samchain/econo-pairs-v1 huggingface dataset:
But we are under no illusion that, so far at least, we have only skimmed the surface. Skills and time matching There are several obvious frictions in the matching process between volunteers and sociallyworthwhile activities, which potentially reduce the effectiveness of volunteering or the likelihood of it happening in the first place. One is time. It is not surprising that time is the most cited barrier to volunteering (Figure 14). 32 But technology, as in every other aspect of life, can improve the efficiency of matching in ways which can stretch time. We have recently seen the emergence of a number of charities with support what the NCVO have called “micro-volunteering”. For example, “Help from Home” is an initiative to encourage micro-volunteering by allowing people to donate as little as 5 minutes to a worthy cause. For example, you can spend a few minutes describing photos to improve a blind person’s experience of a museum, play an online game in aid of scientific research, or write an email to a sick child. Tasks are given a “pyjama-rating” to drive home the message that it is easy to volunteer. A second friction is appropriately matching the skills of volunteers to those activities where they would be best put to use. PhD economists are no less capable of painting sheds or cleaning riverbeds than the next person. But this is unlikely in general to be the best use of their skills and time, nor the charities.

16  13  Campbell et al (2011). 14  This was not estimated in Fujiwara et al (2014), but estimates of the impact of TV on well-being are available in Frey et al (2007). 15  The exact figure is £ from Fujiwara et al (2014). 16  This is for all employee jobs from the ONS Annual Survey of Hours and Earnings. BIS central bankers’ speeches  7  If you multiply that per-person benefit by the 15 million or so regular volunteers, you get a private benefit of volunteering close to £ billion per year. 17 If you added in non-regular volunteers, you would get a larger number still. In other words, adding together private and economic benefits roughly doubles estimates of the value of volunteering, to something perhaps closer to £ billion per year. (b)  Health benefits  The Centre for Mental Health estimates that the economic and social costs of mental health problems are huge. The health and social care costs alone are worth over £ the associated output losses £ and the human costs over £ So anything that improves mental health, even in a small way, can make a big difference to social welfare. Volunteering is typically found to have a positive impact on mental health – for example, by enhancing social integration and engagement. 18 Certainly, that is what volunteers themselves say. Remaining active and socially engaged can be particularly important for older age groups, post-child raising and post-retirement.
These include facilities oriented to banks and dealers such as the Term Auction Facility (TAF), Primary Dealer Credit Facility (PDCF) and the foreign exchange swap programs; and facilities designed to improve market function in impaired parts of the money and capital markets such as the Commercial Paper Funding Facility (CPFF) and the Term AssetBacked Securities Loan Facility (TALF). •  Purchase programs oriented to easing financial conditions. These include the agency debt, agency mortgage-backed securities (MBS) and Treasury purchase programs. •  Several firm-specific interventions in which the Federal Reserve has taken on illiquid asset portfolios from Bear Stearns and AIG, with the goal of managing and liquidating these asset portfolios over time in a manner that is in the best interests of the federal government and the U.S. taxpayer. 2  BIS Review 94/2009  These programs have led to significant changes in both the composition and size of the Federal Reserve’s balance sheet. For example, in August 2007, prior to the onset of the crisis, the Federal Reserve’s balance sheet was about $ billion. Currently, the size of the balance sheet is about $ trillion. To gain a better understanding of how we got to where we are now, I think it is useful to divide the past two years into three distinct phases. The first stage I’ll define as the period running roughly from the start of the crisis in August 2007 to September 2008.

This can be done in a variety of ways: reverse repo transactions with dealers and other counterparties, securities sales from the Fed’s portfolio or bill issuance by the Treasury, with the funds deposited at the Federal Reserve. Although our ability to pay interest on excess reserves is sufficient to retain control of monetary policy, it is not bad policy to have both a “belt and suspenders” in place. As a result, we are working out ways to drain reserves to provide reassurance that we will not – under any circumstance – lose control of monetary policy. A related concern is the question of whether the Federal Reserve will be able to act quickly enough once it determines that it is time to raise rates. This concern reflects the view that the excess reserves sitting on banks’ balance sheets are essentially “dry tinder” that could quickly fuel excessive credit creation and put the Fed behind the curve in tightening monetary policy. In terms of imagery, this concern seems compelling – the banks sitting on piles of money that could be used to extend credit on a moment’s notice. However, this reasoning ignores a very important point. Based on how monetary policy has been conducted for several decades, banks have always had the ability to expand credit whenever they like. They don’t need a pile of “dry tinder” in the form of excess reserves to do so.
In a similar vein, I would like to address a related comment that I have often heard. Some observers argue that Basel II will have a detrimental effect on capital flows to emerging market economies because the new framework does not recognise the diversification benefits that characterise investments in such markets. It is true that Basel II falls short of recognising the diversification benefits of full credit risk models, although the internal-ratings based approach recognises the benefits of diversification to some degree by assuming that a bank’s assets benefit from the same degree of diversification as that of an  1  In the standardised approach the risk-weight of residential mortgage is 35% instead of 50% in Basel I. For SME’s and other retail the new risk weight is 75% versus 100% in Basel I. Past due loans can have a capital charge of 50% when there are enough provisions (loss reserves > 50%). 4  BIS Review 33/2004  average, internationally active bank. Under the evolutionary approach of Basel II, the Committee recognises the importance of continued active dialogue with the industry regarding both the performance of this models and their comparability across banks, and we have included this issue in our agenda for future work.

In response, I believe that concerns in this respect may reflect the perception that I have already challenged – that regulatory capital charges directly drive credit pricing decisions. As I noted, research suggests that it is economic capital that drives credit pricing, not regulatory capital. Consequently, Basel II will simply align regulatory capital rules more closely to banks’ actual practices; it will not change how they price credit facilities. Nonetheless, the Committee recognises that any risk-sensitive capital framework will cause the capital requirement to fluctuate for the same exposure if a borrower’s creditworthiness strengthens or weakens. To mitigate excessively wide swings in capital requirements, the Committee has flattened the risk weight curves that apply under the “internal ratings-based approach” to credit risk so that a small change in credit risk does not lead to a large change in capital requirements. At the same time, the Committee will require banks adopting the more advanced approaches to credit risk to adopt a more forward-looking approach to credit risk management by requiring meaningful stress testing of their credit portfolios. Stress testing is intended to help banks understand how their exposures to credit risk may change in the future should sudden shocks affect the market in some way. BIS Review 33/2004  5  2. Is Basel II appropriate for banks in emerging market countries? The first key question addressed Basel II’s potential impact on investment and capital flows between countries.
The probability of interest rates having 3 percentage points of headroom over this horizon is around 40%. Put differently, based on these estimates there is a considerably greater chance of interest rates needing to be cut to their floor to meet recessionary needs than of them gliding back to levels that could safely cushion a recession. Even after interest rates have lifted off from their floor, it is more likely than not they may return there over a ten-year horizon. For the foreseeable future, the effective lower bound will exert a strong magnetic pull. Another way of illustrating the same point is through the lens of real interest rates. In the 1990s, they were around 4%. With a 2% inflation target, that meant nominal interest rates would be expected to average around 6% over the cycle. That would give more than enough room to cut interest rates to cushion recession in a typical loosening cycle. Today, global real rates are around zero. With 2% for inflation, that gives a nominal interest rate of only around 2% over the cycle. That would give insufficient room above the effective lower bound to accommodate a typical loosening cycle. Provided real rates remain low, the lower bound constraint is likely to form part of the new normal. Of course, part of the reason the yield curve is low in the first place is because markets are weighing recession risk, perhaps using historical probabilities.

This has allowed the banking sector to have a different focus from the one it had during the global financial crisis in 2008 or during the local problems in the sector in 2014. In these previous episodes, the banking sector was mainly engaged in solving problems within the sector. In the Covid crisis over the recent two years, the banking sector was not concerned with its own problems, but mainly with alleviating the effects of the crisis on businesses and households and subsequently with the recovery and speed-up of the economy. In this sense, the Covid crisis legitimised an important qualitative change in the position of the banking sector – from a source of problems in the past to an important factor in their resolution in recent years. Significantly, the banking sector absorbed and implemented successfully and without shocks the anti-crisis package of measures approved by the BNB, amounting to about 9% of the GDP, as well as a private moratorium on loan repayments by businesses and households. At the same time, credit activity not only did not stagnate, but increased. According to the latest data from the 2021 monetary statistics, loans to businesses and households grew year-on-year by 4.1% and 12.5%, respectively. Good operational performance was underpinned by progress on important strategic tasks. October 2021 marked the one-year anniversary of the country’s accession as a full member to the European Banking Union. The assessment of this participation by both the ECB and the BNB is unequivocally positive.
REFERENCES Asdrubali, P., B. Sorensen and O. Yosha (1996), “Channels of Interstate Risk Sharing: United States 1963–1990”, The Quarterly Journal of Economics 111(4): 1081–1110. Bank Recovery and Resolution Directive, 2014/59/EU of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council. Beck, R., L. Dedola, A. Giovannini and A. Popov (2016), “Financial integration and risk sharing in a monetary union”, ECB Report Financial Integration in Europe, Special Feature A. Brunnermeier, M., L. Garicano, M. Pagano, R. Reis, T. Santos, D. Thesmar, S. Nieuwerburg and D. Vayanos (2011), “European Safe Bonds”, The Euronomics Group. Capital Requirements Regulation and Directive IV includes: Capital Requirements Directive (2013/36/EU) (CRD), which must be implemented through national law, and Capital Requirements Regulation (575/2013) (CRR), which applies to firms across the EU. Carmassi, J., S. Dobkowitz, J. Evrard, L. Parisi, A. Silva and M. Wedow (2018), “Completing the Banking Union with a European Deposit Insurance Scheme: who is afraid of crosssubsidisation?”, ECB Occasional Paper 208, April 2018. Claessens, S. (2016), “Regulation and Structural Change in Financial Systems”, in The Future of the International Monetary and Financial Architecture, ECB Forum on Central Banking Conference Proceedings, 188–222.

So far, measures adopted in the context of the CMU initiative, albeit positive and helpful, are not yet commensurate with the ambition of the project. With CMU, we should aim to reach a situation where both issuers and investors enjoy the same basic legal rights concerning capital markets activity regardless of the EU country where they are located. The CMU project involves all EU member states but it is particularly important for the euro area member countries. It is a big waste to have taken the huge step to adopt a single currency and continue to forgo the benefits that could be reaped by creating a true banking and capital markets union. I believe that euro area countries should forge ahead in enhanced co-operation in order to achieve CMU more rapidly. We should however, be well aware that CMU requires a European safe asset, the harmonisation of taxes on financial products, a convergence of company law, including on bankruptcy, the 6/9  BIS central bankers' speeches  creation of a single rule book of regulation for markets activity and ultimately a European Single Securities Market Supervisor. The other big condition is a rock solid monetary union so that assets’ risks and returns are not significantly influenced by redenomination risk but exclusively by their idiosyncratic features. A heavy toll, I know, but I will believe that the CMU project is possible when I see authorities start making inroads in some of those difficult issues. Thank you for your attention.
• The effects on the exchange rate may vary according to international conditions - interest rates in other countries - required rates of return and risk premiums in financial markets  SG Gausdal 31.01.03  Norges Bank has one instrument: the interest rate. It is set to achieve the operational target for monetary policy - an inflation rate of 2½ per cent over time. An increase in the interest rate will normally contribute to reducing inflation by curbing demand for goods and services and by strengthening the krone against other currencies. An interest rate reduction has the opposite effect. Inflation targeting means that monetary policy contributes to smoothing fluctuations in the economy. This implies that the interest rate is increased in response to pressures in the economy and a risk of higher inflation, and that the interest rate is reduced when growth is sluggish and the outlook points to lower inflation. This objective is also expressed in the Regulation on Monetary Policy. The effect of the interest rate on inflation is uncertain and may vary over time. Its impact is partly dependent on the debt rate in the private and public sectors, the situation in the labour market and the impact of a change in the interest rate on the exchange rate. The effect of interest rate changes on the exchange rate may vary according to external conditions, such as foreign interest rates, required rates of return and risk premiums in international financial markets.

The direct effect of the global downturn on overall growth in the Norwegian economy has so far been limited. This is partly attributable to high oil prices and the high level of activity in the oil sector. However, as a result of the interest rate differential and the strong krone, the global downturn will have a substantial impact on Norwegian business and industry. The government’s use of petroleum revenues or expectations of increased spending of petroleum revenues may have contributed to sustaining activity and the strong krone. Increased use of petroleum revenues over the central government budget is stimulating demand for goods and services. This will intensify the contest for economic resources and pressures in the business sector. Mainland GDP in 2002 Percentage change. Projections published at different points in time 2.5  2.5  2  2  1.5  1.5  1  1  0.5  0.5  0  0 Nov 00  Mar 01  Jul 01  Nov 01  Mar 02  Jul 02  Nov 02  Source: Norges Bank SG Gausdal 31.01.03  The exchange rate may move more in the short term than is necessary in the long term. One reason may be that the krone has to overshoot its long-term level since market participants will weigh the interest rate differential against the possibility of a future depreciation of the krone.
For one, I do not think the economic expansion—now in its ninth year—is vulnerable just because it is “old.” As 3/6  BIS central bankers' speeches  we like to say, expansions don’t die of old age—they die either because monetary policy needs to be tightened appreciably to combat rising inflation, or because the economy gets hit with a large shock that overwhelms the ability of the Federal Reserve and other policymakers to stabilize it successfully. In general, with inflation below the FOMC’s long-run objective we can be cautious in how we adjust monetary policy. Similarly, I am not concerned about the recent flattening of the Treasury yield curve even though some commentators believe that such a flattening foreshadows a recession. At the end of 2017, the spread between the 10-year Treasury bond and 2-year Treasury note had narrowed to 52 basis points, from 125 basis points at the start of the year. As I see it, some flattening in the yield curve should be expected as we gradually remove monetary policy accommodation. If the yield curve were not flattening, it would suggest that we were behind the curve in removing accommodation. Moreover, this recent flattening is not particularly pronounced. For example, the 10-year/2-year spread of 52 basis points is only 46 basis points narrower than the average since 1978. In addition, all else equal, we should expect the yield curve to be flatter than normal in the current environment.

This mismatch in durations, together with low interest rates, means we have a growing problem. 16. We cannot address this fundamentally through changes in asset allocation strategy among insurance and pension funds, taken as a whole. There have been recent shifts towards alternative assets. There has been a search for yield, and some funds have seen improvement in their return on their assets. But we have to bear in mind that globally, there is a limited supply of quality alternative assets. Funds are moving into private equity, real estate and some other alternative assets but more money going into these assets doesn’t raise yields. It can only mean a lower return on these assets over time. The search for yield doesn’t raise yields overall, it just redistributes yields among different players. So there are limits to this strategy for the pension and insurance fund industry as a whole. 17. I should note that the challenge we are talking about in retirement security is not a problem only for the advanced economies. Several emerging economies too are entering a phase where their societies are ageing, and some are quite unprepared for it. 18. Brazil is the most pronounced case, where the unsustainability of its social security system is reaching crisis proportions. Past promises have not been funded, are soon going to have to be funded, and they are not going to be able to fund it. China has also begun ageing.
Less controversial seems to be the observation that downward spirals in prices can be magnified by the institutions involved in the selling wave of the crash, thereby generating contagion across markets  2  BIS Review 53/2003  and countries. In particular, the Russian and LTCM crises demonstrate the important role of market liquidity as a potential channel of crisis contagion, as market price falls due to liquidity withdrawals could cause losses for many market participants. To summarise the lessons learnt from past experiences, it seems that volatility is in itself not necessarily a threat to financial stability. Other elements are necessary before serious concerns arise over financial stability. One of the key elements is the risk faced by banks and other financial institutions, because this could be the channel through which the functioning of the financial system as a whole could be jeopardised. This view is supported by the recent episodes of market volatility in late 2002 and early 2003, when the sequence of substantial market readjustment was generally managed in an orderly manner by financial institutions across the globe. B.2  Progressing financial innovation  Let me turn to the second theme - the implications of progressing financial innovation. In fact, the reason why the latest episode of stock market adjustments did not cause systemic problems could be attributed to the contribution of financial innovation to the more even distribution of risks. However, some concerns have emerged regarding the securitisation and credit risk transfer markets, for instance.

This means that, given that we have already reinforced the level and quality of capital for the overall banking industry, the impact on requirements of the current revision should be borne by those parts of the banking system where the major unwarranted low asset densities are located. This objective of reducing the unwarranted variability in risk-weighted assets could be achieved through the implementation of a combined set of measures that ensure risksensitivity and comparability. Internal models are being revised with that objective in mind. First, there are some portfolios which should be defined as non-modelable, due to the scarcity of reliable data (i.e. low default portfolios). Second, among those exposures or risks that are considered as modelable, there are reasons that justify the revision being undertaken on definitions and methodologies. And, third, consideration should be given to the inclusion of restrictions to model parameters as a means to facilitate the supervisory task, so avoiding abnormally low values for individual parameters. In order to limit unwarranted variability in risk-weighted assets, a common backstop that has enough granularity to ensure risk-sensitivity is also needed. In this regard, capital floors based on the standardized approaches and designed as a limit to the output of internal models may be considered. In this regard, the revision of standardized approaches is also relevant. This revision seeks to incorporate the lessons learned in order to increase their risk sensitivity avoiding undue complexity.