samchain/econo-pairs-v1 huggingface dataset:
Both in Norway and the rest of Europe, the fall in the number of working hours is ascribable to longer holidays and shorter working days. The standard working year is short in Norway, but on the other hand Norway also has a higher percentage of part-time employees than other countries. Access to these working hour arrangements has made it easier for women and young workers to enter the labour market. 8  See for example OECD (2006): Economic Policy Reforms: Going for Growth; Bart van Ark (2005): “Europe’s Productivity Gap: Catching Up or Getting Stuck”; and Christine Cumming: Panel Remarks in a Symposium on Productivity, Competitiveness and Globalization, Banque de France, Paris, November 4, 2005. 9  See for example Cumming (2005) and van Ark (2005), op.cit. 10  European Commission (2005): Special Eurobarometer 224, Europeans, Science and Technology, June 2005. 11  Source: Telemark University College: Norwegian Mathematics Council’s autumn 2003 survey among new students, February 2004. BIS Review 10/2006  7  The income level in Norway has increased. Many may prefer to take advantage of this by increasing their leisure time in the form of shorter working days or longer holidays. And this has in fact taken place. Moreover, the retirement age is steadily declining. The expected retirement age is now below 60, when disability pensioners are taken into account. At the same time, life expectancy has increased, and leisure time accounts for an increasing share of our lives.

But when capacity utilisation increases, the interest rate will have to be raised gradually towards a more normal level. Even though price inflation has deviated from the target for a period, there are no indications that economic agents have changed their view of future inflation. Expectations are stable. When households and businesses make their saving and investment decisions and set prices, they can safely ignore the possibility of sustained, marked increases or decreases in the general price level. The business sector can base their decisions on the assumption that wage and cost inflation will not revert to the level seen in the 1970s and 1980s. Employees also know that their pay increases will not be eroded by inflation. Low and stable inflation is a credible objective. 4. Are we equipped for the future? Norwegian enterprises have access to new markets and are encountering increasing competition. New businesses are emerging while others are scaling back and closing down. We have behind us 15-20 years of fairly sound macroeconomic management, which provides a good basis for growth in the Norwegian economy. The banking system and securities markets are highly developed. Generally, only unprofitable projects lack financing and capital. In a take-over, new owners completely re-haul poorly run operations. In Norway, as in other industrialised countries, private ownership is firmly protected. This is a competitive advantage and a fundamental precondition for a market economy to function over time. We like to believe that we have a highly educated labour force, and find some support for this in OECD surveys.
To meet the  4  When interpreting the figure, it may be useful to know that Prospera’s wage expectations systematically underestimate wage trends by around 0.5 percentage points. BIS central bankers’ speeches  7  inflation target in such a situation, the Riksbank would have to raise the repo rate more rapidly. This would further dampen employment. However, the result also depends on the reason for the higher wage increases. If these are due to the stronger development of productivity, costs will not increase and the intensifying effects on inflation and unemployment will not be experienced. My assessment is still that if wage increases were to be slightly lower than the approximately 3.5 per cent per year in 2012 and 2013 that the Riksbank estimated in its April forecast, not only inflation and unemployment, but also interest rates, could be lower. This would be preferable from the wider perspective of welfare. It would also reduce the risk that increasing energy and commodity prices or rising inflation and wage expectations will push up inflation beyond our expectations. Conclusion The Riksbank is not a party in the collective bargaining process. It is the social partners that conclude the agreements. But monetary policy aims to maintain a low and stable level of inflation. This job is made easier if wage formation works well. The effective functioning of wage formation since the mid-1990s is due to the improvement of both the conditions for wage formation and wage formation itself.

The Rehnberg Agreements of 1991–1992 resulted in significantly lower agreed wages than previously and – more importantly – they removed the price and wage clauses from the agreements, thus contributing to breaking the price and wage spiral. The Industrial Agreement of 1997 was another important change. The wage bargaining rounds of 1995 had resulted in relatively high wage increases of over 5 per cent per year for the following two years. This resulted in pressure from the government of the time on social partners to change wage formation through negotiation. The Industrial Agreement was exactly this kind of change. It assumes that the manufacturing sector, exposed as it is to international competition, should determine the level of wage increases. The Agreement also means that there are rules for the conducting of negotiations, for example that demands should be specified well ahead of the expiry of agreements and that the conclusion of negotiations should be supported by mediators, the so-called impartial chairman. There are also similar, but not as far-reaching, agreements in other sectors. The National Mediation Office, which was set up in 2000, was another important change. As is widely known, the Office’s tasks are to mediate in labour disputes and to actively promote efficient wage formation. The active promotion of efficient wage formation entails, among other tasks, ensuring that wage formation permits the strong growth of employment.
Before turning to the focus of this talk – the measurement of household inflation expectations – I want to provide a quick summary of market-based and professional surveys. The difference in yields between nominal and real government debt can be used to derive a measure of market inflation expectations for the price index used to protect the holders of real government debt from inflation. In the United States, that price index is the consumer price index (CPI). Thus, if the nominal 10-year yield is 3.5 percent and the real 10-year yield is 1 percent, one crude measure of average CPI inflation expected over the next 10 years would be 2.5 percent. Further, if the nominal 5-year yield is 3 percent and the real 5-year yield is 0.2 percent, then a crude measure of average CPI inflation expected over the next 5 years would be 2.8 percent and a crude estimate of the 5- to 10-year forward average CPI inflation would be 2.2 percent. BIS central bankers’ speeches  1  I say crude because such calculations ignore any difference in liquidity between and within the two types of debt, any compensation investors require for the uncertainty of the real value of nominal coupon securities and a variety of other issues, such as the fact that Treasury Inflation-Protected Securities (TIPS) are indexed to the CPI with a time varying lag. There are numerous ways to measure inflation expectations that take into account liquidity differences.

So higher relative growth is often associated with a higher price level and a stronger real exchange rate. The reverse provides an important partial explanation for the krona's long-term real depreciation: Sweden's growth trend in recent decades has been weaker than in our most important competitor countries (Diagram 1). BIS Review 65/2002  3  Diagram 1. Real exchange rate and relative GDP against the euro area Index 1992:Q4=100 130 Relative GDP  120  110  100  90 Real exchange rate  80 1970  1974  1978  1982  1986  1990  1994  1998  2002  Source: Sveriges Riksbank  Another important explanatory variable for the real exchange rate is terms of trade, which is also a relative price for groups of goods. Here, however, the categories of goods in the comparison is more limited than in the case of the real exchange rate. More specifically, terms of trade represent the price of imported goods expressed in terms of the price of goods that are exported. In Sweden's case, shifts in terms of trade often stem from changes abroad; in our small and open economy, changes in domestic supply and demand are of secondary importance for the long-term development of our terms of trade. A look at Sweden's terms of trade in recent decades reveals a number of episodes where major changes in terms of trade have led to sizeable movements in the real exchange rate.
This gives rise to something called convexity effects, which indicate negative risk premiums. These convexity effects are normally limited, but will grow if uncertainty about the future increases. 2  BIS central bankers’ speeches  expectations provide such a mixed picture, it is not surprising that different analysts reach different conclusions. Figure 1 Two-year forward interest rates and money market agents’ repo-rate expectations two years ahead according to Prospera Per cent  Sources: Reuters EcoWin and TNS SIFO Prospera. Note. Forward rates have been adjusted for risk premiums and describe the expected overnight rate. Risk premiums include both credit risk and maturity premiums. The dates of Prospera’s surveys refer to the dates the surveys were carried out. So, how should you go about assessing market expectations in such a situation? This is a difficult question and I have no complete answer. However, this should not stop us from trying to determine how to evaluate different measures of monetary policy expectations. Let me begin with forward rates. Forward rates have many merits. They reflect market expectations for many different time horizons and they can be observed continuously, which makes it possible to analyse how market expectations are affected by different events. Often, but not always, they also provide a fairly reasonable picture of market expectations. However, the problem with forward rates, as we have already seen, is that they are also affected by a range of other factors and this sometimes means that they provide a misleading picture of market expectations.

2023 Paris Finance Forum – Paris, 5 July 2023 Regulation and innovation: the yin and yang of the financial sector  Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 of 6 Ladies and Gentlemen, It is a real pleasure to be taking part in the Paris Finance Forum and I wish to warmly thank Augustin de Romanet for his invitation, and Europlace for their work. Europlace has contributed to the growing interest in the Paris financial centre in the wake of Brexit. As I have the privilege of speaking this lunchtime, I shall begin with dessert. According to an excellent Bloomberg article,i "If any city can make claim to being the European Union’s new pre-eminent hub, it’s Paris". Paris is the only financial centre to offer a broad range of financial activities – from global asset management to insurance and banking and market activities – and it has benefited from the relocation of all segments of the financial industry. Paris has now overtaken London as Europe's largest financial centre in terms of stock market capitalisation. With the presence of the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), there is also a 'regulatory hub' – to which I should add the ACPR, generally recognised as an exacting but extremely competent supervisor. The Paris financial centre is therefore a good illustration of harmonious coexistence between regulation and innovation. In my view, these are the yin and yang of the financial sector.
The new figures thus confirm that there has been a sharp downturn in the growth rate and completely support the picture that could be discerned at our latest meeting. Increasing cost pressures have been an important factor behind the series of interest rate increases introduced by the Riksbank. The new figures from the National Accounts show that the figures for hours worked have been revised up-wards compared to the version available to us in September. Together with the marginal downward revision of the figures for growth, this means that productivity declined more than indicated by the preliminary figures. As the figures for labour costs per hour worked have also been adjusted upwards, the new figures show that unit labour costs increased by 5.3 per cent on a 12-month basis in the second quarter. This was almost a percentage point more than in the preliminary version of the National Accounts. The fact that productivity is weak may be because companies have not had time to adjust their workforce as the downturn in economic activity has been so sudden. We can now see that the number of vacancies is falling and that plans to recruit new personnel are being  BIS Review 113/2008  5  toned down. An adjustment is underway which will be followed by a recovery in productivity, in line with the Riksbank's forecast. Rising costs are of course a factor that the Riksbank has every reason to monitor and analyse carefully.

If that consensus exists, we stand ready to work with the market to deliver this complementary tool. We strongly encourage market participants to engage on this consultation and look forward to receiving responses. 15  For presentational reasons, Figure 3 shows the SONIA index and compound rates over different time periods from those shown in Section 2 of the accompanying Discussion Paper, but the underlying data and calculation methods are identical. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Transitioning the Bank of England’s lending facilities away from LIBOR  Our second announcement today also relates to our presence in the market – specifically, how we treat LIBOR-linked collateral in our Sterling Monetary Framework lending operations. We released a discussion paper on this topic last year and today we set out the actions we intend to take. Our lending operations are designed to provide liquidity support to market participants experiencing either a predictable liquidity need or a firm-specific or market-wide shock. We lend to firms against a wide set of eligible collateral. But to protect public funds we apply a risk-averse ‘haircut’ to that collateral to protect against possible falls in its value in the period between a counterparty default and collateral sale, including in times of potentially severe stress. The current average haircut on pre-positioned collateral is a little under 25%, giving the Bank a lending capacity of over £ after accounting for existing lending (for example under the Term Funding Scheme).
The Riksbank’s mandate remains unchanged. We shall continue to safeguard financial stability. We shall therefore continue to analyse and oversee the financial system, to inform and warn of risks and to make recommendations regarding measures to take. As I mentioned earlier, financial stability is also an important condition for monetary policy to function. The new framework also entailed establishing a forum for representatives of the Government, Finansinspektionen, the Swedish National Debt Office and the Riksbank to meet and discuss questions of financial stability, what is known as the Financial Stability Council. The Council meets regularly, normally twice a year, and the information provided and discussions held at these meetings are publicised in the form of minutes no later than two weeks after the meetings. The meetings give us the possibility to discuss how the policy areas interact and what types of measure are needed to avoid new financial crises as far as possible. The authorities represented on the Council then make decisions independently within their fields of responsibility, as to which measures should be taken. Figure 12 illustrates the new framework for macroprudential policy in Sweden. This spring’s work in the Council – focus on capital requirements We have so far had two meetings of the Financial Stability Council. The first, inaugural meeting was held in February, and we noted there that there was a need for further measures to reinforce financial stability. At the end of May the first real meeting was held, and we were able to conduct a more in-depth, concrete discussion.

The main risk continues to be an abrupt deterioration of financial conditions facing emerging economies, especially because markets seem to be more reactive to negative news. In this area, what happens in the US is still relevant, in terms of both the evolution of inflation and its outlook and the unfolding of the trade conflict. This situation has revived the fears about China, especially the risks implicit in the imbalances it maintains in several of its markets. In Europe, among other issues, the uncertainty surrounding Brexit is cause for concern. In the context of normalizing global financial conditions, investors have drawn a line between the emerging economies they perceive as more vulnerable and those with more solid fundamentals. Chile meets the current situation with good macroeconomic indicators in terms of growth, inflation and the balance of its fiscal and external accounts. Moreover, our floating exchange rate makes it possible to cushion external shocks, and the monetary policy framework permits us to act countercyclically. This is feasible due to the low exposure to interest rate and exchange rate risks by the main economic agents. On financial matters, one issue drawing attention in this conjuncture is the external debt. The Box in this Report, entitled “Financial Volatility and External Debt”, provides an in-depth analysis of this issue, particularly with regard to corporate debt.
For starters, the Federal Reserve now makes its most consequential supervisory decisions on a system-wide level through the Large Institution Supervision Coordinating Committee or “LISCC.” The committee comprises representatives across professional disciplines from several Reserve Banks and the Board of Governors. The New York Fed supplies only three of its 16 members. LISCC sets supervisory policy for the 15 largest, most systemically important financial institutions in our country and develops innovative, objective, and quantitative methods for assessing these firms on a comparative basis. LISCC also coordinates the supervision of the largest supervised institutions through its Operating Committee, which reviews and approves supervisory plans for exams, receives regular updates on major supervisory issues, and makes material supervisory decisions regarding matters that affect the firms’ safety and soundness. In this respect, the Operating Committee provides an important safeguard against regulatory capture by ensuring that no one person or Reserve Bank has the power to make a final decision on a matter of significance. Another procedural change is our increased application of cross-firm, horizontal review. This technique enables peer-to-peer comparison of banks, facilitates a better assessment of the overall health of the financial system, and safeguards against regulatory capture by providing insight from across the Federal Reserve System. The analysis is done not only at the level of the Board of Governors – for example, through CCAR and Dodd-Frank stress testing – but also within the New York Fed. We hold weekly discussions among senior supervisory and risk officers to identify developing concerns that may pose a systemic risk.

By contrast, the euro area was more exposed to the energy crisis than the US, given its proximity and higher energy dependence to Russia and especially Russian gas. As long as inflation is largely caused by supply side factors such as energy prices, interest rate hikes cannot address the problem. Hence the ECB reacted when the inflation rate in the projected horizon breached its 2% target and saw signs of infiltration of inflation into demand side factors of the economy. Consequently, the ECB started raising interest rates in July 2022. However, it had started normalising its monetary policy much earlier in 2022 by terminating the PEPP and APP bond purchases. The second main difference relates to the labour market dynamics of the two economies. The US labour market exhibited at a relatively early stage, a greater degree of tightness, evidenced by stronger wage growth in the US than in the euro area. This higher degree of US labour market tightness was another key factor in explaining the medium-term inflationary pressures. By contrast, in the euro area, the pick-up in wage growth is relatively a more recent phenomenon. Characteristically, US labour costs increased by 5.8% in 2022, and almost 12% in the two year period 2020-2022. In the euro area, data until the third quarter of 2022 show that labour costs have increased by 2.8%, with a cumulative growth of 7% over the same period of 2020-2022.
First, in the area of monitoring and assessing risks to financial stability, central banks can benefit from extended access to supervisory information and intelligence to better understand risks and vulnerabilities for the financial system as a whole. At the same, there is clearly the issue, of how to translate the outcome of the financial stability assessment into supervisory action. In principle one cannot but agree that there should be a way through which, if the central bank identifies serious risks to financial stability, the competent supervisor should be able to act. Therefore, communication needs to go both ways: from the central bank to supervisors and vice versa within the respective legal framework. Second, in the area of liquidity, there is clearly room for a closer interplay between the two authorities. Central banks would benefit from enhanced access to supervisory information and intelligence for its role of maintaining stable money markets. To that end for instance access to information on banks’ liquidity contingency planning funds would be useful. At the same time, supervisors would benefit from information available at central banks stemming from their role in the money markets. Third, in the area of crisis management and resolution, depending on the nature and feature of the crisis, there is a need for close interaction between the two authorities. Provision of Emergency Liquidity Assistance is a clear point in case where central banks need supervisory information for decision-making.

Gertrude Tumpel-Gugerell: What is the role of central banks for banking supervision? Introductory remarks by Ms Gertrude Tumpel-Gugerell, Member of the Executive Board of the European Central Bank, at the panel discussion at the ZEIT Konferenz “Finanzplatz: Menschen und Entscheidungen”, Frankfurt am Main, 8 September 2008. *  *  *  The ECB has already expressed its position on the possible role of central bank in financial supervision in 2001. This was triggered in the context in which some countries were in the process of transferring the supervisory function from the central bank to independent authorities. The main position at that time, which remains valid today, is that there is no optimal arrangement for the organisation of supervision at the national level. All organisational models – sectoral supervision, supervision by objectives, supervision in a single authority – can in principle work well or fail depending on circumstances. However, regardless of the model, it is important that there exists a very close and smooth interplay between the central banking and the supervisory function. Does the experience of the turmoil bring new elements in this domain? This is certainly the case. In general the turmoil has clearly confirmed the importance of a strong interaction between central banks and banking supervisors as also confirmed by the specific recommendation of the Financial Stability Forum in this field. As a new element the turmoil has somewhat contributed to specifying the relevant areas in which this interplay should be reinforced.