samchain/econo-pairs-v1 huggingface dataset:
The use of internet and online shopping have increased in Sweden and are at a high level compared with other European countries. We now have access to more information than before and can compare prices of various products and various sellers very quickly. Previously, if you wanted to buy a new pair of shoes you had to go into several shops to compare prices. First you needed to have an idea of where to find a specific model of shoe, say a pair of Converse all-stars in size 39, and then you needed to travel round to find the best price. Now you can quite simply visit a price comparison site online and enter the name of the model and get price information, stocks status and suggested sales points that are online. This has reduced the search costs enormously.21  Companies’ pricing At the same time, e-commerce is changing the playing field for many trading companies and changing their pricing. Why should customers pay more for something in a shop when they can buy it cheaper online? 19 Heyman et al (2016). 20 Sveriges Riksbank (2018c). 21  The Swedish Competition Authority commissioned researchers Niklas Rudholm and Charlie Lindgren to analyse how price transparency through price comparison sites affects prices and price spread between companies. They used information from the comparison site Prisjakt to compare how prices of games differ between various online traders. They saw that the development of prices for a particular product was highly correlated among the largest companies.

This can increase competition and reduce the companies’ mark-ups when costs increase.18 Thirdly, the consumer price index (CPIF) is directly affected by lower costs for information and communication technology. 17  See Monetary Policy Report, February 2015. 18 Apel et al (2014). 7 [12]  Productivity and the labour market Let's begin with companies’ production capacity and the consequences for the labour market. In the manufacturing industry digitalisation appears to have to increased productivity, but this is not the case in the service industries. The development in employment appears to have been poorer in professions where digitalisation has been stronger. The labour market appears to have become more polarized as a larger number are either employed in high salary or low salary professions.19 Companies responding to our own Business Survey often confirm that digitalisation leads to a competence shift in the labour force. They see a substantial need to recruit specialists with, for instance, digital competence and they have less need to recruit general staff.20 In consumer-related sectors companies believe to a greater extent that digitalisation will lead to fewer employees within a few years, while the responses from manufacturing companies are more neutral. The explanation is often that the manufacturing industry has already made major changeovers and that digital technology is already a complement to large groups of employees. In the retail trade there are larger groups of cashiers, stocks workers and shop assistants who can be replaced by automated solutions. Consumer behaviour Digitalisation also affects us as consumers.
Low interest rates contributed at the beginning of the upturn to high growth in private consumption and housing investment. Last year, exports and corporate investment also showed solid growth. There is now a broad upswing in demand for goods and services. It has taken time for employment to pick up, but this is occurring now. Inflation has increased somewhat, but is still very low, even 2½ years after the cyclical change. Inflation is still being restrained by the fall in prices for imported consumer goods, increased competition in a number of markets and the current period of lower nominal pay increases. The trend in prices for consumer goods over the past two or three years is a result of favourable developments in the Norwegian and global economies. Low inflation is being accompanied by real income growth and a rise in production. In other words, low inflation is not the result of declining demand, activity or employment. The labour supply and production equipment set a limit in the short term on the level of production in Norwegian enterprises. When production approaches this limit, wage and price inflation will pick up. For an open economy like Norway’s, this limit can vary. We buy an increasingly wide range of goods and services abroad. The production of goods for the domestic market can be moved abroad. Services can also be provided by producers in other countries. Norwegian companies are no longer looking to the domestic labour market only. Other Nordic countries are an important source of labour.

In a period of increased cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variation in inflation and deviations from the target, as we have witnessed over the past two to three years. Even though economic growth has been strong over the past 15 years, economic cycles have varied. A clear upturn in the years from 1993 to 1998 was followed by a period of more moderate growth and  3  Interview in Adresseavisen, 27 December 1980. 4  Based on an analysis conducted by Norges Bank of price indices for more than 130 different groups of goods and services for the period 1980-2005. 5  Alan Greenspan: Testimony before the Committee on Banking, Finance and Urban Affairs, U.S. Senate, July 13, 1988. BIS Review 10/2006  3  a mild downturn in 2002 and into 2003. Since summer 2003, the Norwegian economy has again experienced a marked upturn. Wage developments reflect and influence business cycles. Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years is being accompanied by a strong cyclical upturn. The Norwegian economy has continued to exhibit high growth this year. Low interest rates, higher petroleum investment and strong global growth have been the most important driving forces.
This type of developments could create vulnerabilities in the real estate and construction industry, or in those households searching for a new home. It is also worth noting that the current combination of higher property prices, low long-term interest rates, favorable lending standards and higher volatility of other financial asset categories, configure a scenario that could motivate an increase in financial investment in the sector, potentially exacerbating these risks. Therefore, we have stressed how important it is that agents consider these risk factors when evaluating their investment and lending decisions in the sector. In particular, these decisions need to bear in mind that past price increases are no guarantee of further increases in the future. We believe that raising this type of alert, thus increasing the amount of information available for risk assessment, is part of our role of promoting the normal functioning of the  BIS central bankers’ speeches  5  financial system. We believe that the extended discussion that has taken place on the topics of the real estate sector is extremely valuable. Another risk factor requiring close attention is the evolution of medium-sized banks. Recently, credits granted by these banks have increased faster than those of other banks (figure 8). There is certainly a positive side to it, as it implies lower concentration of risks in the system. However, its growth dynamic could become a source of vulnerabilities.

12  BIS central bankers’ speeches  Figure 8 Total loans (real annual change, percentage) 30  30  20  20  10  10  0  0  -10  -10 07  System  08  09  Large multibanks  10  11 12 Medium-sized multibanks Retail banks  Source: Central Bank of Chile based on SBIF data. BIS central bankers’ speeches  13
Any signs of expectations becoming dislodged would be a signal that policy might need to be tighter than otherwise, in order to provide insurance that expectations remain on track. I will revert to this theme later. Over recent years long term inflation expectations have remained anchored close to the target level. This is important in delivering price stability: the fact that people think the MPC will be successful in sticking to the target conditions their behaviour in a number of ways. Higher prices for oil products, and indirectly other goods and services, leaves less disposable income for other things. Whilst the MPC takes comfort from the observation that so far inflation expectations and earnings growth have not risen, it is nonetheless possible that this could lead to demands for higher wages. Such demand, if granted, could be inflationary and even result ultimately in increased unemployment. The likelihood of this happening may be slight and there is no real sign of expectations presently becoming dislodged in the UK. And it is striking that although the effects of oil may have some impact  in today’s modest slowdown of consumption, that we have nonetheless managed to weather a significant price increase with so little disruption to the economy. Quite different from the late 1970s. But I think it is still too early to relax in relation to inflation expectations, and I think that the subject of oil will feature as a significant issue for some time to come in the monetary policy arena.

For evidence, we only need to look to the spread of infectious disease such as Covid-19 and severe floods that are occurring at shorter intervals and with greater intensity. But transition risks are also intensifying. With the announcement of the net zero national target, further changes in climate policies are inevitable to achieve the target. Technological changes will also have important economic and financial consequences for businesses and those that fund them. So will changing consumer preferences. And if that isn’t sufficiently persuasive, the reality of disorderly transitions, once thought to be a risk further into the future, has now been brought painfully home for many with the energy crisis that is confronting Europe. The financial sector has a critical role in helping the economy and society mitigate these risks. At Bank Negara Malaysia, we see this from two perspectives. First, as part of our mandate to manage risks to financial stability, we expect financial institutions to understand how climate-related risk drivers can impact their risk exposures - including credit, market and insurance risks from their lending, underwriting and investment activities. We expect financial institutions to be able to identify, measure and manage these risks well. Second, we believe that the financial sector can and should play a catalytic role in the transition towards a low carbon economy through its control of resources that fuel the economy. With this in view, let me highlight a few key developments that will shape the Malaysian financial sector’s climate response in the coming years.
6  BIS Review 45/2008  BIS Review 45/2008  7  8  BIS Review 45/2008  BIS Review 45/2008  9  10  BIS Review 45/2008  BIS Review 45/2008  11  12  BIS Review 45/2008  BIS Review 45/2008  13  14  BIS Review 45/2008  BIS Review 45/2008  15

Mohamed S Fofana: Benefits of microfinance in Sierra Leone Speech by Mr Mohamed S Fofana, Deputy Governor of the Bank of Sierra Leone, at the Official Opening Ceremony of the ProCredit Bank (SL) Limited, Freetown, 1 February 2008. *  *  *  Madam Chairperson Ministers of Government Members of the Diplomatic Corps Members of the Board of Directors, Senior Management and Staff of the ProCredit Bank (SL) Limited Heads of Banks and other Financial Institutions Colleagues from the Fourth Estate Distinguished Ladies & Gentlemen: I am happy to be here this afternoon to address this distinguished audience on the official opening ceremony of the ProCredit Bank (SL) Limited. The Bank of Sierra Leone issued a licence to ProCredit Bank (SL) Limited to conduct banking business in Sierra Leone on 1st August, 2007, and the bank opened its doors on 3 August 2007. Its activities, since that time, have been largely focused on microfinance promotion; taking deposits from and giving credits to small businesses. This is an important mile-stone in Sierra Leone’s poverty reduction drive, which is consistent with Government’s desire to make the microfinance sub sector of the financial industry viable and responsive to the needs of the vast majority of Sierra Leoneans. Madam Chair, Distinguished Guests, the benefits of microfinance are numerous and well documented, especially as they relate to a country’s effort in reducing poverty. I cannot go through all such benefits this afternoon. I will however attempt to highlight a few.
30  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  During the first three Industrial Revolutions, the skills workers needed to keep one step ahead of the machine were largely cognitive. Machines undertook largely manual (“doing”) tasks, which had previously used labour-intensive technologies. Cognitive (“thinking”) tasks remained, by and large, the exclusive domain of humans. So institutions emerged to nurture thinking skills, largely in children and young adults, to increase the chances of successful transition to the cognitively-intensive future world of work. In children, the most important of these institutional innovations was probably compulsory schooling. For children between the ages of 5 and 10, this was formally introduced in the UK with the Elementary Education Act of 1880. It was extended to age 11 in 1893 and age 12 in 1899. The Fisher Act of 1918 provided for compulsory education to age 14 and part-time education to age 18. Compulsory full-time education was extended to age 15 in 1947 and age 16 in 1972. 33  As these pieces of social infrastructure developed, so too did standards of educational attainment and cognitive skills. The fraction of the population aged 15 and over that attended secondary school rose from 23% to 60% between 1950 and 2010. 34  In the 1950s, less than 11% of the relevant age group passed five  or more GCSE O levels in England and Wales. By 2010, that had reached almost 80%.

Anson, M, Bholat, D, King, M and Thomas, M (2017), ‘The Bank of England as lender of last resort: new historical evidence from daily transactional data’, Bank of England Staff Working Paper, No. 691. Autor, D (2014), ‘Education, and the Rise of Earnings Inequality Among the “Other 99 Percent”, Science, 23 May 2014, pp. 843-851. Autor, D (2017), ‘Economic and political consequences of China’s rise for the United States: lessons from the China shock’, IFS Annual Lecture 2017, 22 June 2017. Baddeley, M (2006), ‘Convergence or Divergence? The Impacts of Globalisation on Growth and Inequality in Less Developed Countries’, International Review of Applied Economics, Vol. 3, pp. 391-410. Bolton, P (2012), ‘Education: Historical statistics’, House of Commons Library, Standard Note SN/SG/4252. Bresnahan, T and Trajtenberg, M (1995), ‘General purposes technologies ‘Engines of growth’?’, Journal of Econometrics, Vol. 65, No. 1, pp. 83-108. Broadberry, S and Wallis, J (2017), ‘Growing, Shrinking, and Long Run Economic Performance: Historical Perspectives On Economic Development’, NBER Working Paper, No. 23343. Brynjolfsson, E and McAfee, A (2014), The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, W. W. Norton & Company. Brynjolfsson, E, Rock, D and Syverson, C (2017), ‘Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics’, NBER Working Paper, No. 24001. Bughin, J et al (2017), ‘Artificial Intelligence – The Next Digital Frontier?’, McKinsey Global Institute Discussion Paper.
Let me now turn to the other side of the coin. Despite the above examples of areas where good prospects may arise for market activity, there are also elements of uncertainty on the horizon, and one of them is Brexit. Brexit On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union. This means that 30 March 2019 is, in principle, the “withdrawal date”. So far, in the draft Withdrawal Agreement, there is no specific regime with regard to financial services and this unquestionably generates a context of uncertainty that affects all market participants. Allow me to focus on how it affects banks. “Wait and see” is not an option. Banks need to prepare. Within the framework of the Single Supervisory Mechanism (SSM), the ECB, together with National Competent Authorities, is trying to communicate, to banks which may be considering relocating their banking activities to the euro area, the SSM’s supervisory expectations on different aspects such as: authorisations and licences to carry out banking activities in the euro area; internal governance and staffing arrangements; or authorisations and use of internal models. These expectations have a key underlying principle, which is the need to guarantee consistency across the existing and the relocating institutions, so that they both operate under the same regulatory, prudential and supervisory standards. There is another key aspect, which is the need to ensure that relocating banks are not empty shells.

The concern about empty shells arises because, given the uncertainty about the future relationship between the UK and the EU and the cost of making organisational changes, a good number of institutions are studying how to adapt to Brexit minimising the changes to be made to their structures, management and business models. They may be considering making extensive use of the capabilities of their UK headquarters through the use of back-to-back booking models for risk management, maintaining shared governance structures, extensive outsourcing within the group or keeping the bulk of their workforce in the UK through the artificial use of branches in the UK. Empty-shell banks do not have risk management and governance structures that ensure a safe continuation of the local business or a smooth wind-down in crisis situations, and may present operational risks and financial stability issues for the countries hosting them. For this reason, when assessing booking models, the ECB and national supervisors will pay attention to whether banks have adequate: (i) internal governance and organisation; (ii) access to financial market infrastructures; (iii) booking and hedging strategies; iv) intragroup arrangements; and v) IT infrastructure and reporting. Lastly, another very relevant issue with regard to Brexit that I would like to mention is that of the transition period. 5/6  EU and UK negotiators have reached agreement that a transition period should be a matter of mutual benefit and have set the principles for the negotiation of a transition period between the date the withdrawal agreement enters into force and 31 December 2020.
The FDIC has also guaranteed bank  BIS Review 28/2009  3  and bank holding company funding through its Temporary Guarantee Liquidity Program. As a result, bank term funding spreads have narrowed a bit this quarter. However, while the Federal Reserve can provide liquidity to the banks and dealers and the FDIC can reduce counterparty concerns via its guarantee program, these steps cannot force banks and dealers to on lend these funds to their customers. This is where several new initiatives may show the way forward. First, the Federal Reserve has begun to bypass the banks and dealers, which are balance sheet constrained, and instead has begun to provide liquidity directly to borrowers. One of these programs, the Commercial Paper Funding Facility or CPFF has been up and running since late October. Under the terms of the CPFF, the Federal Reserve offered to purchase A1-P1 rated commercial paper at 84-day maturity from issuers. Although A1-P1 rated paper is the highest quality stuff, it makes up almost all of the CP market. The only catch is that the CPFF will only buy at rates that are quite high compared to the rates one would expect in the market during normal times. The Fed has to charge a high rate and up-front fees to provide some equity in the fund to offset potential credit losses. This facility has worked extremely well in restoring market function in the commercial paper market. Initially, there was a surge of issuance into the facility.

Investors who thought they had purchased safe AAA-rated assets found that these assets were very vulnerable to a housing bust and that the ratings were unreliable predictors of the risk of loss. The poor performance of these securities, in turn, made investors much less willing to invest in structured-finance products more generally. Secondary market liquidity evaporated, which exacerbated the difficulty in valuing the securities. This made the market even less attractive, causing risk premia to widen further, which only worsened the valuation problems. As this process unfolded, the result was a virtual shutdown of the securitization market for residential mortgage assets not backed by the federal government directly (Ginnie Mae) or implicitly (Fannie Mae and Freddie Mac). The subprime and the Alt-A mortgage markets,  BIS Review 28/2009  1  which relied heavily on the securitization process dried up. Of course, this just reinforced the downward pressure on housing prices, which, in turn, led to increased delinquencies and foreclosures. This deterioration undermined the value of the securities further. It was a vicious feedback loop in action. The poor performance of highly-rated mortgage securities caused investors to begin to shun securitizations more generally. The shutdown of the securitization markets led to significant pressure on bank balance sheets. Banks could no longer securitize non-conforming mortgages or the collateralized loan obligations associated with leveraged buyouts and other private equity activity that they had financed. Moreover, bank backstop liquidity lines were triggered as SIVs and conduits could no longer issue asset-backed commercial paper.