samchain/econo-pairs-v1 huggingface dataset:
for instance 2021 stress tests conducted by the EBA (EBA publishes the results of its 2021 EU-wide stress test | European Banking Authority (europa.eu), consulted on 21 March 2022), and the Fed (Federal Reserve Board - Federal Reserve Board releases results of annual bank stress tests, which show that large banks continue to have strong capital levels and could continue lending to households and businesses during a severe recession, consulted on 21 March 2022). 10 Cf. IMF, Global Financial Stability Report, October 2021. 11 Cf. SNB, Financial Stability Report, 2021, chapter 2.2.  corrections in real estate prices represent a key source of risk from a financial stability perspective. In several countries, real estate price growth has increased since the start of the pandemic, and has been higher than can be explained by fundamental factors. For instance, the residential price-to-rent ratio, a simple measure of real estate valuation, lies above its long-term average in many countries. 12 This has been accompanied by higher mortgage lending and, in some countries, by an increase in lending risks. 13 Overall, these developments have made real estate and mortgage markets more vulnerable to shocks, such as a sudden increase in interest rates or a deterioration in economic prospects. There are several reasons behind this marked increase in real estate prices. They include tight housing supply, a probable increase in housing demand due to the pandemic itself, and the historically low interest rates that have prevailed in recent years.

For central banks and other economic forecasters, the challenge will be to attempt to make the best assessment possible of the manner in which potential output and growth may be impacted by both the crisis and the regulations resulting from it. For the authorities that are to design the regulations, the challenge will lie in finding an appropriate balance: on one hand, the regulations will need to be sufficient to reduce the risk of financial crises – which can cause potential output to fall. However, on the other hand, they should not be so comprehensive as to impede the financial sector unnecessarily, thus risking dampening potential growth. In other words, it is a matter of finding just the right level of regulation. Figure 5 Potential output with and without crises Potential output Without regulations, with crises With regulations, without crises  Time  Somewhat simplified, it could be said that this is a matter of making a choice between two development paths for potential output (Figure 5). In one, development is interrupted now and again by crises, during which potential output falls, but between these, growth is relatively strong. In the other, development is even, but growth may be slightly lower than is the case between crises in the first development path. It is not obvious which development provides the best welfare effects over the long term, but it is clear that general opinion at present is that we should attempt to reduce the risk of crises and abrupt halts.
During the first phase of the upturn, output growth was largely attributable to a sharp increase in person-hours worked. This partly reflected a marked increase in average working hours when sickness absence declined in 2004. Higher activity did not therefore result in substantial labour market tightening. Additional labour inflows following the enlargement of the EU and the EEA in 2004 also contributed to increasing potential output. A substantial share of inward labour migration is accounted for by foreign companies with contracts in Norway. Labour inflows from the new EU member states still appear to be growing rapidly, with the construction industry absorbing a particularly large share. On the other hand, a rise in sickness absence and the number of persons on disability benefits are pushing down potential output this year. Over the past six months, labour shortages in the Norwegian economy have come into increasing evidence. Unemployment has shown a marked decline and is now at a low level. Employment is still on the rise, while the labour force has remained virtually unchanged in recent months. Registered unemployment, seasonally adjusted, stood at 2.5 per cent of the labour force in August. The number of registered unemployed adjusted for seasonal factors was around 61000. Unemployment has declined for all occupational groups, and has been most pronounced in manufacturing, the construction industry and in the engineering and ICT sectors. BIS Review 80/2006  1  Norges Bank’s regional network also supports this picture.

In the June Inflation Report, Norges Bank assumes that money market rates among our trading partners will gradually increase over the next three years. The path for domestic and external interest rates does not imply considerable changes in the krone exchange rate. Growth in disposable income has been high in recent years. Lower interest expenses as a result of the decrease in interest rates and relatively high real wage growth have resulted in an increase in household purchasing power. The rise in house prices may also have fuelled growth in private consumption. With high growth in employment and falling unemployment, consumption growth is expected to be high again this year. Since the publication of the June Inflation Report, electricity prices have increased to a further extent than expected. Forward prices for next winter have also increased. Higher electricity prices may in isolation reduce household purchasing power somewhat. On the other hand, growth in household income is high and there are market expectations of a fall in electricity prices later next year. A continued rise in house prices may contribute to holding up consumption growth. House prices increased further this summer, and the twelve-month rise moved up to 15.8 per cent in July. Residential construction is still high. In 2005, the number of housing starts was the highest since the beginning of the 1980s. As the interest rate level gradually normalises, household interest expenses will increase. Combined with projected lower employment growth and higher inflation, this might reduce growth in household purchasing power in the years ahead.
All these elements will ensure that bank managers are conscious of how risk-drivers change through the cycle and in stress conditions, and that they incorporate these elements into their decision-taking processes and capital strategies. Let me move now to the work under way to implement the new framework. I’d like to highlight two areas in this respect. 3. Catalytic role in promoting supervisory co-ordination and convergence  The effective implementation of Basel II will depend to a large extent on the ability of “home supervisors” and “host supervisors” of internationally active banks to co-operate efficiently. Certainly one of the goals for any international framework is to foster a more level playing field for internationally active competitors. The Basel Committee wishes to ensure that competition between internationally active banks is driven by each bank’s individual strengths, rather than by differences in each country’s rules. Basel II is intended to promote a more level playing field for internationally active banks. Yet Basel II cannot and should not be expected to create perfect harmonisation across all jurisdictions. Differences in legal systems, market practices and business environments in each country make it an extremely difficult task - and, indeed, an impossible one - to even out all distinctions across all borders. Our goal should instead be to facilitate the application of minimum standards and to work together, across borders, to promote a more consistent implementation and application of the new framework. This enhanced co-operation is a process that will promote consistency and convergence of supervisory practices.

Supporting Moldova’s first currency issues via technical support, expertise and professional training was the first area of institutional cooperation. This was followed by a more focused collaboration in almost all areas of professional training. I would like to mention, for example, the 2001 project in the field of banking supervision, then the provision of technical assistance in the field of inflation targeting in 2010, but also the 2015–2017 twinning project on banking regulation and supervision. Also noteworthy is the multilateral cooperation, within the joint constituency at the International Monetary Fund, or during the meetings of the Central Banks Governors’ Club of the Central Asia, Black Sea region and Balkan countries. Given the time span of more than 30 years of close bilateral institutional cooperation between the National Bank of Romania and the National Bank of Moldova, highlighted by the strategic partnerships for developing and broadening cooperation in areas of mutual interest, I would like to emphasize the positive synergies created over time. I express my firm belief that these synergies are a major factor in advancing this project as well, but also the future ones. Let me also underline the major role played by the successive top-management teams of the National Bank of Moldova in carrying out these numerous bilateral cooperation projects and I take this opportunity to thank them and express my appreciation to those with whom we have worked.
However, inflation should not become too low either. Deflation is often synonymous with recession. Central banks have always had a natural responsibility for stabilising the value of money. Schweigaard was concerned with stabilising the krone’s value in silver terms. Since that time, Norway has operated various regimes with the aim of stabilising the value of money. A silver standard for the krone was followed by the gold standard. Later Norges Bank sought to stabilise the krone’s value against other currencies, first the pound sterling and thereafter the US dollar. For a long period after the war, various fixed exchange rate systems were introduced under international agreements, which were subsequently abandoned in favour of  1  Slagstad, Rune (1998), “De nasjonale strateger” (National strategists), Pax  2  Aubert, L. M. B. (1883), “Anton Martin Schweigaards barndom og ungdom” (Anton Martin Schweigaard’s early years), P.T. Mallings Boghandels Forlag  BIS central bankers’ speeches  1  a more unilateral stabilisation of the krone against various currencies. Since 2001, the objective of monetary policy has been low and stable inflation. Rather than stabilising the value of money indirectly through an exchange rate target, we now aim to attain a more direct objective which we believe monetary policy can achieve over time. The operational target of monetary policy is annual consumer price inflation of close to 2½ per cent over time. Monetary policy shall also contribute to stabilising output and employment. In this respect, inflation targeting is flexible.

There are no sharp dividing lines between these horizons. Nonetheless, the time horizon imposes various requirements on economic theory and models for our purposes. The starting-point for the analyses is important. Current statistics and anecdotal information can serve as a basis for providing some indication of how the economy has evolved up to the present. But the information set is uncertain. Statistics are published with a lag and are often revised. Data from different sources can provide different pictures of the situation at hand. Statistical models can provide us with good support and help distinguish between news and noise in the data. They can capture time series properties in data and correlations that in many cases will be able to produce good forecasts of developments in the months ahead. There are certain similarities between projecting developments in the Norwegian economy in the coming months and forecasting the weather. Meteorologists have observed that averaging forecasts from a large number of models generally produces more accurate forecasts. To project consumer price inflation in the coming quarters, the Bank has developed a system for averaging forecasts from about 170 different statistical models, all of which are intended to project inflation in the Norwegian economy in the very near term.3 The model weights are determined on the basis of historical accuracy and are continually adjusted so that models with better predictive power are given greater weight in the  3  The models are grouped into three classes: factor models, indicator models and VAR models.
During  BIS Review 1/2008  1  this “French period” of your career, you acquired an extraordinary knowledge of our country, its language and culture. Since then, you have always shown deep and unswerving friendship towards France. You have many French friends, some of whom are with us today. The French Government recognised your exceptional contribution to Franco-Japanese friendship by awarding you the “Commander of the Legion of Honour” – the highest of our national honours. Let me say how happy and moved I was to be present, in Tokyo on 25 November 2005, at the ceremony where you received this decoration from France’s Ambassador in Japan. I would add that I myself am fascinated by Japan and its culture. For over 25 years I have been to your country almost every year. I also have dear friends there, some of whom have been kind enough to join us today. This mutual attraction for one another’s cultures has helped us, Governor Fukui, to build a strong personal relationship over the course of our meetings at the international institutions, in Basel and Washington in particular. This doubtless explains why we agreed straightaway, when invited by the diplomatic authorities in our respective countries, to involve our institutions in the celebrations of this 150th anniversary. If you look, on the website of the Japanese Embassy in France, at the schedule of events celebrating this occasion – some of which will be quite exceptional – we see that the arts and culture have pride of place.

Having become independent in the 1990s, both the Banque de France and the Bank of Japan maintained price stability in the face of adverse pressures, whether inflationary or deflationary, making use of a range of appropriate instruments. Participating in the community of central banks that has gradually been built up, the Banque de France and the Bank of Japan, in parallel, have been regional pivots of the central bank function. After the Second World War in particular, our two institutions favoured co-operation with the central banks of economic regions undergoing reconstruction and newly emerging markets. Finally, during the twentieth century, we carved out a place for ourselves in the world by adapting to the new international functions: the more dynamic the international markets were, like in the 1920s and in stages from the 1960s onwards, the more our two banks’ international functions developed. 2  BIS Review 1/2008  This morning’s session, concerning the history of our economies and institutions, will enable us to shed light on all these aspects. The afternoon’s session will focus on developments in our economies and institutions in an increasingly globalised world. Globalisation is not a new phenomenon. The past 150 years of diplomatic and economic relations between our two countries are proof of this. However, the scope and the speed of the current stage of globalisation have far outstripped anything experienced in the nineteenth and twentieth centuries.
Andrew G Haldane: Why banks failed the stress test Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Marcus-Evans Conference on Stress-Testing, London, 9-10 February 2009. I would like to thank Geoff Coppins, Harry Goodacre, Nigel Jenkinson, Salina Ladha, Iman van Leyveld, Jack McKeown, Joe Noss, Adrian Penalver, Nick Vause and Matthew Willison for contributions and comments. *  *  *  By any historical standard, the financial crisis of the past 18 months has been extraordinary. Some have suggested it is the worst since the early 1970s; others, the worst since the Great Depression; others still, the worst in human history. Time will tell. Risk managers are of course known for their pessimistic streak. Back in August 2007, the Chief Financial Officer of Goldman Sachs, David Viniar, commented to the Financial Times: “We are seeing things that were 25-standard deviation moves, several days in a row” To provide some context, assuming a normal distribution, a 7.26-sigma daily loss would be expected to occur once every 13.7 billion or so years. That is roughly the estimated age of the universe. A 25-sigma event would be expected to occur once every 6 x 10124 lives of the universe. That is quite a lot of human histories. When I tried to calculate the probability of a 25-sigma event occurring on several successive days, the lights visibly dimmed over London and, in a scene reminiscent of that Little Britain sketch, the computer said “No”.

This would enable the framework for financial stability in the context of Islamic finance to interface with the arrangements that exists for the conventional financial system, therefore avoiding any fragmentation in the global regulatory framework. Malaysia, as the host of the IFSB will continue to be committed to support its development and its potential as a prudential standardsetting body in the international financial system. On that note, I wish you a productive session today and look forward to the constructive outcomes of this engagement. BIS central bankers’ speeches  3
It now has 95 members, including the US Fed since last December and this number will still grow in coming weeks. The Banque de France provides its global secretariat with 15 staff, and we created last April our Climate Change Centre chaired by Nathalie Aufauvre. We are indeed making good progress across the board. But each year that passes without sufficient emission reductions makes the issue more severe, and the solutions more radical. To grapple with this dynamic situation, it is imperative that we are able to better understand and forecast the macroeconomic impacts of climate developments. 2. An imperative for the year to come: forge models that gauge the interaction between climate and the economy One aspect of the ECB’s action plan launched on the back of the strategy review may have received too little attention: macroeconomic modelling and scenario analyses. The challenge is huge as we face a triple source of uncertainty: first, how climate change will materialise, second, what the transition could look like and, third, how both will translate to the macroeconomy. The NGFS has produced detailed macro financial scenarios and the corresponding data that provide the most comprehensive framework to date for financial risk assessment. To make such scenarios possible, the central banking community – with a strong involvement of Bank of England and Banque de France among others - has collaborated with first tier research institutes in climate science and economic modelling. This is a huge step forward.

The forthcoming NGFS work should therefore also focus on shorterterm horizons (2030, and not only 2050) as the transition to a low-carbon economy may be less linear than anticipated, with tipping points accelerating the transition in a disorderly way. [Slide] We generally need to better understand the long-term trade-off, in terms of GDP, between transition and physical risks and the cost of delayed action. The chart breaks down the GDP losses under three scenarios into the costs of transition and physical damages. Under the “Paris Agreement” scenario, GDP would be 5% lower in 2060 and around 7% lower in 2100, and most of this reduction can be attributed to transition policies. Under the two “Too-little too-late” scenarios, the transition costs are limited, but by the end of the century the impact of physical risks becomes much larger, leading to overall losses that could range between at least 10 and 20% of world GDP level. From an economic and rational standpoint, the prescription is clear-cut: an orderly transition would require a governmental forward-looking guidance, sending long-term signals and anchoring credible but ambitious commitments. This “climate forward guidance” should include an appropriate pricing of carbon; and as long as we don’t have such global pricing, a carbon border adjustment mechanism (CBAM), as recently put forth by the EU in order to prevent carbon leakage is appropriate. We all know how politically sensitive these issues are, domestically as well as internationally.
BIS central bankers’ speeches  7  Third, what tools might such agencies bring to bear in tackling financial arms races in return, speed and safety? With hindsight, it is not difficult to identify instruments which might have slowed the pre-crisis race for excessive returns in banking. The most direct and effective would have been to place tighter constraints on banks’ leverage. This would have defused the return on equity race at source. The FPC has prioritised the leverage ratio as a macro-prudential instrument in its recommendations to date.29 A complementary approach would have been to require banks to adopt performance metrics which did a better job of adjusting for risk. At the end of last year, the FPC raised concerns about the use of return on equity metrics by banks which generate incentives to shrink equity to hit return targets.30 Some institutional investors have raised similar concerns – and are showing encouraging signs of acting on those concerns. After all, it is not difficult to devise performance metrics which would do a better job of adjusting for risk, such as return on bank assets. There is some evidence recently of return on equity targets having become a less important determinant of some banks’ portfolio allocation and executive pay decisions. But equity returns remain hardwired into both to some degree. Moreover, many global banks continue to publish return on equity targets. This continuing attachment to counter-productive performance metrics is a puzzle – and a worry.

Caleb M Fundanga: The new K10,000 banknote in Zambia Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the new K10,000 banknote, Bank of Zambia, Lusaka, 16 June 2008. *  *  *  • Members of the Press • Official from commercial banks present • Ladies and Gentlemen I wish to welcome you all to the Bank of Zambia. The objective of this Press Briefing is to announce the introduction of the new K10,000 banknote in our economy. The new K10,000 banknote will be put into circulation as early as this week. By showing you the new K10,000 banknote first, we expect that you will, in turn, help us to inform the public about this new banknote. In order for us to help you understand the new K10,000 banknote, we have produced posters and will make a short power point presentation. The posters are showing the main public recognition and security features of the new K10,000 banknote. Let me from the outset inform you that although we are calling it a new K10,000 banknote, most of the features on the banknote are still the same as those on the current K10,000 banknotes. The differences can best be detected by comparing this new K10,000 banknote with the current K10,000 banknotes in circulation.