samchain/econo-pairs-v1 huggingface dataset:
Development of unit labour costs in trade and industry, and total agreed wage increase Per cent 8  8 Unit labour cost  7  Total wage increase  7  6  6  5  5  4  4  3  3  2  2  1  1  0 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03  0  Note. Forecast 2001-2003. Sources: National Institute of Economic Research, Statistics Sweden and the Riksbank  The main downside risks are connected, for example, with the possibility that the adjustment in the United States after the long upward phase could take longer than expected. After September 11, moreover, terrorist attacks and military action can clearly cause developments to take very different paths, with markedly divergent outcomes for the global economy. Another aspect is the highly expansionary direction that economic policy has now taken in many countries, not least Sweden. If confidence in the future is restored, the table is really laid for a quick upturn. But all in all, there is considered to be a strong probability of inflation being lower as a result of the slowdown abroad being deeper and more protracted. Such a development would be likely to lengthen the slowdown in Sweden as well. There are also risks of inflation being higher than in the main scenario. One has to do with the fact that inflation has risen more than expected. Our main scenario makes some allowance for the higher outcomes but the revision is rather small.

To begin with this was perceived as just a temporary dip - a blip in the stocks cycle, a minor adjustment in the IT sector or something else. But stock markets seemed to be clearly over-valued and it would have been odd, particularly after such a long upward phase, if this had not led to a certain amount of overinvestment. There were also clear signs of insufficient saving, particularly in the United States. Consequently there were grounds for believing that once a slowdown had started, it could prove to be both relatively deep and long. Against this background, in the March Inflation Report we talked not so much about a V-shaped path as a U-shaped one or a “banana”. Since then the outlook has become darker but more of that later. For monetary policy, turns in the business cycle are not inherently a major problem, apart from the difficulty of foreseeing them. Falling resource utilisation, for example, should normally led to lower inflation in the future. That in turn can pave the way for interest rate cuts. In the past year, however, things have not been quite as simple as that. Two partly interrelated factors have contributed to this. One is inflation, which has been higher than expected and also above our target. The other is the exchange rate, which has been weaker than anticipated and also weaker than the real economy warrants. During a period in the late spring, moreover, the krona fell rather uncontrollably in the absence of similar movements in other currencies.
These include the FXCs in Mexico, South Africa, Scandinavia and Switzerland. Through the membership expansion, the Code will become more global as these FXCs promote the adoption of the Code within their jurisdictions. 7 Second, on embedding the Code and integrating it into the FX market. If done well, we should see market behaviours reflect the good practices set out in the Code. We have seen that the process of issuing the Statements has prompted internal reviews within many firms, where market participants considered how the Code could apply to their business. In issuing our Statement, we have done the same in MAS. It has been a helpful and meaningful exercise to benchmark our internal processes against these good practices. We have also seen a number of training tools being developed by market participants to support learning, and these have enhanced the ecosystem of good practices within the FX market. Another key area where we think the Code has enhanced market behaviour is that a number of market participants have updated client disclosures to provide greater transparency, and to incorporate the principles within the Code. 8 Third, on evolution of the Code. When the Code was launched, the GFXC has stated that the Code will need to evolve over time to promote a robust, liquid and transparent FX market. The Code has become the platform or reference point for discussing issues relating to the FX market. This is a good outcome where emerging issues are identified, debated and addressed within the Code.

8 An exit from the krone market may be tight when many investors seek to shift out of krone positions at the same time. This can trigger a considerable depreciation of the krone, as experienced in autumn 2008. On the other hand, Norwegian securities can be perceived as safe havens because the associated credit risk is perceived to be low. Experience has also shown that international turbulence can in periods lead to an appreciation of the krone. A krone that is too strong can over time result in inflation that is too low and growth that is too weak. In that case, monetary policy measures will be taken. In Norway, the key policy rate is the relevant instrument. We still have room for manoeuvre in interest rate setting – in both directions. Foreign exchange interventions are not in principle an instrument suited to influencing the krone exchange rate over a longer period. It would only be relevant should the krone exchange rate move significantly out of line with that deemed reasonable in relation to the underlying fundamentals of the Norwegian economy, and should developments at the same time threaten the credibility of the inflation target. In addition, the interest rate weapon must have already been exhausted. Over the past decade, inflation has been low and stable. This shows that monetary policy has functioned effectively. Transparency about the response pattern and key policy rate forecasts reinforce the impact of monetary policy.
The sharing of credit information reduces asymmetries of information and search costs, thereby enhancing access to financing to a broader spectrum of the population. It also allows for more effective risk-based pricing, which could lower the cost of financing for borrowers with good credit background and history. With the availability of non-traditional data provided by credit reporting agencies, borrowers demonstrating strong financial characters are able to leverage on such “reputational collateral” to obtain borrowings at favorable terms and rates. For lenders, credit information helps to strengthen the entire chain of credit evaluation and credit risk management. The availability of a wide range of credit information on a real-time basis facilitates advancements in risk and decision-making analysis, thus contributing towards institutional soundness. For regulators, this will enhance the stability of the overall financial system. Additionally, from a social perspective, the sharing of credit information contributes towards inculcating financial discipline and avoiding incidences of imprudent and excessive borrowings among borrowers. All these, combined, would definitely enhance the overall credit culture in an economy. The benefits of having a well functioning credit reporting infrastructure are evidenced in Malaysia. The Central Credit Reference Information System, or better known as CCRIS, which is owned and operated by Bank Negara Malaysia, enables real time access to both positive and negative credit information on all borrowers in the banking system and of a selected group of non-banks. The system contains more than 22 million outstanding credit accounts and 7.9 million borrower records.

The development and growth of credit information registries needs to be supported by a robust regulatory and supervisory framework. As the recovery in the global economy continues to be weighed down by uncertainties, greater attention is been focused on the role and scope of shadow banking entities in transmitting risks to the overall financial system. Such entities include those outside the regulated banking system that are involved in the extension of credit to borrowers or facilitate the credit intermediation process. Whilst credit information registries are not directly involved in the provision of credit, it plays a significant role in facilitating and enabling the expansion and outreach of credit intermediation by making available credit information to lenders. If the infrastructure is not well-managed and not subjected to appropriate oversight, it could inadvertently result in significant build up in leverage in the economy. In addition, the legislative framework is also critical in facilitating cross-border data flow, an area that I foresee will be the next, if not already, major area of discussion in the credit reporting industry. With globalisation and the increasing ease of movement of human capital and businesses across borders, we cannot deny that there will be an increase in the amount of credit extended across borders as well.
This kind of effect was reflected in the MPC’s judgment in the February 2010 Inflation Report that effective supply capacity might at the moment be reduced below  9  Nelson and Nikolov (2005) suggest that in the 1980s the average real-time output gap measure was over 5 percentage points below the average final measure, of which more than 4 percentage points was due to revisions to the level of output. 10  Discussed in detail in Neiss and Nelson (2005). 11  Greenslade, J and Parker, M (2008). 4  BIS Review 27/2010  the estimate which would result from simply looking at trends in capital, labour and total factor productivity. The MPC is prompted to look at this type of explanation against the background that at present CPI inflation (adjusted for estimates of the impact of the VAT change and of higher oil prices) is rather higher than might have been expected given the sharp fall in output. But the possible explanations discussed above suggest that the output gap has recently not been as large as simple models might suggest, and therefore higher CPI is less surprising. One reason for thinking that this effect may be pertinent is that indicators of spare capacity (Chart 3 shows one example) have fallen by less in response to the sharp fall in output than might be expected. But it is also probably true that these surveys are more difficult than usual to interpret in the wake of very large shocks to demand.

Moreover, we must recognize that the rest of the world is closely monitoring our ability as a nation to come to grips with our long-term fiscal challenges, and to pay our debts when they come due. This is an important litmus test of our credibility and ability to exercise global economic leadership. But the challenges extend far beyond fiscal policy. We, as a nation, have to take steps that facilitate the needed structural adjustment of U.S. economic activity that will position us to thrive in the next chapter of global economic transformation. We need to make sure the next business cycle will be more sustainable than the last, which was built on an unstable foundation of asset price gains, easy credit and outsized financial-sector profits. This will require a shift in orientation from consumption to export and investment-led growth. As EMEs have shown us, comparative advantage and global competitiveness are not inevitable consequences of factor endowments – they are the result of the choices we make as nations. There are no easy answers or quick-fix solutions. But in this regard, ensuring broad access to educational opportunity and improving opportunities for people to retool their skills mid-career so they can compete in a rapidly evolving global economy are important. So too is ensuring that regulation is calibrated such that it achieves public policy goals in the most efficient manner possible, with the least compliance costs and unnecessary delays. A continued commitment to open markets and free trade is essential.
The system has remained resilient through several episodes of market stress, ranging from the 2014 US Treasury “flash crash”, and the 2015 Swiss Franc de-pegging to the 2016 Brexit vote. What have been the overall effects of the reforms? Work in this area is nascent, there are no clear answers yet. But let me sketch some of the key issues. In each of these areas, we are confronted with the problem of attribution. It appears that regulation has had some role but we do not know how much of a role alongside other factors. Let me begin with market liquidity. There are concerns that liquidity has declined in some markets. Preliminary evidence indicates there is less depth and potentially less resilience under stressed market conditions3. Some of the blame has been ascribed to the emergence of more automated trading, which has little to do with regulation. 2/9  BIS central bankers' speeches  But other factors – such as less market making by dealer banks and increased post-trade transparency in corporate bond markets – appear to have stemmed from regulation. Second, bank profitability. The profitability of several large banks today is below the cost of capital. This is worrying. Banks need to be profitable in order to be strong. Retained earnings are one of the major sources of equity – which is the highest quality capital that banks hold. Unprofitable banks are a potential source of instability. Banks also need to be profitable to be able to support the real economy.

Figure 13: Crude Oil (Brent) (USD/Barrel) 150  Crude Oil  130  110  90  70  07.08  05.08  03.08  01.08  11.07  09.07  07.07  05.07  03.07  01.07  50  Source: Bloomberg. 10  BIS Review 100/2008  Members of the Press and Dear Guests, Our revised forecasts envisage slightly higher food inflation in 2008 and 2009 compared to the April Inflation Report. Although unprocessed food prices followed a relatively favorable course, processed food inflation is likely to stay at high levels for while, given the elevated course of agricultural commodity prices. Against this backdrop, we have raised the assumptions for food inflation from 13 percent to 14 percent for the year 2008, and from 8 percent to 9 percent for the year 2009. These changes have led to an upward revision in our inflation forecasts by about 30 basis points, for both 2008 and 2009. The projections envisage gradually moderating food inflation throughout the forecast horizon. In this context, assumption for 2010 food inflation is 7 percent. According to the framework drawn so far, we now forecast inflation to be around 10.6 percent at the end of 2008. Under the assumption of a limited tightening towards the end of 2008, our medium term forecasts suggest that, with 70 percent probability, inflation will be between 5.9 and 9.3 percent (mid-point 7.6) at the end of 2009, and between 4 percent and 7.8 percent (mid-point 5.9) at the end of 2010 (Figure 14).
Looking ahead, the baseline scenario predicts that the economy will continue to improve, that mobility restrictions will not return to mid2020 levels, and that the fiscal and monetary momentum will continue, with positive annual growth figures showing more consistently in 2021 starting in the second quarter. Even so, the erosion caused by the deep fall in activity and the use of public and private buffers—which was very necessary to navigate the first months of the pandemic—increases our vulnerability to risk scenarios and poses significant challenges in order for growth to advance towards its trend rate. Let me now share with you our evaluation of the economic scenario and related risks. Page 1 of 19  II. The macroeconomic scenario  Global activity has continued to recover from the impact of the Covid-19 pandemic, in a context of increased mobility and continued fighting of the disease. This has also been the case in Chile, although the pace of normalization has been slower than in other countries, slowing down the expected economic recovery (Figure 1). In recent weeks, there have been major outbreaks in the United States and Europe, which has led to the reinstatement of some restrictions. However, as opposed to developments early in the pandemic, these measures have been more focused and not as severe, so mobility has not been reduced as much.

Along with thanking this support, we promise to maintain the same motivation, proactivity, and cooperation in the next stage, precisely because there is still so much that remains to be done. Thank you. Page 9 of 19  Figure 1 Mobility (1) (moving seven-day average)  20  20  0  0 Europe (3) U.S.  -20  -20 Latin Am. (2)  -40  -40 Chile  -60 -80 25-Feb.  -60 -80  26-Apr. 26-Jun. 26-Aug.  26-Oct.  (1) Average of the categories stores and leisure, supermarkets and pharmacies, transport stations and workplaces. (2) Simple average of Argentina, Brazil, Mexico, Colombia and Peru. (3) Simple average of Germany, Spain, France, Italy and United Kingdom. Source: Covid-19 Community Mobility Reports, Google. Figure 2 GDP, selected economies (variación anual, porcentaje)  1Q.2020  2Q.2020  3Q.2020  5  5  0  0  -5  -5  -10  -10  -15  -15  -20  -20 U.S.  Eurozone  China  Latina Am. (*)  Chile  (*)Weighted average at PPP for Argentina, Brazil, Colombia, Mexico and Peru according to the World Economic Outlook (WEO, October 2020). For Argentina, the figure for Q3.2020 is the average of the annual variations of the EMAE for July, August and September. Sources: Central Bank of Chile, Bloomberg, and International Monetary Fund.
The level of mistrust among US investors towards new instruments with collateral in property in small, distant countries should not be underestimated. BIS central bankers’ speeches  7  So, in terms of risks for an acute liquidity crisis, it is important how the banks borrow, in particular which proportion of the borrowing is short-term. And this brings the problem back to just how to get hold of dollars. However, the problem is also related to that of how the borrowed dollars are used. In principle, there are three options. One way is to purchase US government bonds to use as a liquidity reserve. Borrowing for this purpose (and this has been significant for a couple of banks, at least) does not form a problem. Government bonds can always be sold on the market when the loans fall due, as they are highly liquid and remained so throughout the entire crisis. Another way of using the borrowed money is to exchange it immediately into Swedish kronor, but at the same time to enter into a forward contract where these kronor are exchanged back to dollars on the same date as the loan falls due. This entire process – borrowing in dollars, the immediate exchange into kronor and the exchange of these back again into dollars when the transaction falls due – is generally combined into a single transaction known as a currency swap.

When the banks’ foreign currency borrowing was not particularly great, this was not a significant problem. However, the growth in borrowing and our experiences from the crisis give us reason to think again. Today, it seems reasonable for the banks to carry the cost of the Riksbank’s foreign currency reserve, in as much as it is needed to meet their liquidity requirements in the event of a crisis. If they were to carry the cost of maintaining a liquidity buffer in the Riksbank, it is likely that the banks would find it profitable to cut back on the riskier areas of their dollar lending. In this case, the Riksbank would also reduce its foreign currency reserve, as the need for a buffer would have decreased. However, the banks should pay a charge to cover the costs of the remaining buffer. The extent to which the banks could imagine reducing the riskier areas of their foreign currency lending, the size of any charge, and how this could be repaid remain to be discussed by the Riksbank and the banks. The rough calculation I made earlier could form a starting point, but I make no claims for it to be any more than that. However, it is essential that this question receives an answer. The present situation is unacceptable in the long run. BIS central bankers’ speeches  11
In particular Chapter III, Part III and IV of the BFSA deal with the boards of directors of banks and financial institutions.

Nonetheless, probably the most important factor is that the banking sector is one of the most highly regulated sectors in society and is subject to strict supervision. A bank cannot operate without a licence, and banks are required to satisfy a number of requirements relating to capital adequacy and liquidity management, all of which limit bank lending and money creation. Norwegian banks cannot behave as Stockholms Banco did in the 1600s. By ensuring that banks are solid and sufficiently liquid, regulation and supervision also underpin trust in the money we use. The financial crisis in autumn 2008 was triggered by the collapse of an under-regulated financial institution – the Lehman Brothers investment bank.10 In the years preceding the crisis, Lehman’s equity was less than two percent of its assets. With so little capital supporting loans, it does not take more than a puff of wind to bring down a house of cards. New forms of payment and new forms of money Trust is necessary, though not sufficient, for money to function as a universal means of payment. It must also be efficient and safe to use. When you make a payment in a shop using a bank card, one of the largest systems we have is set in motion. Payments move back and forth between banks. Banks settle the payments by transferring money between their accounts at Norges Bank. Your payment then becomes available in the recipient’s account, normally a few hours after the payment process was initiated.