samchain/econo-pairs-v1 huggingface dataset:
This helps explain the uneven pattern of wealth gains by age since the crisis, as older cohorts are more likely to be owner-occupiers. Taken together, then, the rising cost of rents, and the rising share of renters, appears to have caused a further erosion of some households’ income since the crisis, particularly renters, the poor and the young. For those cohorts, rising housing costs are likely to have contributed to the sense of this being an invisible recovery. Whose recovery? To a significant extent, those owning their own home. The social jigsaw So far, we have looked at relatively standard measures of economic health and wealth, the staple diet of economists like me. But there are now many studies showing that objective measures of economic health and wealth do not always correspond well with individuals’ subjective sense of well-being and fulfilment. 11 Let me give a simple example to bring this point home. The highest per capita income region in the UK is London, where the average person earned £ per year in 2014. At the bottom of the per capita income league table was Northern Ireland, where the average person earned £ per year in 2014. Yet when it comes to measures of life satisfaction, the tables are completely turned. London ranks at the bottom of the regional league table of happiness, while Northern Ireland occupies (by some distance) pole position.

But the pattern is again uneven, with the largest gains in London (47%) and the South-East (25%), whereas in Wales the gains are smaller (8%) and in the North East there has been a small fall in wealth. With  9  6  In other words, this is a standard “Benthamite” (Bentham (1789)) social welfare function of the form : 𝑆𝑆𝑆𝑆 = ∑𝑖𝑖 ln 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 where 𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖 is gross value-added for region i See, for example, Sen (1970). Other forms of social welfare function – such as those proposed by Rawls (1974) and Sen (1973) – place greater weight on those with lower initial levels of well-being. They would suggest weaker profiles for social welfare than those shown here. BIS central bankers’ speeches  wealth in the former regions already higher than in the latter, the upshot has been a widening in the regional distribution of wealth. As with income, these wealth data can be translated into a measure of social welfare. Chart 14 plots that relative to aggregate wealth since 2007. The well-being benefits from higher wealth have been roughly half as large as would have been the case had these gains been evenly distributed regionally. This evidence goes some way towards reconciling the macro data and the micro stories from my regional visits. Whose recovery? To a significant extent, those living in London and the South-East of England. (b)  Income distribution  A different lens on recovery comes from looking at how income gains are distributed across households.
Studies indicate that the probability of suffering a large fall in housing prices almost doubles if the saving ratio is unusually low.20 An important difference between Sweden and countries that have experienced severe falls in housing prices, such as Ireland, Spain and the United States, is that the latter have also had a construction boom (see Figure 4). This gradually led to an over-production of housing, which in turn contributed to housing prices falling even more once the market began to weaken. A construction boom appears to be an important – perhaps necessary – ingredient in the recipe for crisis in the property sector. 17  A “left-to-live-on” calculation estimates the difference between disposable income and housing and maintenance costs, possible alimony payments and a standard for households’ cost of living. The banks take into account the borrower’s whole loan situation and assume on average a mortgage rate of around 8 per cent when calculating interest costs and assume some amortisation will be made. Finansinspektionen (2012). 18  A stress test of housing prices in the report shows that a large price fall of 40 per cent and an increase in unemployment of 20 percentage points without unemployment benefit means that only 10 per cent of the new mortgage borrowers have a loan-to-value ratio of over 100 per cent and a deficit in a “left-to-live-on” calculation. (Finansinspektionen 2012, Figure 17). 19  Claussen, Jonsson and Lagerwall (2011).

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).
the government on organic  In line with the international appetite to  agriculture, mainly due to the  promote green financing, the Central  multiple benefits that accrue from it,  Bank has also joined the Sustainable  the Central Bank expects to promote  Banking Network (SBN) of the  commercial scale organic agriculture  International Finance Corporation (IFC),  and dairy entrepreneurs through the  which is a knowledge and capacity  establishment of formal agribusiness societies and multi-stakeholder enterprises. building platform for financial regulators and banking associations of emerging markets on sustainable finance. As a   A Loan Scheme for Promoting Rooftop  member of the SBN, we would focus on  Solar Power Generation: A new loan  sustainable banking practices to help  scheme, funded by ADB, will be  banks to effectively manage  Central Bank of Sri Lanka – ROAD MAP 2017  31  environmental and social risks in the  finance, with the support of IFC, we  projects they finance and support  intend to conduct a workshop for the  businesses that are greener, climate  senior staff of banking institutions in Sri  friendly and socially inclusive. As an  Lanka during the first quarter of 2017.  important step towards sustainable  Central Bank of Sri Lanka – ROAD MAP 2017  32  6.

Smoothing out the bumps, surveys of activity and confidence, among both consumers and businesses, have scarcely budged. Although a little weaker than last year, those surveys continue to point to solid, around-trend, growth. What has clearly changed recently is the composition of UK growth. Consumer spending has slowed, perhaps sharply, while there are signs business investment is picking up (Chart 17). Surveys also suggest a strengthening outlook for exports. With their balance sheets strong, their cost of capital low and with demand for their products – particularly from overseas – buoyant, UK companies may be emerging from under the duvet, putting their balance sheets to work. If so, and even if aggregate growth is somewhat slower, this will make for better balanced and more resilient growth. None of this is to suggest that the risks of a Brexit break have disappeared. There are still enough straws in the wind to believe a sharper slowdown than expected is possible, with consumers’ spending on houses, cars and household goods all having slowed sharply. And it might not take much of a squeeze on consumer demand to induce companies to return to their duvets. But there has been no consistent evidence, so far at least, of this discontinuity risk having increased significantly during this year. As for nominal pressures, there have been some signs of a stirring. Consumer price inflation, at 2.9% in May, exceeded market expectations, as did measures of core inflation.
It means measures to reduce disruption to financial markets if a bank is wound up. And crucially it means agreement between the authorities in the countries in which these global banks operate on how they should be resolved if they fail. We have made a lot of progress on too big to fail. But we are not yet there. I do not think we can say with confidence now that we could resolve a failing global giant. Getting agreement on international standards to end Too Big to Fail is perhaps the most important regulatory priority for the G20 Summit in Brisbane in November this year. When you stand back and look at the progress of this unprecedented programme of international financial reform, on the capital and liquidity framework, on inter-connectedness, on shadow banking and on too big to fail, a huge amount has been achieved. 4  BIS central bankers’ speeches  If we can get the progress that G20 leaders committed to this year by the Brisbane G20 summit in November we will have “completed the job” of agreeing most of the key international standards and rules. And, in many areas, we will have gone a substantial way to implementing them. And I am very pleased to say that the Bank of England has played a key role – and in many areas a leadership role – in moving this programme forward. And I hope we can continue to do this as, increasingly, we move into the implementation phase. IV. Have we succeeded?

Gent Sejko: Albanian economic progress in 2018 and banking industry challenges for 2019 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the year-end function organised by the Albanian Association of Banks, Tirana, 13 December 2018. * * * Honourable AAB Chairman, Your Excellency, Minister of Finance and Economy, Dear senior representatives and colleagues from the banking system in Albania, Ladies and gentlemen, It is a special pleasure for me to participate and address this year-end function organised by the Albanian Association of Banks. In my brief address, I would like to bring to your attention some highlights of 2018, regarding the contribution of the banking sector and the financial system, as well as some milestones set for 2019. Let me first focus on the overall performance of the Albanian economy. The overall performance of the Albanian economy in 2018 was positive. Economic recovery is tangible across all of its dimensions. The pace of growth picked up, employment increased, internal and external balances were strengthened, while the main indicators of the banking sector’s soundness have been improving. It is encouraging to see that the sources of economic growth are both increasing and well diversified. From the aggregate demand perspective, growth in the exports of goods and services and in the domestic consumption and investments continued to underpin economic growth. In the meantime, from a sectorial perspective, economic activity expanded, reflecting a more notable contribution from output in the industry sector and the services sector.
Their effectiveness has also been studied by assessing whether they have helped reduce the likelihood of a systemic crisis [BCBS (2010)], a bankruptcy of a bank or group of banks and debtor default [Galán y Lamas (2019)]. But only on limited occasions has there been a cost-benefit analysis of the application of these measures in terms of their effects on GDP. More recently, researchers have begun to assess the differential effects of activating as opposed to deactivating macroprudential instruments, since their impact may be asymmetrical [Jiménez et al. (2017)]. 14  A methodology has recently been developed which allows an integrated analysis of these aspects to be performed. Specifically, Adrian et al. (2019) has developed the concept of Growth at Risk, the aim of which is to analyse the impact of the instruments on the distribution of expected GDP growth at different horizons. In that way, the impact not only on a baseline scenario (the most likely, characterised by the 50th percentile of the distribution), but also on a tail scenario (derived from a hypothetical systemic crisis, 5th or 10th percentile) can be analysed. At the Banco de España we have used this methodology to analyse the impact on the effectiveness of different macroprudential instruments at the European level [see Galán (2020)].

The macroeconomic effects of a transfer of resources from debtor to creditor 1/5  BIS central bankers' speeches  countries is an old issue, going back to the debate between Keynes and Ohlin about Germany’s international obligations after World War I. In recent decades, Maury Obstfeld and Ken Rogoff 4 have pointed out in a series of papers that the basic mechanism of the adjustment results in a transfer of real resources from debtor countries to surplus countries, regardless of the drivers of global rebalancing. In the debtor country, there is a clear macroeconomic cost related to a drop in domestic spending and welfare, leading to large negative output gaps and high unemployment rates, and in turn putting strong downward pressures on wages. This is typically what we saw in the euro area, where the adjustment contributed to the very different dynamics of unit labour costs across countries [Slide 5], and therefore led to relative price adjustments. In cumulative terms since 2007, Germany has seen real exchange rate appreciation of about 8% relative to France, and 20% relative to Spain, although we should take into account in these dynamics the large gains in German competitiveness before the crisis. The adjustment relied mainly on nominal adjustment in deficit countries. The link between the current account and the real exchange rate is still subject to considerable debate among academics.
6. Instead of setting a quantitative threshold or target for Green investments, we believe our present approach is a more pragmatic and likely to be a more effective way of promoting Green and ESG investments. We will continue to work with like-minded investors to promote focus on good ESG practices in managing their investments. In the interest of transparency, the HKMA will also consider an appropriate framework for disclosing the Exchange Fund’s Green and ESG investment efforts without arousing market sensitivity in the process. Capacity Building in Green Finance: Centre for Green Finance (CGF) 7. Hong Kong is already one of the major green finance hubs in the world. Last year a total of $ billion of green bonds were issued and arranged in Hong Kong. Earlier this morning, the HKMA, as the implementation agent of the $ billion Government Green Bond Programme, announced that a roadshow will be held for a potential green bond offering. Under the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay 2/3  BIS central bankers' speeches  Area, Hong Kong is the designated green finance centre in the Area. With the launch of the Green and Sustainable Banking initiative and the rapid growth of the Green Bond market, Hong Kong possesses enormous potential to become a leading Green Finance Hub in the world. However, in pursuing our aspirations, there is a pressing need to upgrade our capacity and expertise in green finance in the financial industry. 8.

There has been growing evidence that Green and ESG investments may not lead to a sacrifice in returns. On the contrary, some ESG investments could actually enhance long term sustainability and improve risk-adjusted returns for investors. As the manager for the Exchange Fund, the HKMA takes a long term view and sees Green and ESG investments as an important driver of value in the long term. In this connection, the guiding principle that the HKMA will adopt going forward is that priority can be given to ESG investments if the long term return is comparable to other investments on a risk-adjusted basis. More specifically, the HKMA has taken or will take the following measures to support Responsible Investment: ___ (a) we have already incorporated ESG factors in our credit risk analysis of bonds; we have required our external managers of the Hong Kong equity portfolios to comply (b) with the Principles of Responsible Ownership promulgated by the Securities and Futures Commission in 2016; we have invested two tranches of $ billion each in the Managed Co-lending Portfolio (c) Programme (MCPP) run by the IFC. A substantial part of the MCPP will target sustainable investments across emerging markets; (d) we will further grow our green bond portfolio, through direct investment or investment in green bond funds; (e) we will participate in ESG-themed public equities investments through external managers in passive or active mandates targeting ESG benchmark indices; and (f) we will accord green accreditation as a predominant factor in investment in buildings in our real estate portfolio.
Jean-Pierre Landau: Procyclicality – what it means and what could be done Remarks by Mr Jean-Pierre Landau, Deputy Governor of the Bank of France, at the Bank of Spain's conference on Procyclicality and the Role of Financial Regulation; Madrid, 4 May 2009. *  *  *  It is a great pleasure and privilege to be in Madrid for this conference hosted by the Bank of Spain and the Financial Stability Institute. I would like to present a few remarks on procyclicality, what it means, what role it played in the current crisis and which policy options are available to mitigate its amplitude and impact on financial systems. What is procyclicality? Strictly speaking, procyclicality refers to the tendency of financial variables to fluctuate around a trend during the economic cycle. Increased procyclicality thus simply means fluctuations with broader amplitude. Such a simple description seldom fits the behaviour of financial systems in real life. More likely, following a shock, the path of asset prices and evolution of financial aggregates will display various and highly irregular forms of volatility, with possible non linearities and discontinuities (a good example being liquidity freezes). These are characteristic features of complex systems. "Once such a system is destabilized, it moves away from the linear regime and experience non linear behaviour such as path dependance … sustained oscillations … and regime shifts" 1 . Indeed, financial systems can be seen as complex systems 2 . They are based on interdependence between multiple actors and counterparties.

If assets market are booming and perceived returns are high, banks will always find the necessary capital, whatever the regulatory requirement. They will be able to both meet those requirements and distribute profits. Conversely, capital dries up during downturns, when it is  4  BIS Review 94/2009  most necessary 9 . There is clearly an asymmetry with strong equity outflows in boom times and no inflows in bad times. It is not clear that Introducing counter cyclical capital requirements will suffice to counteract this very powerful dynamic, especially in bad times. It may be necessary to look at other tools in order to address procyclicality and pre-empt the build up of imbalances. Those tools have to act more directly on individual and collective incentives. This is where accounting may matter most. Economically, it will always remain difficult, when looking at revenues drawn from a financial investment, to distinguish excess return from additional risk taking. But financial reporting may be conceived in such a way that this distinction is prudently introduced. There is no reasonable or practical alternative to fair value accounting for tradable securities. This does not mean, however, that any single valuation gain or loss should instantly be recognized as a profit (or loss) and financially treated as such. There is a possibility to delink valuation from income / profit recognition.
Second, I would welcome the efforts of the supervisory community, namely through the Basel Committee on Banking Supervision and the Committee of European Banking Supervisors, in keeping each other abreast of developments and in considering jointly possible measures to contain the potential effects of the turmoil. Third, I would underline the importance in stress situations, like the current one, of effective and smooth cooperation and exchange of information between the supervisory authorities and central banks. As to the policy lessons to be learned in order to avoid the recurrence of similar disruptions in the future, I would say that, while it is still too early to draw definitive conclusions, there is a common understanding on the key issues requiring further analysis. In this respect, let me recall a few topics. First, the need for the financial industry to provide significantly more public information about securitisation, credit risk transfer and complex structured products. Transparency appears to be of the essence in order to restore trust and confidence. Second, the need for rating agencies to review their methodologies for complex structured products and to address very seriously potential conflicts of interest. Third, the need for investors to review their investment behaviour excessively reliant on ratings. Fourth, the need for supervisors to implement the new capital framework under Basel II as rapidly and effectively as possible and to reflect on possible improvements of the framework, including the enhancements of the supervisory regime for liquidity risk.

Just before Christmas we lengthened the maturity of the second last main refinancing operation from one to two weeks, thus facilitating the coverage of the year-end liquidity needs of banks. For this specific operation, we announced that we would satisfy all bids received at 4.21 percent or above, the 4.21 percent level being the weighted average rate of the previous main refinancing operation one week before. This action, combined with our liquidity-absorbing operations until 4 January, contributed to a smooth end of the year in the euro area by keeping short-term interest rates close to the ECB’s minimum bid rate. Overall, the ECB’s actions permitted to maintain very short-term rates close to the ECB’s policy rate. The tensions, which have been observed in the longer term money market rates in euro, are due in particular to the persistence of uncertainties surrounding the financial health and liquidity needs of financial institutions as well as the impact of the ongoing global financial market correction, with a general re-appreciation of risks. These tensions have receded whilst remaining significant. By reducing the volatility of the very short-term rates around the key policy rate of the ECB and by containing pressures in the interbank term money market, the ECB’s liquidity operations have contributed to a better resilience of the European financial system without – of course – eliminating the causes of the tensions, originating outside the money market. During this tumultuous period, the Eurosystem remained, as usual, in close contact with other major central banks.