samchain/econo-pairs-v1 huggingface dataset:
In addition to the discussion on the causes of the low levels of wage increases and inflation, there have also been a discussion of the possibility that the flatter Phillips curve, that is, the weaker covariation between wage increases and unemployment, may have led to a deterioration in monetary policy’s capacity to steer inflation. We can see in Figures 5a and 5b that in the period prior to the financial crisis the Phillips curve had a negative slope, so that lower unemployment was linked to higher wage increases, but that after the financial crisis it has become flatter and slightly positive. Figure 5. Phillips curve prior to the financial crisis (blue line) and after (red line). Wages measured as short-term wages and collectively agreed wages. (a) Short-term wages (b) Collectively agreed wages 2000-2007 2010-2018  5  4  4  3  3  2  2  1  5  6  7 8 Unemployment  9  1  5  Nominal wage growth  Nominal wage growth  5  2000-2007 2010-2018  5  4  4  3  3  2  2  1  5  6  7 8 Unemployment  9  1  Note. Annual percentage change and percentage of labour force, 15–74 years. Seasonally adjusted data. Sources: National Mediation Office, Statistics Sweden and own calculations  The apparently weaker link between wages and unemployment is not merely a Swedish phenomenon.

12 They say that there has been a change in the composition of the labour force over the past  11  See Jonsson and Theobald (2019). 12 See Mojon and Ragot (2019). 8 [24]  ten years. Labour force participation in the age group 55-64 years has tangibly increased, which has slowed down prices and wages. If the compensation levels are lower, employees will have greater incentive to accept lower wages. This will also lead to companies’ costs declining and to price pressures slowing down. If employees’ negotiating strength weakens, their scope to have their wage demands accepted declines. This means lower wages and a downward adjustment in prices. One should not draw any definite conclusions regarding the implications for monetary policy on the basis of these results. While lower price pressures in themselves might justify a more expansionary monetary policy, decisions on the policy rate consist of an overall assessment of various different factors, where developments on the labour market are one such factor. On the other hand, one can say on the basis of these results that supply effects and long-term trends may be important pieces of the puzzle for monetary policy analysis. This is something that has been emphasised in other studies, too. 13  A flatter Phillips curve need not signify less of an impact from monetary policy.
In the context of monetary policy in an inflation targeting regime, those situations could be accommodated by escape clauses. But, more in general both objectives should be addressed with more than one instrument. The overall purpose of financial stability is to ensure the proper functioning of markets and to avoid having to arrive at the degrees of turbulence and dislocation we have witnessed in the past year. For this reason, financial regulation plays a major role in granting financial integrity. At the beginning, regulation focused on the strength of individual institutions. However, the tensions we have seen show how individual fragility may quickly evolve into systemic problems. The interrelationships among financial institutions and the proper operation of the markets where liquidity is traded are essential ingredients of a market economy, but these characteristics are also the channels of financial contagion, as recently seen. So it is crucial to have a systemic vision, not only from the perspective of how the different institutions relate to each other, but also on how the different types of financial and operating risks are intertwined, creating potential vulnerabilities. Regarding price stability, conducting monetary policy within an inflation targeting scheme is appropriate, and recent experience shows that it may provide ample room for expansionary policies when facing a global recession such as the current one. There will be a long debate and a number of research papers on the proper mechanism to secure financial stability and how it should be combined with monetary policy management.

(2009b), “Exchange Rates, Real Adjustment and Monetary Policy,” presented at the 2009 Money and Banking Conference, Banco Central de la República Argentina. Desormeaux, J., P. García and C. Soto (2009), “Terms of Trade, Commodity Prices and Inflation Dynamics in Chile,” forthcoming, BIS Papers. Edwards, S. and R. Rigobon (2009), “Capital Controls, Exchange Rate Volatility and External Vulnerability,” Journal of International Economics, Vol. 78, No. 2, pp. 257-267. Ellis, L. (2008), “The Housing Meltdown: Why Did It Happen in the United States?,” BIS Working Paper No. 259. BIS Review 113/2009  9  Plosser, C. (2007), “Two Pillars of Central Banking: Monetary Policy in Financial Stability,” Opening Remarks at the PACB Convention, Federal Reserve Bank of Philadelphia. Prasad, E., K. Rogoff, S. Wei and A. Kose (2003), “Effects of Financial Globalization on Developing Countries: Some Empirical Evidence”, IMF Occasional paper No. 220.
Although the US may fare better than Europe, its economy is heading towards the “fiscal cliff”. Similar to Europe, it is also necessary for the US to make significant cut in expenditures in the medium to long term in order to regain fiscal balance and discipline. The situation in Japan is even more worrying. Public debt in Japan has now exceeded 200% of GDP, excluding civil service pension and other contingent liabilities. Currently, the market is not concerned about Japan’s repayment ability as it is believed that the Japanese government will continue to address the ever-increasing deficits by maintaining an exceptionally low interest rate environment. However, it is worth noting that the market was treating the European countries in the same way until recently. Once market sentiment changes, the situation can take a sharp turn and it would be very difficult to arrest a deteriorating trend. In addition to the pain brought about by deleveraging, I would also like to talk about the different forms of “quantitative easing” implemented by the various central banks. Why did these economies implement “quantitative easing”? If we agree that the root cause of the global financial crisis is excessive leveraging, then the only solution would be deleveraging. However, in reality, the process of deleveraging is just too painful.

This would translate into an acceleration of wage and price inflation and unstable conditions in the foreign exchange market. The Petroleum Fund is designed to channel the revenues resulting from an increase in the oil price to the Fund for investment abroad, in order to prevent an increase in oil prices from influencing the budget. The increased revenues would thus not have an impact on the domestic economy, but be invested abroad through the Petroleum Fund. The current account balance and government budget surplus show that Norwegian consumption has adjusted to petroleum wealth by increasing net imports and by maintaining a budget deficit excluding petroleum revenues. At the same time some of the wealth is saved abroad to redistribute income between generations. This means that there has already been a gradual resource reallocation from the exposed to the sheltered sector. As long as consumption is fairly well adjusted to the expected level of the petroleum wealth, there may not be a need for substantial exchange rate movements in the near future to achieve further adjustment. 5. Stability of the Norwegian krone  Let us turn to the stability of the krone. People in the banking industry often suggest that the krone is a petro currency fluctuating widely with the price of oil. Is this the case, or has stabilisation policy been successful in Norway so far? Looking at the data, we note that the krone exchange rate has been fairly stable over time. Since 1986 the authorities have focused on stability of the krone exchange rate.
Andrew Gracie: Making resolution work in Europe and beyond – the case for gone concern loss absorbing capacity Speech given by Mr Andrew Gracie, Executive Director of Resolution, Bank of England, at the Bruegel breakfast panel event, Brussels, 17 July 2014. *  *  *  Introduction It is nearly three years since the FSB published its Key Attributes of Effective Resolution Regimes (KAs) and, as we look forward to the G20 summit in Brisbane in November, it is worth taking stock of the progress that has been made to end Too Big to Fail. In Europe we now have the Bank Recovery and Resolution Directive (BRRD) 1. Broadly speaking this maps to the FSB Key Attributes: the BRRD establishes a comprehensive set of legal powers and articulates the process through which recovery and resolution planning will take place to ensure that firms develop and maintain effective recovery plans, and that the necessary actions are taken to ensure that they are resolvable. And the objective is in line with the Key Attributes: both view resolution in terms of ensuring the continuity of critical functions without recourse to public funds. So it will be a real step forward for us here in Europe when the BRRD is implemented. The 1 January 2015 deadline for doing so is fast approaching and all Member States are working hard to revise their national laws and bank resolution frameworks by then.

But the principle is clear that liabilities will be written down and converted according to the creditor hierarchy and, within a given class, all affected creditors will be treated equally. Moreover, there is an explicit safeguard that creditors shall be left no worse off following the application of the bail-in tool than they would have been in insolvency. This enables resolution authorities to act with sufficient speed and flexibility, whilst providing shareholders and creditors with an appropriate degree of certainty as to how they will be treated. •  Valuation: Determining the amount of write-down and conversion of debt required to recapitalise a failed bank and calculating the counterfactual insolvency valuation for the no creditor worse off test are at the heart of the bail-in. A series of valuations are therefore required in the course of a resolution transaction, as the BRRD sets out in some detail 5. First, a “going concern” valuation of the firm’s assets and liabilities will be used to the gauge the size of any bail-in that is required. A core purpose of this valuation is to quantify expected future losses and so the recapitalisation need at the point of resolution. Second, an equity valuation is needed to inform the terms of the exchange and the allocation of the net asset value generated via the bail-in to the liability holders that have been written down or converted.
Yet they all failed to some degree to prevent the accumulation of risks that finally produced the crisis. So it is unlikely that there is a simple answer. Any plan for reform should take into account the nature of financial risk. Why were so many people misled for so long? And was there an inherent weakness in the structure of modern banking? Banks are dangerous institutions. They borrow short and lend long. They create liabilities which promise to be liquid and hold few liquid assets themselves. That though is hugely  BIS Review 32/2009  1  valuable for the rest of the economy. Household savings can be channelled to finance illiquid investment projects while providing access to liquidity for those savers who may need it. But given how risky banks are, it should not be surprising that from time to time they get into trouble. And they have done so regularly since banking began. Confidence in a bank can disappear quickly making it vulnerable to a destructive bank run. If a large number of depositors want liquidity at the same time, banks are forced into early liquidation of assets – lowering their value. And, of course, if banks make sufficient unwise loans to borrowers who do not repay, then that can threaten solvency as well. Banks can of course take their own actions to ensure that investor confidence is maintained. For example, a visible source of liquidity helps.

Rare events, even when dramatic at the time, lose their power to shape policy as memory recedes. The role of institutions is to retain a collective memory and to resist the temptations of the present. That is one of the most important roles of a central bank. It is accepted as such in the domain of monetary policy. And there is an equivalent role in financial stability. The introduction of simple and robust policy tools into a regulatory regime based on the exercise of constrained discretion would make it easier to resist overly rapid expansion of financial institutions. In particular, the authorities should maintain a clear focus on the issues that matter when the worst occurs – liquidity and leverage. It should be intrusive, in the sense of knowing what is going on, but not bureaucratic. A system in which it is easier for a large bank to expand and then destroy its balance sheet than for an individual to open a bank account has lost focus. That is not the fault of regulators, but a reflection of the pressures and incentives they have faced – from all of us. As a Kennedy Scholar at Harvard, I have always treasured Harold Macmillan’s words in his tribute to John F Kennedy. He was, said Macmillan, a man “whose eyes were on the horizon but whose feet were on the ground".
Mario Draghi: Euro area economic outlook, the ECB’s monetary policy and current policy challenges Statement by Mr Mario Draghi, President of the European Central Bank, prepared for the Twenty-Eighth Meeting of the International Monetary and Financial Committee, Washington DC, 12 October 2013. *  *  *  I would like to focus on the euro area economic outlook, the ECB’s monetary policy and current policy challenges. Economic activity in the euro area bottomed out in the first half of the year and is expected to strengthen gradually in the period ahead. Recent economic indicators, which have been predominantly positive, support expectations of a modest and gradual recovery. Output is expected to recover at a slow pace, driven by a gradual improvement in domestic demand supported by the ECB’s accommodative monetary policy stance and a gradual strengthening of external demand. Furthermore, the improvements in financial markets seen since August 2012 appear to be gradually working their way through to the real economy, as should the progress made in fiscal consolidation. The risks surrounding the economic outlook for the euro area continue to be on the downside. Developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect the economic outlook. Other downside risks include higher commodity prices in the context of renewed geopolitical tensions, weaker than expected global demand and slow or insufficient implementation of structural reforms in euro area countries.

With regard to money market conditions, the ECB will remain particularly attentive to developments which may have implications for the stance of monetary policy and is ready to consider all available instruments. Further reducing fragmentation of euro area credit markets and improving confidence in the euro area banking sector are essential to ensure an adequate transmission of monetary policy to the financing conditions in the euro area countries and to further repair the credit channel. Financial stability risks have diminished in the euro area. Measures taken by European and national authorities have helped to ease the severe market stress that earlier weighed on sovereigns and banks. The euro area banking sector has made progress in balance sheet repair by improving its regulatory capital ratios, by reducing its leverage since  BIS central bankers’ speeches  1  the outbreak of the financial crisis and by shifting its funding structure towards more stable funding sources. Net inflows of capital from abroad as well as a reduction in excess liquidity conditions continue to be observed, reflecting an improvement in financial market confidence. Repayments of funds taken up in the context of the ECB’s three-year longerterm refinancing operations conducted in December 2011 and February 2012 have resulted in a decline in the size of the Eurosystem’s balance sheet since end-August 2012. We will remain attentive to all developments that influence an adequate transmission of monetary policy to the financing conditions in euro area countries.
Union Pay International (“UPI”), headquartered here in Shanghai, signed a MOU with  NETS, a leading payment services group in Singapore, in November this year to support cross-border connection of their mobile wallets. As UPI’s first cross-border tie-up with another nation’s mobile wallet – NETS’ NETSPay platform – this will allow Chinese customers to pay at NETS merchants in Singapore while Singapore’s NETSPay users can make mobile payments at over 8 million merchants in China. The MOU will also support collaboration on technology know-how between UnionPay and NETS, and facilitate the joint setting up of a research and development centre in Singapore, initially focusing on mobile services technology. 2nd MAS – SFRB Training and Exchange Programme  Lastly, deepening information and knowledge exchange between Shanghai and Singapore industry participants and officials. 10  The 2nd MAS-Shanghai Municipal Financial Regulatory Bureau Training and Exchange Programme will be held from 28 to 30 November 2018. Such training a . programmes will encourage mutual exchange and deepen ties between financial regulators, promote better understanding of each other’s markets and enhance their knowledge in specialised topics. Conclusion 11 Asia remains strongly committed to maintain an open global trading system and to  preserve multilateralism. There is therefore great potential for Asian countries to ride on each other’s growth, and for cities like Shanghai and Singapore to strengthen our bonds.

BIS Review 130/2009  3  4  BIS Review 130/2009  Fourth, the immense heterogeneity and diversity of the Asian economies have not been a restraint on progress, but have complemented and facilitated the region's economic development. The vast differences in the stage of development of the individual economies, such as from the advanced Japan to emerging China to developing Vietnam, together with the rich variety of natural resources and endowments throughout the region, have enabled Asia to capitalise on a multitude of strengths and comparative advantages. In particular, there are the region's different development levels and consequent technological capabilities, known commonly as the “Flying Geese Model”. Such specialised division of labour is evident in the 1970s when Japan relocated the more labour-intensive stages of production processes to the newly industrialised Asian economies, such as South Korea and Singapore, and subsequently in the 1980s, to emerging Asia, including Malaysia, Indonesia and Thailand. The emergence of China in the recent decade has further provided significant impetus to this pattern of vertical specialisation, which has effectively resulted in a globalisation of the production chain across the network of regional economies. Whilst Asia's fragmented industrialisation has led to a considerable strengthening of trade links within the region, the transfer of capital, knowledge and technologies that are crucial for strengthening industrial capabilities have also been enhanced. Asia after the Asian financial crisis The 1997-98 Asian financial crisis represents a significant juncture in the history of Asia.
18 18  1.2 17  17 Jul. 18 18  (f) Forecast. Source: Bloomberg. Figure 6 MPR expected by the market  Interest rate differential between the US and Germany and multilateral dollar  (at December of each year, percent)  (basis points; index)  3  3  330  June MP Report 2 Fed fund  2 March MP Report  95  2 years  310  94  290  93  270 1  1  Libor  250  0  0  -1  -1 12  14  91  230  10 years  210  Euribor 10  92 DXY (right axis)  16  18  20  190 01.18 18  Source: Bloomberg. 10  90 89 88  03.18 Mar. 05.18 May  Figure 7 Nominal exchange rate and multilateral measures (1)  Parities against the US dollar (1) (2)  (index, 2017-2018=100)  (index, 2017-2018=100)  110  110 120  120  105  105 110  Latam currencies 110 (3)  MER-5 100  100 100  100  MER 95  95  90  90  80  Commodity currencies (4)  Chile  90  TCN 90 17  17 Jul. 18  80 17  17 Jul. 18 18  (1) Dashed vertical line shows statistical cutoff date of March 2018 Monetary Policy Report. (2) Uses April 2018 WEO weights. An increase denotes a depreciation of the currency with respect to US dollar.

The CRR/CRD started out after a global framework had been agreed in Basel, and this EU level framework was in turn implemented at national level in the Member States. In my day-to-day work I deal with financial stability issues on different levels if one will; As Chair of the Basel Committee for Banking Supervision the scope is global, while as Governor of the Swedish Central Bank I have a national perspective on financial stability although, admittedly, the international agenda and developments play a key role there, too. Being Chair of the Advisory Technical Committee of the ESRB and a member of its decision making body, the General Board, of course provides an EU-level perspective on macroprudential policy and systemic risk. These levels or perspectives are in my view becoming increasingly intertwined, especially after the financial crisis and the lessons learned there. Much of the agenda is indeed set at the global level first. And the way financial markets function today, this is also quite natural. We need at least minimum requirements at the global level. But we also need to strike a balance between common rules of the game in terms of minimum requirements and the need for national flexibility, not least in the EU, which to put it mildly is far from a homogenous group of countries. In fact, the economic and financial conditions differ substantially between the Member States.