samchain/econo-pairs-v1 huggingface dataset:
iv This loss of growth occurred even before tariffs were raised, and for a reason that is often underestimated: protectionist uncertainty reduces business leaders’ confidence in the future and leads them to postpone their investments. Britain under the threat of Brexit has been a clear illustration of this private sector confidence deficit over the past three years [the Bank of England estimates that business investment is 20-25% below its previous trend], and even the United States is beginning to  Page 3 of 10  suffer. Faced with this situation, political leaders – and one of them in particular – have the most important role to play: it is up to them to restore the confidence they have undermined. Monetary policies do their part by keeping interest rates low in the face of the slowdown, but they cannot tackle the underlying cause. For the euro area, these uncertainties are being compounded by a painful paradox: the causes of the slowdown are largely external, but the region is being acutely affected. This imbalance is attributable to the weight of Germany, which is highly specialised in the manufacture of capital goods and “overexposed” to global trade. It nonetheless also illustrates the fact that Europe needs to make greater use of the scope it has to respond: it has less public debt (81% of GDP) than the United States (106%) or the United Kingdom (87%), but it makes less use of fiscal stimulus, especially in Germany.

At the end of their working life, the funds available are an additional source of retirement income. The virtue of these systems is that they do not deter worker mobility. This is so in Austria because, by not forgoing their "established rights", it is workers themselves who manage the accumulated resources during periods in which they are unemployed. Also, this arrangement offers protection to all workers, even those whose previous terms of employment have been short-lived. In Denmark, the choice was of a system which firmly supports the unemployed (with substantial unemployment subsidies and intensive training programmes) in a setting in which, however, firing costs are very low. Just as 50 years ago the external sector crisis obliged Spain to change its trade protection policy, the current, serious unemployment crisis should lead us to examine what we can change in our labour market, given what other countries have done with very favourable results. Admittedly, this is nothing new, since the Banco de España has reiterated in its annual reports, at least in the past 10 years, the need for such reform. What is new is that reform has now become absolutely vital; otherwise, when we emerge from the current crisis, and in the absence of the instruments that were used in the past, we will be liable to grow far below what we did in previous decades. The reform of labour institutions is a pressing task, since the short-run effects on hiring are absolutely necessary in the current circumstances.
The immediate task was to repair the banking system so that it would not be crippled by future economic shocks - forcing it to cut back sharply on credit supply. We now have standards in place that ensure banks can keep lending through economic shocks more severe than the financial crisis. Next was to guard against the financial system enabling other parts of the economy to become too highly indebted. It’s well established that high levels of mortgage debt magnify economic downturns as high-debt 2  households cut back sharply to keep paying the mortgage. That’s why we’ve set limits on high loan to income mortgage lending. Because we are tasked with achieving a general outcome, not with implementing a specific rule book or even a set of principles, we have a duty to adapt regulation as risks change and the financial system evolves. We must fight the next war as well as the last one. The Brevan Howard Centre’s own mission statement is clear on this: “Future research may show that the current focus on capital and liquidity regulation is inadequate. Among the topics that require further research are panics, asset price bubbles, contagion, deficiencies in the financial architecture, and foreign exchange mismatches.”  1  Financial crises often lead to a long-run reduction in GDP, with a persistent decline in output relative to pre-crisis trends. Staff estimates based on the impact of historical financial crises in a sample of advanced economies, reported in Brooke et. al.

When they’re low, the world appears less risky, so less compensation appears to be needed for 12  risk. The trouble is that these are not measures of risk. They are a reflection of the risk appetite of those selling insurance. Taking on more risk because implied volatility is low is the equivalent of ignoring the road conditions and driving faster because your insurance got cheaper as a herd of new entrants flooded the car insurance market. When accidents start to increase, the whole thing can go into reverse. Those who had been selling insurance can incur losses. What might have looked like a profitable insurance business won’t do so any more. The terms on insurance can shift abruptly. The result: driving speeds slow down to a snail’s pace. In markets, this means price adjustments, whatever triggered them, might be followed by sharp withdrawal of cheap insurance… ….which removes the need for dealers to act as a stabilising influence… …Leading to greater market volatility…. …And sharp reduction in risk appetite. Market moves are amplified. These dynamics are difficult to size. They may or may not be of consequence. Exploration is needed about behaviour in some of the furthest corners of the system in order to take a firmer view on the form and extent of this fragility. As the Office of Financial Research in the United States noted, “Available data on investor portfolios are not sufficient to assess this…adequately”.
6  anticipates reducing the quantity of reserve balances to a level “appreciably below that seen in recent years but larger than before the financial crisis.” While the FOMC has articulated how the balance sheet will be reduced, there remains uncertainty about the long-run size and composition of the Federal Reserve’s balance sheet. Importantly, the size and composition will depend on growth in the various non-reserve liabilities, demand for reserve balances, and the future monetary policy implementation framework. The FOMC has not made any decisions about the long-run monetary policy implementation framework; however, the minutes from the July/August FOMC meeting suggest that the Committee will likely resume a discussion of operating frameworks in the near future. 17 It is also not known how non-reserve and reserve liabilities will evolve going forward; however, our regular surveys give us a sense of how some market participants are viewing many of these components, which we show in Figure 7. In particular, the surveys ask respondents about their expectations for the size and composition of the Federal Reserve’s balance sheet, on average, in 2025, under the assumption of no return to the zero lower bound. The responses serve as a good proxy for expectations about the long-run size of the balance sheet. The median expectations are for the balance sheet to be $ trillion on average in 2025 and for reserve balances to be $ billion, or about $ trillion below their current level.

In any case, the bias and probabilities of external risk scenarios reinforce the need for a small and open economy such as Chile to maintain deep-rooted macroeconomic foundations, particularly a path of fiscal consolidation, sustainable debt levels and adequate capitalization of the country’s banking system. At home, we estimate that the risks to activity are unbiased. The economy has brought positive surprises in good measure because the possibility of a more dynamic behavior of investment identified in previous reports has materialized, short only of a more significant response from large-scale projects and the real estate sector. For its part, although the labor market could take a little longer than expected to recover, the latest data tend to provide greater robustness to the employment, wage bill and consumption projections. As for inflation, we estimate that the risks are unbiased. Although the risks in the international scenario and their negative implications have increased, the economy has shown more dynamism than expected and the short-term outlook for headline inflation has been corrected upwards. In this context, we consider that the current level of monetary stimulus is less necessary and may begin to withdraw it in the coming months. Thus, we reaffirm our commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon. Institutional advances and challenges As I pointed out at the beginning, this presentation to the full Senate has a special connotation.
The business representatives surveyed by our delegates are also confident about 2019. Risks remain to the downside, as is the case with the global economy. In particular, a sharp slowdown internationally would quickly spread to Switzerland. Exchange rates, inflation expectations and interest rates  Let me now move on to address the monetary conditions – that is to say, exchange rates and interest rates – as well as inflation expectations. As I mentioned at the start, the Swiss franc depreciated slightly in the third quarter. Overall in 2018, however, it has appreciated by 3.5% against the currencies of our trading partners, largely driven by a weaker euro. Analysis of the exchange rate situation as a whole indicates that the Swiss franc remains highly valued. The real trade-weighted exchange rate, which is relevant for the economy, is still high. Given the economic and political uncertainties, there is also the risk of major and sudden movements in the exchange rate, which would significantly alter monetary conditions. We therefore continue to regard the situation on the foreign exchange market as fragile. This leads me to our inflation expectations, as derived from surveys of households, companies and forecasting institutions. It is our mandate to ensure price stability while taking due account of economic developments. We equate price stability with a rise in consumer prices Page 3/4  Berne, 13 December 2018 Thomas Jordan  News conference  of less than 2% per annum.

In this context, global growth lost momentum somewhat in the third quarter. This was largely attributable to special factors, such as production losses in the German automotive industry and extreme weather events in Japan. Economic expansion in the US and China remained robust. Employment figures in the advanced economies rose again and unemployment continued to decline. The growth in international trade in goods also continued. In our baseline scenario for global economic developments, we anticipate solid growth in the coming quarters. In the short term, the world economy is set to continue to expand somewhat above potential, benefiting from the clear improvement in the labour market situation and the ongoing expansionary monetary policy in the advanced economies. However, a gradual slowdown is likely in the medium term. Nevertheless, we also see significant risks to this baseline scenario, primarily in connection with political uncertainties and protectionist tendencies. These risks have considerable potential for damage. The resulting uncertainty alone can curb growth and weaken the resilience of the global economy. For instance, surveys indicate that trade tensions have prompted companies to reassess their investment plans and value chains. As far as Brexit is concerned, uncertainty remains high following the postponement of the vote in the UK parliament. The tension surrounding Italy’s fiscal policy also persists. All these risks could lead to turbulence in the financial markets, jeopardise global economic growth, and also influence monetary policy.
Instead, it should aim to promote and support the adaptation of the productive system and workers to the new realities and the efficient reassignment of resources among industries and firms. In short, the design of economic policy measures should be adapted to the changing circumstances of the crisis itself. The ability, over the coming quarters, to recalibrate the support measures to ensure that at all times they match the needs arising from the course of the pandemic will determine our opinion in a few years’ time of the success of the economic policies of today in addressing this crisis. It is this spirit of needing to adapt to continuously changing circumstances that has inspired the recent agreement between the Government and the social agents to renew furlough arrangements (ERTEs) until 31 January 2021: the agreement has introduced new forms of temporary suspension of employment relationships, in response to activity restrictions that may arise entirely or partly as a consequence of the introduction of fresh pandemic containment measures. One particular dimension of the necessary redesign of these mechanisms is a more selective focus. The protection measures should be directed at those industries and firms most directly affected by the activity restrictions resulting from the course of the pandemic, this being an aspect of the latest ERTE extension. The rationale for this heightened focus is twofold. First, public funds are limited and already subject to considerable pressure, so they need to be channelled towards those uses that yield the highest returns.

A correct diagnosis of the situation and decisive national policy action to help fully harness the opportunities offered to us by the EU are essential preconditions for future well-being. This is why I advocate achieving broad political and social consensus to address the urgent, ambitious and comprehensive growth strategy that our country needs. Thank you very much. 11  See M. Tommasi and A. Velasco (1996), “Where are we in the political economy of reforms?”, Journal of Policy Reforms, No 1, pp. 187-238. 22
This makes sense, particularly in view of the special liquidity requirements I have already mentioned. In addition, we also place funds in small cap companies. In terms of market capitalisation these holdings only account for a small portion of our equity portfolio, but in numbers they make up about three-quarters of all the securities we hold. This, too, shows the breadth of our equity universe. When selecting our equities, we use a benchmark. This is a combination of various commonly used indices, assembled by us. As soon as we have determined the benchmark, equity investment becomes a largely automatic process. Why does the SNB not make targeted investments in individual companies or sectors where an above-average return can be expected? In other words, why do we not engage in stock picking? Warren Buffett is quoted as having said, wide diversification is only required when investors do not understand what they are doing. I can assure you that our investment specialists have an excellent understanding of what they are doing. However, we choose to have recourse to a broad equity universe for the following four reasons. First, we achieve a greater diversification effect within the equity segment by investing as widely as possible, across both regions and sectors. Second, it should not be our objective to enforce strategic or, indeed, political interests by means of our investments in individual companies. This could limit our monetary policy room for manoeuvre and would also make our position vulnerable.

In the initial stages the risk and returns structure of the portfolio improves. The expected return increases and the expected risk decreases. However, once a given equity share is exceeded, at point B, a trade-off between risk and return begins. At this stage, each further increase in potential return has to be ‘bought’ at the cost of increased risk. In the extreme case, we reach the situation of a portfolio consisting solely of equities (point C). The equity share we are aiming for is obtained by weighing up additional risk against higher potential return. After potential return and risk have been weighed up in this way at the SNB, what does the final result look like? Fundamentally, our efficient frontier presents less attractive risk/return combinations than in the case of many other investors. That means our efficient frontier tends to look more like the right-hand curve in slide 7. In addition, the point at which a further  1  According to a survey published in early 2013, only eight of 60 central banks worldwide held equities as part of their currency reserves at that time. A further six central banks stated that they intended to diversify into equities in the future (cf. Pringle, Robert and Nick Carver, eds. 2013, RBS Reserve Management Trends 2013, London, Central Banking Publications). 4  BIS central bankers’ speeches  increase in the equity share means a rise in total risk (point B’) is reached earlier than in the left-hand curve. I have already talked about the reasons for this.
In particular, there has been extensive deleveraging by Spanish households and firms; an increase in the solvency and liquidity of the balance sheets of credit institutions; an improvement in competitiveness (which has enabled a current-account surplus to be maintained since 2012, even after the outbreak of the pandemic and the energy crisis); and a reduction in the share of construction investment in activity to levels similar to those seen in the euro area as a whole. However, certain structural vulnerabilities remain, which shape the outlook and sustainability of economic growth going forward. Notable among them is that arising from the high level of public debt (up by more than 80 pp of GDP since the start of the financial crisis), which is also accompanied by a considerable structural budget deficit. In addition, the Banco de España, along with other institutions and analysts, has in recent years highlighted the vulnerabilities stemming from the increase in certain aspects of inequality in Spain, in particular in the area of opportunities. With this backdrop in mind, what lies behind this failure to converge and what role does productivity have to play in this process? First, it should be pointed out that the comparatively low productivity of Spain’s firms is a widespread problem, unrelated to the sectoral specialisation of the economy or the size of such firms.

The stock of private productive capital (relative to employment) has increased by 40%, and much the same can be said of the stock of residential capital (relative to the population). The stock of public capital, essentially comprising transport, health, educational and other infrastructure, has almost tripled in real per capita terms over this period. Government spending on education and health has risen twofold. The percentage of the adult population with intermediate and higher studies has increased by 28 pp and 20 pp, respectively. Moreover, since 1978, the Spanish population has grown by over 10 million, and the number of people in work has risen by more than 8 million, including over 6 million women. This has raised the female participation rate from a mere 28% to 54%. Overall, economic success in the democratic era can probably be put down to a combination of our economic integration into Europe, the consolidation of stability-oriented economic policies, the development of our welfare state and the modernisation of our tax system. Against this backdrop, I would like to focus my address on the outstanding structural challenges and the economic policies best equipped to address them, as further explored in the Banco de España's latest Annual Report, published in May. These challenges can be illustrated, first of all, by acknowledging the Spanish economy's failure in recent decades to converge consistently towards the per capita income levels of the euro area.
François Villeroy de Galhau: Bank of France - how the commitment to fintechs is being implemented Speech by Mr François Villeroy de Galhau, Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de resolution (ACPR), at the ACPR-AMF Forum Fintech, Paris, 11 October 2021. * * * Dear Minister, Ladies and Gentlemen, I am very pleased to welcome you to the Banque de France this morning for this annual ACPRAMF Fintech Forum – and I would also like to welcome Robert Ophèle, Chairman of the AMF. Mr. Minister, dear Cédric, you have once again given us the pleasure of being present for this second forum. The strong attendance of public officials testifies to our collective commitment to fintechs, which I am convinced are indispensable to the financial sector, as a driver of creativity, vitality and efficiency. Previously a garden in the making, the fintech ecosystem is now growing in leaps and bounds. This is especially the case since these start-ups have benefited from the acceleration of digitisation in finance resulting from the health crisis. Moreover, 2021 was a record year for fundraising in the sector: EUR 1.7 billion had been raised by the end of August 2021, which is already twice as much as for the whole of last year, and this year also saw the birth of the first French fintech “unicorns".

This contributes to the ongoing work in the Eurosystem, in which we decided on 14 July to launch a prototype, and to decide accordingly in 2023 about the launch of a digital euro, which could be concretely achieved around three years later. As regards artificial intelligence, last July we organised the first ACPR Tech Sprint to test the market on the concept of algorithm explainability. The challenge was for teams of data scientists to design tools to explain credit risk models with which they were unfamiliar. The event was a great success, with 24 teams registered, including some students in order to raise awareness of these issues among our future data scientists. Allow me to quote the testimony of one of the banks that designed one of the models for the ACPR’s Tech Sprint: “It is interesting to create community dynamics around these issues because we can see that it is not the banks against the ACPR or the banks against each other: trust in artificial intelligence is a matter for everyone and we really stand to gain from working as an ecosystem on this subject”. I would like to conclude with a quotation from Georges Bernanos, who was certainly not a lover of technology, but was a great writer: “We don’t endure the future, we create it”. Faced with the acceleration of digital technology and Bigtechs, we must develop a more “Schumpeterian” finance capable of fostering the emergence of innovative European players.