samchain/econo-pairs-v1 huggingface dataset:
How the U.S. outlook evolves in the future is fundamentally tied to the fortunes of the economies around the world. As I look ahead, I’m keeping a keen eye on all the data, both domestic and global, and the implications for our economy. With an uncertain outlook, vigilance and flexibility are essential for achieving our dual mandate goals of maximum employment and price stability. Persistently low inflation, heightened uncertainty, and global cross-currents make this a particularly challenging time for monetary policy, and my laser focus is on doing the best we can to support a strong economy and achieve our 2 percent inflation goal. Thank you. 1 Jerome H. Powell, Challenges for Monetary Policy, speech delivered at the “Challenges for Monetary Policy”  symposium, sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 23, 2019. 2 See the FOMC’s Statement on Longer-Run Goals and Monetary Policy Strategy, as amended effective January  29, 2019. 3 International Monetary Fund. 2019. World Economic Outlook Update: Still Sluggish Global Growth. Washington,  D.C., July. 3/3  BIS central bankers' speeches

Further, while the heterogeneity of regulatory frameworks has recently been lessened following the entry into force of the Capital Requirements Directive and Regulation (CRD IV and CRR), differences persist and must be discussed. Such differences include most notably so-called national discretions and options. On one hand, the new framework provides for a gradual transition to the new capital requirements, in line with the Basel III Accord. The regulation gives countries some discretion in setting the pace of convergence towards the new requirements, which may give rise to temporary differences in the treatment of some specific aspects. For instance, a country may decide to bring forward the application of the new capital conservation buffer, initially envisaged for 2016, or the deduction of certain capital components. Moreover, the regulation provides for a series of national options that might give rise to permanent differences in the treatment of specific aspects. It is logical that the SSM should work to achieve a degree of harmonisation, seeking to restrict national options of a permanent nature. It is perhaps less logical to take steps in the case of temporary discretionary arrangements, which by their very nature must disappear within a few years. Different accounting practices, especially as regards provisioning, also significantly affect the uniformity of capital figures and should be a supervisory concern. It is thus reasonable to expect the SSM to contribute to convergence in the interpretation of international accounting standards. And it is essential that the SSM should strive equally to revise the calculation of riskweighted assets.
If the local banks stay small and weaken over time, we will be worse off for it. In the longer term, stronger and larger local banks offer far better assurance of Singapore’s interests. MAS’ approach to consolidation While MAS welcomes the process of consolidation, it will remain strictly neutral, and will not seek to influence the outcome. We have made it known to all the participants that we will allow the local banks to bid for one another. The new configuration should be determined by the free play of the market. MAS will leave the banks and their shareholders to decide whom they should merge with or acquire, subject to five conditions being met: a. First, the banks should have the capability to achieve effective integration following the merger. The management of the acquiring bank must understand the financial, operational, and cultural issues involved in integrating two entities and have a credible plan in place. b. Second, the merger must not impair the bank's financial soundness. In particular, the bank must meet MAS’ capital adequacy requirements at all times. Consolidation should not compromise the safety and soundness of the bank. c.  Third, we will consider the impact of the merger on competition. Consolidation should not lead to the emergence of one or a small group of overly dominant banks, which are in a position to engage in monopolistic or other anti-competitive behaviour.

BIS Review 88/2007  1  Strong GDP growth and investment 8.0  31.0  GDP growth (%)  7.0  29.0  Investment (%GDP)  6.0  27.0  5.0 25.0  4.0 3.0  23.0  2.0  21.0  1.0 19.0  0.0 -1.0  2001  2002  2003  2004  2005  2006  2007F  -2.0  17.0 15.0  Banking system health strengthening  Net NPL  23  Return on Assets  2.0 1.8 1.6  18  1.4 1.2  13  1.0 0.8  8  0.6 3  0.4 0.2  -2  2  2002  2003  2004  2005  2006  0.0  BIS Review 88/2007  Unemployment declining (%) 13 12 11 10 9 8 7 6 5 4 1995  1996  1997  1998  1999  2000  2001  2002  2003  2004  2005  2006  Public debt declining (% of GDP) External Government Debt  58  59  45  46  45  2002  2003  2004  BIS Review 88/2007  60  Domestic Government Debt  58  50  53  47  44  40  2005  2006  2007F  3  As you may have noted, just yesterday, Standard & Poors revised the outlook for Sri Lanka from negative to stable and that is indeed a useful confirmation of the success of the manner in which the economy is progressing.
That said, I wouldn’t conclude that we are not at risk of coordination failures. Let me share two reflections in this regard: 1. Our collective “doctrine” on monetary policy, in the G7 and G20, remains valid: that we central banks target domestic price stability and not exchange rates. But it implies as a counterpart an in-depth and confident dialogue, in Washington, Basel and elsewhere, on our intentions: there should be mutual predictability of policy making. We will achieve the closest to a cooperative solution if we avoid significant surprises between policy makers. As Jay Powell rightly said in 2019 in Paris “Pursuing our domestic mandates in this new world requires that we understand the anticipated effects of these interconnections and incorporate them into our policy decision making.”ix Lael Brainard reiterated this welcome statement no later than yesterday: “The combined effect of concurrent global tightening is larger than the sum of its parts. The Federal Reserve takes into account the spillovers of higher interest rates, a stronger dollar, and weaker demand from foreign economies into the United States, as well as in the reverse direction”. x  2. But there can be market misperceptions of policy intentions or overshooting, and exchange rates can become fundamentally misaligned. Under such circumstances, there were G7 interventions in the past. Several of them were 12  Page 13 sur 14  effective, which we shouldn’t forget.

This set Iceland apart from several other countries that also suffered badly from the GFC, mainly because of vulnerability of public finances. In the aftermath of the crisis, the economy was rebalanced; the current account transformed from a deficit to a surplus; the international investment position changed from large net debt to significant net assets; a major share of private debt was wiped out; the banking system recapitalized; and asset prices deflated. 1  The economic consequence of the pandemic As a result of the rebalancing of the economy following the financial crisis, Iceland’s economy was in a position of relative strength when the pandemic struck. The macroeconomy remained broadly balanced, despite a negative shock to exports in 2019. Unemployment was low, private sector indebtedness relatively benign, inflation moderate and public finances had recovered significantly from the turmoil following the GFC. The human suffering from the pandemic was also less pronounced than in many advanced economies. Iceland’s relatively young population, strong health care system, low population density and the relatively well-balanced management of the outbreak, are all likely positive contributing factors. Icelandic economy at a glance versus OECD countries in 2019  Measures taken to slow the spread of the disease were relatively successful and the Icelandic authorities did not need to impose exceedingly stringent and protracted restrictions, as was required in many other countries. As a result, the impact of the pandemic on households’ willingness and opportunity to spend and on corporate operations was milder than in countries where stricter measures had to be adopted.
If we have reason to believe that the exchange rate will remain permanently strong or weak, Norges Bank will inform the authorities that measures other than those available to the Bank are required. We note, however, that the present exchange rate level has more or less prevailed for more than 10 years. On the basis of its analyses, Norges Bank does not find grounds for regarding this level as inappropriate. 9. How does the Norwegian regime differ from inflation targeting? Price stability is an important part of long-term exchange rate stability, and the setting of interest rates will often be the same whether the goal is exchange rate or inflation targeting. However, Norwegian monetary policy differs in some respects from monetary policy in countries with an inflation target. •  Norway has a long tradition of cooperation between the political authorities and social partners. Income and wage determination is fairly centralised, and the social partners evaluate the effects of wage outcomes on employment. •  In a number of countries that have switched to a monetary policy regime based on inflation targeting, fiscal policy is oriented towards reducing government debt and deficits. A passive fiscal policy implies that in practice monetary policy assumes a greater role in stabilising the 11  BIS Review 121/1999  economy. In Norway fiscal policy has an important role in demand management. The fulfilment of this task is facilitated by the fact that the Norwegian government has greater financial leeway than most other countries due to its oil revenues.

The petroleum sector employs only a small part of the total labour force, but brings in substantial revenues. A main question for Norwegian economic policy is therefore how to stabilise the Norwegian economy in the face of high, fluctuating revenues from the petroleum sector. 3. The importance of the petroleum sector  Some figures will illustrate the importance of the petroleum sector in the Norwegian economy. Oil production started in the 1970s and has gradually increased. Given the current estimates for existing resources, production is expected to be at its maximum level between the years 2000 and 2010, and then decrease gradually as the remaining resources are reduced. The level of future oil production is highly uncertain. Employment in the petroleum sector and related industries is only around 4% of total employment. Investment in the petroleum sector has been substantial compared to investment in the rest of the economy, and as a share of GDP. Investment has an import share of about 1/3, which means that investment relating to the petroleum sector has had a substantial effect on industries in mainland Norway. The income from petroleum extraction is of substantial significance to the Norwegian economy and to the public sector in particular. In the 1990s the export value of oil has been around 1/3 of total exports excluding ships and oil rigs. The petroleum sector is an important source of revenues for the government, both through taxes and through direct government ownership. 1  BIS Review 121/1999  Petroleum production. In mill. Sm3 o.e.
Conversely, when home prices are flat or declining, or mortgage credit is tight, this will put a damper on retail spending. Events of the last decade have driven this point home in a very clear way. It is well known that beginning in the mid-1990s and intensifying in the early 2000s, there was a massive U.S. housing boom that dramatically increased the value of residential real estate in the United States. Over the period from 1995 to 2006, the aggregate value of real estate owned by households and nonprofits nearly tripled, rising from $ trillion to nearly $ trillion. A remarkable, yet not widely-known, fact about this boom period is that while home values were rising very quickly, borrowing was growing almost exactly as fast. Rather than saving the extra wealth that was being generated by the housing boom, households were diverting a large share of it to other purposes. Indeed, the fraction of every additional dollar of households’ housing wealth that was consumed seems to have been higher than that for financial wealth—such as investments in equities and bonds—suggesting that they viewed the increase in home prices as permanent. In order to be able to assess the evolution of household finances more precisely, we worked with Equifax—a major credit bureau—to create a new database that tracks the credit files of a random sample of households over time.

In fact, the lessons from the housing boom and bust may have been even more traumatic. There are many versions of this story, and most have a word like “scarring” in them. Perhaps some potential homeowners, having seen the wild gyrations in home prices during the 2000s, have soured on homeownership altogether. This would result in a reduced homeownership rate due to a loss of confidence in housing as a good financial investment. Data indicate that homeownership has declined, especially among younger workers. However, households in our Survey of Consumer Expectations continue to report that they believe that housing is a sound financial investment. So, the explanation for our declining homeownership rate doesn’t appear to be that homeownership has lost its luster as an investment. And, reduced homeownership doesn’t explain why people who still own homes have become less likely to tap their available equity to finance consumption. Other households may have been scarred by the experience of seeing their neighbors who borrowed heavily during the boom lose their homes and have their credit ratings badly damaged. Observing these consequences may dissuade current homeowners from making themselves vulnerable to foreclosure by borrowing against rising home values. This would lead to an increase in a household’s precautionary demand for savings in the form of higher housing equity. This increased equity cushion would guard against the risk that the household could find itself in a negative equity position in the event of a future decline in home prices.
The same day the Swiss franc reached a record high, peaking close to parity, at 1.0073 per euro.1 These extreme movements on the foreign exchange market were also accompanied by high  1  Measured using the Electronic Broking Services (EBS) currency trading platform. BIS central bankers’ speeches  1  volatility in equities and bond markets. Between July and early August, the equity volatility index, VIX,2 abruptly doubled from less than 20% to over 40% and the broad bond volatility index, the MOVE Index,3 went from around 85 to almost 120 base points. This extreme level of volatility had a huge impact on front office operations. It also affected “post-trade” processes in the back office, where volumes increased at much the same pace. While the average EUR/CHF turnover on Electronic Broking Services (EBS) in August usually hovers around EUR 3.5 billion, the daily average in August of this year was closer to EUR 12.5 billion. These figures are symptomatic of the pressure the FMI is under. They also highlight the importance of ensuring that it can cope with such significant increases in trading volumes. After all, as trade volumes swell, so do operational risks. Thankfully, there have been few instances in which the FMI, or a lack of effective infrastructure services, were at the root of any market crashes. Let me, however, highlight three instances in which the system has been put to the test. The first case was referred to as the “Paperwork Crisis” of 1968 and 1969.

After all, most businesses do not work with margins that can absorb such extreme exchange rate fluctuations, in terms of both speed and level. The Swiss economy is very open and dependent on exports. Every second Swiss franc is earned abroad. The massive overvaluation of our currency this summer carried with it the risk of a recession and of deflationary developments. This is why  14  It is worth noting that this long run average is a purely backward-looking statistical concept and not a forwardlooking or equilibrium concept. We use it throughout as a statistical yardstick. The SNB does not endorse a specific equilibrium exchange rate level as the notion of equilibrium is model-dependent and thus not uniquely defined. Every model we know of concludes, however, that at CHF 1.20 per euro, the Swiss franc remains high. 15  This is an approximation of the real effective exchange rate, assuming constant weights and inflation differentials. 6  BIS central bankers’ speeches  the SNB concluded that it had to act in order to protect the economy and safeguard price stability. On 3 August, the SNB announced that it would be aiming for a three-month Libor as close to zero as possible. This was to take immediate effect. It would also expand banks’ sight deposits from their then level of around CHF 30 billion to CHF 80 billion.
Vítor Constâncio: Completing and repairing EMU Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Hyman P Minsky Conference, organised by the Levy Economics Institute and ECLA of Bard with support from the Ford Foundation, The German Marshall Fund of the United States, and Deutsche Bank AG, Berlin, 26 November 2012. *  *  *  Ladies and gentlemen, It is a great pleasure to be here today to participate at this event organised by the Levy Institute. It is fair to say that, intellectually, the Levy Institute has had a “good crisis”. Building on the post-Keynesian analysis of Minsky’s Financial Instability Hypothesis and Wynne Godley´s theory of sectoral balances and stock-flow consistent models, the work of the Institute´s resident scholars predicted and explained many of the challenges we are facing today. This serves as a reminder of the importance for policy-makers to keep an open mind in continuously refining our economic thinking. It is today clear to us that conventional macroeconomic models were ill-equipped to capture the key role of financial markets. Our theoretical foundations proved to be misplaced when tested in reality. The way forward therefore has to involve taking the lessons from this empirical test: using the knowledge we have gained so far to better understand the necessary conditions for economic and monetary union to function. What this implies for the euro area will be the subject of my address today.

The financial trilemma of Dirk Schoenmaker, 6 that states that financial integration, financial stability and national supervision are not compatible, was disregarded and the consequences were significant in terms of the enormous capital inflows channelled by the banks of core countries to banks in the periphery, significantly contribute to the subsequent macroeconomic imbalances. Initially no one thought about banking union. Lesson number two: the financial and economic shock of the crisis vastly outran the shock absorption capacity at the national level. Nothing was foreseen to deal with liquidity crises that could emerge from contagion and multiple equilibria generated by market perceptions. Only later the EFSF and the ESM were created to address crisis management. Lesson number three: the existing rules on the fiscal front were insufficient in pre-crisis times, and even more so in crisis times when crisis management was key. Initially, no one talked about fiscal union to introduce more discipline and help with shock absorption. Lesson number four: the development of macro and external imbalances was significantly driven by private sector indebtness, proving that the fiscal brake was not enough to guarantee macro stability and excessive heterogeneity among member states. This provided the rationale for the recent creation of a formal Macroeconomic Imbalances Procedure to monitor and promote timely policy measures to avoid the building up of macroeconomic instability in member states. The deep integration of financial markets led to very large imbalances within the euro area. This was in part because fiscal rules were implemented weakly, not applied rigorously and subsequently watered down.
This has resulted in the intensification of our supervision on areas or businesses that are more prone to ML/TF risks, or where controls have been found to be lacking from past inspections. 17. We have organised and will organise more industry engagements to share supervisory findings on common lapses and good practices at the end of each series of inspections. This is intended to help level up controls over time. 2/5  BIS central bankers' speeches  18. Our inspections go beyond rules-based compliance. We focus on whether financial institutions demonstrate a good understanding of risks, and a good risk culture within the organisations. We much prefer that FIs adopt a proactive approach in meeting their regulatory obligations than a passive rule-based attitude. Let me elaborate on this. 19. One area relates to governance. You are all familiar with the common thinking of having three lines of defence. Recently, there are suggestions to augment this with a “four lines of defence” model for better governance in financial institutions. The first line involves frontline and management controls within business units; then compliance and risk management functions as the second line; and the audit function as the third line. A newer fourth line involves interactions of the FI with its external auditors and regulators. An FI’s senior management and board should monitor and be satisfied that these lines are effective. Senior managers should never “look the other way” on suspicious transactions, even if they involve major clients who are significant revenue sources.

As a result, national governments and wage setters alike should be able to design and implement the policies under their responsibility in a manner that allows for the interdependencies of these policies with the single monetary policy. Obviously, if they take the single monetary policy’s credible commitment to maintain price stability as given, this will help to align expectations and condition their behaviour in a favourable way. National governments and wage setters, in turn, are reassured that monetary policy will respond favourably to appropriate fiscal polices and wage settlements which allow to maintain price stability over the medium term. Sustained stability - be it maintenance of price stability or stability in a wider sense - needs a sound institutional framework. As regards monetary policy the independence and clear mandate of the ECB provides the best possible arrangement. At the same time it is obvious that a monetary union which is not a mature political union also requires a framework for fiscal policy. This framework must respect the sovereignty of national governments and parliaments on the one hand and the need to ensure sound fiscal policy across the euro area on the other hand. Both, sound monetary and fiscal institutional arrangements are indispensable for a consistent and sustainable stability framework. The success of EMU rests not only on the ECB and its monetary policy but also on a robust framework for national fiscal policies.