samchain/econo-pairs-v1 huggingface dataset:
Structural parameters As we said in September, in this Report we updated our estimation of the structural parameters used in our medium-term projections. The new estimate covers trend growth and the neutral interest rate. It is important to note that trend growth is related to the medium-term growth capacity of the economy. Therefore, when we estimate it, we refer to a long period of time, usually a decade. The Bank also constantly estimates potential growth, which is a different concept, more closely associated with the evolution of the economy's short-term productive capacity. In any case, in the medium term, the two variables —trend and potential growth— converge. We estimate that for the period 2023-2032 the trend growth of non-mining GDP will average 2.2%, following the same declining trend that we anticipated in our June 2021 estimate. At that time, we projected that trend growth would average 2.9%, although the baseline period was different: 2021-2030. The main difference with the previous projection is that in the shorter term it factored in a recovery in hours worked and labor participation rate after the Covid shock. In the current estimate, which starts in 2023, these variables have already made most of their recovery. Thus, in the next few years, they will no longer contribute as importantly to trend growth. Towards the end of the period, the convergence of hours worked to the OECD average becomes more important, which will gradually reduce the contribution of the labor factor.

This restricts the future freedom of action in economic policy and means that there is a risk of fiscal policy in practice having a destabilising effect. This is particularly the case in that, with high revenue and spending ratios, the Swedish budget is sensitive to cyclical factors. Seen from this angle the Government’s target of a 2 per cent budget surplus over the economic cycle appears reasonable, though there is no academic foundation for a quantified level of ambition. There may be grounds for strategic tax cuts to improve the long-term growth potential. But in the light of the experience with government finance in recent decades a warning should be issued against tax cuts without parallel cuts in spending. Weak employment The labour market trends in recent years have been bleak. Although annual economic growth since 1993 has averaged 2.7 per cent, employment has not risen. This indicates that a considerable proportion of unemployment is structural in the sense that the level is liable to remain high even if activity continues to improve. The difficulty in generating new jobs is not confined to Sweden; it is a problem we have in common with much of Europe. But there are countries in Europe that have succeeded in turning the employment curve upwards since the mid 1980s. I am thinking in particular of the Netherlands, where employment, after a long period of stagnation, has been increased by 20 to 25 per cent since the mid 1980s.
So, what is it that we need in order to achieve better crisis preparedness? As I just indicated, one important requirement is to have in place solid frameworks for the management and closure of distressed banks. Such frameworks include several different aspects, everything from deposit guarantee schemes to insolvency procedures. Basically, it is a quite technical mix of legal and financial measures which can look rather different from country to country. However, the basic concept applies to all. Frameworks should facilitate the quick and efficient closure of banks at a low cost to the deposit guarantee system, while making shareholders and uninsured creditors bear the responsibility for their investment decisions. It must also allow for special measures to be taken in the exceptional situation where the failure of a bank risks destabilising the financial system as a whole. Also in such situations, the government needs to have a strong negotiating position relative to the shareholders. Necessary ingredients for achieving all this are to allow distressed banks to be put under special receivership and to enable governments to issue guarantees and make capital injections. As a countermeasure the government obviously needs to have farreaching authority to take control of the institution, for example by requiring the compulsory sale of shares. 4  BIS Review 134/2008  With regard to central banks there is also reason to contemplate how crisis preparedness can be improved. For example, we need to consider how appropriate flexibility is achieved in the central banks’ operational frameworks to deal with extraordinary situations.

3 “The future of finance and the outlook for regulation”, Remarks by Vítor Constâncio, Vice-President of the ECB, at  the Financial Regulatory Outlook Conference organised by the Centre for International Governance Innovation and Oliver Wyman, Rome, 9 November 2017. 4/4  BIS central bankers' speeches
Having both the public and 2/3  BIS central bankers' speeches  private sectors on the same platform would help to cement the shared responsibility mindset and synergise our efforts in addressing the ML/TF/PF risks. Finally, let me thank the APG Secretariat for coordinating this Workshop. Special thanks as well to all speakers, moderators, and participants that took their time to be with us for the next three days. With that, I wish all of you a successful and productive Workshop ahead. 1 RUSI, 5 years of growth of Public-Private Partnership to Fight Financial Crime, August 2020 2 FATF Guidance on PF Risk Assessment and Mitigation 3 UK National Risk Assessment of Proliferation Financing 4 Mitigating the Unintended Consequences of the FATF Standards  3/3  BIS central bankers' speeches

It is important that this critical issue be well understood. The public must be absolutely confident that the Fed can meet its monetary policy objectives of low and stable inflation and sustainable economic growth. Before I begin to get into these issues in earnest, let me note that, as always, the views I put forward today are my own and do not necessarily reflect the position of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Turning first to the outlook, the economic contraction appears to be waning and it seems likely that we will see moderate growth in the second half of the year. The economy should be boosted by three factors: 1) a modest recovery in housing activity and motor vehicle sales; 2) the impact of the fiscal stimulus on domestic demand; and 3) a sharp swing in the pace of inventory investment. In fact, if the inventory swing were concentrated in a particular quarter, we could see fairly rapid growth for a brief period. Regardless of the precise timing, there are a number of factors which suggest that the pace of recovery will be considerably slower than usual. In particular, I expect that consumption – which accounts for about 70 percent of gross domestic product – is likely to grow slowly for three reasons. First, real income growth will probably be weak by historical standards.
I shall here take up three aspects of flexible inflation targeting: measures of inflation, taking consideration of developments in the real economy and taking into account financial developments,” said Mr Öberg. “Monetary policy is guided by various measures of underlying inflation. There is no single measure of inflation that at each point in time indicates the proper stance of monetary policy. The Riksbank can choose to disregard effects that contribute to inflation deviating temporarily from the target. This occurs on a regular basis with regard to, for instance, indirect taxes and household mortgage interest expenditure, as well as supply shocks that are assessed as temporary. In practice, monetary policy today is mainly based on one measure of underlying inflation, UND1X,” observed Mr Öberg. “The Riksbank also takes into account developments in the real economy when making monetary policy decisions. In the preparatory works for the Sveriges Riksbank Act, it was stated that the Riksbank, without prejudice to the price stability target, should support the goals of general economic policy with a view to maintaining a sustainable level of growth and high rate of employment. If a disruption were to contribute to inflation deviating substantially from target, it is a question of judgement as to how quickly it should be returned to 2 per cent. Normally, monetary policy aims to attain the inflation target within two years.

“Our monetary policy decisions also take into account changes in asset prices and other financial variables. At present, there is reason to give particular consideration to the credit expansion and to  1/2  house price developments. This is primarily a question of avoiding severe fluctuations further ahead. When economic activity eventually begins a downswing, this could result in an abrupt adjustment with falling house prices and weak growth in demand. The risk of this type of development increases if monetary policy is excessively expansionary for too long,” continued Mr Öberg. “There has recently been unease on the stock markets. However, it is too early to draw any more farreaching conclusions from recent events. As usual, the Riksbank will monitor developments and how these may affect inflation and other macroeconomic developments,” concluded Mr Öberg. 2/2
So for example, in the most recent fielding of our survey, the panel was asked:  4  BIS central bankers’ speeches  In your view, what would you say is the percent chance that the following things may happen to the rate of inflation/deflation over the one-year period between February 2013 and February 2014? Chart 6 gives you the question in full. We have been fielding the forward inflation expectation question since spring 2008, and Chart 7 contains some time-series information from the responses. We use established statistical techniques to estimate continuous probability distributions from each individual set of responses. We then find the median of the medians of the individual distributions to represent the average forward expectation and the upper and lower quartiles of the individual medians to measure disagreement across respondents. For our measure of uncertainty we report the median of the individual inter-quartile ranges. As a complement to attempting to improve the measurement of household forward inflation expectations, we have also been investigating expectations about wage growth. Because firms and workers may negotiate changes in wages to be in line with their expected rate of inflation, data on wage expectations are an additional information source for analyzing inflation dynamics and the interaction between wage and price determination. Furthermore, discrepancies between expected changes in wages and expected inflation may affect households’ financial decisions. Despite the obvious importance of wage expectations, information on wage expectations is particularly scarce.

Philipp M Hildebrand: Current monetary policy situation and economic prospects Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at “Finanzinstitute Thurgau bei der Universität Konstanz”, Kreuzlingen, 26 April 2004. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Due to the vigorous monetary and fiscal policy stimuli from the US, the global economy is expanding again. In Switzerland, too, the upswing has become a reality. In the current year, the Swiss National Bank (SNB) is expecting growth of 1.5% - 2%, which slightly exceeds the present growth potential. Since capacity utilisation is still fairly modest, such economic growth does not bring an immediate threat of inflation for Switzerland at the moment. The downward risks still existing therefore justify a cautious monetary policy. In order to be able to ensure price stability in the medium term, the SNB must, however, bring its expansionary monetary policy back on normal course again as soon as the economic recovery sets in and capacity utilisation improves markedly. BIS Review 24/2004  1
Although they were not necessarily articulated fully at the time, these solutions had several goals: to preserve a functioning domestic payment system, ringfence the state in the case of bank failures, limit the socialisation of private sector losses, and create the conditions for rebuilding a domestic banking system. The adopted solution incorporated several elements. The Government declared that all deposits in Iceland were safe. Second, on 6 October the so-called Emergency Act was rushed through Parliament, giving the Financial Supervisory Authority broad-based powers to intervene in failing institutions, granting all deposits seniority over other unsecured claims in case of bank failures, and giving permission for Government capital injections into new domestic banks. The Emergency Act thus allowed new domestic banks to be created when the old crossborder banks failed and were placed in special resolution regimes followed by winding-up proceedings. In essence, the old banks became the property of the creditors, which were mostly foreign. The new banks were created by carving the domestic assets and liabilities out of the old banks, so it was not a good bank–bad bank split. The idea, then, was that the Government would recapitalise the banks and place compensation bonds in the estates of the failed banks. However, valuing the assets and liabilities proved a complicated process in the middle of an economic and financial crisis, and a solution emerged where the creditors of the failed banks became majority owners of two of the banks and kept a small equity stake in the third.

And, for our part, we need to: •  improve our communications with firms, including being more timely and clearer in our feedback;  •  improve collaboration with home and other host supervisors; and,  •  make supervisory colleges more effective, by promoting more robust discussions and more direct feedback to firms. Thank you for your attention today. I look forward to continuing to work with you on these issues as we seek to enhance our supervisory programs. BIS central bankers’ speeches  5
Lower oil prices will also boost UK domestic demand directly as households spend their windfall. Our forecast conservatively assumes that they save 40 pence in every pound of that amount. On balance, there is likely upside risk to growth and inflation from this assumption. Oil isn’t the only reason why inflation is low globally. Measures of inflation that strip out volatile factors – so-called “core” inflation – have been trending down as well (Chart 6). Core inflation rates in the euro area, the US and the UK have declined by between ¾ and 1 percentage points since 2012. Core inflation in the UK, currently around 1.4%, is likely to decline further in the coming months, reflecting sterling’s past strength and muted domestic cost growth. The weakness in core inflation across the globe reflects the shortfall of global demand below global supply (Chart 7).10 In some major economies there are additional disinflationary forces. For example, in the euro area, a series of necessary internal devaluations are weighing on wages and prices. In China, a rebalancing of investment and consumption risks generating further disinflation. The producer price inflation rate has been negative for 35 months in a row, reflecting longstanding overcapacity in industries such as concrete and steel, while the more recent weakness in the property market could further increase excess capacity in related sectors. All this suggests a persistent period of low inflation globally is a possibility, and as I mentioned a few moments ago, could itself create a self-fulfilling fear of a bad outcome.

And more broadly, following the 2008 financial crisis debt deflation has been the dog that hasn’t barked (Chart 4).8 But we shouldn’t rest too easy – there are several reasons why the dog might have just been sleeping, and central banks need to be vigilant against the risk that recent low inflation stirs it from its slumber. 2. Global factors and domestic inflation  Low global inflation matters for the UK because we are an open economy. Around one-third of the goods and services consumed by UK households are imported, creating a direct channel from global influences to UK prices. And the UK’s exports are around 30% of GDP, opening an indirect channel through which global activity affects costs and prices in the UK through demand for our products. The importance of these channels has waxed and waned over decades, with changes to both the degree of global integration and the conduct of monetary policy. Under the Bretton Woods system of fixed exchange rates prevailing until the early 1970s relatively closed financial and goods markets may have contributed to lower cross-country co-movements between inflation rates (Chart 5 (a) – see annex). After Bretton Woods collapsed, countries’ inflation rates became more highly correlated across the advanced world as they lacked the strong nominal anchors necessary to manage global cost shocks and subsequent attempts at disinflations (Chart 5 (b) – see annex).9 That situation persisted until the early 1990s ushered in the era of Inflation Targeting (Chart 5 (c) – see annex).
8 Japan has also remained a significant partner in trade with Malaysia. While Japan's economic relationship in investment and trade in the region is well established, there is a significant potential for strengthening further the financial linkages in future. There is potential to evolve the direct investment and trade in goods to grow the financial ties. Islamic finance represents a vehicle that could further deepen our financial relationship and the regional financial integration process. By enhancing new linkages in this relationship and the prospect for greater integration, it would contribute towards unlocking potential opportunities for mutual prosperity of the region. To advance relations in the area of Islamic finance, a memorandum of understanding between the Central Bank of Malaysia and Japan Bank for International Corporation (JBIC) was signed in 2007. There is also a strategic alliance between one of the world largest Japanese insurance groups with a domestic insurance company in Malaysia which resulted in the establishment of a takaful company. Efforts can also be focussed on facilitating cross listing of sukuk in multiple jurisdictions. Japan may also use Malaysia as a platform for innovation and research in Islamic finance. There are various institutions, including the industry-owned research and training institute in Islamic finance, the Islamic Banking and Finance Institute Malaysia (IBFIM), INCEIF and universities which have undertaken research on Islamic finance. Thus, it is hoped that the Japanese participation in the Islamic financial  5  Based on projection by Institute of Islamic Finance and Insurance & Investor Offshore Review, February 2006.

6  To-date there is more than 10 retakaful companies providing retakaful capacity for both family and general takaful business. 7  United Nations Conference on Trade & Development's (UNCTAD) World Investment Report 2007. 8  Sources: JETRO from Ministry of Finance Balance of Payments Statistics and Bank of Japan foreign exchange rates. BIS Review 23/2008  5  markets would contribute towards further international financial integration and thus achieve a more efficient allocation of resources across borders. Conclusion Let me conclude my remarks. The increasing awareness and appreciation of the inherent strengths of Islamic finance and its tremendous potential for advancement have ignited interests amongst the global financial community to venture into this new sphere of finance. Taking advantage of the increasing role of Islamic finance in bringing together different parts of the world with surplus funds in search of investment opportunities, with those that have financing needs, will increase these mutually reinforcing prospects. We look forward to Japan's participation in this new financial evolution. Thank you. 6  BIS Review 23/2008
This needs to be done in a way that combines deeper integration with good incentives and governance so that it can be broadly supported by both the core and  2  BIS central bankers’ speeches  peripheral countries. In this respect, it is important to recall that the architects of EMU from the outset defined it as a project of Economic and Monetary Union. I view the task of transitioning to a pan-European banking union with the ECB as the primary overseer of the European banking system as a critically important next step. Successfully moving to a pan-European banking union would generate a large number of benefits: •  It would demonstrate a commitment toward greater integration that would enhance the credibility that monetary union is indeed irreversible. •  It would help to sever the link between the fiscal position of individual governments and the health of their banks. •  By eliminating the scope for national bias, it would strengthen market confidence that large hidden losses are not likely to be buried within the banking system. •  It would move against fragmentation and promote re-integration of the European banking system. •  It would help to make monetary policy more effective in supporting activity in the peripheral countries.

If we can understand the fundamental mechanisms involved in earlier periods of turbulence, perhaps it will be possible to avoid or mitigate similar developments in the future. That naturally leads me on to consider what can be done and the role of the authorities. The crisis in Sweden Many reasons can probably be found to explain why Sweden in the early-1990s was hit by the gravest crisis since the 1930s. Some of them go back a long way and others probably had more to do with contemporary developments. Macroeconomic factors played a part and so did more structural matters. Many aspects have been thoroughly penetrated in various studies in recent years. Today I shall be concentrating on the financial field. 1  BIS Review 127/1999  The deregulation of credit and currency markets in the 1980s was followed by a rapid expansion of credit and strong price increases for various types of asset, including shares and real estate. The GDP ratio for private sector debt rose in five years from 100% to 150% (Diagram 1). Moreover, in the second half of the 1980s asset prices rose in real terms by over 70%. 1.