samchain/econo-pairs-v1 huggingface dataset:
The financial system is also clearly much stronger, with the banking system much better capitalized and with much larger liquidity buffers than in the years preceding the financial crisis. In today’s briefing, we will be focusing on the household sector. Given the importance of consumption to U.S. economic growth, the health of the household sector is critical for an assessment of risks to the outlook. Over the last several years we have devoted significant resources to better understanding the state of the household sector, and one outcome of this attention is our now well-known Quarterly Report on Household Debt and Credit. This report, and the data that underlie it, give us direct insight into the health of the household balance  1  See William C. Dudley, The U.S. Economic Outlook and Implications for Monetary Policy, Remarks at the Economic Leadership Forum, Somerset, New Jersey. BIS central bankers’ speeches  1  sheet. The assets and liabilities that families hold is a crucial determinant of the household sector’s ability to help immunize the economy from shocks. We learned during the Great Recession the importance of household liabilities – in particular, mortgages, which make up more than two-thirds of the sector’s total liabilities. As you know, the early part of the 2000s witnessed a very substantial expansion in borrowing by households. This borrowing took many forms, but was particularly notable in mortgages and home equity lines of credit, and reflected the very high and unsustainable expectations of house price appreciation.

Anne Le Lorier: Bailouts, bail-in and financial stability Welcome address by Ms Anne Le Lorier, First Deputy Governor of the Bank of France, at the conference “Bailouts, bail-in and financial stability”, jointly organized by the Bank of France and the Toulouse School of Economics, Paris 28 November 2014. *  *  *  It is a great pleasure to welcome you here today at the Banque de France for this joint conference organized with the Toulouse School of Economics. It is the seventh conference jointly organized with TSE since the beginning of our partnership on financial stability issues. In the previous events, we tackled “Extreme events” in 2008, and then “Liquidity” in 2009, “the Future of Financial regulation” in 2010, “Debt crisis in the euro area” in 2011, “Banking models and banking structures” in 2012, and “Bank liquidity, transparency and regulation” last year. Today’s topic is “Bailouts, bail-in and financial stability.” In the follow up to the last financial crisis, almost all regulatory initiatives have been motivated by the objective of ensuring no future public bailouts of banks or, in the language of economists and banking regulators, ending the Too-Big-Too-Fail problem. This objective is to be reached for all systemically important financial institutions, be they banks, insurance companies, market infrastructures or entities belonging to the so called “shadow banking system” (asset managers, hedge funds and so on).
BIS central bankers’ speeches  19  Table 1: Population and GDP per capita growth since 1million BC GDP per capita  Population  Year  Annual % change  Annual % change  -1m to –10000 BC  0.000  0.000  -10000 to –1000 BC  0.003  0.028  -1000 BC to 1 AD  -0.015  0.122  1 to 1000 AD  0.020  0.044  1000 to 1500 AD  0.007  0.095  1500 to 1750 AD  0.102  0.211  1750 to 2000 AD  1.452  0.870  Source: DeLong (1998) and Kremer (1993). Table 2: Technology growth since 1 AD Technology growth rate Year  Annual % change  1 to 1000 AD  0.001  1000 to 1500 AD  0.025  1500 to 1750 AD  0.045  (a)  1.034  1750 to present  Source: Clark (2009); Hills, Thomas and Dimsdale (2010). Notes: Technology growth prior to 1750 here is estimated by Clark (2009), assuming that the population stabilizes at a level at which the land per person produces just subsistence income. (a) Growth rate based on average annual TFP growth in the UK between 1850 and 2009 in Hills, Thomas and Dimsdale (2010).

Miguel Fernández Ordóñez: Weiß und Rot – the cycle, central bankers and supervisors Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the “World Currency Regime – to Float or not to Float” session, 18th Frankfurt European Banking Congress, Frankfurt am Main, 20 November 2008. *  *  *  Let me begin by thanking the organisers of this edition of the Annual European Banking Congress for the opportunity to address such a distinguished audience on the subject of the cycle, central bankers and supervisors. I will be talking about “Weiβ und Rot” and not exactly about wines. *** Numerous factors have played an important role in triggering the current crisis: the subprime mortgages, the highly complex securitisation structures, the originate-to-distribute model, the over-reliance on rating agencies, risk valuation models that few could understand, etc. Many of these mistakes have been identified over the past 15 months by the authorities and by financial institutions themselves. Some regulatory reforms are already under way in the EU and overseas, while the financial entities themselves are reviewing their risk management. We can be sure that the next crisis will not be like the current one. But it is naive to believe there will be no further expansions and slowdowns. For 5,000 years now, since the Pharaoh asked Joseph about the meaning of a dream in which he saw seven fat and seven lean cows, we have known that the economy is unequivocally cyclical.
Tarisa Watanagase: Asian banking – coping with risks and seizing opportunities Luncheon talk by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the 27th Asian Pacific Bankers Council (APBC) General Meeting and Conference, Bangkok, 31 October 2008. *  *  *  Chairman of Asian Pacific Bankers Council, Distinguished Speakers and Guests, I would like to thank the Asian Pacific Bankers Council for inviting me to join this meeting today. With great uncertainty ahead, actions of each and everyone – banks, regulators, central bankers – can have significant impact at home and abroad. At this time, confidence and trust forged by candid and opened communication between key stakeholders is of paramount importance. Therefore, this meeting offers an immense opportunity for us to foster this dialogue. Just over a month ago, the global economic and financial market condition was at a much different place from today. Since then, the magnitude of market adjustment, volatility, and contagion across markets, types of institutions, and countries have proven that risk diversification is easier said than done. This is especially as markets and institutions seem to correlate in a crisis as a result of risk-aversion and fear of counterparty risk. Nevertheless, the positive factor that has emerged is that governments of major economies and financial centres are now addressing this with comprehensive package. The aims are chiefly to restore “main street’s” confidence by deposit guaranty; to shore up “Wall Street’s” confidence with adequate liquidity; and to mitigate counterparty risk through interbank guaranty.

Banks with CDO exposure have already made full provisioning and recognized losses in line with IAS 39, and presently all sub-prime related CDOs have been unwound. Thai banks also have very low exposure to investment banks like Lehman Brothers and have no investment in US GSE securities. In all, total exposure of Thai banks to foreign investment is about 1.2 percent of total assets, about half of which are sovereign assets. Having said this, we are very mindful of the risk from second round effect of slowdown in global growth and domestic growth, which can affect credit, market, as well as liquidity risk. To handle this, the Bank of Thailand has been holding dialogue with top managements of banks to discuss financial stability outlook, and have conducted stress-test to ensure that banks are alert to these risks and are able to manage them to ensure adequate capital and liquidity. We will continue to hold candid and two-ways dialogues with all the banks operating here to ensure that we can manage these challenges and dynamics of the global turmoil. Ladies and gentlemen, I would like to conclude with some lessons learned so far to increase our immune system going forward. First, growth must be based on strong macroeconomic foundation, with prudent fiscal and monetary policy, flexible policy options, and strong external positions.
Andrew Sentance: Prospects for global economic recovery Speech by Mr Andrew Sentance, Member of the Monetary Policy Committee of the Bank of England, at the British Chambers of Commerce Annual Convention, London, 18 March 2010. *  *  *  I would like to thank Michael Hume and Abi Hughes for research assistance and I am also grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. Over the three-and-a-half years I have spent so far on the Monetary Policy Committee, one of the things that has struck me most forcefully is the way in which the UK economy is so heavily influenced by international developments. The global financial crisis and the recession which resulted from it have highlighted that very clearly. But even before we felt the full force of the crisis in late 2008 and early 2009, UK inflation was pushed up to over 5% by a surge in global energy and commodity prices. And looking back over the whole history of the MPC since 1997, most of the shocks to UK growth and inflation that the Committee has had to worry about have had a significant international or global dimension. 1 These global influences on the UK economy partly reflect our economic history.

Relative prices are distorted leading to inefficient allocation of resources;  v.  High Cost of Investment as interest rates skyrocket;  vi. Savings propensity is low as savers are discouraged by negative real interest rates;  vii. In an inflationary economy, interest rates are high and borrowing for investment is inhibited, which leads to:   Limited access by productive (private) sectors to investment funds;    Low investment, output and employment; and    Lesser impact on the social sectors. Ladies and gentlemen, as you share thoughts in this workshop, allow me to underscore the importance, we at the Bank of Zambia attach to capacity building programmes for all employees in the financial sector. I am reliably informed that during the workshop you will cover a number of important topics including the following: i.  Analysing the framework for collective bargaining and exploring new trends in collective bargaining;  ii. Enhancing negotiation skills and knowledge base of Union Officials; and  iii. Developing a pool of professional union negotiators in ZUFIAW. I am fully aware that some of the topics that you will be discussing during this Forum may not be entirely new to you, but I firmly believe that they may be necessary for purposes of reinforcing what you already know. I therefore, urge you all to take keen interest in all the deliberations if you are to realise the full benefit of the workshop.
19  This is not to suggest that Gallatin was opposed to government-sponsored infrastructure projects. Indeed, in 1808, he presented the Gallatin Report on Roads and Canals. As he put it at the time, the vision of roads and canals to link up the young nation “could not be left to individual exertion.”  20  The federal debt stood at approximately USD 83 million when Gallatin took office in 1801. By 1808, Gallatin had succeeded in reducing it to USD 57 million, including the extra USD 15 million added by the Louisiana Purchase. United States nominal GDP has been estimated at approximately USD 520 million in 1800 (see Susan B. Carter, Scott S. Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (eds. ), Historical Statistics of the United States, Volume Three: Economic Structure and Performance. Cambridge University Press, New York NY, 2006). Hence, almost doubling the size of the United States through the purchase of the Louisiana territory from Napoleon in 1803 cost approximately 3% of the GDP of the existing territory. 21  Balinky, op.cit., for example, comes out strongly against Gallatin’s debt reduction strategy, arguing that it was a narrow-minded and short-sighted fiscal policy for a country in need of economic development. 22  More precisely, the United States debt-to-GDP ratio was reduced by an estimated 56 percent between 1801 and 1808. This estimate is based on nominal GDP estimates for the US in the early 1800s provided in Carter et.

17 For Gallatin, a reduction of the United States’ federal debt burden “was the end toward which all other fiscal policy was designed.” 18 He argued forcefully that the federal government should spend tax revenues on new public services, goods or investment only when tax revenues were freed from having to service a large public debt stock. 19 Gallatin’s cautious management and reduction of the public debt during his first years in office was crucial. It gave the United States Treasury the necessary credibility to access financial markets and therefore finance extraordinary expenses. The most prominent example, of course, is Gallatin’s arrangement to finance the Louisiana Purchase in 1803. He quickly managed to raise the necessary amount – nearly USD 15 million – through a bond issue arranged by the British merchant bank Barings. 20 With hindsight, some scholars have questioned whether public debt reduction should be the main fiscal policy objective of an emerging country with high growth potential. 21 But, given Gallatin’s debt reduction objective, his efforts were extraordinarily successful. By 1808, Gallatin had managed to reduce the federal debt-to-GDP ratio by an estimated 50 percent or so, including the additional debt from the Louisiana Purchase. 22 This was a remarkable effort  16  Balinky, op.cit., provides a detailed description of the tax structure of the early United States and its changes under Gallatin. 17  See Balinky op.cit., pp. 101-103, for an account of the United States Mint under Gallatin. 18  Quoted from Balinky, op.cit., p. 39.
Very often such type of predatory lending results in perpetual debt since the interest rate is prohibitively high, and the borrower does not have recourse to legal aid or proper financial advice given that the transaction takes place in the informal financial sector. Increased financial literacy would avoid recourse to such financing and would facilitate greater reliance on the formal financial service providers. An important objective of enhanced financial literacy is to achieve greater personal accountability for post-retirement financial, medical and social needs. Unlike in the developed economies, the financial burden of those who have retired with respect to health and retirement costs are usually borne by the individual. This requires understanding of the various insurance products and other health care plans. The most sustainable approach to mitigating this type of risk is to have informed participation in health and retirement funding schemes. Greater understanding and knowledge of these financial risks through improved financial literacy is the first step towards actively managing these risks. Enhanced financial literacy can also contribute towards a more stable and sound banking system. A more discerning household sector can drive greater innovation, greater efficiency in terms of lower fees and charges and better quality of services. This combined with the monitoring by Central Banks to ensure that financial services are provided fairly and to ensure appropriate risk management and governance practices adopted by the industry increases the potential for enhanced stability and performance of the industry.

That is not to say the macroprudential angle was ignored, but there was certainly a view – quite prevalent in the pre-crisis world – that if banks were individually stable, the financial system would itself stay upright. During the Great Moderation, little appetite existed for new tools and international regulations of a macroprudential nature, even if the Committee could have foreseen all of the looming threats. The financial crisis brought home the lesson that financial stability could not be assured only through the use of microprudential tools. And so Basel III represents another important step in the Committee’s development. Basel III has substantially enhanced the microprudential framework. And, in the countercyclical buffer, it has also introduced the first international agreement on a macroprudential tool. Subsequent work on the framework for systemically important banks (both global and domestic) has further expanded the Committee’s input into this relatively new field – a trend that is unlikely to be reversed. My fifth key influence on the Committee’s evolution is also quite recent, and hence its eventual impact on the Committee’s work is still difficult to foresee: its role in monitoring the implementation of Committee standards. Post-crisis, the Committee has not only expanded its membership, but it has also taken on the role of monitoring the implementation of the standards agreed by its members.
What have we learnt from all these experiences with common standards? •  The technology behind common standards is not all that complicated and is becoming less of an impediment to systems integration. •  What is more important is for operators, subscribers, and consumers to recognise the larger collective benefits from investing in an infrastructure for interoperability and to work out a framework to ensure its commercial viability for all participants. Seamless data sharing A second key characteristic of a progressive information technology architecture is seamless data sharing. By some estimates, the universe of digital information is growing at about 60% each year. It will grow even faster as embedded sensors become more common. How to make sense of all this data? We must get the basics right in data management. •  First, quality data. Data must be rich in quality, free from error, and commonly understood. •  Second, aggregated data. To extract maximum value, data must be efficiently aggregated. The value of each data point increases as it is connected to other data points. •  Third, intelligible data. Data must be formatted so that it is machine-readable as well as machine-usable. –  4  For example, it is much easier for a system to process data provided in simple text formats such as CSV files rather than in a PDF report. BIS central bankers’ speeches  Greater availability and deeper analysis of data helps us understand the world around us with a clarity and depth that was not possible before.

The Riksbank conducted a study in 2007 with the aim of investigating how large a proportion of the cash in circulation could be explained on the basis of what we know about cash usage.2 The study was based on available statistics on retail sales, secondary markets, liquidity buffers, lost or destroyed banknotes and coins and a number of other factors. Despite this we were unable to explain more than around 40 per cent of the value of the banknotes and coins in circulation. Although the study did not reach beyond 2004, I dare to claim that we still cannot explain what a large proportion of the cash is used for. Part of the explanation may be that the public has more  1  This comparison is based on cash usage measured as the value of the banknotes and coins in circulation (MO) in relation to GDP and on the number of card payments per person and year. 2  Guibourg, Gabriela and Björn Segendorff (2007). The Use of Cash and the Size of the Shadow Economy in Sweden. Sveriges Riksbank Working Paper Series, No. 204. 2  BIS central bankers’ speeches  cash at home, as a buffer, than we believe. Unfortunately, it is difficult to get good statistics on things like this as people may feel it is risky and sensitive to say how much cash they have at home. Another explanation is that cash is used in the shadow economy, for example for various household services such as repairs and cleaning.
A rise in labour costs of more than 5 per cent will only be consistent with the inflation target if the krone continues to appreciate. In our projections for the Norwegian economy in the next two years, we expect 5 per cent wage growth. As long as wages increase this much, the business sector’s competitiveness will decline, thus contributing to a reduction in employment in goods-producing industries. When manufacturing and other industries exposed to competition are scaled back to the extent that there is room for a larger service sector, competitiveness will once again stabilise. In the long run, wages must be compatible with the value added that is generated by workers, i.e. labour productivity. Over time, the increase in real wages is therefore determined by developments in labour productivity. 2  BIS Review 20/2002  In mainland Norway, annual productivity growth has averaged 1½ - 2 per cent over the last 20 years. If this continues to be the case, an average increase in labour costs of around 4 - 4½ per cent in the long term will be consistent with the inflation target. The guidelines for economic policy may affect the krone exchange rate in two ways. On the one hand, increased use of petroleum revenues may lead to a deterioration of the business sector’s competitiveness. With low and stable inflation, this may at times be reflected in a strong krone. On the other hand, our inflation target is slightly higher than our trading partners’ inflation targets.

Normally, this will lead to an appreciation of the krone, with a further reduction in earnings and employment. Manufacturing will, therefore, feel the effects of excessively high wage growth to an even greater extent than earlier. At present, the labour market is relatively tight, which is reflected in high wage growth. In other countries, the situation is different, with sluggish economic development and declining inflation. As a result, interest rates are higher in Norway than in other countries. According to the guideline for fiscal policy, the use of petroleum revenues will increase every year for a number of years ahead. This will sustain the demand for labour. The service industries will need more resources. The contest for labour resources will intensify. To contain inflation, monetary policy must probably be fairly tight in the years ahead. Since 1997, labour costs have increased by between 5 and 7 per cent per year. Nevertheless, the increase in consumer prices has been about 2½ per cent the last couple of years. The krone exchange rate has appreciated since the summer of 2000 as a result of a wider interest rate differential between Norway and other countries. Combined with low growth abroad and increased trade with low-cost countries such as China, this has led to a slower rise in import prices. A higher rise in prices for domestically produced goods and services reflects an increase in labour costs in Norway. As the world economy recovers, import price inflation will probably edge up.