samchain/econo-pairs-v1 huggingface dataset:
In the first months of 2020, CPI inflation slowed substantially, reflecting a fall in electricity prices. The rise in the CPI adjusted for tax changes and excluding energy products (CPI-ATE) moved up through spring and summer and remained above the inflation target, primarily owing to higher imported goods inflation. Higher imported inflation reflects the krone depreciation in early 2020. Annual CPI inflation was 1.3 percent in 2020, while CPI-ATE inflation was 3 percent. Towards the end of 2020, higher electricity prices pushed up CPI inflation. In March 2021, the 12-month rise in the CPI was 3.1 percent, while underlying inflation was somewhat lower. Surveys indicate that inflation expectations are firmly anchored around the 2 percent inflation target. In the immediate aftermath of the Covid-19 outbreak in Norway, housing market turnover fell and house prices edged down. But through spring 2020, housing market activity picked up and prices rose. In April 2021, house prices were more than 12 percent higher than at the same time in 2020. Growth in household credit increased slightly through 2020, but is still lower than in the 2/4  BIS central bankers' speeches  years prior to the pandemic. Economic policy Let me now say a few words about the economic policy conducted since Covid-19 hit Norway. Fiscal policy has taken the lead and played a decisive role in limiting the adverse economic impact of the pandemic and the measures to contain it.

Acting through these channels, monetary policy helps to ensure that the downturn is not needlessly protracted and helps to reduce the risk that unemployment becomes entrenched at too high a level. Inflation is now above the inflation target, but we have always held the view that this has been a transitory consequence of the sharp krone depreciation in spring 2020. Low economic activity and high unemployment have a dampening effect on wage and price pressures, and we expect inflation to fall below the target in the coming year. An expansionary monetary policy stance contributes to normalising economic activity, which will in turn contribute to pushing up price and wage inflation further out. Last year we were concerned that a fall in house prices would amplify the economic downturn. The situation has since reversed. High house price inflation over the past year reflects low interest rates, but the Covid-19 pandemic itself has likely increased the willingness to spend money on housing. We are at home more and are less able to spend money at restaurants, on travel or on other experiences. A sharp rise in house prices tends to be followed by faster growth in household debt. This may lead to a build-up of financial imbalances, which in turn could amplify a future economic downturn. Weight is given to this consideration when making monetary policy trade-offs. As economic conditions normalise, it will be appropriate to raise the policy rate.
First of all, the ECB’s accountability practices have evolved over time.3 With the launch of European banking supervision in 2014, specific accountability arrangements were established for the ECB’s supervisory arm. We also strengthened our relationship to reflect the greater complexity of the ECB’s monetary policy measures. For example, when the ECB was taking unprecedented action during the exceptional circumstances caused by the pandemic, I held an ad hoc exchange of views with the political group coordinators of this Committee. Moreover, we have agreed to interact more closely in the context of the ECB’s strategy review and ensure that our regular dialogues play a key role in how we inform about the exercise. The outcome of the review will also provide an opportunity for us to consider the ECB’s accountability practices. The ECB’s accountability has also been enhanced by a better flow of information between our 4 2/4  BIS central bankers' speeches  two institutions. As we discussed last February4, this requires us to continuously aspire to communicate as clearly and as openly as possible. As part of this endeavour and also in response to parliamentary and public demands, the ECB has already started providing more detailed information about its asset purchases and current holdings on its website. Today I can announce an additional transparency measure.

2  All speeches are available online at www.bankofengland.co.uk/speeches  2  Part of the case for an international capital standard is that insurance markets have become more global over the past few decades, even if that trend appears to have steadied after the financial crisis (Chart 1). This is most obvious in wholesale general insurance and reinsurance, where the underlying rationale for insurance provision arises from the law of large numbers and the benefits from pooling and diversifying across risks. Recent cross border mergers and acquisitions, and with talk of more to come, suggests the increase in the amount of business written by overseas companies might resume. Chart 1: business written by overseas insurers  Source: OECD and Bank calculations  Mergers and acquisitions are in part a response to the prolonged period of soft conditions in wholesale general insurance and reinsurance markets. For many insurers underwriting returns are now below the levels required to achieve sustained profitability, even in years of ‘normal’ natural catastrophe activity. Our sense is that until this year, many had thought that market conditions would improve cyclically: for example, following a large loss event. They had therefore sought to maintain their market position and wait for better times. The limited increase in market prices following the losses from the 2017 hurricanes in the US and Caribbean has, however, caused a number of boards to look more fundamentally at the sustainability of their current businesses.
& food Other service Arts & recreation Construction Education Transp. & storage Admin. & support Distribution Manufacturing Extraction Health Professional, etc Info. & comms Electricity Agriculture Water Financial Real estate Public admin. & def. 0  -20  -40  -60  -80  -100  Sources: ONS and Bank calculations. Note: Data to April 2020. This sharp contraction in economic activity has been accompanied, unsurprisingly, by a sharp fall in working hours. Globally, it is estimated that hours worked in Q2 were almost 11% lower than prior to the crisis, equivalent to over 300 million full-time workers.5 The IMF forecast that the advanced economy unemployment rate will double this year to over 8%. And the ILO estimate that the crisis could increase unemployment globally by anywhere between 5.3 and 24.7 million people.6  In the UK, employment data to April from the Labour Force Survey (LFS) does not point to a sharp contraction so far. But other, more timely, labour market indicators suggest a sharp fall in employment. Claims for Universal Credit have risen by 2½ million since mid-March and administrative data from HMRC point to a large rise in joblessness. Claimant count measures of unemployment have risen by around 1½ million since the start of the year. In addition, over 9 million jobs are estimated to have been furloughed as part of the Government’s Job Retention Scheme.7 A further more than 2.5 million self-employed workers are claiming income support.

It is also impressive and relevant that the pace of financial integration for advanced economies was much faster than that of their trade integration from the early 1990s onwards. This is evidenced by the ratio of the sum of external assets and liabilities to the sum of exports and imports [see Chart 6]. Interestingly, this same ratio has been roughly stable for emerging market economies and developing countries over the same period. Finally, another pertinent indicator measures the extent and rapidly growing importance of the total cross-border bank assets and liabilities since the early 1990s, which increased fivefold from about 5 trillion US dollars in 1990 to almost 25 trillion US dollars in 2006. [Chart 7]. Globalisation and the development of financial markets The fast pace of financial globalisation has reflected, and at the same time has contributed to, the rapid development of financial markets. Both financial integration and development have been driven by several factors: deregulation, capital liberalisation, financial innovation and advances in communication and information technology. These factors have contributed, in a mutually reinforcing manner, to the exceptional growth of the overall size of financial markets relative to GDP [Chart 8] and the consolidation of the banking sector, with the emergence of large and complex financial institutions. They have also contributed to the exponential growth of new financial instruments, the adoption by banks of the “originate and distribute” business model and the increasing presence of new financial intermediaries.
Risk-sharing transactions and undertakings under the participatory finance models in Islamic finance also enhances prospects for increasing financial inclusion and in bringing the financially unserved into the economic mainstream. In many IDB member countries, studies have shown that economic development is constrained by the lack of access to finance, given that only about 30 percent of the adult population use formal financial intermediaries. Greater outreach to small and medium enterprises (SMEs) and microenterprises can be achieved through the wider application of equity-based structures in financing for SMEs and Islamic microfinance given their strong emphasis on promoting entrepreneurship and valuecreating activities. This contributes towards the overall objective of generating inclusive growth that enhances the prospects for job creation. Integration with other financial products such as microtakaful and social welfare arrangements such as endowment (waqf) can also provide a total financial solution for the lower income groups and small businesses. Risk-sharing in Islamic finance also extends to the creation of a more equitable and just distribution of wealth. Redistributive instruments such as obligatory alms giving (zakat), endowment (waqf) and charity (sadaqah) complement risk-sharing financing tools to form part of a comprehensive approach to address poverty and promote social justice within the community, aspects that are important in increasing the potential for a more balanced economic growth.

It will be the safest asset as it will have legal tender statusiv and it will be accepted everywhere throughout the euro area. Its basic functionalities will be free for individualsv and it should not be remunerated. But "Cash+" will also provide additional advantages over banknotes: it will allow everyone to use central bank money in e-commerce, for peer-to-peer payments as well as for conditional or "programmable" payments. These considerations have led the Eurosystem – under the auspices of Christine Lagarde and my colleague Fabio Panetta - to launch an investigation phase focused on a digital euro, which should culminate in a preparatory phase by the end of 2023, subject to the agreement of the Governing Council. Based on these preparations, we could then decide on a gradual launch, beginning in 2027 or 2028. Last Wednesday, the European Commission published a draft directive to enable the issue of a digital euro. This legislative proposal is clearly a very good step in the right direction: it ensures that the digital euro will indeed be equivalent to a “digital banknote”, providing a high level of confidentiality, while guaranteeing that it is properly integrated into the financial and payments ecosystem. Let us be clear here: I consider it our duty to develop this possibility for our citizens, however, they themselves will be free to use it or not.
Inflation can be expected to be somewhat higher than this forecast for some time to come due to the higher energy prices, although, it is a matter, as I see it, of changes in a rather short time perspective. However, as we have earlier pointed out, there is also reason to assume gradually increasing inflationary pressures as the economic upswing leads to a rise in capacity utilisation both in Sweden and abroad. The basic assessment of inflation developments over the next few years still stands, given the new information received since the Inflation Report. My overall conclusion is that the new information received since the Inflation Report in February mainly confirms the picture then outlined of economic activity in Sweden, while it indicates a slightly stronger development abroad. Inflation prospects in the next few years also appear to have held up rather well on the whole. In February, when we chose to raise the repo rate, our conclusion was that the interest rate should perhaps be increased at a somewhat slower rate than was anticipated according to the interest rate path on which the forecasts in the Inflation Report were based. Personally, I do not see any reason in the current situation to change that assessment, although international developments now look slightly better than we had anticipated in February. This is something I will discuss with my colleagues when we meet next week.

If the forecasts for inflation and the real economy are assessed to show a desirable development, market expectations will provide a reasonable forecast for coming monetary policy decisions. However, it is important to remember that new data are being received all the time, which must be taken into account in our monetary policy. The fact that implied forward rates are being used in our forecasting work should not be regarded as a commitment regarding future monetary policy. There is considerable uncertainty over future macroeconomic developments, and this means that market expectations of the future repo rate path may often be incorrect. This is also illustrated by the considerable uncertainty intervals around the assumed interest rate path (see Figure 4). The current monetary policy situation The principles that I have just discussed apply primarily when we produce and publish complete forecasts in connection with Inflation Reports. At the intervening meetings, we start from the forecast that applied in the previous Inflation Report and study how the information received since then affects both the interest rate assumption and the forecasts. Our next monetary policy meeting on 27 April will involve making this kind of intermediate, more qualitative assessment. The implied forward rates on which the forecast in the Inflation Report published on 23 February was based reflected a 15-day average as per 9 February. On 16 February, an unexpectedly low CPI outcome was published for January.
Fi 2015:02 “Tillgång till betalkonto med grundläggande funktioner [Access to payment accounts with basic functions],” Interim report 2 from the 2015 Payment Services Inquiry (Fi 2015:02) Fleming M.J. and N.J. Klagge (2010), “The Federal Reserve’s foreign exchange swap lines,” Current Issues in Economics and Finance, 16: 4, Federal Reserve Bank of New York. Flodén, M. (2015), ”Sweden needs its inflation target,” speech at Fores, Stockholm, 13 October. Giavazzi, F. and F. Mishkin (2006), ”An evaluation of Swedish monetary policy 1995–2005”, Reports from the Riksdag 2006/2007:RFR 1. Goodfriend, M. and M. King (2016) ”An assessment of Swedish monetary policy 2010–15”, Reports from the Riksdag 2015/16:RFR6. Goodhart, C. and J-C. Rochet (2011), “Evaluation of the Riksbank’s monetary policy and work with financial stability 2005–2010,” Reports from the Riksdag, 2010/11:RFR5. Goodhart, C. (1988), The evolution of central banks, Cambridge, Mass: The MIT Press. IMF (2015), Monetary Policy and Financial Stability, Staff Report, 28 August 2015. 18  BIS central bankers’ speeches  IMF (2016), Strengthening the International Monetary System – A stocktaking, IMF Policy Papers, March 2016. Ingves (1982), Den oreglerade kreditmarknaden, Expertrapport till Kreditpolitiska utredningen [The unregulated credit market, Expert report to the Credit Policy Inquiry] (SOU 1982:52). Irwin, N. (2013), “The Alchemists: Three Central Bankers and a World on Fire,” Penguin Books, London. Krugman, P. (2014), “Inflation Targets Reconsidered,” essay presented at the ECB Sintra conference, May 2014. Leeper, E. (2011), "Monetary Science, Fiscal Alchemy", in Macroeconomic Challenges: The Decade Ahead, Federal Reserve Bank of Kansas City Economic Conference Proceedings, 2010 Jackson Hole Symposium, pp. 361–434.

My own experience of EU cooperation prompts the same conclusion. As a “free rider” alongside EMU it is not just business opportunities that we lose but also influence on European cooperation. BIS Review 14/1997
These characteristics of the crisis shape the two principal challenges that financial systems face today: reviving the flow of credit to economic agents, and the orderly restructuring of the financial system. Let us analyse these two issues separately. The first and most immediate aim is that credit and liquidity should once again flow unimpeded towards companies and consumers. The resolute action of European central banks and governments since October has meant that illiquidity strains have largely been resolved in the financial sector. However, credit to companies and consumers has been checked by banks' mistrust, by the increased risk profile of borrowers and by the sharp decline in demand resulting from the slowdown in economic activity. The deceleration is proving particularly acute and credit growth has fallen from a rate twice that of nominal GDP before the crisis to around 5%. And the prospect is that this trajectory will continue on the immediate horizon, with credit growth dipping to a zero or even negative rate. That generates a perverse effect which feeds back into the difficulties of both those demanding and supplying financing, making a global approach necessary: just as it is inconceivable that the current difficulties of the financial sector may be resolved if the downward spiral of the Spanish economy is not curtailed, nor may it be assumed that the current situation can be plausibly overcome if the flow of credit were to seize up.

The figures on falling employment and rising unemployment in Spain in recent quarters dramatically illustrate how our labour market accentuates the contraction in employment in downturns and acts as the main factor amplifying recessions. As you all know, this is Spain's most negative distinguishing feature relative to other advanced countries. Decidedly, we cannot put off adopting, as soon as possible, reforms to staunch the ongoing rate of dismissals and to promote to the full new hires. It is vital to reform those labour market arrangements whereby the main means for the adjustment of Spanish firms continues to be labour shedding. Here, the current collective bargaining system plays a key role. As it stands, it prevents working and wage conditions from adjusting in a sufficiently differentiated manner to the different labour and productive environments that companies and productive sectors face. The adverse effects of our particular collective bargaining system are not so visible in periods of strong growth, although then, too, they hamper increases in productivity. But in today's circumstances, where the crisis impacts companies and productive sectors very unevenly, such effects mean that the adjustment operates by unnecessarily forcing out a large number of workers from the market. Therefore, at least during the crisis, collective bargaining agreements should be applied flexibly to allow employers and workers to reach temporary agreements within individual companies so that, in these exceptional circumstances, working conditions can be adjusted in exchange for maintaining employment levels or softening reductions. Recent days have seen some agreements along these lines.
However, other lenders remained in these markets, including those without ON RRP access, those who received funds late in the afternoon after the ON RRP operation had already occurred, and those for which the ON RRP was not an acceptable substitute. On this last point, for some institutions, the ON RRP is an imperfect substitute to lending in private unsecured markets because, in the tri-party repo system through which the ON RRP is settled, cash is not returned at maturity until late the next day, whereas in private unsecured markets, earlier return of funds can be negotiated.39 These quarter-end effects, as measured by the effective federal funds rate, are likely to appear a bit larger when we switch in early March to a median calculation. As I mentioned, on December 31, the median fell a bit more than the mean did, 20 basis points in the median versus 15 for the mean. A larger relative decline isn’t unusual; averaging across the quarterend dates in March, June, and September 2015, the median declined by 7 basis points while the mean declined by 6. The median declines more because it is, in most cases, a better measure of the center of the distribution of traded rates – an issue the Desk analyzed at some length in the technical note I mentioned earlier. This difference between the two might grow a bit more as rates move further from zero. In secured markets, rates in the tri-party repo market on year-end were relatively stable.

Looking at all these events, there is a recurrent pattern: innovation in the real or financial economy and deregulation measures are followed by accelerated growth, which is accompanied by a very expansive lending policy on the part of banks. Sooner or later, the boom comes to an end and price corrections take place that often end in a recession. As a rule, the stronger the boom is at the start of the cycle, the larger is the subsequent harm to the economy and to society. BIS central bankers’ speeches  1  This pattern is often complemented by another factor. Particularly, but not exclusively, in the financial sector – a sector with fierce competition between regulated and non-regulated financial market participants – regulatory loopholes are actively exploited in order to gain competitive or other advantages. This is particularly well illustrated by the example of assetbacked securities (ABSs). From the middle of the 1990s, the originate-to-distribute model, i.e. the securitisation and resale of loans, was seen by many as the financing model of the future, not just in the United States, but also in Europe and Germany. Many saw it as a solution to economic and socio-political problems and took measures in favour of ABS financing in terms of regulatory requirements. Accordingly, banks were able, for example, to finance their ABS-based special-purpose vehicles solely through short-term credit lines, credit lines that are in place “until further notice”.