samchain/econo-pairs-v1 huggingface dataset:
Some policyholders and creditors are able to monitor and react to changes in the creditworthiness of insurance firms. Clearly, for those that can, good quality, timely disclosures enhance market discipline. Where market discipline is strong, there is less need for stringent regulatory minima. But the strength of market discipline varies widely across the sector, according to the nature of policies and policyholders, as well as being different at the point of purchase and during the subsequent life of a contract – often measured in years not months. Moreover, there is another, essential element of the regime that serves to reduce market discipline. This is not a pillar but a net strung between the pillars. Large classes of policyholder would suffer significant hardship if their insurer failed, but have either no way of observing that it is courting failure, or no way of switching to a safer firm – often both. Annuitants are an obvious example. So such policyholders are offered an unlimited, 100% safety net by the FSCS. Certain general insurance products are in the same camp, and not just indemnities covering potentially ruinous liabilities to third parties: indeed, last year we extended 100% cover to certain building guarantees policies when it became clear that they met the criteria of significant hardship and inability to switch provider. So far so good, and the safety net promotes competition by giving consumers confidence in purchasing insurance and shopping around.

Meanwhile, on the supply-side of the economy, there is little evidence as yet in the productivity data that would suggest an acceleration in the underlying rate of capacity output growth such as we have seen in the US, and which, while it lasted, would allow the economy to grow correspondingly faster without necessarily generating inflationary pressure. We might all fervently hope to become infected by that particular disease - but the actual evidence so far suggests that up to now we have remained immune. That does not necessarily mean that we will not see accelerating productivity growth. But we can’t afford to gamble on that happening either. When people approach me with the sound-bite “give 3  BIS Review 18/2000  growth a chance”, what I hear them saying is “take a risk with inflation”. But equally when they say “you must take no risks with inflation”, I hear them saying “the world will never change”. The truth is that nobody knows with any great confidence. The important thing is to keep an open mind and to monitor intensively all of the data as they becomes available to us, and then draw what inferences we can as to how those data affect the balance of risks around the inflation target looking ahead. And that of course is precisely what we do in the Monetary Policy Committee.
Jarle Bergo: Oil prices, cyclical developments and monetary policy Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at Vest-Norsk Sparebanklag’s autumn conference, Bergen, 12 November 2004. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 3 November, Inflation Report 3/04 and on previous speeches. The references and the  Charts in pdf-format can also be found on the website of the Norges Bank. *  *  *  The objective of monetary policy is to safeguard the value of money in the long term. In the short and medium term, monetary policy can also contribute to stabilising production and employment. Historically, the experience of Norway and other countries is that high inflation has resulted in unstable output and employment. A fall in the price level will often occur in tandem with a downturn. The objective of low and stable inflation provides an anchor for economic agents’ expectations concerning future inflation. We have a very open economy with free capital movements. Stable inflation expectations also contribute to more stable krone exchange rate expectations. I will discuss this aspect in more detail later. Inflation targeting has proved to be particularly appropriate in very open, small and medium-sized economies such as the Norwegian economy.

At its monetary policy meeting on 3 November, the Executive Board decided to leave the sight deposit rate unchanged at 1.75 per cent. At this meeting, the Executive Board did not see any clear alternatives to leaving the interest rate unchanged. In reaching its decision, the Executive Board has weighed the objective of bringing inflation back to target against the risk that output growth may eventually be too high. 6  BIS Review 67/2004
This is confirmed by the fact that most of the rating agencies as well as the IMF's recent mission to Estonia have expressed positive assessments of Estonia's economic outlooks. To support economic growth, it is necessary to reinforce the principles of open economy and market flexibility and to ensure the stability of the national economy. In order to meet these goals, the best state support is the resumption of investment in the private sector and using the new possibilities that accompany every crisis. Thank you for your attention! BIS Review 91/2009  3

Jean-Pierre Roth: Impact of the global crisis on Switzerland Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Schweizerisch-Deutscher Wirtschaftsclub, Frankfurt am Main, 2 March 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  What started as a financial crisis has now become a global economic crisis. Although the Swiss economy was in a very sound state before the crisis set in, Switzerland’s standing as a financial centre, its real economy and its public finances have all been strongly affected by the global turmoil. Recovery will depend largely on the development of the US economy. Despite having reached worldwide proportions by now, the crisis was not triggered by globalisation itself. Rather, it is the result of a lack of discipline in the industrialised nations. Monetary policy today must contribute to the stabilisation of the financial system and the real economy without losing sight of its principal task, which is to maintain price stability. BIS Review 24/2009  1
Given that monetary policy exerts its impact on the economy with a time lag, our work is based in practice on ensuring that future expected inflation is 2 per cent. Our underlying assumption is that the time lag in policy is mainly one to two years. However, there is sometimes reason to refrain from achieving the target as defined in this way. This may be the case when inflation is affected by transitory effects, such as quickly rising or falling energy prices or changes in indirect taxes or  4  BIS Review 29/2003  mortgage interest expenditure. For this reason, the Riksbank also makes use of measures of inflation that exclude such effects. Inflation measured by the index UND1X is one example. Moreover, there may be reason after a shock to bring inflation back to the target in the somewhat longer term. This enables us to avoid overly negative implications for production and employment. The ECB measures price stability as a year-on-year increase in consumer prices of below, but close to, 2 procent. The target relates to inflation measured by the Harmonised Index of Consumer Prices, HICP. The idea is to reach the goal in the medium term, which implies that the ECB also disregards transitory effects on inflation. Consequently, the ECB’s definition is similar to our own. There are some differences, however. One is that the ECB’s target is defined in terms of HICP.

I don’t want to get too sentimental, but it is clear that our centuries-long common and shared history is no mere accident and that without exactly this similarity and closeness maybe our shared history could never have been so long in the first place. Again, this does not mean that we do not have our differences. Yes, we are still not equally wealthy, for example. Our elites have different opinions on many issues. Logically, we have different historical national wounds and pains. But again, this changes nothing in our mental – and not just geographical – closeness. Ladies and gentlemen, we are in Vienna, and my favourite Czech philosopher Vilém Flusser once said that Vienna and Prague are just two halves of one, single city. I very much agree. Perhaps this is ultimately why Czechs feel good in Austria: they feel very much at home. Therefore allow me right here my last point: if you are looking for anecdotal evidence of the closeness I am talking about, here is one anecdote I like to give here in Austria. Because we have friends here at the central bank, it is good to realise that the governor of the Austrian central bank is named Nowotny, his vice-governor and my dear friend is named Duchatczek, and the head of the local financial markets authority is called Pribyl. All these are typical Czech names.
Furthermore, the sovereign has been able to tap foreign capital markets twice, for a total of 2 billion US dollars, and use part of the proceeds to repay a significant part of the loans associated with the IMF programme ahead of schedule. FX reserves and other Central Bank FX assets currently cover scheduled sovereign foreign debt repayments beyond 2022 (see Figure 10b). The balance of payments problem that the current controls on capital outflows are intended to address therefore lies elsewhere. It is best demonstrated by Figure 11, which shows, on the one hand, liquid ISK assets held by nonresidents, which amount to 22% of GDP, and the old banks’ ISK assets, which will, in the absence of other action, accrue mostly to foreign residents and may be added to the overhang of potentially liquid offshore krónur. Given that the underlying current account surplus is in the region of 3–4% of GDP and that there are a lot of other debt repayments laying claims to it, it is clear that if these amounts were to be released overnight, we would be at risk of another currency crisis, with potentially significant financial stability implications. That is why these assets must be released after significantly reduced valuations in terms of foreign currency or must flow out over a much longer period. The more their value is reduced in terms of foreign currency, the faster can the controls be lifted.

Although the adjustment would ultimately be greater if it occurred slowly, a very rapid contraction would deliver such a jolt to the finances of many households and businesses that loan losses would result. It is likely that a range of risks will have to be faced, but efforts must be made to minimise the probability of a financial crisis that could harm potential output and living standards. In the final  2  BIS Review 41/2007  analysis, the critical factor is how strong and well equipped the financial system is to withstand shocks, i.e. its resilience. The crucial factor behind the Central Bank’s assessment that the financial system is now more resilient to shocks is the banks’ stronger liquidity and equity positions than a year ago. The major commercial banks have a diversified income base that extends to many countries. Another advantage is the somewhat different business models they have used in their expansion. Their diversified assets give less reason to fear the consequences of an unexpected strain on the financial system. Iceland’s strong fiscal position underpins the banks’ international credit ratings. Other important factors have been the strengthening of Iceland’s foreign reserves and the Central Bank’s capital. Both measures represent natural responses to changes caused in the Central Bank’s operating environment by the very rapid expansion of the commercial banks, especially abroad. Although the main function of a financial stability report is to highlight risks, factors conducive to strengthening the long-term economic outlook should also be duly noted.
Among the factors behind these differences are the date that the first cases appeared, the speed of the spread of new cases, how strictly containment measures were adopted and the response of the population. In the case of China, the greatest impact of the pandemic was recorded in the first quarter. Peru, on the other hand, saw a dramatic drop in the second quarter, as strict nationwide quarantine was implemented. Incoming information for Chile suggests that activity is picking up in sectors that had been particularly hard hit, such as retail and some services (Figure 5). This reveals that some activities have managed to adapt more quickly to new forms of operation, notably a more intense use of online sales and teleworking. In contrast, sectors such as construction, which are highly intensive in on-site work, have suffered greater than expected consequences, given the territorial and time extension of the quarantines. Because of its highly contagious nature, the pandemic caused a particularly sharp contraction in demand and supply in socially intensive areas, directly affecting the incomes of businesses and individuals. This has had a strong impact on the labor market, including self-employment. Thus, in the moving quarter ending in July, the annual drop in employment affected slightly more than 1.8 million jobs. About half of this figure corresponds to salaried jobs, mostly formal. Another 760,000 interrupted occupations correspond to non-salaried workers (i.e. self-employed workers and employers).

16  40  60 80 Unchanged  100  Figure 9  Labor income and social benefits (1) (2) (variación anual, porcentaje)  20  20  10  10  0  0  -3  -10  -10  -20  -20 -27  -30 -40  Second quarter Labor income  -30 Third quarter Social benefits  -40 Net  (1) The labor income is calculated using the wage bill, where (a) the employment projection is that implicit in the baseline scenario of the September 2020 MP Report, (b) those employed covered by the Employment Protection Law are excluded from the calculation, and (c) the labor income of self-employed workers would fall by 55% in Q2 and 35% in Q3. (2) The calculation of benefits considers: Employment Protection Law, Emergency Family Income (IFE), Severance Insurance, Covid-19 Emergency Bonus, and Middle-Class Bonus. Official information regarding payments already made is updated to 27/Aug/2020 and interpolated for the remaining months. For the IFE, four payments are considered. It does not consider the reforms to these benefits that had not been approved at the statistical closing. Source: Central Bank of Chile using INE, Ministry of Finance and Superintendence of Pensions data. Figure 10  Sales by electronic billing (*)  (moving two-week average, billion pesos)  7  Supermarkets  6  30/Jul,: Law for 10% pension fund withdrawal published in Official Gazette  5  +33% 6 +15%  4  2  20 01  4  2  26/Mar.
It seems implausible to assume that the impairment of our banking system – the very life blood of our market economy – has not affected the productivity and general efficiency with which companies operate.8 If that is the case, we may be less confident that the supply capacity of our economy will pickup markedly purely in response to an increase in demand, unless and until some of these credit frictions are repaired. Where does all this leave us? The argument that it’s possible to grow the economy without much increase in inflation is, of course, seductive and enticing. It’s like being offered a free lunch. And yes, there are some grounds for thinking that the trade-off between growth and inflation may well be unusually favourable. But how strong those mechanisms actually are is far from clear. And it seems  7  For a more detailed discussion of some of these points, see McCafferty (2013). 8  There are a number of empirical studies that suggest financial crisis can have material effects on productivity and output. See, for example, Furceri, D and Mouragane, A (2009), Oulton, N and Sebastía-Barriel, M (2013), IMF World Economic Outlook (2009). 6  BIS central bankers’ speeches  particularly optimistic to assume that the financial crisis and the near crippling of our banking system has played little role in the recent limp supply-side performance of our economy.

Meanwhile, it became clear to us that the standardisation of mortgage origination documents would facilitate the securitisation of mortgages more efficiently, by removing the need for due diligence review of documentation by credit rating agencies and investors. The HKMC therefore spent considerable efforts in promoting such standardisation. With the generous support of the legal fraternity and the banking industry, the HKMC introduced, in July 2001, the Model Mortgage Deed and the Model Deed of Guarantee and Indemnity. Fourteen major mortgage lenders have since adopted these model documents. Further standardisation of mortgage origination documents is in progress. It was against this background that the HKMC found it able to embark on another MBS programme the Bauhinia MBS Programme. The first series of MBS under that programme was issued in March 2002 and amounted to $ billion. The paper issued was in the form of bonds that investors are familiar, with a secondary market of considerable liquidity. Great care has been taken to design the Programme in such a way as to provide a convenient, flexible and cost-efficient platform for the issue of MBS. Benefiting from the standardisation of product structure and legal documentation, the leadtime for arranging an issue has been shortened substantially, from six to nine months for a standalone issue, to a few weeks under the Bauhinia MBS Programme. The current issue of $ billion of MBS is the second series under the Bauhinia MBS Programme. We are grateful and greatly encouraged by the enthusiastic response of the underwriting banks and investors.
In this supportive international environment, the euro area experienced a brilliant first quarter of 2011, emphasizing the robustness of the recovery. GDP increased by 0.8% over the quarter but as fast as 1.5% in Germany and 1.0% in France. All euro area countries, except Portugal, enjoyed positive growth rates. These developments no longer reflect solely the economic policy stimulus and the inventory cycle; they testify to a broad-based recovery, with a self-sustained private sector dynamics. One remarkable development of this first quarter is that French and German growth has been mainly driven by private domestic demand and, in particular, business investment. In France, it grew at a 1.9% quarterly rate, posting a fourth consecutive quarter of strong growth. The pace of recovery may slow in the coming quarters. Business climate indices, such as the Purchasing Managers Index, the Economic Sentiment Indicator or Germany’s IFO, have peaked at high levels. Beyond these observations, the crisis may have left scars on our economies. Potential growth may have been affected. The balance sheet repair process, involving both public and private agents, may also weigh on growth in the medium term. Still, prospects are encouraging. The OECD, which recently issued its latest forecasts, has just raised its growth forecast for the euro area to 2.0% in 2011 and 2012. All in all, we have strong reasons to believe that we successfully exited the economic crisis. There are increasing signs that the recovery is now well on track.

Between 2000 and 2008, Greece and Ireland posted cumulative labor productivity growth rates, as measured by the output per employee, of 14.7% and 10.2% respectively. Both significantly outpaced that of Germany (6.1%). This is exactly what you would expect in an integrated economic and monetary area and this process should continue in the future, provided that appropriate policies are implemented. Economic convergence will therefore boost growth and support the return to debt sustainability. It is true that, looking at nominal developments, a different picture emerges. During the same period, nominal wages grew by a total of 42% in Ireland and 52% in Greece, compared with only 7.4% in Germany. There has to be a regime change in the way in which nominal wages and prices are set in some parts of the euro area. As central bankers, we have been putting forward this argument for years. Strong reforms are now being pushed in labor market legislation as well as in wage determination in the public sector in many countries. What about banks? I would like to end with a few words about the banking sector. Revenues for the twelve biggest European banks grew, in aggregate terms, by 8.6% in 2010 (as compared to 2.5% for the main US banks). As a result, European banks’ Core Tier 1 ratios stood at between 8.5% and 15.3% at the end of 2010 (corresponding numbers for US  4  BIS central bankers’ speeches  banks were between 8.4% and 13.3%).
The latest data for January also shows continuation of a broad-based economic recovery in all sectors. BIS Review 41/2010  1  •  Our manufacturing production index rose at 28.6 percent;  •  Exports grew at 31.4 percent;  •  Private consumption expanded at 4.7 percent;  •  Number of inbound tourists are now exceeding 1.6 million for the second consecutive months; and  •  Farm income has improved noticeably from mid-2009. All of these have been instrumental in reducing the unemployment rate of our economy from the peak of 2.4 percent during the crisis to a near historic low level of 0.9 percent, with some sectors such as electronics and automobile industries now starting to experience labor shortages. These are exactly the picture of the economy that we are hoping and looking for: growth that is based on confidence of consumers and investors that feel secure enough about their jobs and business prospects. So much so that it leads to the renewal of consumption and investment activities, especially the consumption of durable products such as cars, refrigerators, and televisions as well as the purchase of new home and new investment projects. Going forward, the prospect of the Thai economy remains robust. The momentum of the recovery is expected to continue into both 2010 and 2011.

Lars Nyberg: The infrastructure of emergency liquidity assistance - what is required in today’s financial system? Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at the CGFS regional meeting in Tokyo, Bank of Japan, on 22 May 2000. *  *  *  Sweden experienced a severe banking crisis in the beginning of the 1990s. To manage the crisis, the authorities had to implement measures that averted a complete breakdown of the financial system while attempting to limit the costs to taxpayers. In addition, it was imperative for the authorities to consider whether or not their actions would contribute to future moral hazard problems. During the crisis, an effective division of labour developed between the authorities involved, namely the Ministry of Finance, the Riksbank, the central bank, Finansinspektionen, the financial supervisory authority and the Bank Support Authority. As the crisis progressed, the Riksbank provided emergency liquidity assistance (ELA) twice, acting in its role as “lender of last resort”. The remarks in this note are largely drawn from the Riksbank’s experiences in this crisis, and how these experiences can be used to assessing the role of ELA in a general crisis management infrastructure. When discussing the infrastructure that is in place to handle financial crises, two aspects are of primary importance. First, ELA must be put in the context of the overall methods of crisis management that the authorities would employ should a financial crisis occur. ELA is not a measure that can or should be used in every financial crisis.