samchain/econo-pairs-v1 huggingface dataset:
Concerns for bank-to-bank contagion due to interconnectedness resulted in a loss of confidence for the entire banking system. In 2008, bad events continued to unfold. In the summer of 2008, the US government was forced to rescue Fannie Mae and Freddie Mac. The relatively slow build-up of the crisis abruptly came to an end when Lehman collapsed on September 15. Confidence simply disappeared and liquidity evaporated. Several banks got into severe difficulties: Merrill Lynch, Hypo Real Estate, Bradford & Bingley, Fortis, Dexia and the Icelandic banks: Landsbanki, Glitnir and Kaupthing, to mention a few. A melt-down of the financial system was prevented by a massive intervention by central banks and governments worldwide. A loss of confidence is the driver of a liquidity crunch, but the lemon problem, as first noted by George Akerlof in 1970, explains the mechanics of a market breakdown. A lemon is an asset of bad quality, originally referring to poor quality cars. In short, the lemon problem arises when sellers know whether or not their asset is a lemon, but potential buyers cannot tell the difference. The risk of purchasing a lemon will lower the price buyers are willing to pay for any asset and, because market prices are depressed, owners of non-lemon assets will be unwilling to put them up for sale. In normal times, banks can obtain short-term finance by borrowing on the interbank market and by selling assets.

However, the implication is that the home supervisor, as the consolidating supervisor, has the overall picture, while the host country has the responsibility. In a crisis, decisions must be taken fast and, typically, based on insufficient and uncertain information. Access to information is thus crucial for effective crisis management. In the present crisis, host countries have had difficulties in obtaining timely information from home country authorities. Considering the importance of information, the frustration of host countries is understandable. However, let me emphasise that the problem of insufficient information flows also goes the other way. Home country authorities have also experienced difficulties in getting accurate information from host authorities. A result of the lack of cooperation has been suboptimal solutions, the breaking up of banks and a move towards nationalistic objectives. Experiences from the crisis prove that it is easy to sign an MoU in good times, but much more difficult to live up to the spirit of that MoU in bad times. Financial integration will continue. The question, then, is how do we improve cross-border crisis management? Part of the problem today is a lack of mutual trust. In bad times, trust is essential for sharing information. Reaching a joint assessment and making efficient decisions often require frank and open-hearted discussions. Such discussions will not take place if the parties do not trust each other. I believe that we must put effort into building trust among authorities. In this respect, the trust shared among the Governors of the Nordic Central Banks can provide inspiration.
Growth has been supported by buoyant domestic demand and a pick-up in net exports. Financing conditions for firms have been very favourable, supporting investment, while private consumption has benefited from low levels of inflation. [Slide 3] This steady economic growth has translated to the labour market bringing close to 8 million workers [7.8m] back to employment since 2013, more than offsetting the losses experienced during the crisis. Annual growth in employment has reached its highest level since 2008 and the unemployment rate fell to 8.7% in the fourth quarter of 2017, the lowest rate for nine years. Looking ahead, unemployment is expected to further decrease to reach 7.2% in 2020, in spite of an increase in the participation rate. [Slide 4] In France, GDP growth is robust, averaging 2.0% in 2017. Expansion is expected to continue at a sustained pace in 2018, supported by strong domestic demand and a notable increase in exports. Investment should remain robust thanks to favourable financing conditions and the positive business outlook. Net exports are expected to pick up in 2018 and be supportive of growth. The upswing is expected to continue in 2019–2020 with a GDP growth rate which should remain above-potential growth, despite a slight slackening in global demand. [Slide 5] In France too, the ongoing recovery has led to a strong decline in the unemployment rate which fell to 8.9% in the fourth quarter of 2017.

This should give more flexibility to firms and contribute to supporting employment. The ongoing apprenticeship reform aims at making this status more attractive for both workers and firms, in order to tackle youth unemployment. In a context where the number of job vacancies remains too high, the ongoing reform of lifelong vocational training, which is currently too costly and inefficient, should help to better match the skills of workers to the needs of firms. Add very significant reforms of primary and secondary education and university, and you can expect a steady improvement in French labour’s skills in the coming years. The unemployment benefits reform will also be an essential building block in improving the functioning of the labour market. More control over the job-search effort should increase labour force participation and also contribute to tackling structural unemployment, while improving the efficiency of the welfare state. 2/4  BIS central bankers' speeches  [Slide 11] Finally, consistent tax reforms have aimed at rebalancing the tax burden from production factors towards broad-based taxes. Labour costs were lowered, with in particular a tax credit on payroll, implemented in 2013 and reinforced by social contribution cuts this year. Regarding capital, important measures have also been taken to alleviate taxation on productive capital and savings: the scrapping of the household wealth tax on everything except property assets, the introduction of a 30% flat tax on household capital gains, dividends or interests and a decrease in corporate tax from 33% to 25% in 2022 to ensure convergence towards the EU average.
On average, it will rise to 2.8% in 2022 as a whole, but then gradually slow over the rest of the projection horizon. Compared with the December projection exercise, the inflation forecast for 2022 is revised upwards significantly (by 3.8 pp), due, above all, to the recent energy component surprises. The balance of risks in this projection exercise is tilted to the downside in the case of economic activity and to the upside in that of inflation, amid extraordinary uncertainty as a result of the war in Ukraine and its geopolitical implications. In particular, economic activity and inflation will be very sensitive to energy and commodity market developments, to the hypothetical emergence of second-round effects on prices and wages and to the path of household consumption and saving. By way of example, later on I will describe in some detail the adverse repercussions for the Spanish economy of such second-round effects, underscoring the need to adopt an economic policy response that pre-empts these risks via an incomes agreement. The economic policy response The magnitude of the effects of the war will also ultimately hinge on the economic policy response, which has a crucial role to play. Allow me to offer a few thoughts on that response. European economic policies Like the pandemic, the invasion of Ukraine is a very adverse, exogenous shock common to the European Union (EU) as a whole, albeit with uneven effects across countries, sectors and firms.

The information available to date suggests that such cost sharing across firms and workers is already taking place on a tacit basis. Specifically, in the collective bargaining agreements registered to March the wage increases for 2022 stood at 2.4%, well below the recent increase in consumer prices and that expected for 2022 as a whole. Therefore, in practice workers are losing purchasing power. That said, in large part, this increase essentially reflects the deals struck by the social partners in the multi-year collective bargaining agreements negotiated over the past two years in an inflationary setting that bears little resemblance to the current one. There are therefore signs that this stabilisation mechanism is running out of road. With this in mind, I believe that concrete action is needed. Similarly, in the case of businesses, recent data reveals that they have not fully passed on their rising costs to their customers, and their margins are therefore likely to have been squeezed. This can be inferred, for instance, from the feedback from Spanish firms 8  in the latest edition of the EBAE for the first quarter of 2022. According to the survey, around 82% of businesses saw their costs rise as a result of higher input prices, whereas just over 40% raised their selling prices. Second, the asymmetric impact of the current shocks on workers, firms and sectors must be borne in mind when determining the specific features of the incomes agreement.
Yet the persistence of low inflation and the financial implications of normalisation call for a gradual approach. The experience of the “taper tantrum” episode in the US, in 2013, showed us that markets can rapidly shift their sentiment and prompt an abrupt adjustment of financial variables. Predictability and a clear communication strategy will be important in order to avoid adverse market reactions. It will also help mitigate spillover effects in third countries. In any case, emerging economies are now better prepared to manage this new context, given their enhanced resilience and stronger growth outlook. At the same time, we have to be vigilant regarding the signs of overvaluation of asset prices, the underpricing of risk and the exceptionally low levels of expected volatility.  Risk of overburdening monetary policy: It is important to stress that we should avoid overburdening monetary policy. Secular stagnation requires an overall policy strategy: in particular, both fiscal policy and structural reforms have an important role to play in supporting demand, and in raising productivity and potential growth. 2. Implementing new financial regulation   Safer scenario / implementation challenge. The new micro and macroprudential regulations and the strengthened supervisory framework provide a safer scenario for the financial sector. There are higher capital requirements for financial institutions and enhanced supervision, including new instruments for early identification of financial risks.

In addition, the money market in Europe has been functioning at negative rates for almost two years without any disruptions. The ECB is currently applying a –0.4% interest rate to money deposited by banks on their central bank account. It is in principle possible to cut this rate further, but there is currently no plan to do so. In March the ECB decided to lend money at a fixed rate over four years to banks which increase their loans to households and companies. We have a lending volume benchmark, and the rate will be as low as –0.4% for those banks which outperform their benchmark by a sufficient margin. We are convinced that these credit easing measures are even more important than the negative interest rate, even if they complement each other. What is the impact of your monetary policy on the real economy, so far? This package of monetary easing policies is supporting short-term growth in a visible way. The European economy is coming back and recovering from the recession. But monetary policy cannot create long-term growth. Long-term growth will be driven by productivity gains, well-functioning economies and a reformed Economic and Monetary Union. It is the responsibility of the democratically elected governments to propose and implement the right reforms. Mario Draghi has insisted in his press conferences that fiscal policy and structural policy are also important, yet some European countries still continue to pursue austerity. Could you tell us your opinion on that?
Those challenges include the prevailing low interest rate environment; the consequent influx of alternative capital, especially into reinsurance markets; the transformation to the “at retirement” taxation system in the UK; competition in general insurance from overseas locations, possibly linked to regulatory arbitrage; as well as the new Solvency II regime. I plan to focus my time mostly on Solvency II; but will also touch on the “at retirement” taxation changes. Before that, I would first like to reflect upon the role insurance plays in the wider economy: •  Insurance is a critical cog in a financial services sector which facilitates trade and commerce and the efficient allocation of resources. Without a fully functioning financial services sector, the economy would stagnate. That importance of financial services to growth should be one of the big lessons of the Great Financial Crisis for anyone who did not appreciate the fact previously. More specifically, the insurance sector provides a critical risk-transfer role and is a vital long-term investor in the economy. •  The UK insurance industry is also an end-contributor to UK output and employment – being the largest insurance industry in Europe and third in the world. The UK insurance industry is known for its innovation and entrepreneurialism, typified through the modest beginnings of Edward Lloyd’s coffee house. The role played by the insurance sector in future will be contingent upon maintaining that tradition of competition and innovation and the PRA is committed to support that, not least through our secondary objective in respect of competition.

The PRA therefore welcomes the more rigorous approach to group supervision that will be introduced by Solvency II. This will lead to a much more joined-up approach between regulators through the operation of colleges. Enhancing information flows and producing equivalent and comparable data should make European colleges easier to operate – leading to more effective supervision and enhanced co-ordination among national supervisory authorities. We think that the UK has been ahead of the game with the ICAS regime. But it is important that there is a more rigorous rulebook across Europe to allow more effective supervision in an interconnected world. Challenges ahead As I mentioned earlier, the industry is currently facing a number of other challenges. In particular the changes to the UK taxation system of the “at retirement” market, the impact of which is already significant on some insurers’ business models. Change to the annuity market will also bring about: •  New / untested risk exposures;  •  Increased competition;  •  A need for enhanced support for the consumer; and  •  Potential redistribution of pension pot monies. Changes to business models will naturally lead to changes in risk exposures which will need to be carefully considered and managed. Through these changes, it is imperative that we continue to learn and adjust, working openly and transparently with the industry.
It has been the endeavour of this report to propose a type of central bank which, with proper skill and understanding in its management, will establish monetary conditions in Ceylon that may make possible, as never before, the fuller use of the nation’s human and material resources and a rising standard of comfort for all.” History has judged us before! I will leave it up to you to judge us in future as well! Bibliography Bernanke Ben S. and Michael Woodford (eds), The Inflation Targeting Debate. Cambridge Massachusetts: National Bureau of Economic Research Studies in Business Cycles, 2005. Bernanke, Ben S., Thomas Laubach, Frederic S. Mishkin, and Adam S. Posen (eds), Inflation Targeting. Princeton: Princeton University Press, 2001. Blinder, Alan, Central Banking in Theory and Practice, Cambridge Massachusetts: The MIT Press, 1996. Central Bank of Sri Lanka, 40th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-1990. Colombo: Central Bank of Sri Lanka, 1990. Central Bank of Sri Lanka, 60th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-2010. Colombo: Central Bank of Sri Lanka, 2011. Central Bank of Sri Lanka, Annual Report. Various Years. Central Bank of Sri Lanka, Road Map: Monetary and Financial Sector Policies, Various years. Colombage, Sirimevan, The Political Economy of Central Banking in Sri Lanka. Prof. H. A. de S. Gunasekera Memorial Oration, University of Peradeniya, October 2017. 23  Government of Ceylon, Sessional Paper XIV: Report on the Establishment of a Central Bank for Ceylon (Exter Report). 1949.

In 1995, the monetary strategy of stable exchange rate of the denar was formalized – a strategy for which then and now there is a broad consensus that it is one of the key pillars of the stability of the Macedonian economy. The benefits of macroeconomic stability have been enjoyed for 24 years. Our economy is small, commercial and financially open and hence, prone to external shocks. Despite the numerous external and internal shocks, the National Bank constantly succeeds to keep inflation at a moderate level, which is similar to the European level. Low inflation is extremely important for the protection of the real purchasing power of citizens, but also for maintaining the competitiveness of our exports without which small economies like ours can not achieve higher and sustainable growth. The maintenance of low and stable inflation, as the main goal of the central bank, is underpinned by the stable exchange rate of the domestic currency against the euro. The prudent monetary policy, as well as the good coordination with other macroeconomic policies, led to an almost continuous growth of the foreign reserves, which today are at the highest historical level and directly strengthen the exchange rate stability. Confirmation of the soundness of the policies implemented by the National Bank is a historic step in providing access to European Central Bank’s foreign exchange liquidity. The key to the successful attainment of the goals of the National Bank so far is its strong institutional capacity which has been built for years.
Prices have also risen considerably over the past year as a result of poor crop yields in many parts of the world following storms and drought. Our analyses of the outlook for the world economy and the Norwegian economy are based on the assumption that oil prices will remain at the current level. It is difficult to predict future prices with any assertion. Should oil prices show a marked decline, the oil fund mechanism will to a considerable extent shield the Norwegian economy from the short-term negative consequences of a fall in oil revenues. However, our petroleum wealth will be reduced. On the other hand, should oil prices continue to rise, the Government Pension Fund Global and the fiscal rule provide a sound and robust system for coping with higher revenues. The investment strategy for the Government Pension Fund Global Let me now turn to how the changes in the world’s economic geography influence the investment strategy of the Government Pension Fund Global. Chart: Norway’s terms of trade Norway has profited from globalisation, through both trade and capital markets. As a major commodity exporter we have benefitted from high commodity prices. At the same time, we have had access to cheap imports from emerging economies. Norway’s terms of trade have improved throughout the past decade. Norway’s national income has risen substantially throughout the oil age. Substantial current account surpluses and the buildup of the Government Pension Fund Global have also made Norway a significant exporter of capital.

Jean-Pierre Roth: Autonomy on the edge of a large monetary zone - the Swiss experience Address by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Leonard Davis Institute for International Relations, Hebrew University, Jerusalem, 28 May 2006. This paper was prepared with the support of Ms Petra Gerlach-Kristen, Economic Research Section, Swiss National Bank, Zurich. *  *  *  This is my second visit to Israel and I am delighted to be back. I am especially happy to speak at this institute which, according to the will of its founder, Leonard Davis, should promote a better understanding of Israel external policy. The first time I was in Jerusalem was in November 2004 when the Bank of Israel celebrated its 50th anniversary. The Swiss National Bank is itself approaching an important anniversary. Next year, it will have been 100 years since we opened our doors for business. Since 1907, our institution has seen large changes in the monetary environment. When the SNB began operating, the Swiss franc's parity was defined in terms of gold and silver. In the early 1920s, Switzerland adopted a gold standard and fixed exchange rates remained the dominating feature of its monetary regime until the collapse of the Bretton Woods system. Since then, we have learned how to conduct our monetary policy independently and how to live with flexible exchange rates.
Armed with Big Data on someone’s genome and health history, an algorithm could diagnose many ailments, and prescribe treatments, as well as humans if not better. Would doing so sound the death knell for doctors and surgeons? I suspect not. Medical professionals are likely to draw increasingly on data and algorithmic insights. But there will be an accompanying, increasingly important, role for human judgement, explanation and empathy. Indeed, it is already the case that these human skills are often among the most highly-valued by patients. In a world of robo-medical advice, the balance of doctors’ skills will shift further in this interpersonal direction. As with much of human history, this will be a case not so much of humans versus machines as humans with machines. The evolutionary arc of humankind will not switch, discretely, from one defined by neurology to one defined by technology. What we could see instead is a co-evolutionary arc with minds and machines, neurology and technology, co-mingled and complementary.34 In a number of tasks they already are. 31  https://www.bbc.co.uk/news/technology-34066941 Bughin et al (2018) Bakhshl et al (2015). 34 Tegmark (2017). 32 33  14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Take chess. A generation on from Deep Blue beating Gary Kasparov, you might expect machines to have taken an unassailable lead. In fact, they have not. The world chess championship is not waged between mainframes.

And AlphaGo learned thousands of years of human knowledge within a matter of months. Against that backdrop, there has been a surge of recent interest in the potential for large-scale job losses, as machines displace humans. This fear is not new. Fears about job displacement have been a recurrent theme for 300 years, as machines first displaced agricultural workers and, more recently, factory workers. These shifts were huge. In 1750, half the labour force worked in the primary sector. Today, it is 1%. Estimates of the potential scale of future job displacement are highly uncertain. Studies suggest between 10% and 50% of the global workforce could see their jobs disrupted significantly, if not displaced entirely,  12  All speeches are available online at www.bankofengland.co.uk/speeches  12  over the next 10-15 years.26 At the upper end, that would be almost 2 billion people globally whose livelihoods could be significantly disrupted. This is vastly more than any previous industrial revolution. As in the past, the costs of this disruption are unlikely to be spread evenly. Recent studies have shown that those at greatest risk are likely to work in sectors and regions still reeling from earlier Industrial Revolutions. Jobs among lower-skilled workers doing routine tasks in the service sector in post-industrial towns and cities are ripe for automation.27 The BBC website has an app which puts this probability at 83%.