samchain/econo-pairs-v1 huggingface dataset:
And even if we had more confidence in the forces behind past movements in asset values, we would still face substantial uncertainty about their future behavior. The relatively low compensation for risk priced into asset markets today does not necessarily mean the future will justify that confidence. This uncertainty surrounding the current behavior of asset values complicates the task of assessing the future trajectory of asset prices, and the impact of alternative monetary policy paths on asset values. And by widening the already substantial degree of uncertainty that surrounds estimates of the equilibrium real rate of interest, these developments complicate the task of assessing the appropriateness of a given stance of monetary policy against the objectives of the Federal Reserve. While the evolution toward more efficient and globally integrated financial markets is surely a positive for long-run economic growth both here and abroad, it also challenges policymakers to constantly update and question our understanding of the behavior of financial market indicators and the signals that these indicators can provide in the policymaking process. And as financial markets continue to broaden and deepen, the behavior of asset prices will play an important role in the formulation of monetary policy going forward, perhaps a more important role than in the past. What might this mean for the Fed and for other central banks in practice? There is a well established, and I believe fundamentally correct, case against directing monetary policy at specific objectives for asset values or the future path of those values.

In other words, asset values should be neither a target nor a goal of monetary policy. The rate of increase in asset values alone seems to tell us very little about underlying and future inflation. Because we know so little about how to assess the appropriateness of asset values against fundamentals, because we have so little capacity to both forecast and predictably affect the future path of asset prices, and because we know relatively little about how changes in wealth affect the real economy and inflation, we cannot use monetary policy responsibly or effectively to achieve specific objectives for asset values. Monetary policy does not today and is unlikely in the future to offer us an effective tool for directly reducing the incidence of large or sustained deviations of asset values from what might turn out to be their fundamental values, what some call bubbles. That said, monetary policy still has to take into account the impact of significant movements in asset values on output and inflation. Financial asset prices, by their nature, allocate resources between the present and the future and thereby affect consumption, investment and future growth. History provides us with numerous examples in which significant movements in asset prices have had sizable effects on the path of output relative to potential and on price stability. And experience suggests that asset values can be very sensitive to movements in monetary policy or to the perceptions of future policy moves.
While these trends are shaping the evolution of the East Asian insurance industry today, several other factors also need to be taken into account. First is the much faster pace at which these forces of change are taking place in East Asia. Second is the significantly more demanding regulatory environment in which insurers now operate. And third is the impact of climate change. This thus calls for a greater urgency in responding to these developments. Allow me to elaborate on these factors given their potential to have an important bearing on the industry’s focus and priorities in navigating its future growth path in the region. On the first point, the growth trajectory for the demand for insurance products and services in East Asia over the medium term will be much higher than the path that history implies. The global volume of cross-border trade has almost tripled since 2000. In addition, intra-regional trade within Asia is projected to account for an increasingly larger share of this expanding world trade. Further liberalisation and greater regional economic and financial integration in Asia will reinforce this trend. This presents substantial opportunities for East Asian insurers to support the growing trade activities. After decades of strong growth, the Asian region is also now the home to a middle income population of 500 million. This number is projected to increase by more than six-fold to 3 billion by 2030. The OECD also projects that by 2020, Asian consumers will account for 40 percent of global consumption.

Under a fixed exchange rate regime the real appreciation takes place through higher inflation and real depreciation through lower inflation, while with a floating exchange rate it occurs through nominal appreciation or depreciation. A tight fiscal policy can counteract the extraordinary real appreciation due to capital flows. A strong central government budget also makes it possible to respond with an expansive fiscal policy if the capital flows are turned into outflows. However, this requires that fiscal policy has ample reserves. The convergence criteria for public finances in the EMU, particularly the target for a budget deficit no greater than 3 per cent of GDP, therefore function as sound targets for the candidate countries. Despite the recent criticism vis-à-vis the budget criterion I believe that 3 per cent is a sufficient margin for fiscal policy, as long as it is in balance over the cycle. Yet there are still risks in rushing to meet all of the convergence criteria – especially if EMU membership cannot realistically occur for several years. There is a discussion in academic circles on whether very low inflation figures, that is to say, much lower than most candidate countries have now, are really compatible with rapid growth and a fixed exchange rate. The export sector's rapid growth creates pressure on the domestic economy through the 'Balassa-Samuelson' effect and raises domestic prices, creating a 'natural' inflation. To then artificially press down inflation to very low levels could be overly ambitious.
This would hold back consumption spending, and hence GDP growth, in the oil importing countries. Not surprisingly, the world economy is expected to slow in 2008, led by the US and other developed economies, amidst falling asset prices and tighter credit conditions as well. The US is weighed down by falling house prices, weak consumer spending and continued credit market distress. Domestic demand in Europe is expected to be subdued while softer external demand and the strong Euro could constrain export growth. Some slowdown is to be expected in Asia, although firmer domestic demand conditions should offset some of the weakness in exports. The region would also be buoyed by continued strong growth expected of China, India and the Middle East, which would help to mitigate the impact of the softer G3 economies. Indeed, inflation has emerged as a bigger concern in Asia, particularly among the faster growing economies I have just mentioned, including Vietnam. Thus, governments and central banks in the region not only have to deal with slower growth prospects, but also guard against rising inflationary pressures arising from strong domestic monetary expansion as well as higher commodity prices. High commodity prices would shape manufacturing decisions and define future trade flows. Higher shipping costs from fuel hikes have eroded the wage advantage of low cost producers such as China and Vietnam especially in inexpensive items that have high freight cost relative to final sale price.

Mugur Isărescu: Developments in the Romanian economy since 2008 Speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the “Romania Investors Days” conference, Bucharest, 16 June 2015. *  *  *  Ladies and gentlemen, I am happy to witness the growing interest the investors’ community is showing towards the Romanian economy. Since this is the first reverse roadshow focused on Romania, I hope it will prove fruitful for all parties involved and that it will be followed by other similar events. In my address today, I intend to briefly touch on the most relevant developments in the Romanian economy and I guess you will agree with me that we have come a long way since the beginning of the crisis. Probably the most synthetic assessment of the transformation is given by the fact that, at the onset of the crisis, Romania fell short of all four Maastricht criteria – inflation, long-term interest rates, public deficit and debt, exchange rate stability –, but now they are all fully met. Up to 2008, Romania was going through a period of fast economic growth (in excess of 7 percent per year, on average), fuelled by large capital inflows and the strongly pro-cyclical stance of the fiscal policy, especially in the last two years before the onset of the crisis.
Better information to allow investors to take a view An old adage is that which is measured can be managed. Information about the carbon intensity of investments allows investors to assess risks to companies’ business models and to express their views in the market. A well-known dictum of macroeconomics is Say’s Law: that supply creates demand. This means that the act of producing new products creates income and profits that ultimately finance the demand for them. By analogy, a framework for firms to publish information about their climate change footprint, and how they manage their risks and prepare (or not) for a 2 degree world, could encourage a virtuous circle of analyst demand and greater use by investors in their decision making. It would also improve policymaker understanding of the sources of CO2 and corporate preparedness. A carbon budget – like the one produced by the IPCC – is hugely valuable, but can only really be brought to life by disclosure, giving policymakers the context they need to make choices, and firms and investors the ability to anticipate and respond to those choices. Given the uncertainties around climate, not everyone will agree. Some might dispute the IPCC’s calculations. Others might despair that there will never be financial consequences of burning fossil fuels. Still others could take a view that the stakes make political action inevitable. The right information allows sceptics and evangelists alike to back their convictions with their capital.

Indeed, there are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. 18 In addition, climate change could prompt increased morbidity and mortality from disease or pandemics. Such developments have the potential to shift the balance between premiums and claims significantly, and render currently lucrative business non-viable. Absent actions to mitigate climate change, policyholders will also feel the impact as pricing adjusts and cover is withdrawn. 19 Insurers’ rational responses to physical risks can have very real consequences and pose acute public policy problems. In some extreme cases, householders in the Caribbean have found storm patterns render them unable to get private cover, prompting mortgage lending to dry up, values to collapse and neighbourhoods to become abandoned. Thankfully these cases are rare. But the recognition of the potential impact of such risks has prompted a publicly-backed scheme in the UK – Flood Re – to ensure access to affordable flood insurance for half a million homes now considered to be at the highest risk of devastating flooding. This example underlines a wider point. While the insurance industry is well placed to adapt to a changing climate in the short-term, their response could pose wider issues for society, including whether to nationalise risk. The passage of time may also reveal risks that even the most advanced models are not able to predict, such as third party liability risks.
[slide] This improvement in investment is underpinned notably by ongoing growth in lending to the private sector, at 2.5% year-on-year in August 2017 for firms and at 2.7% for households, with interest rates also remaining very low. We are also observing favourable developments in inflation, which is gradually moving back towards our target of 2% over the medium term [slide]. After peaking at the start of 2017, the inflation rate stood at 1.5% year-on-year in September. This performance remains below our inflation aim, partly reflecting headwinds due to the past appreciation of the exchange rate. However, for 2017 as a whole, euro area inflation, at 1.5%, should be much higher than a year ago. For the next few years, we foresee inflation at 1.2% in 2018 and at 1.5% in 2019 – with a change in composition: less “energy” inflation, more underlying inflation. This represents a first success: our monetary policy measures have succeeded in warding off the risk of deflation which was still threatening the euro area last year – we mustn’t forget that inflation was declining in April 2016, standing at -0.2%. That said, despite the progress made towards our target, it is still incomplete. Underlying inflation, excluding energy and food, has admittedly increased – rising from 0.8% in the first quarter of 2017 to 1.1% in September 2017 – but it  Page 3 sur 8 still remains at subdued levels, despite the strong recovery in activity and employment. A significant factor is the relatively low nominal wage growth.

- A fiscal accelerator, once we have increased trust between Member States and made headway towards greater economic convergence: the euro area budget could be used to finance, for the benefit of all countries, certain “European common goods” such as digital technology, energy transition, security, migration controls. - An institutional accelerator: i.e. first and foremost a euro area Finance Minister, President of the Eurogroup and member of the Commission,  Page 8 sur 8 backed by a European Treasury; but also a euro area Parliament group, in order to ensure the democratic legitimacy of the institutions and decisions. The latter two accelerators, fiscal and institutional, would require Treaty changes, unless they were to be very limited. But this must not stop us from making progress straightway on the first two, in order to breathe new life into Economic Union. **  I would like to conclude my speech today by quoting Stefan Zweig, one of the most famous Austrian authors. He wrote a beautiful text after his visit to the Banque de France in Paris in 1932.viii But he above all paid tribute to his home town in the following words: “For the genius of Vienna — a specifically musical one — was always that it harmonized all the national and lingual contrasts. Its culture was a synthesis of all Western cultures.
This effort has been undertaken by a team whose dedication and effort has allowed us to be at the forefront in these matters. The new regional GDP series will be launched with the dissemination of data for the first quarter of this year and will have a lag of 83 days for the first three quarters of the year and 113 days for the end of the year. This publication considers the breakdown of the 16 regions into which our country is currently broken down administratively. At the sectors level, series will be published for the activities of mining, manufacturing industry, other goods, trade, and services. On the demand side, household consumption of durable goods, non-durable goods, and services will be published. 7  The regional activity figures complement a number of other efforts aimed at better understanding the richness and diversity of the country's economy. For almost 10 years, the Bank has published a quarterly Business Perceptions Report, based on interviews and surveys with more than 600 representative companies across all regions. This close relationship with companies throughout the country has enabled us to gain a more detailed understanding of the economic reality of our country, enriching our view and understanding of the national economy. During July, we will complement this information by making available on our website a compilation of regional and gender-specific statistics produced by other institutions. The objective is to make information of interest available in a single place, using the Central Bank's Statistical Database platform.

The background data for the May Business Perceptions Report also points to less dynamic employment in the months ahead, in line with business expectations as reported in the IMCE. This is consistent with declining real wages amid rising inflation. In any case, the unemployment rate remains below its historical averages, standing at 7.7% in the February-April quarter (figure 5). On the external front, global inflation has risen significantly in recent months, with core inflation accelerating in several economies. In the United States, in addition to high goods inflation, there has been higher records in services and volatile components of the basket, amid a still tight labor market and high house prices. In the Eurozone, while energy remains the main factor behind price increases, food inflation and core measures have accelerated lately. In the United Kingdom, in addition to higher goods and energy inflation, services have become more prevalent, amid upward wage pressures. In Latin America, energy and food prices have continued to drive inflation, which has also passed through to higher prices for some services (figure 6). The rise in inflation has occurred in a scenario of high cost pressures around the world. The continuing impact of the pandemic on global supply chains and commodity prices has been compounded by the effects of Russia's invasion of Ukraine and recent confinements in China. Producer price indexes have risen to unprecedented levels and across countries in the last year, reflecting the higher costs of commodities and intermediate inputs.
But what we clearly did is to give the financial and economic sectors visibility over our monthly purchase volume for the whole of 2017. 2. What are the challenges facing the finance industry and how should we tackle them? A healthy financial sector is key for a robust economic recovery. I’d like to remind you of the significant progress that has been made in this area since the financial crisis. We shouldn’t judge the European financial sector only on the basis of its difficult cases, or those “trailing at the rear”. On average, the sector is now far more resilient than before the crisis. This is the result of considerable work carried out to strengthen regulation and to harmonise supervision in the euro area, notably with the Banking Union which is a significant step forward. It also comes from the industry’s remarkable efforts: European banks are now in a much stronger position than a decade ago, in terms of capital, liquidity or risk-taking. Regarding their capital for instance, the 2/9  BIS central bankers' speeches  Common Equity Tier 1 ratio of significant euro area banking groups has risen from less than 7% in 2008 to more than 14% today. Overall, banks are now less risky, and investors should take into account this progress by reducing their expected rates of return: banks’ cost of equity should go down. However, while solvency has improved, there is still one challenge facing European banks: profitability [slide 4].

Last year, the Topaz Solar Farm project in California was structured with a $ debt package featuring $ of bonds. Banks took the construction risks, and the loans were subsequently refinanced via bond issuances. In the Asian context, there may be additional considerations in refinancing bank loans via the capital markets, given the greater reliance on bank lending in this region. Project sponsors need to get more comfortable accessing the bond markets instead of relying solely on their relationship banks. Credit or risk guarantees provided by multilateral development banks or export credit agencies may also need to be adapted for use in the capital markets. Banks need to be innovative and develop a broader suite of financing instruments beyond bank lending in order to meet the financing needs of their clients. MDBs/ECAs are important risk mitigants and could explore new ways to make efficient use of their funds This brings me to the next point – the role of multilateral development banks, or MDBs, and export credit agencies in catalysing broader private sector participation. Given the scale of financing required for infrastructure, discussions at international fora have started to focus on how the multilaterals can further support the sector. For example, part of the G20 agenda for 2013 involves getting multilaterals to increase their lending capacity. Post global financial crisis, these entities have in fact stepped up and filled project financing gaps when bank liquidity is constrained.
Singapore aims to help Asia close the protection gap by addressing data paucity issues with the Natural Catastrophe Data Analytics Exchange (NatCatDax) project, co-creating new risk solutions with regional governments and Industry such as the Southeast Asia Disaster Risk and Insurance Facility (SEADRIF). In November 2020, we established the Global Asia Insurance Partnership (GAIP), a tripartite partnership between industry, academia and policy makers. GAIP aims to be the global centre of excellence in insurance and risk management with a focus on Asia. Climate risk and pandemic risk have been identified as the two initial focus areas of the GAIP. https://www.mas.gov.sg/news/speeches/2021/riding-the-growth-momentum-in-asia  7/11  12/02/2021  "Riding the Growth Momentum in Asia" – Keynote Speech by Ms Jacqueline Loh, Deputy Managing Director (Markets & Development), …  19. The Asian financial markets can also help Asian economies adjust behaviour, for a greener and more sustainable future. Global green bond issuance volume increased nearly 50% to reach $ in 2019 [16] , which is a six-fold increase from 2015. OECD expects it to hit $ trillion by 2035 [17] . In Asia, green bond issuances are also rapidly catching up, and now accounts for 24% of global green bond, a leap from the 5% market share 5 years ago. [18] 20. Singapore launched the Green Finance Action Plan in 2019 to support a sustainable Singapore, and facilitate Asia’s transition to a sustainable future.

Another particularly relevant case at the present juncture is Brexit, which may have very significant effects on the UK and EU economies. Depending on the future framework for relations between the EU and the United Kingdom, and whether or not the departure from the EU takes place in an orderly manner, the latest estimates, published by the Bank of England just a few days ago, range from long-term GDP losses for the United Kingdom of around 2% of GDP in the case of an orderly exit and favourable future agreement, to declines of around 10% of GDP if there is no agreement and the exit is disruptive and disorderly. The costs for the EU would be lower, although in the event of a hard Brexit the impact could be significant for those countries with closer trade and financial ties with the United Kingdom, such as Ireland, Belgium and the Netherlands. At the same time, the evidence suggests that greater protectionism raises the vulnerability of economies to domestic adverse shocks. This is because international trade allows producers to diversify their business and cope with cyclical fluctuations in domestic demand. This diversification mechanism is even more important in crisis periods, as seen in Spain, where businesses facing severe contractions in domestic demand during the most recessionary phases of the last crisis found an escape valve in the form of exports that enabled them to maintain their activity and limit job losses.