasn’t changed that. Even when we tap our phone or watch on an ipad to pay – we’re still generally paying by either card or bank-to-bank transfer. But fintechs, and in some cases big technology firms, are now proposing to change this by using cryptoassets known as ‘stablecoins’ for transactions currently processed by retail or wholesale payments systems. The basic idea of a stablecoin is not dissimilar from a pegged currency. Early forms of cryptoassets such as Bitcoin have so far proved too volatile for widespread use in payments. ‘Stablecoins’ aim to address this by pegging themselves to a fiat currency or basket of fiat currencies. Most propose to maintain reserves or backing assets to defend this peg. While some stablecoins proposals are designed as investment products, most seek stability in pursuit of becoming a new way to pay for goods and services or make peer-to-peer transactions. Many propose to integrate into popular social media or online technology platforms. With this backdrop and an estimated 3 billion social media users worldwide, it’s not hard to imagine that some of these proposals could quickly reach significant scale. 9  including open banking reforms in the EU and the introduction of a payments competition regulator in the UK.

One of the main pillars of policy implementations in this respect is to encourage economic units to borrow less and to use more equity capital (in other words to have lower leverage ratios). Recent implementations such as increasing required reserve ratios, the termination of remuneration of required reserves, the sustained fiscal discipline in the public sector as underlined in the  BIS Review 174/2010  1  revised Medium-Term Program, the increase in Resource Utilization Support Fund deductions imposed on consumer loans, the introduction of limitations to loan/value ratio in mortgages, the 12-percent target for banks’ capital adequacy ratios are deterring measures against an excessive rise in indebtedness ratios. Secondly, the extension of maturities regarding the borrowings of economic units is encouraged. Under the aegis of the Undersecretariat of Treasury, studies for extension of maturities in public borrowings are being carried out successfully. An important development is that The Banking Regulation and Supervision Agency has permitted the issuance of Turkish lira bonds so as to extend the maturities of liabilities in the banking sector. Additionally, the Central Bank decreased overnight borrowing by 400 basis points last month enabling short-term swap interest rates to go down when required. Besides, the Central Bank aims to encourage long-term deposits with the new arrangements to be made in required reserves. The third pillar of the policy framework is to encourage borrowing in terms of the Turkish currency and to strengthen the net foreign exchange position.
degree of transparency and  Hence, countries, which were  accountability. dependent on monetary targeting  Inflation targeting is known to be  frameworks, have been moving away  operationally complex. It requires greater awareness of the whole  Central Bank of Sri Lanka – ROAD MAP 2017  12  monetary transmission mechanism  upgrade the technical capabilities of the  (MTM) and is based on a working link  Central Bank staff. from policy interest rates to interbank interest rates and to long-term interest rates. Under our enhanced monetary policy framework, we expect to predominantly employ market-based instruments, particularly policy interest rates and open market operations (OMO) to guide the average weighted call money rate (AWCMR), which is considered as the operating target, along the desired path. This would ensure effective transmission of monetary policy. With a view to strengthening its policy formulation and modelling capacity, the Central Bank of Sri Lanka has been obtaining technical assistance from the IMF in the area of macroeconomic forecasting, modelling and policy analysis. As such, a joint effort has been made by the Central Bank and the IMF in developing a structural model-based Forecasting and Policy Analysis System (FPAS) to strengthen the monetary policy decision making process and to support Sri Lanka’s transition to a  Within this enhanced framework, the  flexible inflation targeting regime. The  Central Bank does not set any monetary  FPAS is a medium-term, pre-emptive  targets explicitly.

The challenge that we are having right  The country has a number of structural  now is to put in place policies that give  problems that have been amplified over  us sustained stabilisation of  the years by the large fiscal and trade  macroeconomic fundamentals in the  deficits, which are the core weaknesses  country, amidst uncertain global  of the Sri Lankan economy. Being a twin  conditions. deficit country increases vulnerability in  It is important to recognise that stabilising the economy after decades of  an uncertain and volatile global economic environment. fundamentally unstable macroeconomic  Unsustainable budget deficits boost  policies cannot be achieved without  excess and untenable demand in the  discipline. This will inevitably result in  economy. When there is excess demand,  some pain in the short-term. However,  it leads to inflationary pressures and  there is every possibility that a more  higher nominal interest rates in the  promising future can be realised  economy and there is also a higher  through the policies and programmes  propensity to import, given the  that are already in the pipeline. For this  limitations in domestic supply. That in  to happen, consensus must be built  turn, exerts pressure on the balance of  among politicians, policy makers and  payments and the exchange rate.