samchain/econo-pairs-v1 huggingface dataset:
It is thus possible to collect information on new economic and financial developments, such as the impact of recent changes in the price of oil. Other attractive features of online surveys are the ease of incorporating graphics and other visual refinements and the ease of conducting randomized interactive experiments to analyze the updating of expectations and the links between expectations and behavior. A second key design element of the SCE is that it uses a rotating-panel sample design, with approximately 1/12 of respondents rotating in each month, after which they stay in the panel for up to 12 months and then rotate out. In addition to keeping the sample representative over time, this rotational structure allows us to track the changes in individuals’ responses over time. In other words, we can compute changes in expectations over time after differencing out individual idiosyncratic effects. This design contrasts with repeated crosssectional surveys in which an entirely new sample is drawn each month. The panel structure of our survey, with a more stable sample composition, therefore reduces volatility in summary statistics due to a changing sample and increases the signal-to-noise ratio. Finally, it is possible to use the panel to link short-term expectations to actual realizations, and measure individual-level forecast accuracy and its implications in real time.

However, as we know from Slide 10, this masks substantial changes in the underlying density forecasts, with the lower rate mode becoming more prominent. 50  See e.g. Crump et al. (2014), and more recently Brodsky et al. (2016a). 51  Market-implied rates were derived from futures prices at the same time as responses were received from the surveys. 52  Adrian, Crump, and Moench (2013). 14  BIS central bankers’ speeches  Finance models make a variety of assumptions that allows them to extract risk premia from asset prices. Once that is done, they can obtain the underlying so-called “physical” probability distribution of the marginal investor – that is, the actual probability she assigns to various outcomes. Brodsky et al. propose a complementary approach, called “tilting,” which is, in a way, the reverse of the finance approach.53 It starts from the survey probability distribution and asks: How much do I have to “tilt” the original distribution – that is, how much probability mass do I have to shift around – to obtain the market-implied path as its mean? There are many ways to tilt or alter the survey distribution such that its mean is the market rate. Our approach is to require that the tilted distribution is as close as possible to the original survey distribution, where the notion of distance is one that is commonly used in statistics, and is based on a measure called relative entropy or Kullback-Leibler information criterion (KLIC). This relative entropy approach is nothing new.
We exercise our voting rights at companies’ annual general meetings, and we engage in dialogue with a large number of portfolio companies. Recurrent topics in our dialogue with banks include financing palm oil producers and following up TCFD recommendations. Topics related to climate change have also been an important part of the dialogue with companies that buy and sell meat in Brazil. The third pillar is related to the composition of the GPFG’s investment portfolio. Our management mandate requires parts of the fund to be invested in environment-related mandates. The environment-related mandates were first introduced in 2011. The purpose of the investments does not differ from that of the rest of the GPFG. The environment-related mandates are required to contribute to diversification and to improving the return on the GPFG. Chart: Environment-related mandates The Ministry of Finance is in the process of adjusting the guidelines for these mandates. Investments are to be focused on climate-friendly energy, improving energy efficiency, carbon capture and storage, water technology and the management of waste and pollution. The upper limit for the environment-related mandates will be increased from NOK 60 billion to NOK 120 billion, as the mandates will be expanded in 2020 to include unlisted renewable energy infrastructure investments. Primarily, these will be investments in wind and solar power production. In the Bank’s strategy for the management of the GPFG in the period to 2022, our target is an allocation of around one percent of the GPFG towards the end of the three-year period.

Mr. George gives an address on recent changes in the international financial and economic environment Speech given by Mr E A J George, Governor of the Bank of England, at a Dinner with the Lord Mayor for Bankers and Merchants of the City of London on 10 June 1999. My Lord Mayor, Mr Chancellor, My Lords, Aldermen, Mr Recorder, Sheriffs, Ladies and Gentlemen. When we were last here for this splendid occasion I suggested that we were living in a dangerous international financial and economic environment. These were strong words for a central banker – but perhaps not strong enough. That environment rapidly became worse through the autumn, so that by around the time of the IMF Annual Meetings in October there was a good deal of talk about global financial meltdown and impending world recession – which was not simply journalistic hyperbole. Since that low point things have certainly improved. The hectic scramble for financial asset quality and liquidity following Russia’s default and the near collapse of LTCM – an exceptionally highly geared hedge fund – failed to uncover fatal weaknesses elsewhere in the financial system, and lenders and investors have gradually regained some of their appetite for risk. Fears of a general credit crunch in major industrial countries quickly receded; and sentiment towards the emerging markets has improved, with growing evidence of recovery in the original Asian crisis countries and a better than expected outcome in Brazil.
As a Committee, we discussed at some length during the spring of this year why the changes in the quantity measures had not fed through to higher earnings growth. We discussed whether the natural rate of unemployment (and the NAIRU) might have declined due to an increase in trend productivity or improvement in the functioning of the labour market. We also considered whether there had been independent influences on the NAIRU stemming from falls in inflation expectations or the effects of sterling’s appreciation. It is against this background that the MPC’s decision to raise rates in June should be seen. The increase in headline earnings growth to 4.9% in February, from an upwardly revised 4.6% the previous month, appeared consistent with other labour market indicators. But we were fully aware of the evidence suggesting that the rise in earnings growth had been, and for a couple of months would continue to be, affected by unusually large bonus payments. If this was true, earnings growth might well have fallen back once the bonus effect had dropped out. Given the uncertainties in this area, the Committee concluded that it should not place too much weight on the latest numbers. Instead, it stepped back and examined the underlying trend in the labour market over the previous two years. We noted that private sector earnings growth had been rising throughout this period and that reported wage settlements displayed a similar profile.

For example, Ehrmann and Fratzscher (2005) estimate that, over one day, about one-third of US Treasury bill rate changes feed through to euro area interbank rates, but that beyond this US monetary policy has no significant impact on the euro area. Neely (2015) finds spillovers of a similar magnitude. Curcuru et al. (2018), in contrast, find that during a one-day period, ECB announcement surprises spill over to US Treasury yields in a similar manner as Federal Open Market Committee announcement surprises spill over to German Bund yields. 2 See, for example, Kim (2001), Georgiadis (2016), Chen et al. (2017) and Iacoviello and Navarro (2018). The  5/6  BIS central bankers' speeches  results for conventional and unconventional monetary policy are similar. Rogers et al. (2014) and Chen et al. (2016) provide evidence on large spillovers from the Federal Reserve’s unconventional monetary policy to the euro area. 3 Ca’ Zorzi et al. (2019) and Jarociński and Karadi (2018) draw a distinction between monetary policy surprises  (the so-called shocks) and other surprises, such as news effects. 4 Spreads relative to speculative bonds (below BBB rating), averaged over all maturities. 5 Corporate bond spreads increase by about 10 basis points and stock markets decline by about 50 basis points  in response to a monetary policy shock that increases one-year government bond yields by 2 basis points. 6 See Ca’ Zorzi et al. (2019). 7 See Miranda-Agrippino and Rey (2018).
However, if a bank’s liquidity-generating capacity stands at below 100% of the maximum foreseeable needs, it will be obliged to inform the supervisor, with which it will have to agree a plan to regain the 100% level. The initial design of this ratio is very demanding and, perhaps, not very realistic. The year 2015 was too early a date for its full implementation, and the definition of “high-quality liquid assets” or the assumptions of liquidity needs were overly rigorous. Hence, in January 2012, the Basel Committee of Central Bank Governors and Heads of Supervision revised the accord to widen the base of assets considered highly liquid and to soften the implementation timetable. This regulation is also practically finalised, at least in the Basel Committee, as an agreement on its design and calibration has already been reached. The short-term ratio will not come into force immediately. It will be phased in from 2015 – when a level of 60% will be demanded – to 2019, when it will reach 100%. Nonetheless, this timetable may be speeded up at the discretion of the different national authorities. The Banco de España has backed the setting of the short-term liquidity ratio, and the amendments to it, which have softened the original framework proposed. Nor does it intend to accelerate the implementation timetable, although we believe that banks should strive to meet it as soon as possible. As regards reporting and transparency obligations, we consider they should be obligatory for internationally active banks, but that they could be simplified for others.

In this respect, it views favourably the transparency exercise conducted by the Basel Committee on the comparability of asset risk weights. The results of this exercise allow an argument to be made for the need to lessen the differences between requirements obtained by applying the standard method and those calculated using internal models, so that the credibility of the solvency ratios should not be compromised. However, we believe they should not go so far as to abandon the use of internal models; rather, standardised models, based on parameters determined by the supervisors, should be used as a reference for internal models. 2  BIS central bankers’ speeches  I should also like to mention here the review of the treatment of the trading book, with the aim of reducing regulatory capital differences between this book and the banking book, thus avoiding regulatory arbitrage. At the Banco de España we broadly concur with these lines of work. However, concerning the review of sovereign risk and in order to avoid undesirable effects and consequences for financial stability, we believe a wholesale approach should be taken, not one that is independent or isolated in respect of each working group. As to the review of the current framework for the treatment of securitisations, I should like to underscore the importance of the calibration of capital requirements associated with securitisations not being excessively conservative, and that the reopening of these markets should not be hampered in an unwarranted fashion.
These biases in behaviour are similar in spirit, but different in form, to those of primitive man. Both generate negative sentiment towards strangers or the “out-group”. In ancient times, biases were based on the physical identity of strangers; they were overt and visible. Today, many biases are based on the social identity of strangers; they are often covert and subtle. Where primitive man had conscious biases, modern man often has unconscious ones too. 14 That these biases are sometimes covert, rather than overt, does not diminish their importance for society. Unconscious biases are likely to be just as prevalent, and sometimes as pernicious, as conscious one. And precisely because they are harder to detect, sometimes even among those exhibiting these behaviours, unconscious biases are more likely to go unnoticed, and thus unchallenged, than conscious ones. As conscious biases were violent and visible, unconscious biases are silent and invisible. The Sneetches is, at one level, a children’s story with a moral message. At another, it is a case study in social identity theory, a parable for modern times. Even in advanced economies with little fear of conflict or infection, with laws against discrimination and with social norms favouring diversity, we all remain Sneetches. Our biased minds are in part a neurological hangover from our hunter-gatherer past and in part a sociological side-effect of our multicultural present. Either way, these biases are embedded in our brains and behaviours. Diversity as a social good Saying that behavioural biases among individuals are understandable is one thing.

It has been enjoyed by generations of children, so it has a particular resonance at tonight’s event supporting Children in Need. And it has a happy (diverse, multi-cultural) ending. But The Sneetches also shines an uncomfortable spotlight on a psychological flaw in us all – the desire to differentiate, to stereotype. A half-century on, this flaw is one with which society continues to wrestle, not least in a world where the co-mingling of cultures, races and creeds has never been greater. In practice, this co-mingling has not always had such a happy ending. Tonight, I want to discuss some of the issues around diversity. These are relevant to groups large and small, from communities and organisations to economies and nation states. These issues affect all of us, children and adults, whether at school, work or play. In keeping with the spirit, I want to discuss diversity by drawing on a diverse a set of disciplines to explore the lessons they hold. And I will conclude with suggestions for some new directions in promoting diversity, in particular in organisations such as the Bank of England. We are all sneetches Let me start with what might appear, on the face of it, a rather controversial statement. Everyone is this room is a star-bellied Sneetch. I am, all of you are and everyone outside this room is too. By that I mean we all discriminate, to a certain degree and in certain situations, based on the characteristics and creeds of the individuals we encounter.
Private sector infrastructure financing in the region has traditionally relied on international bank lending, particularly from European banks. With the European banks facing deleveraging pressure and retreating from the region, some Asian banks have stepped in and increased their market share. However, there are questions as to whether Asian banks can fully fill the gap. Recent regulatory changes may also reduce banks’ appetite in long-term project financing. Given these circumstances, there are benefits to further develop the capital markets to complement bank financing and provide a channel to tap into other long-term institutional investors such as pension funds and insurers. Policymakers in the region have made steady efforts to develop the local currency bond markets. Along with the faster growth and improved fundamentals of the region, there has been a rapid growth of the regional bond markets in recent years. Notwithstanding this encouraging development, the capacity of the regional bond markets is still limited when compared with the huge financing needs of the region. Much work still needs to be done to develop a deep and liquid regional bond market, including but not limited to expanding the issuer and investor types, gradual liberalisation of barriers to entry of non-resident investors, promoting development of hedging tools, enhancing financial infrastructure linkages, improving corporate disclosure and transparency, and greater standardisation of legal and governance terms. Policymakers, as market regulator and market facilitator, should further their work on these fronts.

I was particularly interested to learn from our hosts today, in their press release of 23 February, that their preferred outcome of the review could free up £ billion of capital which could be returned to shareholders. You will not be surprised to hear that I have some doubts about a reform package which materially decapitalises the insurance sector. While it’s natural for the private sector to focus on private interests, it’s part of our job to keep an eye on the potential public costs of significant insurance failures. In our system, the highest standards are, rightly, applied to financial institutions that bring most risk to the system. Insurers are not at the top of that list – fortunately for this audience that position is reserved for your cousins in the banking sector. But insurance is absolutely essential for the functioning of the economy. For example, collectively insurers are responsible for paying over £ billion of annual retirement income, and a similar amount in motor claims. Imagine the costs to the wider economy of a disorderly failure of a single large insurer or of multiple failures thanks to a common vulnerability. Coming back to the matching adjustment, this makes a contribution of around £ billion to insurers’ capital base at the last count. The principle of the MA – that long-term investors that match assets closely to their long-term liabilities are exposed to fewer risks – is sound. But it does represent the bringing forward – and potentially paying away in dividends – of unrealised returns.
William C Dudley: Asset bubbles and the implications for central bank policy Speech by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Club of New York, New York City, 7 April 2010. *  *  *  Thank you for that kind introduction. Today I want to tackle a difficult subject: How should central bankers deal with potential asset price bubbles. As always, my remarks do not necessarily reflect the views of the Federal Open Market Committee or the Federal Reserve System. As I see it, we need to reexamine how central banks should respond to potential asset bubbles. After all, recent experience has underscored the fact that poorly regulated financial systems are prone to such bubbles and that the costs of waiting to respond to an asset bubble until after it has burst can be very high. Today, I will try to define some of the important characteristics of asset price bubbles. I will argue that bubbles do exist and that bubbles typically occur after an innovation that has created uncertainty about fundamental valuations. This has two important implications. First, a bubble is difficult to discern and, second, each bubble has unique characteristics. This implies that a rules-based approach to bubbles is likely to be ineffective and that tackling bubbles to diminish their potential to destabilize the financial system requires judgment.

This is a dynamic process as the requirements and expectations of consumers are also changing rapidly in tandem with the increased education levels and growing affluence. In recent years, consumers have become more discerning and demanding better product choices, more efficient delivery channels and more customer friendly practices from takaful operators. Bancatakaful, for example, has made noticeable headway to account for 20.4% of takaful contributions in 2005, compared with only 6.5% in 2004, reflecting the consumers' preference for selected products to be made available through this channel. While product offering among takaful operators will eventually converge, the consumers ultimately expect speed in service delivery, simplicity in dealings, stretching or going the extra mile in satisfying customer's needs and unquestionable integrity. Thirdly, Malaysia still has competitive advantage in terms of takaful and is well-positioned to be a takaful and retakaful hub in this region . During the past two decades, we have seen the gradual opening up of takaful operation in many jurisdictions throughout the world, primarily in Islamic countries and countries with large Muslim communities. In this period, Malaysian takaful industry has gained significant attention with the remarkable growth rate recorded domestically and in other countries as far afield as Saudi Arabia. Malaysian takaful industry alone successfully garnered approximately 26% of global takaful contributions and our takaful operator has been recognized as among the leaders at the global front.
To maintain competitive strength, wage growth in Norway had to be on a par with wage growth among our trading partners when productivity growth in Norway was on a par with our trading partners. With the current monetary policy regime, the inflation target is the nominal anchor. According to updated national accounts figures, an inflation target of 2½ per cent and trend productivity growth of around 2 per cent imply annual nominal wage growth of about 4½ per cent. Wage growth that is lower than 4.5 per cent contributes to increased employment. The Swedish Trade Union Confederation’s recommendations to its members are based on the inflation target: “It is therefore in the interests of all wage earners to control total wage increases to avoid exceeding the level that is consistent with the inflation target defined by Sveriges Riksdag (Swedish parliament).”  Challenges facing the Norwegian business sector History has taught us that individual companies and individual industries in wealthy countries may be threatened by the emergence of producers from low-cost countries. Nevertheless, the emerging Asian economies have not posed a threat to industrialised countries' economies as a whole. On the contrary, growth in Asian economies has led to lower prices for a wider range of products. These countries have also gradually developed into important markets. We know from experience that competition from Japanese and then Korean shipyards was an important reason behind the downsizing of our own shipbuilding industry.

Different firms can assess risk by different methods and models, using different data sets or applying different judgements: assessments undertaken by the BCBS1 have shown firms can generate quite different RWA calculations for an identical hypothetical portfolio. And firms may choose to optimise both their choice of assets and the weights attached to them to minimise capital requirements. It has been shown that differences in capital ratios calculated on an RWA basis have historically had little or no correlation with whether firms were able to survive a 1  4  Basel Committee on Banking Supervision July, 2013. “RCAP – Analysis of risk-weighted assets for credit risk in the banking book”. BIS central bankers’ speeches  stress2. A leverage ratio offers an alternative approach, which is not risk sensitive but simply calculates total capital in relation to total assets. The degree of leverage has historically been a much better indicator of likely firm failure (although we can’t be sure that correlation will survive if firms start to manage to a constraint!). As alternatives, the RWA and leverage approaches would generate different incentives for firms to be capital efficient. Under RWAs the incentive can be to expand the balance sheet with assets that carry low risk weights. Under a leverage ratio, the incentive can be to limit balance sheet size but choose riskier assets. Ideally, the two measures would work in tandem to ensure sufficient capital to support both balance sheet size and risk taking.