samchain/econo-pairs-v1 huggingface dataset:
Key lessons of the analysis include that: 1.  flexibility is needed in both design and calibration of macroprudential tools;  2.  no single tool can combat all property risks;  3.  tools need to be appropriate to domestic circumstances; and  4.  domestic policies are more effective for both domestic and EU financial stability if their spillovers are managed. The ESRB has built a framework to assess and manage such spillovers, which should be agreed soon and be operationalised early next year. Its central feature is reciprocity – eliminating regulatory arbitrage to give domestic policy greater traction. It will be member led, but, importantly, backed by ESRB recommendations. Compliance will be on an “act or explain” basis but the presumption will be that many exposure-based measures (e.g. LTV, LTI and maturity) will be reciprocated. This is significant. The ESRB has been notified of macroprudential actions 69 times this year, and 173 times since the introduction of the CRR/CRD in 2014. Although many notices are procedural, they show the direction of travel. More countries are using macroprudential tools, creating an increasing need for a “clearing house” that is both comprehensive and timely. The ESRB will also evaluate the ways national macroprudential authorities might apply countercyclical capital buffers against financial exposures from countries outside the EEA – a tool given to the ESRB under Union law. That will further bolster collective resilience against the global financial cycle and spillovers from outside the Union.

Virtually all of the net credit growth since then has been from the bond markets. In tandem, the assets under management have risen by 60% globally and 80% in the EU. These trends will continue as the Capital Markets Union is developed. The ESRB is currently contributing in two ways to more resilient capital markets. First, it is promoting a shared understanding of the fundamental drivers of market liquidity. Second, it is gathering consistent information on the nature and size of the risks associated with market-based finance. The ESRB has unique powers in this regard given its ability to collect information from financial participants from across the EU.1 The ESRB is currently surveying market makers and asset managers as part of a broader study into the risks from a reduction in market liquidity. This work should be completed by mid-2016. The survey will draw out the implications for liquidity conditions, including whether openended funds have liquidity sufficient to meet redemptions in the event of market stress. 1  2  Of course, the ESRB must exercise this power with care and precision. And the case for doing so must be compelling. But the rapid growth of market-based finance satisfies these tests. BIS central bankers’ speeches  In a similar survey of 143 investment funds, the Bank of England found that, in aggregate, these funds expected to be able to liquidate in one day roughly three times estimated dollar corporate bond market turnover; clearly a fallacy of composition. The ESRB survey will provide a valuable wider perspective.
In summarising the Estonian economy I should say our economy has grown at a satisfactory speed overall, as there is no little uncertainty in the global economy and there are protracted problems with growth in several of Estonia’s export markets. •  The tensions in geopolitical relations last year, including the trade sanctions between the European Union and Russia, have left a mark on the Estonian economy, though fortunately not a deep one. •  Estonian exporters deserve recognition for the flexibility they have shown in finding new markets. Exports have managed to increase even as prices have been generally falling in foreign markets, while local production costs have been driven up by rapidly rising wages. That the market share for Estonian goods and services in the trade with partner countries has increased shows that Estonian export items are competitive in international markets. The work of Eesti Pank The Eesti Pank Act has given us a wide range of responsibilities. Our first responsibility is to keep inflation low and stable, setting a joint monetary policy together with the other central banks of the euro area and implementing it in Estonia. Secondly we must keep the financial system here stable, as strong and functioning banks are vital for economic growth. On top of this we supply the country with high-quality cash, produce timely and authoritative statistics, manage and invest the state foreign reserves, and act as advisor to the government. Last year we succeeded in all of this.

Last year the previous Riigikogu issued the central bank with a clearer mandate than ever before for macroprudential supervision in Estonia, and we have started to act on this mandate. Macroprudential supervision aims to increase the resilience of the banks and the rest of the financial system to systemic problems and to restrain the accumulation of major risks. •  The first measure introduced by Eesti Pank was the requirement for commercial banks to hold a 2% systemic risk buffer. The systemic risk buffer is needed to manage the banking risks that are specific to a small and open economy. The introduction of the buffer did not imply any major changes for the banks operating in Estonia, as their capitalisation levels were already above that required. The measure was a precautionary step by the central bank to guard against possible risks in the future. •  The second step was taken three months ago when requirements for housing loans were applied to the commercial banks by the central bank with the aim of pre-  BIS central bankers’ speeches  3  empting possible credit booms in the future. The requirements do not have any noticeable effect on the loan market as things stand, as the banks are in any case currently acting conservatively. Both of these measures are precautionary steps taken against any significant future increase in the risks in the real estate market should competing banks start to take on excessive risk.
There is possibly a risk that labour market conditions in Sweden could result in a somewhat weaker economic upswing than we expected, mainly in the current year. As regards the view of domestic cost pressure, there are reasons to be somewhat more optimistic. It appears possible that the rate of wage increases could be slightly lower. At the same time, productivity was unexpectedly positive last year. Inflation in November and December has also been slightly lower than we expected in our last forecast. One of the risks of higher inflation that we stressed - that rises in electricity prices would filter through to other areas of the economy - also appear now to be somewhat lower. This is both because electricity prices have fallen sharply and that those rent negotiations that have been concluded have not resulted in such high outcomes as could have been feared. So it is a case of small adjustments to our assessment on  4  BIS Review 6/2004  a few points that, on the whole, imply somewhat lower inflation. But as the inflation outlook as early as December was judged to be fairly benign, even a small revision as I now see it could be significant for the monetary policy decision we will make at the beginning of February. By way of conclusion, there is, as always, reason to underline the fact that new data is being received every day and that any decision on interest rates at the next monetary policy meeting can not be made now.

Accordingly, we will continue to monitor very closely all developments over the period ahead. As regards fiscal policies, many euro area governments are faced with high and sharply rising fiscal imbalances. If not addressed by a clear and credible exit strategy, this could seriously risk undermining public confidence in the sustainability of public finances and the economic recovery. The very large government borrowing requirements carry the risk of triggering rapid changes in market sentiment, leading to less favourable medium and longterm interest rates. This in turn would dampen private investment and thereby weaken the foundations for a return to sustained growth. Moreover, high public deficits and debts may complicate the task of the single monetary policy to maintain price stability. The Governing Council therefore calls upon governments to communicate and implement in a timely fashion ambitious fiscal exit and consolidation strategies based on realistic growth assumptions, with a strong focus on expenditure reforms. Tax cuts should only be considered over the medium term, when countries have regained sufficient room for budgetary manoeuvre. In this regard, the recent ECOFIN Council conclusions, which call for consolidation to start in 2011 at the latest and to go well beyond the structural benchmark of 0.5% of GDP per annum, represent the minimum requirement for all euro area countries. The success of fiscal adjustment strategies will also depend crucially on the transparency of the budgetary procedures and the reliability and completeness of government finance statistics.
To date, under their strategic frameworks, most central banks have followed variants of what is known as inflation targeting, which entails targeting an inflation rate that is close to a specific number (for example, 2%) over a medium-term horizon. 15  Yet alternative monetary policy strategies exist under which central banks attempt to make up for past deviations of inflation from its target. These are the so-called make-up strategies,12 one of which is known as price-level targeting. In this case, the central bank announces a target growth rate for the price level (for example 2%). Unlike under inflation targeting, should inflation temporarily fall below 2% for any reason, the central bank will have to ensure that it rises above 2% in the future so that the price level returns to its target path. This strategy requires the central bank to correct in the future any past inflation deviation from the value consistent with its price-level target. A strategy that is less radical, albeit similar in spirit, is known as average inflation targeting. In this case, the central bank attempts to keep average inflation at its target level over a given period. Unlike traditional inflation targeting, it includes a component to make up for past deviations from the target set, but only over a specific period of time. This contrasts with price-level targeting, where all past deviations must be made up for, regardless of how long ago they occurred.

To reduce the lock-in effects and increase mobility in the housing stock, a review is needed of capital gains taxation when homes are sold, of property taxation and of the current tax relief on interest expenditure. Housing policy: The fundamental causes of increasing indebtedness need to be addressed. The fact that the housing market is functioning poorly, among other reasons due to the construction of new homes not corresponding to the demand, is an important cause of the indebtedness. It is therefore necessary to introduce measures that create a better balance between supply and demand for housing. Another reason why the housing market is functioning poorly is that the rent-setting system creates housing supply limits and lock-in effects that make it particularly difficult to find housing, particularly for young people and for people who are not yet established on the housing market. More rented accommodation would probably improve the balance of supply and demand. In addition, it is important to have measures that lead to the existing housing stock being used more efficiently. Suggestions in the area are not lacking either. See, for example, the recently published special study on more flexible rent-setting and uniform taxation from Finanspolitiska rådet (the Swedish fiscal policy council). 28 If such reforms are adopted, complaints over the amortisation requirements will also decrease. 28 Finanspolitiska rådet (2019). 10 [13]  “My vision” As you see, I have a strong desire for the housing market to change from the way it is today.
Here is a graph that shows the margin of difference in employment performance:  According to Bureau of Labor Statistics’ payroll employment data, Texas has created 1,100,600 jobs since November 2007; the rest of America is still 349,600 jobs shy of the prior employment peak. Texas has been the crucible of job creation in America. More than oil and gas; jobs well-distributed It is a common perception that the jobs that have been created here are primarily in the burgeoning energy sector. It is true that Texas is an energy powerhouse: We produce more than 3 million barrels of oil and 21 billion cubic feet of natural gas per day. To put this in perspective, Texas produces more oil than Kuwait or Venezuela or, if you’d like, more oil than the amount the U.S. imports from the Middle East. With regard to natural gas, Texas produces more than all 28 countries of the European Union combined. Of course, the energy sector is a significant driver for the Texas economy. Last year, the state saw an increase of 16,100 jobs related to oil and gas extraction and associated support services. We are grateful for every one of them. Yet there are seven other sectors of the Texas economy that produced more jobs than the energy sector last year.

Both monetary and fiscal policy are inherently counter-cyclical, and arguably never more so than when we face a shock of the scale of a global pandemic. But at the core of the argument for central bank independence is the evidence from the past that without an independent institution operating monetary policy the overall effects of economic policy were dangerously pro-cyclical at times, leading to bad outcomes. In the face of what may be the deepest recession since 1709, with a collapse of economic activity alongside very low inflation, the question we ask ourselves is what should an inflation targeting central bank do in this situation? The lessons of history don’t change. The answer is to respect our remit and our target, no good will come of ignoring that. The logic of counter-cyclical policy is that all the tools should be applied to raise activity and support employment and the welfare of the public, all of which is consistent with an inflation targeting monetary policy. In practice, doing so has meant using tools to keep financial conditions sufficiently accommodative to offset as best we can such a large shock. This has been essential to support the flow of credit to businesses, which has been very substantial, and has called on both the monetary policy and financial stability tools of the Bank of England. This has also helped to lessen any longer term economic damage from the pandemic, resulting from longer term unemployment and business failures.
Given the array of tools at our disposal, I am confident that the FOMC can adjust and control short-term interest rates as needed to foster its objectives of maximum employment and price stability. The configuration of rates during normalization The Committee’s normalization principles and plans do not detail the manner in which IOER as a primary tool would be combined with supplementary tools such as ON RRPs to move the fed funds rate into the target range. However, as reflected in the minutes to the July FOMC meeting, most Committee participants anticipate that, at least initially, the IOER rate could be set at the top of the target range for the funds rate, and the ON RRP rate could be set at the bottom of that range. This is also consistent with the views of many market participants as reflected in surveys conducted by the Desk. 12 I’d like to take a moment to explain why I believe such a regime would be a sensible way to implement policy during the first stages of normalization, when reserve balances will be in such ample supply. Most importantly, it’s a regime in which the Desk should achieve the target for the fed funds rate set by the FOMC. As IOER is raised, its magnetic force will pull the fed funds rate higher. At the same time, the high level of reserve balances in the system should lead the effective rate to print below the IOER rate, at least initially during normalization.

There are now eight takaful operators, several of which are joint ventures with foreign shareholding that conduct both domestic and international takaful business. In addition, licences have been granted to three reinsurance players to undertake retakaful business in Malaysia. Several existing takaful operators have set up international currency business units (ICBUs) and one new international takaful company has been licensed as an international takaful operator to conduct foreign currency takaful business. Pillar 5: human capital and thought leadership The fifth pillar is human capital and thought leadership. Several important human capital development projects have been implemented to foster Islamic finance thought leadership and to create a supply of talent for the Islamic finance industry. Having a sufficient pool of the talent and expertise has been key to the development of the Islamic financial hub in Malaysia. The International Centre for Education in Islamic Finance (INCEIF) which has an international faculty and students from more than 40 countries, is focused on programmes for Islamic finance professionals and specialists to meet the human capital requirements of the global Islamic financial services industry. The first group of students for the Chartered Islamic Finance Professional, or CIFP, offered by INCEIF is expected to graduate at the end of this year after completing a three year programme that includes an internship with an Islamic financial institution. Strengthening the MIFC initiative Let me turn to today's event.
We Central banks should investigate the many questions it raises – and we have started this work at the Banque de France –, and then decide on its own merits. III. Green finance, “a new frontier for the 21st Century” Let me now turn to green finance. For me, it is “a new frontier for the 21st Century”. First and foremost, I would like to pay tribute to the Governor of the Bank of England, my colleague and friend Mark Carney, who was a pioneer when he pointed out “the tragedy of the horizon”2 in 2015. Much has already been undertaken since then. We are currently witnessing a growing awareness from central banks, supervisors and 2/4  BIS central bankers' speeches  financial institutions about climate-related risks. Clearly, green finance and climate risks management have gone from the “nice to have” to the “must have”, from emotion to reason. In financial institutions, climate change is no longer confined to Corporate Social responsibility (CSR) policy. Concerning central banks and supervisors, the creation of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) in Paris in December 2017 has been a decisive step forward. In 18 months, this coalition of the willing has increased from 8 founding members to almost 50 members and observers from all 5 continents, with the Banque de France acting as its permanent Secretariat and the active involvement of the Bank of England.

BIS central bankers’ speeches  3
Monetary policy can help, and it can underpin the economy by preventing a slide into deflation. So support from monetary policy is necessary but won’t be sufficient to restore sustained real growth until these real determinants are also pushing the economy forwards. One way to think about what has happened during the past 4 years is that there has been a need for balance sheet rebuilding across the economy. The shocks of 2008 revealed that  6  BIS central bankers’ speeches  many parts of the economy had become over-extended: some UK commercial banks are still rebuilding their balance sheets; the Government will take several more years to rebalance expenditure and income; households are still increasing savings rather than spending in aggregate; and some corporates are reluctant – or unable – to take on new debts. And given a very large trade deficit built up prior to the crisis, the overall UK economy had to rebalance, away from domestic demand towards net exports. These are real adjustments that need to be made within the economy. Growth should return, but it is likely that growth can only be sustained at a satisfying pace once the drag on demand and supply from rebalancing lessens. Monetary policy can play a supporting role because the extra liquidity in the economy allows the necessary rebalancing to happen without a disorderly adjustment (eg in asset prices). But patience will be required.

(2) Korean Rep. and Iceland with last available data for 2014. (3) Maximum means 90th percentile. Source: Central Bank of Chile based on SBIF and IMF data. Figure 17 Banks with CAR equal to or higher than 10% under stress scenario (*) (percent of system's assets)  100  100  80  80  60  60  40  40  20  20  0  0 11  12  13  14  15  16  (*) Six-month figures. Results of stress tests presented in Financial Stability Reports. Source: Central Bank of Chile based on SBIF data. BIS central bankers’ speeches  17
The optimal targeting rule for monetary policy is: 𝜆 𝜋𝑡 = − 𝑥𝑡 𝜅  (12)  This “Golden Rule” of monetary policy strategy simply states that the policymaker should let inflation absorb more of the adjustment, after a trade-off inducing shock, either when the relative weight on output in the loss function is high (𝜆) or when the sacrifice ratio is low (𝜅). If 𝜆 is set to its welfare-optimising level, this gives a refinement of the “Golden Rule”: 1 𝜋𝑡 = − 𝑥𝑡 𝜖  (13)  15  All speeches are available online at www.bankofengland.co.uk/speeches  15  This tells us that, once the dust has settled, the degree of market power in steady state is all that matters for monetary policymakers in our simple framework when choosing the optimal trade-off between inflation and the output gap. Specifically, the greater this degree of market power, the steeper the slope of the optimal targeting rule: the policymaker should let inflation absorb more, and the output gap less, of a trade-off inducing shock. The intuition here is simply that market power increases the degree of price flexibility in the model and lowers the sacrifice ratio. This makes it optimal to do a greater amount of (now less costly) output-smoothing in the face of trade-off inducing shocks in the optimal policy rule. It is possible to calibrate this parameter in the optimal targeting rule. Chart 18 plots the relationship between it and mark-ups.

Although they capture subtly different dimensions of market power, there is a weakly positive relationship between measures of mark-up and market concentration at the sector level (Chart 4), which is statistically  6  De Loecker and Eeckhout (2018) use a dataset that largely includes publicly-traded companies, but there are also some privately held firms. 7 Similar estimates have recently been provided by Díez et al (2018). 8 OECD data. 9 De Loecker and Eeckhout (2018) estimate that mark-ups in the US are a little larger than in the UK, so the boost to UK TFP from eliminating them would be smaller than the 35% estimate for the US in Baquee and Farhi (2018), albeit of a similar order of magnitude. 10 The methodology is explained in the Appendix. The data include around a little over 1000 firms, on average, per year. These firms account for around one-third of UK employment. Their sales are equivalent to around one-third of UK turnover and around two-thirds of UK nominal GDP. We exclude financial sector firms and, having estimated mark-ups, trim outliers, i.e. those firm-level mark-ups that are below the 1st percentile and above the 99th percentile of the firm-level mark-up distribution in a given year, 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  significant at the firm level. 11  The same has been found among companies in other countries (Díez et al  (2018)). This gives some degree of reassurance that the rise in measured market power has been a genuine one.