samchain/econo-pairs-v1 huggingface dataset:
A great effort is needed but, as we have so much at stake, it is vital to prevent deviations from these targets from arising and, should they do so, the necessary measures must immediately be implemented to correct them, as the government has undertaken to do. To see this task through, all levels of government must be involved. This begins with the regional governments, who must firmly redress their budgetary positions, in which connection the strict arrangements for the authorisation of indebtedness may prove helpful. Another confidence-building factor would be greater transparency of regional government budgetary information. True, significant headway has recently been made in this area. But, to dispel doubts about the state of regional finances, it would be very important to see the regular publication of figures for the regional governments as a whole and for each particular region, with the same periodicity, degree of detail, lag and accessibility as State figures. The heavy deterioration in the general government deficit in this crisis advises, moreover, adopting measures to achieve a more balanced budgetary performance both in upturns and in recessions. Here, the government announcement to include in the Budgetary Stability Law a rule whereby general government spending may not exceed the medium-term growth rate of the Spanish economy is most positive. This rule would be immediately applicable to central and to local government, but its adoption by the regional governments would also be pursued.

f.  We expect insurers to have effective risk management and governance, including independent risk and internal audit functions; and boards with a majority of independent non-executive directors, for both insurance groups and significant insurance companies within those groups. g. Insurers must disclose their financial position regularly in some detail, based on market prices for assets and liabilities as far as possible. Our regime, however, is not seeking to eliminate all risk (or achieve the stability of the graveyard). Provided insurers match their assets and liabilities, the Solvency II Matching Adjustment insulates them from movements in the market price of assets backing annuity liabilities to which they are not 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  exposed as buy-and-hold investors. They are also able to bring forward into day-one profits any returns on these assets in excess of what is required to compensate for the risk of credit default and downgrade. That adds up to a powerful incentive to invest in long-term assets yielding good risk-adjusted returns. Since the introduction of Solvency II, UK insurers have responded by diversifying out of government and corporate bonds into direct investments in infrastructure finance, commercial real estate lending and equity release mortgages (Chart 3). The infrastructure investments, for example, include renewable energy, hospitals, student accommodation, social housing and railway rolling stock leasing (Chart 4).
Mervyn King: Monetary policy – practice ahead of theory Text of the Mais Lecture 2005 by Mr Mervyn King, Governor of the Bank of England, at the Cass Business School, City University, London, 17 May 2005. The references can be found on the Bank of England’s website. I am indebted to James Proudman, Gertjan Vlieghe, Tony Yates and Richard Harrison who have worked closely with me on this lecture and are effectively co-authors. Alan Mankikar and Tim Taylor provided excellent assistance in preparing the empirical and historical research that support this lecture. *  *  *  Introduction Monetary policy is aimed at maintaining price stability. That may seem self-evident. Thirty years ago it was not. From the end of the second world war until the mid to late 1970s, the majority view of academic economists and policy-makers alike was that monetary policy had rather little to do with inflation, and was largely ineffective as an instrument of demand management.1 The intellectual basis for that view was never clear. And painful experience taught us that price instability led to costly fluctuations in real output and employment. Far from being ineffective, a monetary policy aimed at price stability has proved to be the key to successful management of aggregate demand. Fortunately, the theory and practice of monetary policy in the UK have changed out of all recognition in the past twenty-five years.2 We have moved from the Great Inflation to the Great Stability.

In this way, I trust, we can reconcile those who feel left out, including many of the protesters gathered in Frankfurt this week, with a process of integration that has already generated so many benefits for three generations of Europeans. Let me conclude. This building is a credit to all those who have worked to bring it to fruition. It is a landmark for the city of Frankfurt. And it provides the ECB with an impressive new home to pursue its mandate. But it also stands as a powerful symbol of what European integration is about. It reminds us of where we have come from and where we have come to. Of the horrors that can happen when we split apart, and the huge steps forward we can make when we work together. So let us not undo what has been achieved. Let us not hanker for the past. Let us draw on the past to unite us in the present – to build a complete Union that can deliver the stability and prosperity we need. We as the central bank will do our part in this process by ensuring the integrity of our single currency. Our shared money is the most tangible sign of the trust we place in one another. As the ECB’s first President, Wim Duisenberg, put it at the launch of the euro more than 16 years ago: “A currency is far more than just a medium of exchange … A currency is also part of the identity of people.
In other words, uncertainty with regard to the interest rate reflects the monetary policy response to unexpected disturbances in inflation, output and the exchange rate. When the interest rate, as forecast in the baseline scenario, is raised to a more normal level, Norges Bank will be able to assess the effects of interest rate changes and other new information about economic developments. According to our projections, inflation will be close to target three years ahead. We are uncertain as to the functioning of the economy and how long it will take for the resource shortages observed in some sectors of the Norwegian economy to translate into higher inflationary pressures. This may warrant small steps in interest-rate setting. Employment is now rising more rapidly than expected. Corporate earnings are rising sharply, with higher growth in corporate demand for credit. The sharp rise in household debt is continuing. House price inflation remains high. This is to some extent due to structural adjustments, but gives cause for some concern nevertheless. Wide fluctuations in asset prices may be a potential source of instability in demand and output in the somewhat longer run. Prices for oil and several other commodities have picked up further. At the same time, the underlying rise in consumer prices remains low. So far, a tighter labour market does not seem to have resulted in higher-than-expected pay increases, but there is a risk that wage growth may subsequently rise faster than projected. The krone is stronger than assumed.

Luis de Guindos: Interview with Telediario 2, Televisión Española Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, and Telediario 2, Televisión Española, conducted by Mr Carlos Franganillo on 19 March 2020. * * *  One way or another, this massive asset purchase programme will be of particular help to those countries that have been deeply affected, such as Spain or Italy, to ensure that spreads don’t widen dramatically at this critical time. It will help all euro area countries. Some were in a weaker position; their public finances were also more vulnerable than others. But what the ECB will not allow is fragmentation of any kind in the sovereign debt markets and a return to the nightmare caused by widened spreads. We are dealing with a huge health crisis, there is a severe economic crisis and we are going to ensure that it does not result in some kind of financial crisis or debt crisis. This is what we are going to avoid because the ECB is at the service of the European people. The European Central Bank has said that it will do whatever needs to be done to combat this crisis. Does the ECB have more weapons at its disposal for the weeks or months ahead if the situation deteriorates? We can always do more. As you mentioned earlier in your news item, our commitment knows no limits.
More recently, the disinflationary tailwind in traded manufactured goods imported from China may have come to an end, at least for a period, as more of the increase in productivity there is captured in wage gains. Meanwhile, growing prosperity and urbanization in highly populous countries such as China and India has been the principal driver of a major, multiyear upward shift in the relative price of commodities. This move – a negative terms of trade hit for the United States – has pushed up the overall rate of inflation, at least temporarily. 6  BIS central bankers’ speeches  There are good reasons to believe that commodity prices will not continue to increase at the explosive rate of recent months. Households and businesses will adjust their activities in response to higher prices, and there will be a supply response to higher prices that will gradually build over time. In any event, a shift in relative prices, even if spread out over a number of years, should not to be confused with the onset of an ongoing inflation problem. But the uncertain future path of commodity prices does make the task of the central banker harder. It is the job of central bankers to ensure that changes in relative prices do not infect the general trend in prices. In the United States – unlike in many EMEs that are appropriately tightening policy – a large amount of slack and low unit labor cost increases provide a disinflationary counterbalance to commodity price gains.

These generally carry a higher yield than the assets purchased in the course of the intervention, typically low-yielding U.S. Treasuries. The difference in yields results in a net fiscal cost. 4  BIS central bankers’ speeches  Second, the need for U.S. fiscal consolidation implies that there will have to be offsetting increases in investment and the U.S. trade balance as the recovery proceeds. To illustrate this second point consider the following accounting identity: The public sector balance + the private sector balance = the current account balance Right now the identity holds as roughly: –10 percent of GDP public sector balance + 7 percent of GDP private sector balance = –3 percent of GDP current account balance.5 If the public sector balance must over time move from around –10 percent to around –3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by roughly 7 percentage points of GDP to take up the slack. Assuming that the consumption share of GDP still needs to fall over the medium term, the adjustment in the U.S. private balance will have to occur primarily in terms of rising residential or business fixed investment. There does seem to be room for business investment to expand significantly when firms become more confident in the economic outlook, provided that the United States remains a competitive location for investment. But residential investment is unlikely to climb very much for some time given the chronic overhang of unsold homes.
Mark Carney: Redeeming an unforgiving world Remarks by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the 8th Annual Institute of International Finance G20 conference, Shanghai, 26 February 2016. *  *  *  The global economy risks becoming trapped in a low growth, low inflation, low interest rate equilibrium. For the past seven years, growth has serially disappointed – sometimes spectacularly, as in the depths of the global financial and euro crises; more often than not grindingly as past debts weigh on activity (Chart 1). This underperformance is principally the product of weaker potential supply growth in virtually all G20 economies. 1 It is a reminder that demand stimulus on its own can do little to counteract longer-term forces of demographic change and productivity growth. Chart 1 Serial growth disappointments Actual GDP growth 2011 Dotted lines = Emerging economies Solid lines = Advanced economies  2012  2013  2014  2015  Per cent 8 7 6 5 4 3 2 1  2010  2011  2012  2013  2014  2015  0  Source: IMF. That is not to suggest that such stimulus is without value or impact. Accommodative monetary policy can support activity while parts of the economy delever. Monetary stimulus can avoid hysteresis in the labour market. And monetary stimulus can buy time for structural adjustments which shift activity from public to private, external to domestic, and declining to rising sectors.

Despite a recent recovery, equity markets are still down materially since the start of the year. Volatility has spilled over into corporate bond markets with US high-yield spreads at levels last seen during the euro-area crisis. The default rate implied by the US high-yield CDX index is more than double its long-run average. And sterling and US dollar investment grade corporate bond spreads are more than 75bp higher over the past year. On the back of these concerns, risk premia have increased across the board, with “safe haven” assets and currencies benefitting at the expense of equities, credit and commodities. In this ‘risk off’ environment, correlations across asset classes are up sharply. Falls in market liquidity have contributed to strains in some markets. In treasuries and gilts, spreads between 30-year yields and the equivalent swaps have risen by over 40 basis points since the beginning of 2015. And there has been a widening in the spread between corporate bond yields and CDS premia which may reflect a reduction in arbitrage as dealers conserve their balance sheets. Banking stocks have been particularly hard hit, down about a quarter on average over the past three months, across the advanced economies, prompting some to question whether anything has really changed (Chart 5). This re-pricing likely reflects first and foremost renewed growth worries. Banks have always been high beta to the economy.
Most countries are still in the expansionary phase of the financial cycle, and a real test in the form of a financial crisis has –  3 4 5  Cf. https://www.finma.ch/en/documentation/self-regulation/ (consulted on 21 March 2022). Cf. https://www.snb.ch/en/mmr/reference/pre_20130213/source/pre_20130213.en.pdf (consulted on 21 March 2022). Cf. BCBS (2019), Guiding principles for the operationalisation of a sectoral countercyclical capital buffer. fortunately – not yet occurred. It is therefore essential that we update our assessment as we gain more experience, and as more and better data become available. Containing the build-up of vulnerabilities  Let me start with an assessment of the instruments that aim to contain the build-up of vulnerabilities. International empirical evidence available so far shows that borrower-based instruments such as caps on LTV and LTI ratios have helped to slow down mortgage lending and real estate price growth. 6 This has contributed to dampening the build-up of vulnerabilities, without being able to prevent them completely. Research also clearly highlights that macroprudential policymakers need to be forward looking, given that there are long lags between policy announcements and policy effects. A similar conclusion holds also for Switzerland. Unlike many other countries, Switzerland had not seen a housing boom before the GFC, and accordingly no bust thereafter. Instead, residential real estate prices have increased moderately but very persistently since then, prompting responses by macroprudential authorities.

To meet this expectation, an FSB steering group has coordinated working groups for each of the major IBOR benchmarks. The mandates of these groups are to identify alternative rates and to begin transitioning to them. In 2014 the Federal Reserve convened the Alternative Reference Rates Committee (ARRC) to plan the transition away from U.S. dollar LIBOR.8 The ARRC conducted two public roundtables, published a written consultation, and created an advisory group of end users across market sectors. The ARRC’s criteria for U.S. dollar LIBOR’s replacement included methodological quality, accountability, governance, and ease of implementation. In the end, the ARRC recommended a new rate that the New York Fed had proposed in cooperation with the Treasury Department’s Office of Financial Research.9 The new rate is called the Secured Overnight Financing Rate (SOFR). The New York Fed has published SOFR every day since early April of last year. 10 SOFR measures the cost of overnight borrowings through repo transactions collateralized with U.S. Treasury securities, which is the deepest and most liquid money market in the U.S. It is based on actual transactions and takes in more transactions than any other Treasury repo rate available, recently around a trillion dollars each day. SOFR is relevant to the cost of borrowing for a wide array of market participants, was constructed to meet the best practices for benchmarks set out by IOSCO, and is built to accommodate future market evolution.
This strength in consumption was accompanied by solid income growth, as real disposable income increased at a 3.6 percent annual rate in the fourth quarter, reflecting the stronger labor market. The pace of improvement in the labor market has slowed in recent months from the strong pace at the end of last year. Nonfarm payroll employment increased in the first quarter by about 200,000 per month, well below the pace of the fourth quarter. This slowdown was broad-based, with job growth slowing in both the goods-producing and the service-providing sectors. The unemployment rate was 5.5 percent in March: analysis by my staff suggests that the unemployment rate is nearing the point where we may begin to see a pickup in the pace of real wage gains. If this proves correct and unemployment continues to decline as I expect, then these stronger wage gains could help support solid income growth even if the pace of employment growth slows. However, it will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate. The March labor market report is another indicator that the first quarter is likely to be quite weak. Our current projection is that the economy will grow at about a 1 percent annual rate in the first quarter of 2015. This softer performance is suggested by a wide range of recent indicators that have surprised to the downside over the past couple of months.

We have to demonstrate the same spirit with which the European Union was progressively developed over the past half-century: setting objectives, agreeing deadlines and mobilising the necessary political will within Parliaments. Europe’s governments are committed to pursue fiscal consolidation. Those within the euro area have formally declared that they will take “all measures needed to meet fiscal targets this year and the years ahead in line with excessive deficit procedures” (Euro area heads of state or government declaration of 7 May 2010). Some of them have made precise additional commitments to accelerate fiscal consolidation and ensure the sustainability of their public finances. Fiscal consolidation is being put in place at the same time as we strengthen the resilience of the European banking sector. Publication of the detailed results of a harmonised panEuropean stress test is an important step in the right direction. These tests will increase transparency and enhance investors’ confidence in Europe’s banking sector. They will also contribute to restoring the important intermediation role of the interbank market in channelling funds within Europe. 3. Where next? So where do we go from here? As I have indicated, collectively as European and global policy-makers, we need to ensure economic recovery and renewed confidence, while reducing fiscal deficits and remaking the financial system into one that supports the real economy. This needs to be our clear sense of direction. 1  Keynes (1937), “How to avoid a slump”, Article in The Times, 12 January 1937.
In November 2000, the ECOFIN Council – bringing together the Economics and Finance ministers of the EU Member States – formally adopted the position that unilateral euroisation is not compatible with the Treaty and cannot be a way to bypass the convergence process foreseen by the Treaty for the adoption of the euro. The ECB fully subscribes to this position of the EU Council. Allowing a Member State or a future Member State to take a “short-cut” to the euro, rather than following the official roadmap, could be detrimental to that country and possibly the euro area. Because 1.  a sustainable convergence that is conducive to the maintenance of price stability and the coherence of the euro area may not have been achieved. 2. It would breach the principle of equal treatment. 3. It would not ensure that the country in question pursues the right policies to thrive under the euro. This raises the question of the approach to be taken towards countries, which would in principle qualify for EU membership (Art 49 TEU) but do not formally aspire to join the EU and are thus not candidate countries. This is the category of countries like Iceland. Here, both the rule of law and the principle of equal treatment provide answers. 1. The Treaty does not provide a framework for euro adoption by non-candidate countries.

While there might have been an impact on specific service categories in January, overall there is no evidence that the euro cash changeover has had a significant upward effect on the average price level in the euro area or that the declining trend in annual inflation rates has been affected recently. BIS Review 15/2002  1  In the coming months, the effects of past increases in energy and food prices should gradually subside and annual inflation rates should fall to below 2%. The recent behaviour of producer prices also points in this direction. Beyond that horizon, we expect little upward pressure on prices from aggregate demand and, barring unforeseen developments, inflation rates to be in line with price stability. However, the current favourable outlook for inflation fundamentally rests on the assumption of a continuation of wage moderation. As I already noted last month, there is some cause for concern with regard to ongoing wage negotiations. A continuation of wage moderation in the euro area is crucial not only to foster employment growth but also to support monetary policy in its task to maintain price stability. With regard to fiscal policy in the euro area, the Governing Council welcomes the reaffirmed commitments of the governments of euro area countries with fiscal imbalances to adhere to the objective of achieving balanced budgets by 2003-2004. The confirmation of the political will to continue along the path of fiscal consolidation is most appropriate.