samchain/econo-pairs-v1 huggingface dataset:
17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Table 2: GDP losses from a 10 percentage point increase in tariffs on US trade would be substantial29 GDP impact (peak impact over three year period, %)  US  UK  EA  World (PPP)  Trade war  - 2½  -½  -1  -1¼  Tighter financial conditions  -1  -1  -¾  -½  Greater uncertainty  -½  -¼  -¼  -¼  Permanent tariffs  -¾  0  -½  -½  Total  -5  -1¾  -2¼  - 2½  Notes: Bank calculations. There are signs that concerns about such possibilities are beginning to cascade through economies via reduced investment and demand. Consider the UK as a leading indicator of a nascent global trend. UK business investment has fallen 3.7% over the past year despite the ongoing expansion, high business profitability and accommodative financial conditions. With fundamental uncertainty about future market access, UK investment hasn’t grown since the referendum was called and has dramatically underperformed both history and peers (Charts 12 and 13). Chart 12: The recovery in UK business investment has stalled since the EU referendum  Chart 13: UK business investment growth has fallen below other advanced economies  Indices: peak in GDP = 100 180 Average  Four-quarter growth (%) 20 Range of G7 countries excl.

Chart 10: Chinese credit growth Percentage change on a year ago  45 40 35 30  Non-bank  25  Headline TSF  20  Bank  15 10  Nominal GDP  5 0  2013  2014  2015  2016  2017  2018  Sources: CEIC, Datastream from Refinitiv, The People's Bank of China and Bank calculations. A downturn in the Chinese economy would test the resilience elsewhere. China’s contribution to global growth has risen from one-fifth to one-third since the last US tightening cycle. 22  22 Reflecting the increased importance for China to the global economy, the scenario used in the FPC’s annual stress tests of the major UK banks includes a significant slowdown in the Chinese economy. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  To give a sense of the issue, in the 21 credit booms that matched the scale of China’s since 1975, annual growth dropped by 3¼ percentage points on average in the subsequent years. Adjusting for progress thus far and China’s degree of development, this suggests growth could slow a further 1 to 1½ percentage points. Of course, deeper trade tensions would worsen the slowdown. The Bank of England estimates that a 3% drop in Chinese GDP would knock one per cent off global activity, including half a per cent off each of UK, US and euro area GDP, through trade, commodities and financial market channels.
18 Another important trend from Sweden’s point of view concerns changes in demography and labour supply, not least in light of major migration flows into Sweden in recent years. 19 My assessment is that the changes we still face are substantial and comprehensive. It will probably be even more difficult to learn from historical data and correlations when making assessments in the future. As always, we stand ready to reassess both our forecasts and monetary policy if developments were to justify it. Thank you for this opportunity to speak to you! See, for instance, “The Phillips curve and monetary policy”, article in Monetary Policy Report, July 2018. See, for instance, “Digitalisation and inflation”, article in Monetary Policy Report, February 2015, and G. Guibourg and F. Erlandsson (2018) “Times are changing and so are payment patterns”, Economic Commentaries No. 6, Sveriges Riksbank. 19 See “Monetary policy in a new environment”, speech by Stefan Ingves on 5 March 2018, for a longer discussion. 17 18  13 [13]

4  BIS central bankers’ speeches  Iyer, R. and J.L. Peydró (2011), Interbank Contagion at Work: Evidence from a Natural Experiment, Review of Financial Studies. Jiménez, G., Mian, A., Peydró, J.L. and J. Saurina (2010), Local versus Aggregate Lending Channels: The Effects of Securitization on Corporate Credit Supply in Spain, NBER WP 16595. Jiménez, G., Ongena, S., Peydró, J.L. and J. Saurina (forthcoming), Credit Availability: Identifying Balance-Sheet Channels with Loan Applications & Granted Loans, American Economic Review. Jiménez, G., Ongena, S., Peydró and J. Saurina (2011), Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments, Bank of Spain mimeo. Jiménez, G., Ongena, S., Peydró-Alcalde, J.L. and J. Saurina (2011), Hazardous Times for Monetary Policy: What do 23 Million Loans Say About the Impact of Monetary Policy on Credit Risk-Taking?, CEPR DP 6514. Jiménez, G. and J. Saurina (2006), Credit cycles, credit risk and prudential regulation, International Journal of Central Banking. Kalemli-Ozcan, S., Pappaioannou, E. and J.L. Peydró (2010), What Lies Beneath the Euro, Journal of International Economics. Maddaloni, A. and J.L. Peydró (2011), Bank Risk-taking, Securitization, Supervision, and Low Interest Rates: Evidence from the Euro-area and the U.S. Lending Standards, Review of Financial Studies. Martínez-Miera, D. and R. Repullo (2010), Does Competition Reduce the Risk of Bank Failure? Review of Financial Studies (2010). Matutes, C. and X. Vives (2000), Imperfect competition, risk taking, and regulation in banking, European Economic Review.
Whenever I speak with colleagues from other countries, I stress that only national authorities can decide when to adopt Basel II. Members of the Basel Committee believe that it is beneficial to move in the direction of Basel II, but no country should adopt Basel II if it feels that it is not yet ready. If a country does decide to adopt Basel II, the timing should be determined by its own circumstances, not the timetable for Basel Committee members. I hope you will pardon my pronunciation, but I am told that there is a Turkish proverb that says “hamama giren terler,” or “he who enters a Turkish bath sweats.” If I understand correctly, the point of this proverb is that you should understand the consequences of your actions. If the result is to be very positive, some work and thus some sweat is required. I don’t know whether adopting Basel II is similar to entering a Turkish bath, but I do know that it is important to understand that this is a high-quality and demanding standard. Unlike the 1988 Accord, which was relatively simple to adopt, Basel II is more complex and demands more of banks and supervisors. Therefore, we don’t expect Basel II to be adopted as widely and quickly as the 1988 Accord, at least at the outset. However, we do believe it is appropriate for all economies, and we expect and hope that the number of countries that adopt the new framework will grow over time.

interest rates adjusted for inflation) have been exceptionally low for a long time, and in all likelihood will continue to be so for some considerable time. Monetary policy cannot influence global real interest rates but must relate to the developments we see. The lower global interest rates are, the lower the policy rate must be to have the same expansionary effect on the economy. Another circumstance that has changed the monetary policy landscape – and which I will address later – is that households are more affected by interest rate adjustments than previously. What happens to the bond holdings? As you may know, in addition to lowering the interest rate to negative levels, we have also purchased significant volumes of Swedish government bonds to a nominal value of approximately SEK 350 billion – to make monetary policy even more expansionary. There is much talk about interest rates rising in the future, but many may not be so aware of how adjustments to the repo rate going forward relate to our bond  2  See “Monetary policy in a new environment”, speech by Stefan Ingves on 5 March 2018. 5 [13]  holdings. The figure shown in Figure 5 has been taken from the article we published in December 2017. 3 The shaded parts of the figure show roughly what has happened since then. Figure 5. The Riksbank’s overall normalisation plan for monetary policy  New purchases of bonds were discontinued in December 2017, which also signified the end of phase 1 in Figure 5.
In January, however, survey respondents were asked to assign probabilities to rate outcomes at the end of 2017 and 2018 conditional on two different scenarios: “returning to the zero lower bound (ZLB) at some point in 2016–2018,” or “not returning to the ZLB at any point during 2016–2018.” Respondents were also asked for their subjective view of the probability of each scenario, a topic that I will discuss later. We changed the survey both  42  This is the case for some of the variables of interest, such as the level of the policy rate or, in the past, the projected level of the balance sheet. 43  As noted earlier, questions that elicit a “most likely” value, or mode, can be difficult to interpret. This is particularly true of questions about the path of a variable, for example, the federal funds rate. If respondents are asked for their modal path, then technically, they should give the mode of the joint distribution. For example, the “mode” for policy rate projections could be the mode across all paths that the federal funds rate could follow from 2016 to 2018. It is an open question whether survey participants respond in this way, or respond with the mode of each marginal distribution. 44  A number of explanations are in order. The survey asks for probabilities (marginal distributions) associated with bins for the federal funds rate.

This was due, on the one hand, to measures taken by the ECB, and on the other, to the fact that, in the US, the ‘fiscal cliff’ was averted. As recent weeks have shown, conditions on the financial markets can change again swiftly. In Japan, there has been a sharp correction on the stock market and the yen has again gained somewhat in value. Meanwhile, in the euro area, there is a discrepancy between the generally favourable trend on the financial markets and the disappointing economic data. Finally, in the US, a certain degree of uncertainty about the future monetary policy direction of the Federal Reserve (Fed) has gained ground. Overall, the market  BIS central bankers’ speeches  1  environment continues to be dominated by high levels of uncertainty, thereby remaining susceptible to sudden shifts in mood. Management of currency reserves The easing of tensions on the financial markets also affected the Swiss National Bank’s (SNB) currency reserves. These are mainly composed of foreign currency investments and gold. At the end of May, the SNB held foreign currency investments of just over CHF 440 billion (cf. chart 1). Due to our liquidity and security requirements, a large portion of our foreign exchange holdings are in government bonds and deposits with other central banks. This portion amounted to 78% at the end of the first quarter of 2013. To further diversify investment risk and increase investment in real assets, we raised our proportion of equities from 12% to 15% in the first quarter.
However, it is observed that the decline in the prices of goods is faster and thus, the services group inflation is once again higher than the goods group inflation. Moreover, the annual rate of increase in most of the special CPI aggregates declined in August and that verifies our projection that the effect of exchange rate developments on inflation would decrease in August. However, though less intense, the negative lagged effects of the depreciation of the New Turkish lira on the special CPI aggregate excluding energy, unprocessed food products, alcoholic beverages, tobacco products and gold persisted and the annual increase in this CPI aggregate reached 7.8 percent by August 2006. This improvement in August inflation is very important with respect to attaining single-digits by the end of the year. The upward movement in inflation in the first seven months of the year and the high rates of increase in inflation exceeding expectations especially in April and May, coupled with excessive fluctuations in international markets and perceptions of uncertainty fuelled by domestic and international developments have been deteriorating medium and long-term inflation expectations until recently. Within this framework, inflation expectations over the next 12 months, increased to 8.07 percent in July from 5.47 percent in April 2006 and expectations over the next 24 months increased to 6.07 percent in July from 4.67 percent in April, that signifies an edging away from inflation expectations.

The main contribution of the public sector to growth no longer comes through its expenditures, but through the role it undertakes as a strong supervisory and regulatory agent in the framework of good governance principles and also from its policies focusing on the goal of increasing competitiveness. The public sector’s need for borrowing from financial markets declined due to tight fiscal policies, which provided the private sector the opportunity to find lower-cost and longer term resources. Another change observed in growth dynamics in line with the structural transformation in the economy is that productivity increases have become the most significant factor in growth. The cumulative productivity increase in the private manufacturing industry for the period between 2001 and the first quarter of 2006 reached 35 percent. While the said productivity increases support the growth process on the one hand, they improve the quality and contribute to the sustainability of growth on the other. BIS Review 89/2006  7  The last issue I will touch on about growth factors has to do with the increased level of integration of the Turkish economy with the world. In this framework, exports, which rose by 151.5 percent cumulatively from 2001 to July 2006, made a critical contribution to the rapid growth observed for the last four years. Domestic and foreign competition, which increased due to the increased number of firms that took up export activities and entered international markets as a result of integration with the world, led to a decrease in profit margins in these sectors.
Sweden had built up large surpluses in both its public finances and on its current account prior to the start of the crisis (see Figure 21) and the public sector’s indebtedness is low. This has provided a greater degree of freedom with regard to managing the crisis. Public finances will deteriorate substantially this year and next year as a result of expansionary fiscal policy combined with a decline in public income and an increase in expenditure related to unemployment, etc. as a result of the economic downturn. Our assessment is that the public sector financial balance will fall from +4 per cent of GDP in the peak year 2007 to a trough of -4 per cent of GDP in 2010. But this is a much better situation than in many other countries, such as the United Kingdom, where public finances have also deteriorated substantially, but where they had a deficit to start with. The ambition in Sweden for public finances to show a surplus when regarded over an economic cycle has made it possible to dampen the economic downturn with an active fiscal policy without this leading to an unmanageably large deficit. 8  Labour Force Survey (AKU) June 2008, Statistics Sweden, 3 August 2009. 9  Consumer Price Index (CPI) July 2009, Statistics Sweden, 11 August 2009. BIS Review 98/2009  5  The current account is also showing large surpluses.

The MPC generally agrees on the overall economic outlook and areas of challenges, although views about the balance of risks and the appropriate policy response can differ. My discussion today should therefore be taken as a representation of my own view as an MPC member, and needs not reflect the opinions of all other voting members. Economic outlook Ladies and Gentlemen, Last year was in many ways a year of transition. The economy had to recover from the devastating floods that took a heavy toll in late 2011, and at the same time deal with the fragile global economy. Throughout the year, incoming economic data have nonetheless been a series of positive surprises. The recovery gradually gained traction and became increasingly self-sustaining. Production constraints eased and domestic demand was back on track, thanks to the economy’s sound underlying fundamentals. Meanwhile, monetary policy continued to be accommodative and supportive to growth. Fiscal spending through flood-relief and stimulus measures also played an important role in providing a boost to the economy. As a consequence, the Thai economy was able to sail through those strong headwinds, and grew robustly at 6.4 percent in 2012. Projecting forward, the outlook for this year continues to be positive, supported by domestic demand that should remain robust. The underlying economic fundamentals also continue to be favourable. The banking system is underpinned by solid capital base, prudent risk management practice, and strong risk-based supervision.
They indicate that Swedish companies can compete in the global marketplace, but their operations are such that they do not require very much labour, at least not in Sweden. Different assessments have been made of how large a percentage of total unemployment is cyclical and in turn how much of this cyclical unemployment can be affected by monetary policy. The serious assessment attempts that I have seen usually end up with only a small fraction, according to some estimates only one or a few tenths of a percentage points, of total unemployment being affected by monetary policy. Those are calculations that are highly uncertain and should be taken with a large pinch of salt. However my point is that it is a gross exaggeration when, in the present debate, the Riksbank’s decision to lower or not lower the interest rate is presented as having momentous consequences for unemployment in Sweden. This kind of claim is not compatible with any serious assessments or forecasts. 2  BIS Review 41/2005  On the whole, the reason for the problems in the labour market is not poor demand – on the contrary, lending is growing at a rapid pace and companies have ample liquidity – but these problems are rather related to structural factors.

How can the persistent current account surplus, textbook economic theory and the SNB’s own assessment be reconciled? Is the surplus in Switzerland perhaps even the result of a monetary policy designed to deliberately push down the exchange rate in order to boost exports? 1 International debate about certain countries’ current account surpluses and unfair exchange rate policy has intensified in recent years. In this context, Switzerland has been on the US Treasury’s ‘monitoring list’ since 2016, although it is not designated a ‘currency manipulator’ in the associated report as it does not meet all the relevant criteria. However, Switzerland is being specially monitored. We are maintaining a constructive dialogue on this matter with the responsible government agencies in the US. Foreign authorities and international organisations recognise Switzerland’s special position, and appreciate the rationale for the SNB’s monetary policy measures. According to the latest External Sector Report of the International Monetary Fund (IMF) of July 2017, Switzerland’s current account is in line with macroeconomic conditions, and its monetary and fiscal policy is considered appropriate. Yet, international debate about current account surpluses and deficits has at times been heated and not always objective. Some observers have repeatedly denounced Switzerland for its persistent surplus. As criticism has focused on the SNB’s monetary policy, I am naturally keen to give you my analysis of the situation. Before we get into the details, let me outline the crux of my argument.
In the Industrial Agreement, the social partners have agreed on a process in which negotiations are conducted under the obligation to refrain from industrial action and in good time before the old agreements expire, as well as on specific processes for handling conflicts, a joint basis for negotiations and so on. I therefore conclude that the manufacturing industry, with a possible expansion to include other parts of the Swedish economy that are exposed to international competition, should also set the norm for the development of wages in the round of collective bargaining that will be held in 2010. A broad consensus that this is an appropriate process would facilitate the negotiations and contribute to effective wage formation. At the same time, I would like to conclude by emphasising that the Riksbank is not a party in the collective bargaining process. It is the social partners that conduct collective bargaining. But the development of wages affects inflation and inflation affects the development of wages. Our job is to maintain a low and stable level of inflation. This job is made easier if wage formation works well. Thank you! 8  BIS Review 154/2008  Figure 1.

The growth of productivity was surprisingly strong; certainly much stronger than many of us expected when the agreements were negotiated. Productivity has now fallen in seven consecutive quarters (see Figure 6). My impression is that the recent development of productivity is in all essentials a result of weaker economic activity. Growth has declined rapidly while the number of people in employment has continued to increase. If we study how GDP and employment vary over the economic cycle it becomes clear that there is a time lag in the cyclical fluctuation in employment in relation to production. It also appears that this time lag has increased since the beginning of the 1990s (see Figure 7). The Riksbank's assessment is that a recovery in the growth of productivity is probable over the next few years. This is indicated, for example, by the historical links that I have just mentioned. However, we do not expect the rate of growth to be as high as between 2002 and 2006. In the latest Monetary Policy Update, the assessment is that the growth of productivity in 2010 and 2011 will average over 2.5 per cent. It is more difficult to assess the growth of productivity in the longer term. A number of explanations have been put forward for the rapid development of productivity up to and  BIS Review 154/2008  5  including 2006.