samchain/econo-pairs-v1 huggingface dataset:
8 Even those in a job, secure or otherwise, may not be working as much as they wish. Around three and a half million people, or almost 10% of the working population, say they would like to work longer hours (Chart 7). In 2007, that number was two and a half million. The number of extra hours these people would like to work – around 12 hours per week or 35% of the average working week – is also material. Even if these survey numbers overstate the actual number of extra hours people might wish to work, they leave a sizable fraction of the working population not unemployed, but under-employed. When it comes to the pay of those in work, the picture is also a subdued one. Chart 8 plots mean and median weekly earnings growth for full-time UK employees, in nominal and real terms. Nominal earnings today are around 7% higher than in 2009. But in real terms earnings are still around 5% below this peak. This is the longest period of flat or falling real wages since at least the middle of the 19th century. Although the recovery of the past few years has been jobs-rich, it has been notably pay-poor. Finally, let’s look at household wealth. As with employment, the headline gains here have been impressive, with aggregate net wealth increasing by almost £ trillion since 2009. Chart 9 breaks down these wealth gains by asset type – pensions, property, financial, physical.

ECONOMIC PERSPECTIVES Address by Governor Øystein Olsen to the Supervisory Council of Norges Bank and invited guests on Thursday 14 February 2019  Analyses and charts are based on information up to and including 12 February 2019. THURSDAY 14 FEBRUARY 2019  Economic perspectives 2019  NORGES BANK ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  Good morning, Kristoffer! It is now 6:00 am on Friday, 15 February 2030. The temperature is 7 degrees and it’s raining. You have been through four sleep cycles and can get up without violating the terms and conditions of your health insurance. The health module recommends cereal with oat milk for breakfast. I have bought oat milk, which was delivered at 4:00 am. News of relevance to you: The new government quarter opens today – your space is finally ready. Your investments in Green Equities have risen by 20 percent, on news of the major trade and environmental technology agreement concluded between the United States and China. The trading platform Nett sustained a hacker attack last night. Customer data were stolen, and customers are leaving the platform. I managed to withdraw 8 000 of the 67 000 kroner you had uploaded to the platform before all accounts were frozen. The rest of your money may be lost. In yesterday’s Annual Address, the Governor of Norges Bank announced that the next generation of central bank digital currency will be managed by artificial intelligence for a trial period. Have a nice day.
I once told a friend of mine that small open economies, as is the case with the Balkan economies, are net importer of goods, services and crises. The crisis did not originate in the region. It was gradually transmitted as a result of the integration of the region with the global markets and economy and a consequence of the presence of large international banking groups. Our countries are all as similar as they are different. Consequently, the form, outburst and consequences of the crisis were as similar as they were different. The economic and social structure, the level of convergence and integration with the global markets, the legal and institutional norms and the nature of exchange rate regimes in particular, have established the features of the crisis for each country. The experience of the distinguished governors present in this conference will throw light on the above aspects. As regards the Albanian case, the last 12 months have been challenging for the banking industry. Despite the turbulent times, the banking system has in no case shown any signs of panic or confusion. The Bank of Albania considers that the rationale behind is the prudence shown in the recent years with respect to the banking system’s financial stability. The high level of resilience and the quick recovery were a consequence of a number of important decisions.

Banks have more capital, they have more liquidity and are more resilient. The bigger concern is profitability, which was already low. European banks are solvent but I am aware that this crisis will have further impact on their profitability. In the medium term, banks will need to continue to take steps to eliminate excess capacity and consolidation could be a sensible way of dealing with profitability. From a solvency angle, this is 2/3  BIS central bankers' speeches  not a banking crisis. This time banks can be part of the solution, rather than the problem. If the recession is worse than expected, is there a risk that some banks will lose money on loans which they are currently granting? All governments, Portugal included, have approved State guarantees. When there is this level of uncertainty and a drop in GDP, these guarantees are very important and useful if a credit crunch is to be avoided. A number of economists have expressed the view that the euro area’s response to the crisis has been weak compared to the United States or the United Kingdom, where central banks will even finance the State directly. How would you respond to these criticisms? Looking at the whole package of ECB measures, it is impressive. Then we have fiscal policy, involving the various programmes of the national governments, and lastly there is the decision of the Eurogroup. Europe’s response is comparable to that of other world economies.
The Bank of Canada and the Reserve Bank of New Zealand have also used similar measures. 4  However, MCI has also been called into question on a number of other bases and is currently considered by many not to be a reliable variable for use in monetary policy analysis. See, for example, Stevens (1998), Svensson (2001) and the European Central Bank (2002). 5  So-called menu costs. 6  This means that a firm has contracted to buy or sell a certain amount of a currency at a future date at a given exchange rate. This allows the firm to eliminate exchange rate risk in its overseas transactions. BIS central bankers’ speeches  5  50 per cent over the short term.7 The pass-through on consumer prices will be lesser, as the price in Sweden for imported goods is also determined by domestic components such as wages, taxes and transportation costs. A pass-through of about 15 per cent over one year would seem to be a reasonable assessment.8 Figure 4 illustrates the pass-through of the exchange rate on import prices and consumer prices. It shows a clear connection between the exchange rate and import prices. The connection between the exchange rate and consumer prices is weaker. However, the pass-through of the exchange rate may be non-linear, so that minor or no adjustments are made in the event of small changes in the exchange rate, and relatively major adjustments are made in the event of large changes in the exchange rate.

But it may also be the case that relatively large changes in the exchange rate have minor or no effects on consumer prices, depending on what are known as composition effects. Firms can choose to import other products or to import from other countries.9  7  See, for example, Campa and Goldberg (2005) and Sveriges Riksbank (2001, 2004). In the long term, the pass-through will be higher – estimates vary between 80 and 100 per cent (Sveriges Riksbank, 2001, 2004). Full pass-through is a reasonable assumption over the very long term, when permanent exchange rate changes are considered. 8  See, for example, Ekholm (2010). 9  See Marazzi et al. (2005) for a more detailed discussion. 6  BIS central bankers’ speeches  The effects on the economy of the real exchange rate When the general public discusses exchange rates, this usually means the nominal exchange rate. However, economists are more focused on the real exchange rate, which shows the price of foreign goods expressed in Swedish kronor against the price of Swedish goods in kronor. In other words, the real exchange rate reflects Sweden’s purchasing power and competitiveness. The stronger the real exchange rate becomes, the greater purchasing power a Swedish krona will have abroad. At the same time, a stronger real exchange rate means that Swedish-produced goods will be more expensive compared with foreign goods, and competitiveness will thus decrease.
For us to elevate our fundamentals as an innovation economy, we need to press on with reforms to strengthen the foundations of ideas, quality investments, talent, and market dynamism to ensure efficient allocation of resources. 28. As we face new and emerging challenges, we must embrace new opportunities that are available. One such opportunity is the move to a low carbon and greener economy. Besides producing green products such as solar panels, our own rich biodiversity plays a critical role in the global shift towards sustainability. The key however is not to monetise our natural assets quickly, either as commodities or as green-assets or credits to other countries. Instead, we must look to develop and cultivate our own green industries and services so that we can secure Malaysia’s economic future in the long run. A strong financial sector Ladies and gentlemen,  29. Speaking of reforms to secure our future, it is also fitting for me to talk about the financial sector, and its role in supporting the economic aspirations that I have just highlighted. Indeed, this was at the top of our minds when we developed the Financial Sector Blueprint, which we published in January this year. 30. The Blueprint set out five key priorities for the financial sector. Briefly, they are: a. First, to foster a vibrant funding ecosystem that supports Malaysia’s economic transformation. b. Second, to elevate the financial well-being of households and businesses. c. Third, to advance digitalisation of the financial sector while managing associated risks.

As banks expand their risk taking activities, both on balance sheet and off balance sheet, some banks have become much larger and more complex, thereby rendering themselves “too big to fail”. 10. On the other hand, the proponents of universal banking note that diversification can be beneficial for banks and banking stability. If one area of business underperforms, others can make up for it – making the “whole” more resilient. It can also be argued that banks that are diversified in terms of businesses or geographical operations are better positioned to offer customers the depth and breadth of services these customers require, particularly as 2  BIS central bankers’ speeches  economic activities become ever more specialised and global. Broadening customer access to financial products enables increased flows of savings through the system, facilitating efficient investment and economic growth. These advantages are not to be dismissed lightly. 11. The HKMA takes a balanced and pragmatic view on this issue. Rather than mandating the dismantling of banks’ business structure to deal with the potential problems arising from proprietary trading and overly aggressive risk taking by banks, our preferred response is to ensure the proper risk capture and management of those parts of the operations that benefit from low cost funding and yet cause a disproportionate amount of risk. As part of our on-going supervision we need to critically assess whether banks really understand what sort of risks they are taking on and seek to ensure that such risks are managed properly in order to safeguard depositors’ interests.
The following two structural changes, in particular, drove our decision to adopt the new approach to implementing monetary policy. 4 First, since the GFC the stock of reserves has grown tremendously. 5 As a result, the money market is today characterised by a structural reserve surplus instead of a structural reserve deficit. A return to the status quo before the GFC would have required us to reduce the stock of reserves on a very large scale. 6 Given the substantial quantities involved and the long time it would have taken to complete this task, we doubt that we would have been able to steer money market rates in the short term. Second, the landscape of Swiss franc reference rates has changed significantly. In particular, Libor was replaced by SARON as the new reference rate in Swiss francs. 7 SARON – an acronym for Swiss Average Rate Overnight – is calculated based on actual transactions by the private sector in the overnight segment of the Swiss franc repo market. A sufficient volume of interbank money market activity is therefore required to ensure a robust basis for calculating SARON. Why does the SNB apply reserve tiering? Let me now explain in more detail how our approach works and, in particular, why both elements of the approach are required in order to implement our monetary policy in a positive rate environment. We begin with the first new element in our implementation approach, which is reserve tiering.

As I will show, remunerating reserves lets us steer money market rates in an environment with a positive policy rate and a large stock of reserves. 8 However importantly, and in contrast to many other central banks that also pay interest on reserves, the SNB does not apply the same interest rate to all reserves. Instead, we employ reserve tiering. To illustrate how reserve tiering works, let us consider a highly stylised banking system, depicted on Slide 6. The SNB grants each bank that holds reserves a so-called ‘threshold’. This is marked on the slide by a red vertical bar. Each bank’s individual threshold is a function of its minimum  4 5 6 7 8  Berentsen et al. (2018) examine various approaches to implementing monetary policy based on the assumption of a large stock of reserves. Uncertainty about both the level and variability of the structural demand for reserves has also increased during this period. This uncertainty is partly due to new liquidity regulations that came into effect in the wake of the GFC. The stock of reserves could be reduced by selling some of the foreign currency acquired in previous years and by absorbing reserves via open market operations. In both cases, negative effects, such as a substantial appreciation of the Swiss franc, could not be ruled out. Libor, which had been the key reference rate for several decades, ceased to exist in many currencies at the end of 2021. SARON has fully replaced Swiss franc Libor.
One means is to fix a system that enables the authorities to take control over the bank and to write down not only capital but also claims in an orderly manner, while extending a guarantee to the new financing needed when the bank is under public control. The payments needed to maintain the stability of the financial system would be effectuated, while other payments could be temporarily stopped. A draft model for such a system was presented by the Banking Law Committee in Sweden in 2000 and the proposal is currently being considered by the Swedish Government. As I understand it, there is also work being done in other countries to bring about solutions that would mean that the authorities could claim in all credibility that it was possible to reduce claims even in more complex cases, where there was a risk to financial stability. Ideas that have been put forward include immediately being able to impose a partial payment stop on certain claims, haircuts, in connection with the authorities taking control over the bank and transferring the assets to a temporary bank, known as a bridge bank. To be effective, all these proposals make considerable demands for having IT systems in place that can quickly distinguish different types of claims. A number of other preparations are also required, for instance to be able to transfer contracts.

Fiscal deficits in emerging Asia are 2–3% of GDP.   The debt burden is low. Public sector debt ranges from about 25% to 55% of GDP. External debt is about 30% of GDP.   Official foreign reserves are healthy.   The banks are well-capitalised. The 25 largest Asian banks comfortably meet Basel III Tier 1 capital adequacy ratios.   Governance is stronger. Stronger regulatory frameworks and corporate governance reforms following the Asian financial crisis in 1998 have improved the resilience of the financial and corporate sectors.   There is policy flexibility on the fiscal, and to some extent, monetary fronts, in the event global growth slips more than expected. Notwithstanding emerging Asia’s strong fundamentals, there is no room for complacency. The region is not without significant challenges which, if unaddressed, will prevent it from realising its potential and render it more vulnerable to shocks from the advanced economies. Let me highlight three medium-term imperatives for emerging Asia. Increasing domestic demand First, Asia must increase domestic demand. As growth slows in the advanced economies, it is in the region’s interest to reduce reliance on external demand and develop indigenous sources of growth. This will help to strengthen and stabilise Asian economies over the longer term. If an increase in domestic demand in Asia is complemented by fiscal consolidation in the key industralised economies, a longer term rebalancing of global demand could be achieved. 2  BIS central bankers’ speeches  Demographic factors will work to increase domestic demand in Asia.
This presupposes, however, that the banks have made realistic value adjustments and provisions. We currently assume that this is the case. Moreover, average lending limits for mortgage loans have changed only insignificantly and may be regarded as cautious. For instance, the proportion of low-risk first mortgages – i.e. those mortgages with the lowest lending limit – is over 90%. The criteria used in extending loans can also be rated as conservative. As a rule, assessments of a debtor’s future solvency are based on considerably higher interest rates than the current ones. Mortgage debtors should therefore be able to meet their liabilities even if there is a marked increase in the interest rate level. Our analysis focuses on system-relevant banks and on different groups of banks. We rely on aggregated data and on a random sampling of banks or groups of banks. Problems with individual institutions cannot be excluded but should not threaten system stability. Increase in interest rate risks These assessments, which have so far been positive, are becoming slightly clouded because of higher interest rate risks. Smaller banks in particular have seen a relatively strong increase in direct interest rate risks. A sharp rise in the interest rate level could affect the valuation of assets and liabilities of such banks to such an extent that their capital resources would in some cases be reduced considerably. While such losses could still be absorbed, we would, however, consider a further rise in interest rate risks as critical.

2  BIS Review 86/2005  Graph 2: Interest rate risks by bank groups (reduction in net present value as a percentage of equity following an interest rate shock of +100 basis points) Source: SNB  Conclusion: Increased efficiency without higher risks The slight narrowing of interest rate margins supports the assumption of increasingly fierce competition in the mortgage market. From the viewpoint both of consumers and of economic efficiency, this would be a welcome development. However, in the banking business there is always a danger that fiercer competition might encourage excessive risk taking by the banks. A bank can outperform its competitors by offering more favourable conditions while at the same time accepting poorer risk cover. However, as already mentioned, our aggregated analysis suggests that caution has not waned. Banks’ gross margins are declining slightly because their cost savings and improvements in efficiency are being passed on to customers. The capacity to absorb risks is not compromised by granting customers better conditions. Currently, the positive aspects of healthy competition are taking hold without apparently having any negative side effects. The SNB will nevertheless keep a close watch on trends in the real estate market. In particular, we will monitor interest rate risks, which have already reached a high level. With an appropriate normalisation of money market rates, the SNB contributes to limiting the danger of an abrupt rise in interest rates. In the current environment of historically low rates, however, there is no guarantee that the future trend in interest rates will be moderate.
However, macroprudential policy is designed to monitor and take measures to counteract vulnerabilities in the financial system as a whole, including addressing financial imbalances that may threaten macroeconomic stability. Finansinspektionen has several tools at its disposal to prevent financial imbalances. They are responsible for microprudential and macroprudential policy and the design of the regulatory framework. But responsibility for financial stability is shared with other authorities. The Swedish National Debt Office is responsible for the deposit guarantee, the Ministry of Finance is responsible for legislation and bank support, and the Riksbank is responsible for overseeing the financial system and can provide extra liquidity when needed.27 Collaboration between Finansinspektionen and other authorities exists both in preventive work and in crisis management. This is an arrangement that I think has worked well during my time at Finansinspektionen. For example, the Riksbank together with Finansinspektionen, the Swedish National Debt Office and the Ministry of Finance cooperate in the Financial Stability Council. Among other things, the  25 The concept of financial dominance was introduced by Fraga et al. (2003) in connection with the introduction  of inflation targets by many emerging economies. They described a situation where the central bank – due to a weak or overleveraged financial system – was not willing to tighten monetary policy at the necessary pace because of the threat to the stability of the financial system.

It was therefore understandable that the so-called inflation targeting policy introduced by many countries in the 1990s had a focus on price stability and that risks in the financial system disappeared into the background. This also applied to Sweden, despite the fact that we had had a serious financial crisis in the early 1990s. Another reason why the risks in the financial system were overlooked may have been that the deregulation of the financial markets was new and that the risks of financial imbalances building up were underestimated. 13 See Board of Governors of the Federal Reserve (2023) and FDIC System (2023). 12 [30]  The global financial crisis highlighted the importance of financial stability. Inflation targeting policy seemed to be working well for a long time. Inflation was low and stable while growth was good. US economists James Stock and Mark Watson even coined the expression ‘the great moderation' in the early 2000s, suggesting that the economy had entered a calm and stable era.14 This era came to an abrupt end with the global financial crisis. Much of the deregulation and innovation that had laid the foundations for the favourable economic development had at the same time contributed to the build-up of new risks and imbalances in the financial system.15 An important lesson from the financial crisis was that financial imbalances could be built up even in an environment with low and stable prices. However, this knowledge was not entirely new.