samchain/econo-pairs-v1 huggingface dataset:
Do governments have to do more to protect savers from losses in the value of their assets, for instance by cutting taxes? Our advice to euro area governments is to use the savings gained from the lower cost of debt refinancing in a growth-friendly way to help their citizens. They could, for example, reduce taxes on labour, create more incentives for private investment, or reduce their deficits where required. In many euro area countries the investment climate is too unfavourable. Does the ECB need to become even more expansionary in order to prevent deflation? This depends a lot on global developments. If necessary, we stand ready to use all of the instruments at our disposal. That includes the key interest rates and the size, composition and duration of our securities purchases. We will take a decision on this in March. How will the ECB ever manage to move away again from its expansionary monetary policy? Technically speaking, it’s not hard to do. The US central bank is currently demonstrating how it’s done. What is more important is that our environment – and by that I mean government policies – should support us sufficiently in generating more growth. If this does not happen, we will have to keep rates low for a very long time. So it’s not just up to us whether the low interest rate phase can be brought to an end, it also depends on the pace of reform in euro area countries.

And the integration of RegTech and SupTech allowed data from financial institutions to flow directly into regulators’ data bases in machine-readable formats through Application Programming Interfaces or APIs. Supervisory officers, who used to spend long hours poring over spreadsheets and reports – cutting, pasting, and computing – began to use automated surveillance dash boards. They are able to track on a daily basis the consolidated exposures, credit quality, value-atrisk and other indicators of the banks under their purview. They are able to carry out stress tests and simulations not only of individual banks but also network analysis of risk transference across the financial system. 3/9  BIS central bankers' speeches  Compared to just ten years ago, technology has enabled supervision to become much sharper and surveillance of systemic stability more rigorous. Managing the Risks Posed by FinTech while Harnessing its Benefits The second big theme in financial regulation over the last 20 years is the rise of FinTech. Technology has always featured in financial services. But from about 2015 onwards, there was an explosion in the application of various technologies in financial services – by both regulated entities and unregulated FinTech firms offering niche financial products. FinTech transformed the way financial services were produced, distributed, and consumed. It has brought significant benefits to consumers, financial institutions, and the economy at large. It has helped to reduce costs, manage risks better, create new business opportunities, and improve people’s lives. But like all good things, FinTech brought in its wake new risks and new challenges for regulators.
More people could be put to work on a sustainable basis, enabling them to gain opportunities not just to earn greater income, but also to develop their skills and grow their human capital. Before I go further, let me say a few words about the impact of Hurricane Harvey. The massive flooding in Texas has been a tragedy for countless people. My heart goes out to all who have suffered and face a long and difficult recovery. While the human toll of such a storm is immense, past disasters such as Hurricane Katrina and Superstorm Sandy have shown that the impact on the national economy tends to be modest and transitory. At first, activity dips as normal commerce is disrupted. But later, when rebuilding gets underway in earnest, economic activity receives a modest boost. Although I expect that the Texas floods will make it more difficult to assess the economic data in the months ahead, I do not expect it to fundamentally alter the underlying trajectory of the national economy. Of course, for parts of Texas, sadly, the consequences will be immeasurably greater. Monetary Policy Outlook As I noted earlier, I still anticipate that above-trend growth will lead to higher utilization of the economy’s resources, and that, over time, this will help push inflation higher. Thus, even though inflation is currently somewhat below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually.

2 William C. Dudley, The Importance of Financial Conditions in the Conduct of Monetary Policy, March 30, 2017. 3 See Addendum to the Policy Normalization Principles and Plans, adopted June 13, 2017. 4 See Projections for the SOMA Portfolio and Net Income, July 2017. 5 For related discussions, see Lorie Logan, Implementing Monetary Policy: Perspective from the Open Market  Trading Desk, May 18, 2017, and Simon Potter, Money Markets at a Crossroads: Policy Implementation at a Time of Structural Change, April 5, 2017. 6 The New York Fed’s portfolio projections report and accompanying data files illustrate some projected paths for  the size of the Fed’s securities portfolio under alternative scenarios for the long-run level of liabilities. For midyear 2017 update and report archive, see www.newyorkfed.org/markets/annual_reports.html. 7 See, for example, Eric M. Engen, Thomas Laubach, and David Reifschneider (2015), The Macroeconomic  Effects of the Federal Reserve’s Unconventional Monetary Policies, Finance and Economics Discussion Series 2015–005 (Washington: Board of Governors of the Federal Reserve System, February); Brian Bonis, Jane Ihrig, and Min Wei (2017), The Effect of the Federal Reserve’s Securities Holdings on Longer-Term Interest Rates, FEDS Notes (Washington: Board of Governors of the Federal Reserve System, April 20); and Troy Davig and A. Lee Smith (2017), Forecasting the Stance of Monetary Policy under Balance Sheet Adjustments, Macro Bulletin (Kansas City, Mo. : Federal Reserve Bank of Kansas City, May 10). 8 See David Harrison (2017), “Economists See Modest Impact from a Fed Balance-Sheet Reduction,” Wall Street  Journal, May 11.
A third difference is that while the 19th century globalisation was largely driven by falling transport costs, today it is largely falling information costs, thanks to computers and the Internet, that are the driving force. This development has led to entrepreneurship becoming increasingly global, as it has become much easier to localise various parts of the production process to different countries. An example using telegraphy and the current information technology can illustrate the significance of costs for the spread of innovations. Telegraphy was expensive; in the 19th century people had to go to a telegraph office or hire a telegraph boy and pay significant sums if they wished to send a telegram. In today’s money, it cost them around SEK 2,000 to send a long-distance message of 20 words, while the corresponding cost today is around 10 öre for 20 pages. In other words, the variable cost is negligible and the fixed cost is moderate. We can therefore now find powerful computers and Internet access in most workplaces and in many homes. The costs are so low that many people have the financial possibility to use computers and the Internet, at least in industrial nations. This spread also means that the time and the cost that lay in the telegraph boy’s running from place to place have been  4  BIS Review 60/2004  eliminated. It is thus this spread that makes the current information technology much more important than telegraphy was a hundred years ago.

Mark Twain is supposed to have once said: “I’m all for progress; it’s change I don’t like.” However, change lies in the nature of market liberalism, which neither can nor should be stationary. The structural changes that come in the wake of globalisation mean that less efficient production is replaced by more efficient production, and that sectors that do not hold up in competition are replaced by sectors where the country has comparative advantages, that is to say, is relatively better than its competitors. Structural changes thus consist of two parts: closing down (or moving out) and new establishment of businesses. The Austrian economist Joseph Schumpeter called this creative destruction; old jobs and technologies disappear and new, more productive jobs arise as technology develops and production becomes more specialised. The major challenge in future, in both Sweden and other industrialised nations, will therefore be to create dynamic conditions in which new jobs can arise as the old ones disappear due to rationalisation or are moved abroad. Studies regarding some industrial nations indicate that many jobs lost during the most recent economic slowdown have not yet been replaced by new jobs in the same branch when economic activity picked up again; instead productivity has been higher. However, employment has continued to increase in other sectors, which appears to increase the number of jobs regardless of economic activity. The fact that employees have to change sector leads to greater friction unemployment arising.
Good quality data is necessary to quantity ASEAN’s economic and insurance exposure to natural disasters. Moreover, countries are facing increasingly complex threats that compound the negative impacts of disaster and climate shocks, ranging from supply chain disruptions, to population migration and adaptation issues, to the risk of pandemics. Good data and analytical tools will allow policy makers to identify disaster risk zones, and to quantify the risks as well as the potential fiscal impact. This will in turn, empower governments, regulators and industry to make more informed decisions on disaster risk management, from infrastructure planning, to the use of disaster financing strategies and the development of solutions. 16. To this end, ADRFI will establish a new ASEAN Data and Analytics Platform, to construct a high resolution and objective natural catastrophe database for ASEAN. This platform will use remote sensing technologies such as satellite imagery, and advanced extraction techniques, to produce top down economic exposure data. Such data include building attributes like age and type of construction, as well as building values, will be fused with bottom-up insurance exposure and loss data, to form a holistic and more accurate picture of risk. 17. You may already be familiar with the Natural Catastrophe Data Analytics Platform (or 3/4  BIS central bankers' speeches  NatCatDAX), also led by ICRM, that is already utilising these new methodologies to bridge the data gap in Asia.

While national disaster risk management efforts are important, ASEAN member states can achieve even more by taking collective responsibility, and adopting a coordinated approach to building a regional platform in order to: Collect good quality, high resolution data, which is necessary to quantify ASEAN’s economic and insurance exposure to disasters Enhance capacity building, learn from each other’s experience and consolidate best practices, as well as equip policymakers with knowledge on enabling legal and regulatory frameworks to deploy disaster risk financing solutions; and Third, develop robust regional disaster risk financing solutions such as regional sovereign risk pools and catastrophe bond programmes. 10. Over the past decade, ASEAN has made notable progress to institutionalise disaster risk management across the region. Specifically, it has put in place the necessary coordinating platforms to manage disaster risks holistically across the entire value chain of disaster risk assessment, disaster risk financing and disaster risk response. First, Disaster Risk Assessment. In 2013, the ASEAN Cross Sectoral Coordinating Committee on Disaster Risk Financing and Insurance (ACSCC) was established to strengthen regional coordination of disaster risk management. ACSCC brings together 3 key stakeholder groups: Finance Ministers and Central Banks represented by the ASEAN Finance and Central Bank Deputies Meeting (AFCDM); Insurance regulators represented by the ASEAN Insurance Regulators Meeting (AIRM), and the National Disaster Management Organisations which are represented by the ASEAN Committee of Disaster Management 2 (ACDM).
If they are not to materialise, potential slippage from the projections must be monitored so that there is time to react and the objectives pursued are not compromised. In this respect, the forecasts published by the European Commission several weeks ago should be taken as a warning sign, given that a deficit almost 0.5 pp of GDP higher than this target is estimated. Should this failure to hit the target be confirmed, the structural deficit would also be impaired, making fiscal policy in 2017 procyclical, given the estimation that the output gap would have already moved into positive territory. The importance of budgetary consolidation I should now like to move on to the importance of budgetary consolidation. Since 2009 Spain has embarked on an intense process of public finances consolidation, which has entailed a reduction in the overall general government deficit of 8 pp of GDP. Achieving such an adjustment proved very difficult, given the prevailing circumstances. Yet even if the budgetary targets for 2018 are met, public finances, as projected in the draft Budget, will still be in deficit to the tune of 2.2% of GDP, while public debt will be standing 7/9  at around 97% of GDP. Given that the Spanish economy is regaining, according to most analysts, a neutral or slightly positive cyclical position, this will entail, for 2018, a structural deficit – i.e. the cyclically adjusted total deficit – higher than the budgeted figure of 2.2%.

Accordingly, since October last year we have lowered the monetary policy rate (MPR) by 150 basis points, keeping an expansionary bias for monetary policy. This, together with the performance of the internal and external macroeconomic scenarios, has heavily affected the structure of market interest rates. In particular, long-term rates are in or close to their all-time lows (figure 2). I must stress this because long-term interest rates are the ones that most influence investment. What is remarkable is that today they are even below the rates prevailing in 2008–2009, that is, even lower than they were at the height of the global financial crisis, when the MPR was down to 0.5 percent and unconventional monetary stimulus had to be added to the economy. Mortgage lending interest rates are also below where they were at the time and very close to their historic lows. At the same time, the lower cost of bank funding has been transmitted to the lending rates faced by firms and households. These rates have fallen by as much as 140 basis points since October last year. However, adjusted for inflation, lending has decelerated, particularly in commercial and consumer loans, influenced by the more cautious behavior of both suppliers and demanders of credit, as is apparent in our June Bank Lending Survey (BLS) and our August’s Business Perceptions Report (IPN).
The monetary policy easing that we enacted in the last two months – on a scale that is unprecedented in such a short period of time – was motivated by a sharp easing of inflation pressures looking into the future. The fact that markets could predict our moves with a fair degree of precision – despite the exceptional cloud of uncertainty that surrounds economic projections in present conditions – is a proof that our main mode of  1  See, for example, Alesina, A. and L. Summers (1993), 'Central bank independence and macroeconomic performance: some comparative evidence', Journal of Money, Credit and Banking, Vol. 25, No. 2, May. 2  Benati, L. (2008), “Investigating inflation persistence across monetary regimes”, Quarterly Journal of Economics, 123:3, August 2008, 1005-1060. For instance, estimates of the inflation persistence in the euro area fell by around two-thirds from the period before (until the Bretton Woods arrangement) and after the launch of EMU. 2  BIS Review 160/2008  communication, via disclosure of the economic outlook as we perceive it, is effective and robust to extreme occurrences. The second component of the strategy which helps in times when expectations become disoriented is what we have called the “separation principle”. In view of safeguarding its credibility and firmly anchoring long-term inflation expectations, it is crucial that the Governing Council sets the appropriate monetary policy stance on the basis of no other considerations than the delivery of price stability in the medium term.

For its part, the ECB has established a practise of making its policy transparent and in setting new benchmarks in the area of central banking communication. That being said, on each occasion, a central bank has to carefully assess the relevance, clarity and timeliness of the information. Transparency is a key ingredient of an effective monetary policy. Communication is an ongoing challenge and effective communication will always be characterised by a degree of flexibility and adaptability in order to respond swiftly to a rapidly changing economic environment. Thank you very much for your attention. BIS Review 160/2008  3
However, in a slowdown, as the impaired assets rise, the specific provision requirements increase and the statistical provision becomes negative. This means that the statistical fund (accumulated in previous years) starts being used, its proceeds (the difference between the latent risk and the specific provision) being credited to the profit and loss account. Therefore, thanks to the mechanism of the statistical provision, the burden of credit risk on the profits of banking institutions is better spread over the cycle and more in accordance with the evolution of expected losses. The new scheme offers banks two options. First, to use their own internal measurements of the statistical credit risk and second, to use a standard method. The Bank of Spain expects that in the future an increasing number of institutions will be able to show robust computations, in the framework of an integrated credit risk management system. However, probably in the next year or two, most banks will use the standard method. In the standard system the supervisor sets the parameters. The portfolio is distributed in six blocks, according to the relative riskiness of the different assets, or off-balance sheet items with credit risk. A vector of coefficients (ranging from 0 to 1.5%) is applied to the exposures contained in the six blocks. The resulting figure is the estimated expected loss for the bank portfolio. The computation produces an aggregate annual gross burden (i.e.

At current rates, the statistical fund will reach its peak at the end of 2004. As far as the cyclical behaviour of banks, it is too soon to say, but we tend to think that the anti-cyclical nature of the statistical provision is influencing bank behaviour. I must confess that gaining acceptance among banking institutions for our new provisioning scheme was not easy. Banks were reluctant to see their bottom line profits indented, arguing that the Spanish provisioning system was already demanding (tight asset classification rules plus on-site monitoring and enforcement by Bank of Spain inspectors, not to mention high solvency ratios by international standards). Apart from banks’ initial, and understandable, criticism, some other voices have been raised, although not very loudly, against dynamic provisioning. Some of them can be readily refuted. Others merit careful discussion because the alternatives they propose may affect financial stability. The most obvious criticism is that a system of dynamic provisioning smoothes bank profits. It is true that the statistical provision tends to smooth profits over the course of the cycle. But it is no less true that the current ex post provisioning system (i.e. setting aside a specific provision when the impaired asset appears) artificially increases the volatility of banks’ profits. And what is more important, this increased volatility in the latter case has less to do with economic fundamentals (I. e. expected losses) than with accounting rules. If expected losses appear from the beginning of the operation, banks should start to provision them at the very outset.
The Government has also reduced its stake in the commercial banks over the most recent years and intends to have them largely or fully privatised by the end of the current electoral term next year. The privatisation process creates opportunities for continued rationalisation in the financial system creating ample opportunities in the period ahead, including closer ties with foreign financial institutions. It is tempting to put recent economic developments in Iceland into the context of developments in some of the other Nordic Countries about a decade ago. Liberalisation of the Icelandic financial markets was more or less completed in the mid 1990´s when the last restrictions on the movement of capital between Iceland and other countries were removed. Our liberalisation came a few years later than in the other Nordic Countries. You will recall that in some of the other Nordic Countries, liberalisation was followed by a boom period in the economy, partly or largely fuelled by a rapid growth of credit and in some cases large fiscal deficits. At the same time, these countries were pursuing a fixed exchange rate policy vis-a-vis the ECU. Developments in the domestic economies were such that the fixed exchange rate policy was gradually undermined, the rapid credit growth of banks resulted in weakening loan portfolios when asset prices fell, the exchange rate fixety gave way to floating, the currencies depreciated and inflation rose. The current account of the balance of payments also deteriorated.

The importance of fisheries as a generator of foreign exchange revenue has diminished in relative terms - to less than a half of the total - while the importance of other sectors has risen, such as manufacturing industry, information technology and tourism. In these developments, Iceland is among other things drawing benefits from globalisation to strengthen the foundations of the economy. Foreign direct investment regulations are liberal with the exception that such investment is not permitted in the fishing sector. Foreign direct investment is most noticeable in power intensive industry, such as the production of aluminium, which is based on Iceland’s abundance of untapped renewable energy resources. Recent changes in corporate taxation in Iceland, lowering corporate taxes to among the lowest to be found, serve to attract foreign business to Iceland and encourage Icelandic companies with international operations to favour Iceland as the base of their operations. 2  BIS Review 55/2002  Direct investment by Icelandic companies abroad has risen rapidly in recent years and in a variety of areas, such as fisheries and fish processing, pharmaceuticals, retail commerce and financial services. These developments also benefit the Icelandic economy in the long run as they integrate Iceland further into the global economy, allow Iceland to draw more easily on the experience of others and bring in dividends.