samchain/econo-pairs-v1 huggingface dataset:
5  For an in-depth description of the risks linked to household indebtedness in Sweden, see for instance, Alsterlind Jan, Ulf Holmberg, Kristian Jönsson, Björn Lagerwall and Jakob Winstrand, “Risks to the macro economy and financial stability arising from the development of household debts and housing prices”, Council for Cooperation on Macroprudential Policy’s memo 6, Sveriges Riksbank. 6  One can read more about this in, for instance, the article “Financial imbalances in the monetary policy assessment” in the Account of Monetary Policy 2013, Sveriges Riksbank. BIS central bankers’ speeches  3  However, there was agreement among the Executive Board on the need to cut the repo rate to bring inflation up to the target within the forecast period. Although the economic prospects look fairly good, inflation is too low, and has moreover been lower than expected recently. Our assessment is that inflationary pressures will be lower in the coming period, too, compared with the assessment made in April (see Figure 10).7 A further factor that I mentioned earlier, is that policy rates abroad are expected to be lower (see Figure 2). When the policy rate is higher in Sweden than abroad, the krona exchange rate tends to strengthen, which contributes to lower inflation through lower import prices. All else being equal, lower policy rates abroad therefore imply that interest rates in Sweden will also be lower, so that the krona does not strengthen too much (see Figure 5 for the latest forecast for the krona).

But then a common currency  BIS Review /1998  –2–  of the region, not the dollar, will be agreed upon and the first step in this direction is to have a strong real. Responsibility I have been in the government since the beginning of 1995. I feel myself responsible for what has been done during this whole period. Pedro Malan has a key role in the government. Few Brazilians have his international credentials. He has good relations with men that make this world of international finance. His continued presence is essential to consolidate this transition period. But we should care about policies rather than names. Malan and I are carrying out a mission. Devaluation of the real No economy in the world could sustain a devaluation in real terms of 40%. The difficulty in maintaining a devaluation of that magnitude is that inflation would resume. The exchange rate has overshot, but it will come back, appreciating as time elapses. Currency Board I would like to stress my opposition to the idea of adopting a currency board in Brazil. This subject has already been examined and the government has decided against it. The Brazilian economy is not dollarised and I believe it would be a disastrous policy option. Brazil tried a similar regime in 1906. Nowadays, money supply in the expanded concept (M4) comes to $ billion, while international reserves reach $ 36 billion. To implement this regime we would have to dollarise and lengthen the maturity of these deposits.
However, I believe there is a risk of now leaning back and assuming that all of the problems will be automatically resolved, or perhaps are already resolved. This is not a quick fix. Making decisions in the field of macroprudential policy is no easy task and Finansinspektionen has a difficult workload ahead. Many people have questioned the efficiency and expediency of the policy rate in this context. But, of course, there are a number of questions regarding macroprudential policy as well. An obvious complication is that macroprudential policy is a new field. There is rather limited practical experience of the effects of macroprudential policy measures and nor is academic research able to provide any clear guidance as yet. This means that, at least during a transitional period, there will be considerable uncertainty over the effects of the measures taken. The objective of macroprudential policy – to prevent risks to the financial system as a whole – is moreover clearer on paper than in practice. It is of course not easy to know when the system is sufficiently resilient or if some form of imbalance is building up, which the crisis clearly illustrated. There are no numerical targets here, and determining when a certain deviation has begun to be abnormal is rather difficult.10 Finansinspektionen will probably also need to struggle on occasion with the scepticism of general opinion towards the need for macroprudential measures. There are different reasons for this.

Many say today that households’ debt overhang has caused as big a problem for the macroeconomy as the crisis in the banking system (see, for instance, Krugman, 2013). 5  Bech, Gambacorta and Kharroubi (2012) find that expansionary monetary policy has greater difficulty contributing to a recovery from a financial crisis than after a normal economic downturn. 6  That taking risks into account is not the same as “pricking bubbles” is pointed out by, for instance, Woodford (2012). 4  BIS central bankers’ speeches  macroeconomy. Denmark and the Netherlands are examples of otherwise well-managed economies that have suffered this in recent years.7 One risk factor that may be quite specific to Sweden is that the banks’ mortgage lending is largely market-funded and also to a large extent financed from abroad. If confidence were to be shaken for some reason, investors might choose to reduce their exposure to the Swedish banking sector. The banks’ access to market funding would thus decline. This could cause further negative developments or even be a factor that in itself triggers a downturn. The policy is not problem-free Of course, the type of policy we have conducted is not free of complications and problems. Although our policy has aimed to attain a good economic development and target attainment in the longer run, the consequence is that it has contributed, at least on the margin, to inflation approaching the target more slowly than would have been the case with a more expansionary policy.
The City of Bradford is itself normalising, after a long period of painful adjustment. It has shown real resilience and an indomitable spirit during those lean years. There are now reasons for optimism about the City’s future, as civic and commercial investment return and confidence among businesses and residents builds. Those characteristics – resilience, spirit, optimism, investment, confidence – are ones the UK economy has also had to exhibit of late. They are ones it will continue to need over the next few years during what is likely to be a bumpy ride. Thank you. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Annex  Chart 1: Successive Inflation Report forecasts of wage growth from 2012 Four-quarter wage growth, per cent  7 6 5 4 3 2 1 0 -1 -2 -3 -4  2001  2003  2005  2007  2009  2011  2013  2015  2017  Data  Sources: ONS and Bank of England calculations. Notes: ‘Data’ refers to whole economy total pay (average weekly earnings). Other lines show forecast vintages. Chart 2: Fitted and ‘inexplicable’ component of wage growth Four-quarter wage growth, per cent  8 6 4 2 0 -2  -4 -6 2010  2012 Residuals  2014 Data  2016 Explained by equation  Sources: ONS and Bank of England calculations. Note: ‘Data’ refers to private sector total pay (average weekly earnings).

Historically, there has been a reasonably strong and stable relationship between unemployment and wage growth – the so-called Phillips curve. As unemployment has fallen recently, this Phillips curve relationship would have led us to expect wage growth to pick up. That, plainly, has not happened. Over recent years, the 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Phillips curve relationship has been anything but strong and stable (Chart 3). And that same flatness in the Phillips curve has been found in a number of other countries (Chart 4). 1  There are many potential causes of the weak wage puzzle over recent years. Some of these are likely to have been short-lived, such as the impact of low actual and expected levels of inflation globally. Others are likely to have been longer-lived, such as the impact of the financial crisis on slack in the labour market and workers’ willingness to move between jobs in search of a pay rise. A third set of factors are structural in nature. For example, there is evidence technology and globalisation may have weakened the bargaining power of workers, leading to a secular fall in the share of income going to workers in several countries. 2  Another set of longer-term factors arise from the changing nature of work and the shifting relationship between employers and employees. One such shift, which has operated over a number of decades, is the decreasing incidence of unionisation and collective bargaining in the workforce.
The Banco de España has dedicated notable efforts to promoting financial education for many years. Along with the CNMV (National Securities Market Commission), it has since 2008 promoted the Financial Education Plan, to which numerous institutions and public and private associations covering a wide spectrum of social sensibilities have adhered. The objective of the Plan is to enhance citizens’ capacity to take well-founded financial decisions and, in this respect, it aims to reach out to the entire population and have a durable presence over time. As part of this Plan, and with the focus on the young, the Financial Education Programme for Schools – an initiative supported by the Ministry of Education, Culture and Sport within the framework of the collaboration agreement signed in 2009 with the Banco de España and the CNMV – has recently been launched for another year. This Programme, currently in its sixth edition, seeks to bring basic knowledge of personal finances to the classroom so as to prepare pupils to meet the basic challenges in the financial area that they will face throughout their lives. Key concepts such as saving, income, personal budgeting, what things cost, quality of life and responsible consumption are all developed in the Programme. In the past five years around 300,000 pupils have benefited from it. More generally and in order to reach out to all citizens, another notable component of the Financial Education Plan is the website finanzasparatodos, which has been open to the 7/8  public since May 2010.

And in this context, there is clearly a need to improve financial education and promote the development of digital skills among the public at large. The main challenge bank customers face is entering into financial contracts. If they are aware of the importance of the commitment they assume in signing each contract – and by “signing” we also mean ticking the box that reads “I accept the terms and conditions of the contract” in digitally executed transactions – they will appreciate the importance of being fully aware of this commitment before signing, and of knowing what demands they can make during the life of the operation and which unavoidable obligations they may have during that time. Banks benefit from having properly prepared customers, avoiding the unwanted consequences of poorly conceived consent that ultimately gives rise to legal risks and which may seriously compromise their reputation. For this reason banks, while improving the information they give to their customers, should promote customer awareness, integrating financial education not only into their corporate social accountability programmes but also into their product design and governance strategies. However, this responsibility for financial education does not fall exclusively or chiefly on banks. It must extend to other sectors of society, including, inter alia, third persons whose mission is to ensure the proper understanding and scope of contractual terms. And, above all and primarily, financial education must be an essential part of individual learning from a very early age.
Banks, meanwhile, show low and stable exchange rate mismatches, and have managed to extend the tenor of their external debt. At the same time, our reported stress tests show that the banks’ level of capital allows them to absorb a risk episode like the one just described. On the other hand, the main financial prices have generally proceeded in line with short-term fundamentals. For the stock exchange, the IEF reports results showing some degree of optimism in stock prices with respect to fundamentals. It is necessary to point out that, in the case of Chile, the risks of financial instability from potential price corrections in the stock exchange are low, because the level of debt associated to higher stock prices is small. However, it is important not to become too indulgent because of the resilience of the financial system. Credit users and financial intermediaries must internalize the risks I have just mentioned in their consumption, investment and financing decisions. On its part, the Central Bank permanently monitors these variables and, through instances such as the Capital Market Committee and the Board of Superintendents, coordinates with other institutions to watch over the health of the national financial system within the framework of its legal authorities. In this context, the Central Bank will not hesitate to perform – or request the relevant institutions – regulatory amendments whenever it detects risks threatening the financial system. To finish, let me share with you some thoughts.

Changing market structure Let me highlight a few of the changes in the financial structure that are germane to the mandate of the Federal Reserve. They are: •  The greater systemic importance of a smaller number of large bank-centered financial institutions;  •  The greater role played by non-bank financial institutions;  •  The growth of the GSEs;  •  Greater operational demands on the core of the clearing and settlement structure;  •  An increase in the complexity of risk management and compliance challenges; and  •  The extent of global financial integration. These are not all that new, and not all are unique to the United States, but taken together they are significant. Most conspicuously, we have seen the emergence of a small number of very large, complex, bankcentered financial institutions that now account for a substantial share of the assets and liabilities of the U.S. banking system. The top five domestic bank holding companies now hold about 45 percent of banking assets, almost twice the share as they did 20 years ago. BIS Review 55/2004  1  The earnings capacity of these very large banking institutions, the absolute size of their capital cushions, and the diversity of their activities, geographic and functional, should make them less vulnerable to specific shocks and better able to absorb larger shocks than has been true in the past.
In fact, excess demand and growing costs have put severe pressure on the European model for financing higher education, and European countries are now gradually moving away from the old system, introducing income-based tuition fees and loans to help restrain rising costs and expand access to higher education to more social groups. In the US, we’ve used a more complicated system that has several major elements. First, we have public universities whose tuitions are less than the full cost of providing the education, with the difference made up by state taxpayers. This can align the public and private benefits in the long run, but won’t by itself mitigate the liquidity constraints that families face. Also, as I will discuss in more detail later, it puts public universities at the mercy of the business cycle. Second, we offer Pell grants to families with limited means to pay for college. We also use the income tax system to reduce the cost of attending up to four years of college for people with incomes below a certain threshold. These subsidies, which operate like vouchers since they can be used at lots of different colleges and universities, serve to align private and social returns and relieve liquidity constraints. Because they are related to income, they also potentially have the additional important benefit of reducing inequality. The final major element of our system is loans. These relieve the liquidity constraint, but they don’t necessarily contribute to aligning the private and social returns to higher education.

Rather we see our evidence as suggesting that the way we as society finance those degrees – with an increasing reliance on debt held by the students – has costs to both borrowers and lenders that are only now becoming clear. Given the social benefits of an educated population, we see a strong case for some public role in financing college. Nonetheless, there are many private benefits, including higher lifetime earnings to be had by the successful college graduate. Therefore it is likely that the best system of finance also includes a tuition payment by the student. Because many prospective students are credit and liquidity constrained, and because of the limited enforceability of debt, we outlined the case for a government-supported student loan program to support the payment of tuition. However, we see a case for stronger underwriting standards that would assess the likely quality and outcome of the education match between a prospective student and the educational institution, which would better deliver resources to high potential educational matches, and avoid encouraging poor ones. We’ve learned a lot over the past several years about how student loans are affecting individual borrowers, the taxpayers and the aggregate economy. We’ve by no means answered all the relevant questions, and with over a trillion dollars in outstanding debt and the future of our workforce at stake, I consider these issues to be of first-order importance to the nation.
To put the recent pace of growth into perspective, we believe that the economy’s long-run sustainable growth rate – what economists call the potential growth rate – is around a 2¼ percent annual rate. We need sustained growth above that rate to absorb the still substantial amount of unused productive capacity. Thus, our recent growth rates are barely keeping up with our potential. BIS central bankers’ speeches  3  Even though the unemployment rate has declined sharply from 9 percent last September to 8.2 percent in March, it is still unacceptably high. In addition, many other measures of the labor market remain weak. The labor force participation rate, the percentage of people employed, and the total number of hours worked in the economy all dropped sharply during the recession and remain well below their pre-recession levels, even taking into account the impact of demographic shifts. Also, it appears that productivity growth has slumped recently. Although that means that a given amount of growth translates into bigger employment gains, it certainly is not an unmitigated positive development. Also, we cannot lose sight of the fact that the economy still faces significant headwinds and that there are some meaningful downside risks. In the headwinds department, I would include the run-up in gasoline prices mentioned earlier because that will sap purchasing power, the continued impediments to a strong recovery from ongoing weakness in the housing sector, and fiscal drag at the federal and state and local levels.

Maja Kadievska-Vojnovik: Drivers of European Payment Integration - Innovations and Cooperation (opening speech) Speech by Mrs Maja Kadievska–Vojnovic, Vice Governor of the National Bank of the Republic of Macedonia at the opening of the 10th jubilee edition of the NBRM's Conference on Payments and Market Infrastructures: Drivers of European Payment Integration - Innovations and Cooperation, Ohrid, 5-7 July 2017. * * * Ladies and Gentlemen, Dear guests from home and abroad, It is a great pleasure to wish you very warm welcome to the annual Conference on Payments and Market Infrastructures. This year marks the 10th anniversary of the Conference and we are very proud to host it here in Ohrid in front of a group of eminent speakers and distinguished audience. Let me first thank you all for coming as you are the ones who bring the success to the Conference. I hope you find the next couple of days interesting, informative and productive and most of all enjoyable as we celebrate the occasion. I would like to take this opportunity and extend my sincerest gratitude and appreciation to De Nederlandsche Bank and Banco de Portugal, as institutions with whom we maintain close and fruitful collaboration on many fronts, and particularly with respect to this conference. Your continued support and cooperation is highly appreciated and I believe it will only grow stronger in the future to come. Ladies and Gentlemen, We named this 10th jubilee Conference – Drivers of European Payment Integration – Innovations and Cooperation.
2  BIS Review 76/2010  Development of insurance sector in Malaysia Despite the challenging external conditions posed by the global financial crisis, the Malaysian insurance industry has, on the whole, remained resilient. The industry-wide Capital Adequacy Ratio stood at 242% at the end of the first quarter of 2010, well above the benchmark supervisory target of 130% set under the RBC framework. Total net premiums and contributions for insurers and Takaful operators grew by 8.2% during 2009. This was driven by growth in the ordinary life segments of the life and family Takaful industry, and a broad-based demand in the general sector. Also of significance is that insurers in Malaysia have performed considerably well in managing and responding to the challenges of lower investment returns and the lower interest rate environment following the global financial crisis. Also notable is the rapid progress of Malaysia’s Islamic financial industry which has become a competitive sector and one of the key drivers of economic growth in the country. As Malaysia evolves and emerges as a major international Islamic financial hub, Bank Negara will continue to play an active role in promoting Islamic financial products and services, supporting the enhancement to the payment infrastructure and progressively deregulate and liberalize the financial system. More recently, the liberalization to allow for greater foreign participation in the domestic financial markets will create further international linkages for Malaysia’s Islamic banking and Takaful industries.

By separating the provision of liquidity from exposure to credit risk, credit derivatives, and the related developments in structured finance, give non-banks new ways of accessing credit risk. As well as more dispersed risk buttressing systemic stability, the innovation of credit derivatives has plausibly taken us a further step towards complete markets, in effect providing a richer market for credit insurance than previously existed. Investors and others may, therefore, be able to get a little closer to the portfolios they really want to hold, which would facilitate a better allocation of risk and so bring broader welfare benefits. This works in the direction of reducing the price of risk, which would reduce the risk premium used to discount uncertain future cash flows. There are, therefore, tangible benefits from the new derivative markets for unbundling and transferring credit risk. And the same can be argued for the earlier development of interest-rate, foreign currency and equity derivatives. So where’s the catch? Short-option positions and market dynamics Everyone is familiar with the risk present in markets if ‘everyone’ tries to sell – or buy – at once. Various features of markets can create the conditions for, or reinforce, such herd-like behaviour. Panic in the presence of excess leverage is the familiar culprit, and goes back to well before the invention of derivatives, as various authors have documented in the context of the Great Crash. Derivatives have not altered the firmament in some deep, unrecognisable way. But they have introduced some novel variations on old themes.