samchain/econo-pairs-v1 huggingface dataset:
Furthermore, as suggested by these projections and private expectations, in the fourth quarter the GDP will post a positive annual growth rate. Annual inflation, in turn, is expected to begin rising and become positive during the first half of 2010. Our financial system has been able to weather the external turmoil and the Central Bank has taken actions to avoid inconveniences in the provision of liquidity and implemented a highly expansionary monetary policy, not just reducing the policy rate to its lowest possible. However many risks are still there and we must be extremely careful in our decisions. The economy is beginning a recovery process that is yet to be well grounded. Output gaps are significant and will close gradually; probably taking more than the next two years. Inflationary pressures are generally low. We have said in our communications that we will hold the policy rate at its lowest at least until the second quarter of 2010. However, it is not a mechanical commitment in the sense that after that time we will begin to withdraw the monetary impulse. Experience has taught us the importance of moderation, and a hasty withdrawal could severely hinder economic recovery and jeopardize convergence to the inflation target. As in earlier occasions, our inflation-targeting regime and the credibility it has earned allow us to handle monetary policy very flexibly. Accordingly, we reiterate that the Board will use all the policy tools at hand so that projected inflation stands at 3% over the policy horizon.

The role of insurers in the digitalisation of our economy It is essential for our economy to adapt to the digital revolution: it creates incredible opportunities, but with them, new risks against which the insurance sector, once again, can bring stability and protection. I would like to discuss two subjects in particular: Firstly, cyber-insurance. The cyber-insurance market is still underdeveloped. Insurers can and should take inspiration from their own experiences in tackling cyber-risk, and use it to develop a more mature French and European cyber-insurance offering. The coverage against cyber-risk is a very real concern that affects all companies – both small and large – as cyber-attacks are becoming increasingly frequent and costly: according to figures from Euler-Hermès, 57% of French companies were victims of these attacks in 2016, compared with 32% in 2015. We at the Banque de France, alongside the Eurosystem and our G7 colleagues, have made cybersecurity one of our strategic priorities. And secondly, personal data and big data. Naturally, the spread of connected objects that is triggering an exponential rise in the amount of data available on insurance policyholders represents an opportunity for the business of insurance, which consists precisely in collecting and exploiting data in order to quantify and put a price on risk. Nonetheless, I would urge insurers to take a responsible approach: we need to strike the right balance between segmentation and the sharing of risk between policyholders. The basic principles of solidarity and risk-pooling that are intrinsic to insurance are at stake.
Pursuant to the Ministry’s mandate, the Bank’s Executive Board prepares a job description and investment mandate for the CEO of Norges Bank’s investment management unit, NBIM. The current governance model is in line with the Santiago Principles, which have been developed for the governance of sovereign wealth funds. The Principles stress that the policy purpose of such a fund should be clearly defined. The Government Pension Fund Act contains an explicit objective that the fund shall support government saving and support long-term considerations in the use of petroleum revenues. In the mandate from the Ministry, this has been specified by providing that Norges Bank shall seek to achieve the highest possible long-term real return with moderate risk. The Santiago Principles also emphasise the importance of a clear division of roles and responsibilities and of avoiding micromanagement of investment activities. This is provided for with regard to the relationship between the Ministry of Finance and Norges Bank as the Ministry does not issue instructions in matters relating to the exercise of ownership rights or individual investments. The Santiago Principles are derived from more general principles of corporate governance. An important purpose of these principles is to mitigate what is called the “principal-agent problem”. This problem arises when a principal delegates a task to an agent who has more information and who may have interests other than those of the principal. Delegated investment management is an often-used example of a situation where the principal-agent problem can arise.

The weakness of the recovery has led some people to suggest that we could increase the effectiveness of quantitative easing by directing the money used to buy the gilts to buying private sector assets instead, or else to inject purchasing power more directly by passing it directly to households in the manner of Friedman’s famous helicopter. Such options can always be split into two legs: a fiscal leg, involving some bond-financed public expenditure and which ought to be subject to the control of the Chancellor and the Treasury; followed by a second monetary, or financing, leg in which the Bank buys the corresponding quantity of government debt on the secondary market and is just conventional quantitative easing. Viewing it this way is, I believe, helpful as it allows one to focus on the merits of the alternative use to which the funds are put. For instance, the easiest way to implement a “helicopter drop” would be to increase tax allowances temporarily. But the life cycle/permanent income model of consumption behaviour suggests that one should expect the vast majority of such a temporary windfall to be saved rather than spent. It certainly is not the obvious way to try to boost demand, unless one can direct the additional income to credit-constrained consumers who are more likely to spend it. In any case, the design of any fiscal intervention does not need to be tied to the question of how the financing is split between money and bonds.
We expect to start granting licences to virtual banks around the end of this year or early next year. I believe establishment of virtual banks will provide further traction to the growth of the Smart Banking ecosystem in Hong Kong. 7.Fourthly, the Smart Banking ecosystem is not complete without support from the general public and customers. I am glad to see that a large number of bank customers have signed up with the Faster Payment System (FPS) since the launch of customer registration on 17 September for registration. Growing significance of Regtech in the Smart Banking Era 8.As we watch the positive development of the Smart Banking ecosystem, it is also important that we maintain momentum. This year, the conference’s theme, “Banking for a Smart Society”, reminds us not to be complacent. We should continue to work collectively to further develop the ecosystem. 9.While we naturally pay more attention to new or innovative digital financial services that become available to bank customers as a result of the Smart Banking initiatives, let’s not forget that Fintech is not only about the interface between banks and customers. The importance of a key Fintech segment, Regtech – regulatory technology – in supporting and facilitating the interface between banks and the regulators, should not be understated nor overlooked. I would like to therefore provide a supervisor’s perspective on Regtech in the Smart Banking era. 10.When we look at Regtech, some may immediately start to envisage the substitution of us, banking supervisors, with technologies such as artificial intelligence (AI) or “robo-regulators”.

If the money you hold is losing its value, you have every incentive to get rid of it as quickly as possible. If, on the other hand, it is gaining value fast, you want to hoard it and store it. In any case, swift changes in purchasing power are the mortal enemy of any good currency. Some bitcoin enthusiasts put forward that this problem will moderate over time as more and more bitcoins are mined and the “velocity” of bitcoin money demand increases with more 1/3  BIS central bankers' speeches  universal acceptance of the cryptocurrency. I don’t think so, since there is no guarantee of purchasing power stability for any commodity-based money. Its key principle is exogenous “money supply”, which in my eyes invites inherent volatility in value. From this perspective, bitcoin is the antithesis of our elastic money system, which is based on the notion that to keep the value of money and purchasing power relatively constant and predictable, the amount of money has to change flexibly over time. This is the lesson of the late 19th and 20th century in monetary policy: price stability matters. People take this as such a self-evident statement that typically they do not even think about it and take it for granted. But this observation does nothing less than confirm the most beneficial feature of our money and the monetary policy behind it – people use the currency and don’t have to think about why, in fact, they trust it.
The Bank’s investment management organisation analyses these companies thoroughly, in order to identify long-term investment opportunities, reduce the Bank’s exposure to undesirable risk and the like. We use such analyses in order to safeguard the portfolio. There are companies 3/5  BIS central bankers' speeches  where we prefer not to be an owner. If we see that a company has a business model that we do not regard as sustainable, it may lead to divestment. But unlike the ethically justified divestments, these risk-based divestments are justified by purely commercial considerations. All together, the fund has made risk-based divestments of 282 companies since 2012. The first divestments were of palm oil companies, whose activities entail destruction of rainforests. Since then, the fund has divested of a number of other companies, where the common denominator has been that we have observed inadequate management of risks such as those related to the environment and climate change, corruption and human rights. Chart: Return effects of risk-based divestments Our experience from this work has been favourable. We exploit the fund’s characteristics, primarily its long-term horizon, to reduce risk and – in any case as it appears today – also to improve the fund’s return. Since 2012, risk-based divestments have contributed to increasing the return by an amount equivalent to around 0.27 percentage point of the value of the fund’s equity portfolio, measured against the benchmark index. This is the equivalent of around NOK 7 billion.

Jon Nicolaisen: Responsible investment and active ownership Speech by Mr Jon Nicolaisen, Deputy Governor of Norges Bank (Central Bank of Norway), at Norges Bank, Oslo, 19 November 2019. * * * The graphs can be found on the Norges Bank’s website. Introduction In 1990, visionary politicians decided to establish the Government Petroleum Fund, later renamed the Government Pension Fund Global (GPFG). On Tuesday of this week, the value of the fund passed NOK 11 000 billion – or over 3½ times Norwegian mainland GDP. The fund is now among the largest shareholders in many of the world’s listed companies. Chart: From natural resources to financial wealth What started as oil wealth in the ground has been transformed into savings and financial wealth abroad. Under the fiscal rule, we should only spend the expected real return on the fund. As long as we only spend the return, we ensure that the fund will benefit future generations. In 2020, withdrawals from the fund accounted for more than one krone in five in the central government budget. This means that the fund indirectly finances tens of thousands of public sector employees and ensures that taxes are lower than they would otherwise be. We might say that Norway has moved from being an oil nation to being an investment fund nation. The assets in the fund belong to the Norwegian people. The most important decisions, such the choice of the fund’s equity share, are anchored in the Storting (Norwegian parliament).
Also, the sectors of activity most affected by this crisis (hospitality, transport and leisure) account for approximately 13% of the Spanish economy, compared with around 9% of the euro area economy. As regards the behaviour of the labour market in the coming years, employment in terms of hours worked is expected to move on a very similar path to that of economic activity, showing declines of over 11% in 2020 and a recovery thereafter. The unemployment rate is expected to increase very significantly both in 2020 and 2021 and, despite falling in 2022, will still remain over 18% under scenario 1 and over 20% under scenario 2. Concerning public finances, the general government deficit is forecast to increase strongly in 2020, to 10.8% of GDP under scenario 1 and 12.1% under scenario 2. Although this ratio is expected to fall gradually in 2021 and 2022, the budget deficit will still be very high at the end of the projection horizon, standing at almost 6% under scenario 1 and at slightly over 8% under scenario 2. The government debt ratio is expected to rise very significantly in 2020, by between 20 pp and 25 pp, standing at the end of the projection horizon at 118% of GDP under scenario 1 and at 128.7% under scenario 2.

Taking my previous comments on the most likely public spending and revenue developments in 2021 together, we may conclude that there is a significant risk that the budget deficit will overshoot its reference level of 7.7% of GDP next year. As I have already said, public spending forecasts are subject to certain upside risks, basically deriving from a possible intensification of the pandemic, which we have in fact been seeing in recent weeks in Spain and in the rest of Europe. This may require some of the discretionary measures adopted to protect households, the self-employed and businesses to be extended for longer than initially envisaged. At the same time, we cannot rule out the unemployment rate, and thus spending on unemployment benefit, behaving less favourably than expected. In turn, public revenue projections face downside risks mainly linked to a relatively optimistic forecast for GDP growth and, consequently, for the increase in the tax base in 2021. As regards the fiscal policy stance, this is usually approximated by the change, from one year to the next, in the general government structural balance, a variable that is not directly observable and can only be estimated with a high degree of uncertainty. According to the information contained in the Draft Budgetary Plan, the structural balance will deteriorate from -4.1% of GDP in 2019 to -5.4% in 2020, and again in 2021 to -6.3% (see Chart 14). Accordingly, the fiscal policy stance will be expansionary in 2020 (-1.4 pp), 24  and in 2021 (-0.8 pp).
Our critics, both at home and abroad, have accused us of intervening with the aim simply of propping up the stock market; of being too afraid to face the pain from the necessary interest rate volatility under a strict currency board system operating in difficult conditions; even of trying to introduce a novel form of state ownership by acquiring a substantial interest in Hong Kong’s major corporations. The essence of these charges is that what we did in August marked the end of our long-standing and hugely successful philosophy of non-intervention in the markets. I think it is now increasingly recognized throughout the world that what we did was both necessary and effective. But let me emphasize this: our actions in August were not the end of non-interventionism, not an abandonment of our free market principles, but a measure taken to ensure that those principles prevailed. Free markets cannot mean markets that can be freely manipulated, particularly by large players operating in small markets. We did the minimum that BIS Review 98/1998  -4-  was necessary to preserve the integrity of our linked exchange rate system and allow our financial markets properly to perform the role of financial intermediation. Our responsibility was to keep the markets free and fair for all investors. Not to have acted would, in my view, have been the very height of irresponsibility, and would have seriously damaged Hong Kong’s credibility as an international, and freely accessible, financial centre. We now have a substantial shares portfolio.

We cannot accept this assault on democratic systems and values and on the security of the European continent. Economic prosperity is, and will continue to be, built on the foundations of democracy and security. These values are the bedrock of open economies and financial systems, and Russia has betrayed them. The Russian shock is now the largest contributor to UK inflation by some way. There is an economic cost to the war, and we all have to recognise that, but at the Bank it will not deflect us from setting monetary policy to bring inflation back to the 2% target. The last disturbance is a domestic one. The UK labour force has shrunk over the last two years, and this is contributing to inflationary pressure due to the difficulty of recruiting. It is important to understand exactly why the labour force has shrunk, why inactivity – those not working and not seeking to – has risen, and of course what we might expect to see in the future. Have more people retired than was expected, has long-term illness risen permanently, and how many people may return to the labour force and over what time? A one percentage point reduction in the labour force may not sound much, but with a working-age population of around 40 million it is a lot of people. With such numbers, the shrinkage in the labour market adds an inflationary impulse on top of energy and international goods prices.
Let me briefly remind you of these:  2  BIS central bankers’ speeches  –  respond to all requests for financing within 15 working days of submission of the completed application. This commitment appears to have been met in 90% of cases, 1 which is commendable; but the remaining 10% still amounts to 100,000 late responses per year;  –  explain to VSEs why their loan application has been rejected;  –  in the event of the rejection or cancellation of a facility, inform the client of all the options available for recourse;  –  provide better information on short-term financing;  –  reduce the turnover of VSE financial advisers. I would also like to highlight the valuable contribution of the FBF in producing an explanatory guide on VSE financing. A lot of entrepreneurs need to learn and understand the basics of finance. The misunderstanding between bankers and businesses often stems from the fact that they don’t speak the same language: this makes it harder for VSEs to establish a close working relationship with their bank managers and financial advisers. In addition, the Banque de France and the High Council of the French Institute of Chartered Accountants have worked together to produce a financial guide for VSEs entitled Guide du Routard du Crédit. I would also like to single out the efforts made by the Observatory for Business Financing, which has put together a forthcoming glossary on loan pricing.

Outstanding bank lending to corporates is rising at a faster pace in France than anywhere else in Europe: +4.5% year-on-year at end-November 2015, compared with +2.1% in the United Kingdom, +1% in Germany and an average of +0.9 % for the euro area as a whole. In fact, based on the responses given by business leaders to our surveys, it seems that applications for investment loans are generally accepted fairly readily, and the same seems to apply, more or less, to cash loans. Although difficult to measure, firms’ willingness to apply for loans appears to be strong. Surveys conducted by the ECB show similar results, and rank France on a par with Germany in terms of access to credit and willingness to apply for loans, well ahead of the other major countries in the euro area. Interest rates on loans are also lower in France than anywhere else in the euro area – by around 1 percentage point in the case of individual loans of up to EUR 250,000. With regard to today’s topic, however, there are a number of important distinctions that need to be made. Access to credit is markedly more difficult for VSEs than for other SMEs: –  fewer than 60% of applications for cash loans were accepted (i.e. granting of 75% or more of the requested amount) in the third quarter of 2015, compared with 74% for SMEs.
BIS central bankers’ speeches  3  prices in order to avoid financial instability, one really wants another instrument that acts more directly on the source of the problem.”8 Given that the policy rate has such small effects on housing prices and such large effects on inflation and unemployment, it quite simply does not appear possible to use monetary policy and the policy rate to limit household debt at present, without clear prejudice to the mandate to maintain price stability and attain the highest sustainable rate of employment.9 Monetary policy can hardly affect real housing prices and loan-to-value ratios in the long run Another important issue is whether monetary policy can affect real housing prices and loanto-value ratios in the long run and thus affect household debt. A fundamental and generallyaccepted insight in modern macroeconomics is that monetary policy cannot affect real variables such as production, employment, unemployment, in the long run.10 Monetary policy can only affect nominal variables in the long run, for instance, prices, inflation and the exchange rate. According to the same generally-accepted insight, monetary policy cannot affect real interest rates and real asset prices in the long run. Nor can monetary policy affect the size of the housing stock and its real value in the long run, nor the way it is funded by means of borrowing and own capital. This is instead determined by by real and structural conditions in the economy, including the functioning of the housing and mortgage markets and the housing and tax policies conducted.

Instead, with an additional objective of managing credit growth and asset  5  Sveriges Riksbank (2011). 6  Results using Swedish data in Claussen, Jonsson and Lagerwall (2011) entail a reduction (or avoiding an increase) in housing prices of 10 per cent during a seven-year period normally requiring a policy rate increase that leads to GDP being 6 per cent lower than it would otherwise have been. Under the assumption of an Okun coefficient of 2, this means an increase in unemployment of 3 percentage points. Assenmacher-Wesche and Gerlach (2010) find, using data from 18 countries, that a reduction in property prices of 10 per cent normally requires a policy rate increase that leads to GDP being 4 per cent lower than it would otherwise have been and thus with the same Okun coefficient, to unemployment being 2 percentage points higher. 7  Bean, Paustian, Penalver and Taylor (2011).