samchain/econo-pairs-v1 huggingface dataset:
During this period, the insurance landscape is expected to change in ways that will have a direct and profound impact on the experience that consumers and businesses have with insurance. As major intermediaries between insurance providers and consumers of insurance products and services, how insurance agents think about their business and interact with their customers can make an important difference in helping millions of individuals, families and businesses across the country who remain ill-prepared for losses arising from unforeseen events. Addressing this protection gap is ultimately the goal that we must all aspire to, to promote a resilient economy and the well-being of our society. 4  BIS central bankers’ speeches

So I’d like to begin by taking an opinion poll! I’d like to put to you two questions. The first is how many of you agree that monetary policy should have the control of inflation as its overriding objective? May I ask all those of you who agree that monetary policy should have control of inflation as its overriding objective, please, to raise a hand. Now please would those who disagree that monetary policy should have control of inflation as its overriding objective please raise a hand. Now let me ask you a second question - and I’m afraid that only those who voted in favour in response to the first question are entitled to vote this time - I don’t want a biased result. Given the objective of control of inflation - the 2½% inflation target - please would those of you who think interest rates should be higher than they are at present raise a hand? Please raise a hand now if you think interest rates are at the right level? And will those of you who think that interest rates should be lower than they are at present now please raise a hand - but remember you can only vote if you agreed that monetary policy should be directed to controlling inflation! Welcome to your first meeting of the Monetary Policy Committee! Your votes will all be individually recorded by the Chairman and published with the minutes in a fortnight’s time!
4 The requirements will be eased when the assessment indicates that imbalances in the housing market have receded. Similar measures have been introduced in the UK. Views on how actively this type of instrument should be used vary both among researchers and international fora. In particular, the question of whether frequent changes are appropriate has been raised. As I mentioned earlier, high and rapidly rising credit has historically been associated with more frequent and deeper financial crises. This would imply that there are substantial gains to be made from introducing measures to dampen credit swings. On the other hand, it has been pointed out that experience of using these instruments is limited and that their effectiveness is still an open question. A policy in the direction of fine-tuning credit may in addition dampen key market mechanisms that contribute to channelling credit to where it can obtain the highest return. A highly ambitious use of the instruments also places considerable demands on the level of coordination. In Norway, shortcomings in banking regulation have in recent years been addressed primarily by means of structural measures. The permanent capital requirements for banks have been increased. In early summer this year, the Ministry of Finance designated three banks as systemically important and will be subject to additional capital requirements. In addition, Finanstilsynet (Financial Supervisory Authority of Norway) has tightened requirements for banks’ internal risk models, which will contribute to increasing the equity banks will have to hold against residential mortgage loans than was the case earlier.

Chart: Early warning models for financial crises The chart shows estimated crisis probabilities for Norway based on various combinations of explanatory variables and trend estimation methods. A clear pattern is that crisis probabilities increased markedly in the years ahead of the banking crisis in 1988–1993 and ahead of the financial crisis in 2008–2009. Both of these periods featured rapid growth in credit and real estate prices, combined with a surge in banks’ wholesale funding ratio. The chart shows that the estimated crisis probabilities have declined since the financial crisis, although the spread between the predictions from different variants of the model is considerable. The relationship between the indicators and the probability of a crisis in the model is not linear. The greater the magnitude of the financial imbalances at the outset, the more pronounced the effect of an increase in credit growth or house price inflation will be. We have seen that financial imbalances often wind down in connection with crises. The ratio of household debt to GDP fell markedly in Norway in the wake of the 1990s banking crisis and it has fallen in countries such as Spain, the UK and the US after the financial crisis in 2008. In Norway, household debt has continued to grow faster than income, which may indicate that the vulnerabilities that built up prior to the crisis are still present. An assessment of systemic risk must include an analysis of both the probability and consequence of a crisis.
Sources: Statistics Sweden and the Riksbank  10. GDP gap, September and in real time Per cent 6  6  4  4  September 2011 Real time  2  2  0  0  -2  -2  -4  -4  -6  -6  -8  -8 05  06  07  08  09  10  11  12  13  Note. September 2011 refers to the PF gap. Real time refers to the HP gap except from October 2010 and onwards when the PF gap is used. Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  13  11. Capacity utilisation Per cent, seasonally-adjusted data 100  100 Capacity utilisation in the manufacturing sector  95  95  Mean, 1996-2008  90  90  85  85  80  80  75  75  70  70 95  97  99  01  03  05  07  09  11  Source: Statistics Sweden  12.

It is key for this framework to be rigorously applied, including in terms of the indicators used, in order to consolidate the effectiveness of this new procedure to assess in particular euro area Member States experiencing sustained losses of competitiveness and large current account deficits. The focus needs to be on the prevention of situations creating risks to economic, budgetary and financial stability in the euro area. In addition, this macroeconomic surveillance procedure should rely on transparent and effective trigger mechanisms. Conclusions Let me conclude with three key messages to policy makers – in advanced and emerging market economies alike – who all have a role to play to address the challenges that are ahead of us. First, what has already been decided has to be implemented expeditiously, comprehensively and fully. This requires resolve and fortitude on the part of the public authorities, but also lucidity on the part of the private sector. Second, there can be no complacency as regards the unfinished part of our reform agenda for a stronger international financial architecture. And I cannot help saying that on top of what is clearly identified by the international community as the urgent issues under discussion in the Financial Stability Board and the G20, we are far from understanding the potential global systemic instability that is associated today with the sheer size of the non-banking sector which experienced an exponential growth over the last 20 years.
From the very beginning, we have been aware of the fact that keeping our non-standard measures in place for longer than necessary would entail the danger of creating harmful distortions. Therefore, we designed the measures with exit considerations in mind. In view of the improvements in financial market conditions seen since last spring, we have started to gradually phase out some of them. More specifically, we have stopped providing liquidity in foreign currencies, and we have stopped operations involving maturities longer than three months. Also, we have decided to return to variable rate tenders in the regular three-month operations towards the end of this month. However, the Eurosystem will continue to provide liquidity support to the euro area banking system at very favourable conditions in its shorter-term refinancing operations (that mature after one week and after approximately one month). We have decided to do this for as long as necessary and at least until mid-October this year. The speed and path of the subsequent gradual phasing-out of the non-standard measures will depend on economic and financial market developments. The remaining measures are not many. They include, inter alia, the tender procedures to be applied in the main refinancing operations and the operations with a duration of one maintenance period, approximately one month (which could be returned to variable rate tenders). All our actions will remain fully in line with the objective of maintaining price stability over the medium term. We do not know today what normality will look like after the crisis.

Hong Kong is fortunate to have a strong presence of international financial intermediaries who can leverage on their global network of expertise to develop and structure a variety of Shariahcompliant products here. 16. It is also crucial for fund raisers and investors to be aware of the benefits of Islamic capital market instruments and understand their structures and operations. So, we have been working very closely with the TMA and international bodies like the IFSB in bringing Islamic finance seminars and workshops to Hong Kong market participants, like the seminar today, in an effort to raise the awareness and deepen the knowledge of Islamic finance among the financial community. With the gathering of such a distinguished group of speakers, I am sure that we shall obtain useful insights and get a clearer picture on how to prepare ourselves for the exciting developments in the years to come. 17. I wish this seminar every success, and to our overseas friends, an enjoyable stay in Hong Kong. Thank you. BIS central bankers’ speeches  3
Those techniques are tried and tested in the US, and are the basis for resolutions of regular commercial banks in many other countries. They do not involve taxpayer solvency support. I am doubtful, however, whether those established techniques would work for a complex investment bank or a global commercial bank. Universal banks are typically run on an integrated basis, across functions and regions, so that capital can be reallocated easily as opportunities shift around. It would be a nightmare to execute over a weekend a split of any of these groups, with multiple entities across scores of countries, into those parts providing services that must be sustained at all costs and a remainder that could be wound down as part of a resolution. Moreover, this is not just a matter of critical versus not-so-critical services. Even if, contrary to my doubts, it were possible to execute that separation in the midst of a crisis, winding down a complex trading book would be hugely hazardous, with very nasty spillovers to the rest of the financial system. Quite separately, P&A techniques might also fall short in handling the failure of mediumsized commercial banks in highly concentrated banking systems. Crudely, there may be few or even no potential buyers of the deposit book in such circumstances. That is the background to the so-called ‘bailin’ technique which, within the official sector, takes its inspiration from the way insolvency practitioners effect a capital restructuring of distressed but viable non-financial firms – for example, Chapter XI in the US.

11  See Tucker, P. M. W. (2012), The role of deposit insurance in building a safer financial system. BIS central bankers’ speeches  7  Finally, whatever types of deposit end up being preferred, there should be no discrimination on grounds of location or nationality. The chosen creditor hierarchy should apply the same way to all branches of a bank throughout the world. The Financial Stability Board Key Attributes are clear about that.12 I do not need to remind this audience that depositor preference would not be a guarantee against the relevant uninsured deposits (or the DGS) ever taking losses. But they would be exposed to loss only after bonds, as well as equity, had been wiped out. The greater the gone-concern LAC requirement for bond issuance, the lower the probability of any preferred deposits incurring loss. Group structure: having LAC in the right place, and operational dependencies It will have been apparent from my earlier description of high-level resolution strategies that where and how a group maintains its LAC will vary somewhat according to whether the preferred resolution strategy is SPE or MPE. For SPE resolutions, sufficient loss-absorbing capacity must be at the topco. But more than that, there has to be a mechanism for transferring losses from operating subsidiaries, wherever they are in the world, to the topco. One way of doing that would be for Topco to guarantee the performance of the obligations of its systemically significant and other key operating subsidiaries.
Moreover, climate change claimed its first S&P 500 bankruptcy last year,3 climaterelated shareholder resolutions spiked to 90 last year,4 investment managers controlling over 45% of global assets under management now back shareholder actions on carbon disclosure, and companies representing over 90% of all shareholder advisory services now support the TCFD. Not surprisingly, the supply of disclosure is responding. Over 600 organisations, with a total market capitalisation of $ trillion, have endorsed the TCFD recommendations since 2017. The TCFD’s September 2018 Implementation Report assessed, using artificial intelligence, some 1800 companies, and analysed in detail an additional 200 of the largest companies, drawn from eight representative sectors from across the G20.5 In both cohorts, the majority of companies were already disclosing information in their 2017 filings that aligned with one or more of the TCFD’s recommendations. This is commendable given companies only had six months to respond to the final TCFD recommendations, but more progress is needed. In particular:   Financial implications are often not yet disclosed;    Disclosures are often in multiple reports making comparisons harder; and    Disclosure varies by industry and region, with higher percentages of European firms and higher shares of those on the climate frontline – such as the energy sector – disclosing more information aligned with the recommendations.

In pursuit of that New Horizon, let me briefly discuss progress and prospects in three critical areas reporting, risk and return. First, reporting Three years ago in response to a call from G20 leaders, the FSB began addressing the financial stability risks associated with climate change by ensuring the market had the right information to price climate risk and reward climate innovation. The FSB established the Task Force on Climate-Related Financial Disclosures (TCFD) led by businesses from a wide range of industries across the G20. Eighteen months later, the TCFD delivered to the Hamburg G20 Leaders Summit its recommendations for voluntary disclosures of material climate-related financial risks. Since then there has been a step change in both demand and supply of climate reporting. On the demand side, current supporters of the TCFD include three-quarters of the world’s globally systemic banks, 8 of the top 10 global asset managers, the world’s leading pension funds and insurers, major credit rating agencies and the Big Four accounting firms.2 In total, these financial firms manage almost $ trillion in assets. 1 Carney, M. (2015). Breaking the Tragedy of the Horizon. Available: https://www.bankofengland.co.uk/speech/2015/breaking-thetragedy-of-the-horizon-climate-change-and-financial-stability 2 Full list of current TCFD supporters available on: https://www.fsb-tcfd.org/tcfd-supporters/  2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  As a consequence, the incentives for companies to disclose and manage climate-related risks have increased dramatically.
Lorenzo Bini Smaghi: What future for financial globalisation? – sovereign debt and the global economy Dinner speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the Joint European Central Bank–Journal of International Economics (ECB-JIE) conference on “What future for financial globalisation?”, Frankfurt am Main, 9 September 2010. *  *  *  Ladies and gentlemen, It is a pleasure to welcome you to this conference on “What future for financial globalisation?” A discussion on this topic could not be more timely as policy-makers and academics are currently making great efforts to make sense of what happened before and during the financial crisis. Questions are being asked about what lessons can be learned and what adjustments need to be made to economic policy in the future. When policy-makers have the opportunity to talk to academic researchers many synergies can be identified. That is why I am pleased that this conference has attracted so many excellent researchers in the fields of international macroeconomics and finance. I am especially happy that the conference has been co-organised by the Journal of International Economics. I should like to thank the journal’s Editor, Charles Engel, for helping to organise this two-day event.

There are concerns regarding the burden of adjustment on deficit countries and its impact on the world economy. If debtor countries adjust internal imbalances and raise national savings – thus avoiding the scenario of resurging global imbalances – which country would then act globally as the consumer of last resort? In other words, can we avoid a scenario in which there is protracted slow growth across all regions of the global economy until imbalances are eliminated? Admittedly, this is not a new question, but it is more pertinent than ever. The typical answer is that, in order to avoid the slowdown, surplus and, in particular, creditor economies should rebalance growth within their economies by increasing domestic demand, strengthening non-tradable sectors and reducing reliance on export industries. Thus the policy recommendation to surplus countries is to stimulate domestic demand, in particular through fiscal policies or structural reforms aimed at reducing the level of net savings. The problem is that surplus countries are in surplus in the first place either because they are fiscally more conservative, at least compared with the more profligate countries – and rightly so I should add – or are facing a situation in which private savings are very high and might even increase if public dis-savings were to rise. Since surplus countries are reluctant to embark on expansionary domestic demand policies, the correction of payments imbalances is faced with some form of asymmetry, a situation that is often disliked by deficit countries.
Recently we have extended the model to include financial frictions and also an explicit banking sector and a housing market. As soon as we abandoned an exogenous assumption of future key policy rates, we had to take a stand on how to formulate monetary policy within our core model. Analytically, deriving the monetary policy reaction pattern with a loss function is a useful and practical approach. We have developed an improved apparatus for solution algorithms for DSGE models in order to be able to solve for the endogenous interest rate path in different ways and under different assumptions. The interest rate path that we derive from the model analysis serves as a benchmark for the policy discussions of the Executive Board. The analytical loss function that we use in NEMO to solve for this path reflects our criteria for an appropriate interest rate path. The first criterion is that the interest rate should be set with a view to stabilising inflation at target or bringing it back to target after a deviation has occurred. The second criterion is that  8  For details, see Qvigstad, J. (2005): “When does an interest rate path “look good”? Criteria for an appropriate future interest rate path – A practician’s approach,” Norges Bank Staff Memo 6/2005. 9  The key policy rate is the interest rate on banks’ overnight deposits in Norges Bank. 10  Norges Bank has developed a system, SAM (System for Averaging Models), for averaging short-term forecasts for inflation and mainland GDP provided by different models.

If interest rates rose faster and reached a level 100 basis points higher in 2020 than what the CBO has assumed, the net debt service burden would be about 3 ¼ percentage points higher by 2020, all else equal. Given the uncertainties around economic forecasts that far into the future, it would be highly desirable for the fiscal authorities to put in place a medium-term program of fiscal consolidation now, while market conditions are benign. At the same time, I think we must be careful and not focus exclusively on the imperative of fiscal consolidation. That is because fiscal policy adjustments have important implications for  1  2  The 2011 remittance figure is a preliminary unaudited estimate. BIS central bankers’ speeches  the level and composition of economic activity more broadly–both here and abroad. If we must undertake fiscal consolidation– and over time we must–then we need to be cognizant that this adjustment will need to be accompanied by other offsetting changes in the composition of economic activity in our and the global economy. 2 One way of illustrating these interrelationships is to use the following accounting identity, which imposes an adding up constraint on the overall economy: If you define private-sector net saving as the private balance and public sector net saving as the public balance, then: Private balance + public balance = current account balance.
Milesi-Ferretti (2010), “The cross-country incidence of the global crisis”, CEPR Discussion Paper, No. 7954. 2  See H. S. Shin (2012), “Global banking glut and loan risk premium”, mimeo, Princeton. 3  See V. Acharya and P. Schnabl (2012), “Do global banks spread global imbalances? The case of assetbacked commercial paper during the financial Crisis of 2007-09“, NBER Working Paper, No. 16079. 4  See V. Acharya, P. Schnabl and I. Drechsler, “A tale of two overhangs: The nexus of financial sector and sovereign credit risks”, 15 April 2012. 2  BIS central bankers’ speeches  financing in foreign currency of long-term investments (maturity mismatch) and insufficient prudential standards leading to excessive risk taking and rent seeking behaviour. Unfortunately the warnings were not taken seriously until the issues and risks materialised first with the depreciation of the Thai baht in July 1997. Perhaps we have not learnt enough from the past! As growing financial market tensions made the financing of these deficits ever more difficult, the last and most unexpected layer of the iceberg – namely the so-called “redenomination risk”, the possibility of a break-up of the euro area – came to the surface in the middle of last year. By that time, the sovereign spread of high-yield euro area countries relative to other euro area countries had widened to an exceptional extent, hardly justified by fundamentals and fundamentally incompatible with a well-functioning monetary union.

The second group of implications then offers more a practical view which can be summarized as follows: a)  the ‘policy decision-making’ body should have a strong background in law,  b)  the meeting devoted to monetary policy should not deal with any other issue,  c)  the forecast and economic analysis should be submitted by the staff so as to constrain ‘information filtering’,  d)  the decision makers should interact with the staff. 2  BIS Review 88/2005