samchain/econo-pairs-v1 huggingface dataset:
We can use a model to explain GDP across a range of countries using the stringency of their lockdowns in that quarter, as well as a range of other country-specific factors (Chart 7).10 That model suggests world GDP will be 15% lower in Q2 than at the turn of the year, compared to 26% in the May MPR scenario. Chart 7: Lockdown stringency against GDP growth over 2020 H1 GDP change from 19Q4 to 20Q2, %  10 5 0 -5 -10 -15 -20 -25  UK  -30 -35  0  20  40 60 80 100 Average Oxford stringency index over quarter  120  Sources: Apple, University of Oxford and various national data sources. Notes: See Footnote 10. 10  For a panel of 55 countries, we employ a forecast combination analysis of around 20 different regression models, each of which uses different sets of explanatory variables and the final forecast is a root mean square error weighted average of forecasts from all our specifications. The variables we use are containment, economic and health policy response indices, which are calculated in-house using the Oxford University Covid monitoring database, Apple mobility trends and country characteristics, e.g. share of exports in GDP, dummies for income level and geographic region and average GDP growth between 2014 and 2018. We also include containment policy characteristics such as the maximum containment policy response and the time spent at this maximum response in a quarter.

For those without a university qualification, the probability of being in work three years from now might be 27-37% lower.16  During jobs recessions, many workers choose to move down the skills spectrum to regain a foothold on the jobs ladder.17 But if many displaced workers have low levels of skill and experience, the option of moving down the skills spectrum may not be available or may at least have lower value. Skilling or re-skilling will then be needed. This adds to the time it takes workers to re-enter the jobs market, prolonging high unemployment. 16 17  Henahan (2020). Haldane (2019), Moscarini and Postel-Vinay (2016) and Moscarini and Postel-Vinay (2018). 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  The possibility of labour market mismatches, whether by sector or skill, increases the chances of high unemployment proving persistent, with scarring effects on the economy’s supply potential. Put differently, labour market mismatches raise the economy’s NAIRU – the level of unemployment at which supply bottlenecks and wage pressures re-emerge. The higher the NAIRU, the smaller the degree of slack in the economy. Historically, pandemics have not tended to have a persistent upward impact on prices.18 But a higher NAIRU would be one reason to be cautious before jumping to that conclusion. A second is that the policy response to the Covid crisis, both monetary and fiscal, has been significantly more expansionary than any previous pandemic.
This high level of saving explains why last year’s current account surplus was so large even though investment had returned to its historical average. Underpinning it is increased saving by households, businesses, and the public sector, which in turn stems from several factors: increased caution following the experience of the financial crisis; an improved public sector outcome; the housing market situation, where more capital is required for a first home purchase; and the level of interest rates. A higher level of saving reduces excess demand in the economy. The fifth factor is the success of monetary policy in the recent term. This can be seen in short- and long-term inflation expectations, which have been at target since mid-2016. In addition, expectations appear more firmly anchored to the target than before, which shows in the fact that exchange rate volatility and unexpected changes in inflation have less impact than they did in the past. The inflation target has therefore gained credibility. As a result, it takes more to move inflation away from the target than in the past, and inflation can be kept at target over the medium term with lower interest rates than was previously possible. By the same token, the possibilities for monetary policy to mitigate fluctuations in economic activity without jeopardising the inflation target are greater. 2  What is the current situation, in light of these explanations? In some respects, the current situation is similar to that a year ago.

At present, there are changes taking place in the global economy that will change the situation to some extent. Global GDP growth is on the rise, particularly in industrialised countries. Commodity prices are rising, and inflation in industrialised countries appears to be increasing as well. Interest rates have been raised in the US, and the period of very low or even negative interest rates in the euro area may be coming to an end. This has various effects on the Icelandic economy. It is not a given that terms of trade will continue to improve, and imported deflation will subside as well. Domestic inflation could therefore rise above target more quickly unless domestic pressures ease commensurably. On the other hand, the interest rate differential with abroad will narrow, other things being equal, and this will make the conduct of monetary policy less difficult and reduce the Central Bank’s accounting loss due to the foreign exchange reserves, as I will discuss more fully in a moment. Monetary policy conduct is generally much more complicated during times of significant change than under calmer conditions. The signposts of the policy – such as equilibrium interest rates, output, unemployment, and the exchange rate – could begin to move. However, because these variables are not observable but must be derived from developments in other variables, it is highly uncertain at any given time how much they have changed once they start to move.
In this regard, promoting capital market development is important to open up additional channels of funding for long-term investments such as infrastructure. The good news is that the region is already taking steps in the right direction by improving the financial infrastructure of bond markets and expanding the investor base. Meanwhile, many economies are also making greater use of public-private partnerships to promote critical infrastructure investment projects. 9. In the face of these significant uncertainties and challenges ahead of us, IMF’s assessment of the prospects and risks, as well as advice on policy response for the region is particularly important at this juncture. We look forward to the presentation by IMF and the dialogue during the panel discussions. 10. 2  Thank you. BIS central bankers’ speeches

Speaking domestically, as the mega-regulator of the financial sector, how do you view the strength of the banking segment in terms of contributing to domestic growth? Following the crisis the Macedonian banking sector proved to be quite resilient. No banks failed and all were well capitalized. Our prudential regulation has always kept banks from entering into risky investments as we have a conservative banking system. As a result, we were not exposed to some exotic instruments from abroad before 2008 which is why they did not suffer directly. Indirectly, yes, through reduced economic activity which created some problems with companies in the real sector where they could not repay their loans which in turn raised the Non-Performing Loan (NPL) ratio to around 12%. But again, comparing regionally from Slovenia to Greece it is probably the lowest and more importantly, fully covered with provisions. Liquidity is very high at 30%. So after stabilization the goal is to promote lending activities once more. A second channel of exposure was through the fact that 90% of Macedonian banks are foreign owned and parent banks were primarily oriented to handling problems in their home country. Sometimes they make decisions at a group level without paying specific attention to their Macedonian operations, which affects our banks negatively, depicted by years with no growth. I do have to point out, however, that Macedonian banks do not rely on funds from their parent banks; our Loan-to-Deposit (LTD) ratio is 90%.
A robust and stable financial system, that we have managed to ensure so far, is a necessary, but not sufficient condition for achieving sustainable growth. Financial system efficiency needs to be upgraded, so that it serves to lift economic efficiency, not least by harnessing the hitherto untapped strength of the grass-root economies, where the emerging organic social-economic network has increasingly highlighted the potential contribution to growth and welfare improvement. For the banking system, the strategy to harness this potential is set out in the Financial Sector Master Plan Phase 2, which is a continuation from Phase 1. BIS Review 20/2010  1  Ladies and gentlemen, The challenges I have raised, together, pose a tall order. So in today’s talk, let me set out our strategy and policy priority in three parts. First, the SWOT analysis of the banking system and the challenges we face; Second, the key strategies in the Financial Sector Master Plan Phase 2; and Third, the key measures in risk-based supervision to ensure stability. First, the strength of our banking system is evident in its continuous solid performance. During the toughest times, our banks remained strong and resilient against the backdrop of economic slowdown. Loan decelerated, partly due to contraction in corporate portfolio and deceleration in household portfolio, as a result of more cautious business undertaking and household spending, and partly due to tightened loan underwriting standard. The good news is the figures are already starting to pick up again.

While we welcomed greater engagement of emerging economies in the global regulatory reform process, such as in Basel Committee and various working groups, the key success factors are these: First, our inclusiveness at the policy development stage rather than just implementation stage, and secondly, on the inclusiveness in the supervisory colleges of global banks which are systemically important to our domestic financial system. Ladies and gentlemen, In closing, I would like to iterate that, the success in meeting these challenges, rests as much with us, as with the banking sector. Thus far, we are pleased with their efforts in strengthening risk management, not only in the process, but more importantly, the culture. Often, we are asked why our banking system has managed to remain resilient, while those with more sophisticated risk management system have suffered. I believe the key is, first of all, there is no gap between the risk profile of our banks and their risk management system, as well as our risk-based supervision. Our banks business model is less complex, mobilizing local and stable deposit, for on lending to domestic borrowers, with small investment portfolios, mostly in plain vanilla Thai government bond. They have very little exposure to less familiar risk such as overseas assets and complex products. But looking ahead, things will not stay this safe if both banks and the Bank of Thailand do not work closely to continuously strengthen risk management.
This approach alone could also raise competitive equality problems, making it more difficult to ensure a level playing field, one of the key objectives of the Basel Accord. The third option would be a market-driven solution. As I have already said, the Committee has recognised the importance of market discipline in the third pillar of the New Accord. It draws on the power of markets to create strong incentives for banks, incentives to help ensure that banks manage their risks properly and do not hold unrealistically low amounts of capital for their risk. There is a lot of merit in this approach, yet all of us know that markets sometimes behave inefficiently. They can overreact to certain minor events yet still overlook significant indicators of risk in the short run. Likewise, markets are not always able to capture some externalities on their own, such as the interests of the broader public. They sometimes focus on the immediate needs of direct participants rather than those of depositors or customers or they can be too short-sighted in their time horizon. I think the thoughtful comments made by Malcolm D. Knight yesterday about gaps and limitations of market discipline clarify these kinds of issues most constructively. So it is clear that no single one of these three options provides all of the benefits that supervisors seek. We want rules to provide clarity and strong incentives. We want the ability to use discretion to manage diversity, to tailor requirements to the specific businesses of each bank.

I think it is helpful to recall why so many central banks, regulatory agencies, and commercial banks have devoted their best resources to ensuring the success of the New Accord. The existing Accord, as you know, was already considered a milestone in banking regulation. It offered the first internationally accepted “yardstick” for capital adequacy and a simple measure of risk. It had received praise for reversing a downward trend in bank capital levels and for serving as a benchmark measure of a bank’s financial health around the world. But the 1988 Accord was a blunt instrument that quickly fell behind the times. Advances in technology, in banking products, and in risk management changed the way that leading banks measure and manage their risks. By the mid-1990’s, bankers and supervisors agreed that the original Accord no longer offered the largest and most sophisticated organisations a meaningful measure of risk. Under the leadership of William McDonough, former President of the Federal Reserve Bank of New York and my predecessor as chairman of the Basel Committee, the Committee seized the opportunity to achieve more than a simple update of the capital requirements. Bill brought tireless energy to the project and convinced industry leaders, bank supervisors, and central bankers that we should pursue a far greater objective that would incorporate market discipline and also encourage advances in risk management across the industry.
Petroleum revenue spending over the central government budget had increased, but employment in traditional industries was still high. Despite Norway’s high cost level, merchandise exports and supplies of goods and services to the oil industry held up due to high demand. Instead of a gradual slowdown, economic growth came to an abrupt halt in autumn 2008 when the global financial crisis came to a head. Demand for Norway’s export goods fell markedly. Norwegian banks proved to be highly vulnerable to the credit freeze in global money markets and stopped providing new loans. 2 However, Norwegian banks were not as exposed to loan losses – at home and abroad – as banks in other countries. The downturn proved to be milder in Norway, but the banking industry may also have performed its craft fairly well. Government and central bank liquidity provision measures were effective. The liquidity crisis passed quickly and did not turn into a solvency crisis in Norway’s banking system. The rapid rebound in oil prices and a weaker krone provided a boost to the economy. The interest rate was lowered and public spending markedly increased. The downturn turned out to be milder than we had expected when the interest rate was reduced to a low level – partly because oil prices proved to be higher than expected and partly because the measures implemented were more effective than we had dared to assume. We therefore now expect to be able to raise the interest rate again at a gradual pace to more normal levels.

Among these the greater interrelatedness of economies, which has been conducive to global value chains being extended, may have led to the international determinants of price- and wage-setting increasing in significance, at the expense of the traditional determinants. Other explanations highlight the influence that the automation of productive processes, the digitalisation of economic relations and the development of electronic trade may be exerting. Beyond the macroeconomic area, the expansion opens a window of opportunity to continue entrenching the foundations of the monetary union project, completing the banking union and taking the first steps towards a fiscal union that enables adjustment costs to be reduced when the economy faces an adverse situation. Further, the negotiations in the coming months on trading and financial arrangements with the United Kingdom also pose another major challenge to the functioning of the single market. Situation of the Spanish economy Let me now move on to the Spanish economy. The strength of the recovery is proving notable. On the latest estimates, our GDP is estimated to have grown by around 3.1% in 2017, that is to say, similar growth to that in 2015 and 2016; for the third year running, the growth of our economy is expected to have clearly exceeded that observed for the euro area as a whole. Indeed, last year we regained the level, in real terms, of our pre-crisis GDP. There are two key features of this recovery. Firstly, it is proving to be most job creationintensive.
Jürgen Stark: The adoption of the euro – principles, procedures and criteria Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the Icelandic Chamber of Commerce, Reykjavik, 13 February 2008. *  *  *  I Ladies and gentlemen, It is a great pleasure for me to attend this conference, together with distinguished guests and speakers. In my remarks, I would first like to set out the European Union’s approach towards the adoption of our single currency, the euro. I will then spell out the EU’s and the ECB’s stance on unilateral euroisation. I will conclude my remarks with a brief overview of the potential economic costs and benefits of unilateral euroisation. The EU’s approach towards the adoption of the single currency The creation of the single currency has been a long and truly historic process. Sixty years ago, Europe was marred by political disarray and economic disorder. With the Treaties of Paris and Rome, Europe’s leaders started the construction of a united Europe on the ruins of the Second World War. Since then Europe has achieved a lot: •  One of the most important achievements is the Single Market, with the free flow of goods, services, capital and people across national borders. Consumers in Europe benefit from the larger supply of goods and services. The European companies benefit from the enlarged markets.

And the Bank, through the Prudential Regulation Authority, supervises the banks, insurance firms and broker-dealers active in financial markets. Given the FX market’s global importance, it is vital that it operates to the highest standards. Those standards fell unacceptably short in the years running up to, and following, the financial crisis. And that is why in 2015 the Fair and Effective Markets Review (FEMR), which I led, called for a new global Code, setting out principles to promote the integrity and effective functioning of the market. That Code was launched two years later, here in London, and is now overseen by a Global FX Committee, comprising public authorities and market participants from 18 countries around the globe.1 As of mid-June, the Global Index recorded over 900 public commitments from organisations across all geographies and sectors of the market to abide by the terms of the Code2. Perhaps the most depressing aspect of past FX abuse was the light it threw on historic behaviour in parts of the market, called a ‘bro-culture’ by some,3 in which inappropriate, sometimes illegal, behaviour became the norm through a process of what we termed in FEMR ‘ethical drift’. Groups calling themselves the ‘A-team’, the ‘3 Musketeers’ or (perhaps more aptly) the ‘Semi-Grumpy Old Men’ attempted to pervert the multi-trillion dollar foreign exchange market on which everyone in the world in one way or another depended. For some of those active in the industry at that time, the culture from which this extreme behaviour emerged may have seemed wearingly familiar.
On one hand, a stilllow level of banking activity (as credit continues to fall). On the other, the significant volume of non-productive assets (non-performing and foreclosed) still on bank balance sheets, although it is true that non-performing assets are declining notably, which translates into fewer provisions and an improvement, therefore, in results. Against this backdrop, efforts to cut costs and bring about efficiency gains are of particular importance. Lastly, it should be stressed in connection with banks’ solvency that the maximum-quality capital ratio, namely CET1, has increased by more than 80 bp over the last year, rising to 12.6% at end-2015 for Spanish banks as a whole, comfortably exceeding the regulatory minimum. The cooperative sector in Spain Let me now turn to the cooperative sector. I should begin by stressing that, although the relative weight of cooperative banks in Spain is modest compared with that of commercial banks, the cooperative sector plays a significant role in financing the productive system in various industries and, therefore, in activity and employment generation. The sector’s total consolidated assets amounted in December 2015 to € billion. In comparative terms, they account for 3.6% of Spanish deposit institutions’ total consolidated assets. We need not recall that one of our hosts, Cajamar, is a major component of the sector, accounting for slightly more than 30% of co-operatives’ overall assets. Co-operatives are for the most part small institutions, rooted in the territory where they operate.

Harnessing risk advisory expertise to provide advice and design risk financing solutions. These building blocks will enable ASEAN members to better understand their needs and design appropriate disaster risk financing programs including through transferring risk to capital markets. b. Governments are increasingly using alternative risk transfer mechanisms such as government pools, like the Philippines parametric disaster insurance pilot, the Thai crop 2/4  BIS central bankers' speeches  insurance scheme and the Vietnam pilot agriculture programme. In May this year, the establishment of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF) in Singapore was officially announced. As ASEAN’s first regional catastrophe risk facility, SEADRIF will start by establishing a regional catastrophe pool to insure the flood risks of Lao and Myanmar. SEADRIF will also seek to sponsor different risk management strategies, including issuance of catastrophe bonds, or to act as a reinsurer to national catastrophe pools, to further strengthen the region’s financial resilience to disaster risks. Supporting ILS growth in Asia through Singapore 11 The presence of a full-fledged ILS market and ecosystem in the region will encourage the development of this risk financing instrument. However, there is currently no established market in Asia for ILS. 12 As the leading financial centre in Asia, Singapore is well positioned to fill this need: a. We are a well-established regional insurance hub that offers a comprehensive spectrum of re/insurance activities through a vibrant ecosystem of re/insurance players and service providers.