samchain/econo-pairs-v1 huggingface dataset:
Conversely, inflation is a form of confiscation, which primarily affects the least privileged households. In a modern economy, the social contract is based on the confidence that citizens have in their currency. With the euro, French citizens now possess one of the world’s two foremost currencies, whose legitimacy is based on the stability that it bestows on their savings and purchasing power. The French economy In spring 2007, the picture of the French economy is mixed. At first glance, France’s performance is strong. Growth is above 2%, inflation is under control, investment is dynamic and 256,000 jobs have been created over the past year (of which 155,000 in the market economy). In 2006, the fiscal deficit decreased sharply and government debt was cut by 2 GDP percentage points. This assessment is, however, significantly tempered by the two following observations. First, and for the first time for a long time, growth in France is below the euro area average. France is following and benefiting from a European movement that it is not contributing to fuel. This is illustrated in particular by the (negative) growth differential with Germany, which is without precedent over the past 20 years. Second, France records a substantial current account deficit, which deserves particular attention. Thanks to the euro, the French economy is shielded from financial turbulence which would, in the past under such circumstances, have jeopardised the stability of its currency.

French competitiveness has in particular been impacted by wage increases and catch-ups associated with the reduction in the working week, while Germany has experienced several consecutive years of real wage cuts. From this point of view, it is likely to be positively affected by a strict application of the revaluation rules for the minimum wage. In addition, industrial output has virtually stagnated over the past six years, in spite of efforts aimed at making the French economy more attractive. France is not the only European country in this situation. Industrial output in Italy is also fl at, while that of the United Kingdom has dropped by 5% despite its buoyant economic growth. At the same time, however, industrial activity in Germany and Spain has grown by 15% and 10% respectively. It is as if the French economy had been hit by a “shock” hindering its ability to react to an increase in domestic and, especially, world demand. We need to take a look at the origins of this shock. Corporate investment hardly seems to account for this shock, given that it has risen by the same proportion in France and Germany in recent years (12% in 4 years). Other gridlocks, that are less clearly definable, are therefore hindering the industrial sector’s reaction capacity. Although it is currently impossible to clearly identify them, labour market rigidities have probably played a major role, especially on the supply side.
At the same time, national governance, control and security considerations must be addressed. A neutral platform and set of rules at the central bank for the direct settlement of all payment types is also in this context an obvious option which we are considering. For settlement of this kind in Norwegian kroner at Norges Bank, one may envisage a system either directly linked to Norges Bank’s settlement system (NBO) or by linking to TIPS, as Sweden is now planning. In the near future, we will begin a dialogue with industry representatives. Progress on further modernisation of the Norwegian infrastructure must now be a paramount consideration. Security and national governance and control If a business enterprise performs tasks that are critical to the functioning of society, policymakers need to assess the regulations and systems that are necessary to ensure adequate national governance and control. This issue gains in relevance when more and more of our critical infrastructure becomes a part of or is owned by global tech giants and payment companies. The operation of ICT systems has largely been outsourced. This presents a number of challenges. The private financial market infrastructure (FMI) owners in the payment system have reported to Norges Bank that it is difficult to obtain necessary ICT expertise to operate and maintain key functions. If ICT operation and maintenance are moved abroad, it may, in the short term, provide access to better and more secure solutions. But we must also consider the longterm consequences.

In particular, there are policy decisions required in the following dimensions: (i)  eligibility (what collateral should be accepted, and what should not);  (ii)  valuations and haircuts (how much is the collateral worth? );  (iii)  what fees should apply, if any, and  (iv)  limits (how much diversification should we seek across the collateral delivered?). These are important questions for the banking system as a whole, and have presented new and complex risk management challenges for central banks over the past few years. It is on these issues that we focus in this paper.3 To start with, we briefly outline some of the main features of the Bank’s lending operations. The sterling monetary framework The Bank’s main activity in the sterling market prior to the financial crisis was via its shortterm repo open market operations (STR OMOs). Those regular weekly operations provided the banking system with the right level of reserves such that short-term market interest rates would remain close to Bank Rate set by the MPC.4 In addition, in order to reduce the size of weekly STR OMOs to a manageable size, the Bank undertook longer-term repo OMOs (LTR OMOs) of 3, 6, 9 and 12 months maturity. The remaining operation of note was the Standing Facilities in which a commercial bank could borrow from, or lend to the Bank overnight, albeit at a less attractive rate than Bank Rate.
Benoît Cœuré: Policy coordination in a multipolar world Remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at the 5th annual Cusco conference organised by the Central Reserve Bank of Peru and the Reinventing Bretton Woods Committee: “70 years after Bretton Woods: Managing the interconnectedness of the world economy”, Cusco, 22 July 2014 *  *  *  I would like to thank Michele Ca’ Zorzi and G. Georgiadis for contributing to these remarks. I remain solely responsible for the opinions expressed herein. Dear Governor Velarde, dear Marc Uzan, ladies and gentlemen, I would like to thank the organisers for giving me the opportunity to share some thoughts with you on the changes in the international monetary system (IMS) and the role of monetary policy coordination. History casts a long shadow over the IMS. Over the past three decades, however, the global economy has changed in decisive ways. Three aspects are particularly striking. First, financial factors have become an increasingly relevant source of cross-country interlinkages, with some evidence of cross-country de-linkages since the global financial crisis. Second, emerging economies have raised their clout, as reflected by the impact of their business cycles on global growth and the growing use of their currencies: the global economy has become multipolar. And third, monetary policy in advanced economies has – more recently – entered new territory by resorting to unconventional measures.

After the global financial crisis the correlation rose sharply to 0.6 for the euro area and 0.75 for non-euro area OECD countries. 2  See Ivashina, V., Scharfstein, D.S., Stein J.C. (2012), “Dollar Funding and the Lending Behavior of Global Banks”, NBER Working Paper No 18528, November. 3  See Bank for International Settlements (2014), “EME Banking Systems and regional financial integration”, CGFS Papers, No 51. BIS central bankers’ speeches  1  cross-border liquidity flows or the US rules for foreign banking organisations may be seen as examples. Such a “de-globalisation” scenario, if confirmed, could become self-validating and have profound effects on the degree of international risk-sharing, spillovers and the global allocation of savings, and therefore on global long-term growth. Shifting economic centre of gravity Since the early 2000s the world has also witnessed impressive growth rates in emerging economies, which have exceeded those in the advanced world. In particular the BRICS (Brazil, Russia, India, China and South Africa) have more than doubled their share of global GDP from less than 10% in 2000 to 21% in 2013; similarly, other low and middle-income economies have seen their share increase from 7% in 2000 to 12% in 2013. The rise of emerging economies is also illustrated by the eastward shift of the world’s economic centre of gravity, which is occurring at a faster speed than ever before in human history.
Hence, it is crucial that we continue to give generously, to local and foreign deserving causes. 24. Yet giving is also difficult to do well because it must not lead to waste and leakage or diminish the spirit of self-reliance. I am pleased that Singapore is playing host to this global forum which brings together leading philanthropists and thought leaders to discuss how to better accomplish giving, and to push the frontiers of philanthropy in Asia. 25. I commend Credit Suisse for playing an active role in developing philanthropy capabilities in Singapore, and I wish you a fruitful meeting. BIS central bankers’ speeches  3

Before explaining the Bank’s thinking about these two issues, we need to lay out some basics about the Bank’s objectives, and how it seeks to meet them using its balance sheet. The Bank of England’s objectives and its balance sheet The Bank has two core purposes: maintaining monetary stability and contributing to the stability of the financial system. With some variations, these are the two cornerstones of policy for most central banks around the globe. Monetary policy is quite widely understood in a general sense – the Bank specifically defines it to mean price stability and confidence in the currency.1 Financial stability is less well understood generally but it entails detecting and reducing threats to the financial system as a whole, in order to make it more resilient.2 One major reason why it is for the central bank to pursue both of these purposes is because it has a balance sheet that can be used both to implement monetary policy decisions and to carry out financial operations to support financial stability. A simplified time-series of the Bank’s balance sheet is shown in Charts 1 and 2 below.3  1  Bank of England, Annual Report 2010, page 1. 2  See “A New Approach to Regulation”, HM Treasury consultation document Cm 8012. 3  The Special Liquidity Scheme and Asset Purchase Facility are off-balance sheet, so are not included in the charts.
The scale of the shortfall would be slightly less if measured in terms of output per hour worked, but the same qualitative patterns (and puzzles) are apparent in productivity per hour measures. 3  The UK is not alone: OECD data reveal that several of the world’s largest economies (including Germany, France and Italy) have also been experiencing sluggish productivity growth by historical standards. One exception to this is the US, where productivity has actually grown at rates in excess of the pre-crisis average over much of the past three years. BIS central bankers’ speeches  1  As I fear may often seem to be the case with economists – I’m not going to offer you a simple answer. There is no single smoking gun. Rather I think there are a number of candidate explanations, each of which is likely to have played some role. In the next section of my talk, I’ll highlight three broad classes of explanation – which range from the relatively benign to more worrying diagnoses – and try to provide some guide as to their relative importance. I’ll then discuss how the uncertainty surrounding recent developments in productivity complicates the setting of monetary policy. The MPC needs to form an assessment of the strength of supply as well as demand when setting policy. I’ll conclude with some thoughts on recent developments in the economy more generally and how they have affected my policy decisions. Productivity weakness: a reality or an illusion?

They can adopt a multi-year approach when engaging financial institutions on their transition efforts. This includes acknowledging that there may be short-term increases in their financed emissions from supporting the transition of higher emissions clients towards climate positive outcomes. The Monetary Authority of Singapore intends to do all of the above. 2/5  BIS - Central bankers' speeches  The NGFS is providing thought leadership on the role of financial regulators with respect to financial institutions' transition plans and transition planning process. We are exploring the extent to which financial institutions' transition plans should be considered within the supervisory toolkit and overall prudential framework. While most financial institutions' transition plans have a climate focus, they have different nuances in objectives, ranging from climate risk mitigation to reducing financed emissions to supporting the real economy's transition to net-zero. But there are some common elements to all transition plans which are relevant to supervisors for assessing safety and soundness. The NGFS has completed a stock-take of supervisory frameworks with respect to financial institutions' transition plans. We are sharing the results of the stock-take with the Basel Committee on Banking Supervision and the Financial Stability Board, to facilitate greater coordination in the development of transition planning standards. We will publish a report on key findings and next steps that will provide a basis for further work on the role of transition plans in greening the financial system.
I get immense value from their insights, whether it’s the challenges they face in filling positions, their plans for capital investments, or how global developments are influencing their decisions. These discussions provide a huge amount of detail and texture to the economic picture. One of the great strengths of the Federal Reserve System is our extensive networks of contacts in our communities, and we share what we learn from these conversations when we meet at the FOMC. Being "data dependent" means taking this holistic view when thinking about the economy and monetary policy. Not all of these types of data draw headlines the way shifts in the stock market do, but together they provide a much richer and more complete depiction of what’s happening. And they also tell me whether the signals we’re getting from the markets are reflected in the economy as a whole. 2018 Tailwinds In thinking about where the economy is heading, it’s worth reflecting on where we were 12 months ago. At the start of last year the message I was getting—from business leaders, economic data, and the markets—was one of overwhelming positivity. This reflected three tailwinds: strong global 2/4  BIS central bankers' speeches  growth, fiscal stimulus, and quite accommodative financial conditions. Each of these was giving the economy an extra boost. Indeed, these tailwinds provided even more of a boost over most of 2018 than forecasters had anticipated. Fast forward 12 months and indicators in Europe and Asia point to less optimism about global growth.

And Solvency II sets tests and standards that we must enforce. As models can be highly complex, this is necessarily an intensive process. As you would expect, we are reviewing our approach in the light of experience, including seeing if we can streamline in some areas without compromising standards. We do already seek to focus on the most important risk drivers, including assumptions made about diversification across risks. This includes assessing the expert judgements firms have applied against our own estimates in key areas such as (in the case of life insurers) credit, longevity and interest rate risk. But these are not rigid standards. If firms can provide credible evidence that a different number is appropriate for them, we will accept it. And our estimates are usually in the pack of firms’ estimates. We are not enforcing a higher standard of prudence than required by Solvency II. For the same reasons, we take a robust approach to approving major changes to firms’ internal models. We have now completed the first round of such modifications and my observation is that firms proposed  4  Financial Stability Report , Bank of England, December 2016, chapter on ‘Risks to financial stability from insurers’ investment behaviour’. 5 Solvency II: Matching adjustment – illiquid unrated assets and equity release mortgages – CP48/16, Prudential Regulation Authority, December 2016. 6 Solvency II does include provision for supervisors to set temporary capital add-ons reflecting management and governance failings.
A favourable era for financial regulation followed. This momentum was spurred by revived international cooperation at the highest level, with the milestone G20 Summits in 2009 and 2010 – the political laboratory of the following financial reforms. They resulted in several achievements to strengthen the existing regulatory framework for financial institutions, but also in bringing unregulated segments, activities and actors under supervisory watch – such as over the counter markets, rating agencies and hedge funds. Significant progress has been made on these fronts; even though there still remains room for improvement, notably for a better regulation of non-banking financial intermediation (NBFI) – I will come back to this issue. Page 2 sur 11 In the banking sector, improvements in the regulatory framework are more than evident. The Basel III Agreements finalised in 2017 require larger and sounder buffers for the banking sector and strengthen market discipline. In Europe, as you know well, the Great financial crisis was closely followed by a public debt crisis resulting from the sovereign-bank nexus. As a response, the euro area has forged the Banking Union. Overall, the European banking sector has become much more resilient. Requirements have also been increased in the insurance sector, with the entry into force of the new Solvency II regulatory framework in 2016, which is currently under revision. After the mid-2010s, faced with two structural transformations – ecological and digital –, Europe has been a pioneer in adapting its regulatory framework to be up to the task.

These dynamics contrast with what we observed during the period preceding the great financial crisis, where the real estate boom was associated with deteriorating lending standards, and an increasing default risk of borrowers. In taking these decisions, the HCSF usefully adapted the measures already invoked in other European countries and took their efficiency as a benchmark. Ireland was obviously a source of inspiration, as, among others, an early adopter of borrower-based measures, for instance through binding borrower-based instruments such as limits on loan-to-value and loan-to-income ratios. This measure proved very effective.iv The tightening of our macroprudential stance has strengthened households’ resilience. However, the housing sector has proved particularly dynamic following the Covid crisis: annual house price growth in the euro area reached almost 10% in the beginning of 2022, following a little over 4% on average between 2016 and 2019. This doubling of an already high speed has also been observed in France and still more in Ireland. In the meantime, household income  Page 10 sur 11 only increased by 1.8% in France since the beginning of the pandemic, meaning households are more heavily indebted. Should we then worry about an increased possibility of a turn in the cycle?
The positive market sentiment on the European markets has defied both negative reports from the real economy and various political crises, even those in major member states such as Italy. The lower interest rates have improved the growth outlook in the euro area and opened up a time window for structural reform. A certain degree of calming also occurred for the Swiss franc exchange rate. Demand declined for investments which were seen as safe havens, such as the Swiss franc, with the result that foreign currency purchases to defend the minimum exchange rate have not been necessary for over a year. However, investors remain cautious, as can be seen in chart 1. First, the exchange rate did not perceptibly move away from the CHF 1.20 level until January 2013, in other words, after many months of declining risk premia. Second, the Swiss franc has not weakened fundamentally against the euro during the course of this year, although risk premia have declined further. Nevertheless, many market participants expect a renewed depreciation in the Swiss franc in view of the progress in the euro area. The value of the Swiss franc is still high at present. As can be seen in chart 2, the trade-weighted, inflationadjusted exchange rate for the Swiss franc, for instance, is currently about 10% above its long-term average. The minimum exchange rate continues to prevent an undesired tightening of monetary conditions should the upward pressure on the Swiss franc intensify once again in view of the current uncertainty.

European financial markets calmer thanks to monetary policy If you take a look at chart 1, you can follow the movements in both the euro/Swiss franc exchange rate and the average risk premium for the government bonds of five peripheral euro area countries (Italy, Spain, Greece, Portugal and Ireland). The risk premium is drawn on an inverted scale, in other words, a movement downwards signifies a higher risk. This chart serves as an illustrative example for two developments. On the one hand, it shows that uncertainty in the euro area has decreased greatly over the past twelve months. At the time of the last Money Market Event in Geneva, the risk premium was almost 1,200 basis points; it is now below 400. On the other hand, the chart illustrates the fact that the upward pressure on the Swiss franc has abated. Following a long period last year when the exchange rate stuck closely to the minimum exchange rate of CHF 1.20, it moved away in January and, since May, has fluctuated within a relatively narrow range of CHF 1.22–1.26 per euro. BIS central bankers’ speeches  1  Here, the situation has calmed in two respects. In order to reduce the risk of the euro area collapsing, the European Central Bank (ECB) resorted to an unconventional measure in late summer 2012, the outright monetary transactions programme. Market participants were persuaded, and since then the risk premium for peripheral economies in Europe has declined steadily. What is remarkable is how persistent this trend has been.