samchain/econo-pairs-v1 huggingface dataset:
In fact, reforms will enhance the gains from immigration, as there is some evidence that immigration offers most benefits in those countries with more flexible labour markets. Let me finish by recalling the words of Mr. Kofi Anan, the former United Nations Secretary-General, from a speech delivered to the European Parliament: “Migrants need Europe. But Europe also needs migrants. A closed Europe would be a meaner, poorer, weaker, older Europe. An open Europe will be a fairer, richer, stronger, younger Europe – provided you manage migration well”. It is hard to disagree with him. Managing migration well, will be very good for social and economic stability and will help make our job of maintaining moderate inflation easier. 4  BIS Review 59/2007

But it is also a situation in which cost and price pressures can begin to build up. The task of the MPC is to ensure that this does not happen, by keeping inflation in line with our target so that the economy can continue to grow at a sustainable rate. The uncertainties I have described thus lie in both directions: the economy could grow more strongly or less strongly than we currently project, though the risks lie predominantly on the downside. The uncertainties are probably rather greater than normal just at present, but we can take some confidence from the underlying soundness of the economy. So we address the uncertainties from a position of strength. That does not mean that the ride may not be bumpy at times, but it does mean that we have grounds for reasonable optimism that we will come through the present uncertainties in good shape. 4  BIS Review 22/2001
In this chart this is shown as the dark blue bars. The return on the fund has been solid, as shown as the light blue bars. The accumulated income from financial assets makes up a significant part of the fund’s current value. The yellow bars in the chart show fund withdrawals used to finance the structural non-oil budget deficit. Both returns and exchange rates vary over time. Rising equity prices have generated substantial gains for the fund in recent years. But this means we must also be prepared for losses when markets turn, as they did last year. As I have said, Norwegian society has gained in several ways from petroleum extraction. The earnings from selling oil and gas are only a part of the story. The emergence of a highly advanced and skilled offshore industry is another part. This is the third experience I would like to share with you. From the start of Norway’s petroleum era, we needed foreign technical expertise. Foreign oil companies were required to develop the petroleum fields in partnership with a stateowned oil company. Just as important as a certain degree of national control was the transfer of knowledge. There was also a clear expectation from the very beginning that Norwegian industry and service providers should be involved. The timing was perfect. In the 1970s, the Norwegian shipbuilding industry faced a sharp drop in demand for ships. The industry had resources and skills that could be reoriented to production of platforms and other oil industry inputs.

More recently, petroleum revenue spending over the fiscal budget has been less than 3 percent of the value of the fund. This has happened in a situation where the economic cycle has turned up at the same time as the value of the fund has increased rapidly. Fiscal restraint has proved to be a wise policy. Together, the oil fund and the fiscal rule have shown themselves to constitute a robust framework. This framework enjoys cross-party support. After the fiscal rule was introduced in 2001, all succeeding governments have based their policy on this guideline The advantages of this framework are many. First, it allows us to separate spending from income. When we smooth petroleum revenue spending over time, we reduce the risk of crowding out private businesses. At the same time, we protect public budgets from substantial fluctuations in revenues. Second, the considerable savings amassed in recent years mean that future generations will also benefit from petroleum revenues. Norway’s petroleum wealth does not only belong to those living today. We try to be good stewards, like the farmer who cares for the soil and passes it on to succeeding generations so they too can harvest from it. In the case of Norway, we pass our natural resource wealth on to our descendants in the form of financial assets. Chart: The GPFG – Governance model Before continuing, let me say some words about the fund’s governance structure and the interaction between the Norwegian parliament, the Ministry of Finance and Norges Bank.
This is so not only now, when the doubtful assets ratio for deposit institutions as a whole stands at 2.5%, approximately 3.5 pp below that of credit to the private sector, but also in the past. For instance, in 1993, when the unemployment rate amply exceeded 20% and interest rates were substantially higher than at present, the doubtful assets ratio for house purchase loans was approximately 4.5 pp lower than that for total credit to the private sector. The retail mortgage business in Spain is characterised by its simplicity, by having avoided innovations that tend to lower banks’ incentives to manage borrowers properly, and by the incentives to build relationships with customers, not only because the asset being financed is so important to them, but also because of the guarantees supplementing the mortgaged asset. Furthermore, the ratio between the loan value and the appraisal value is low, at 62% on average, and is similar across the various deposit institutions. That said, I should emphasise that the protracted growth of activity resulted in redundant capacity. Under a traditional retail banking model, in which knowledge of customers and proximity to them are defining characteristics, it is natural to increase capacity in an upturn, for example, by opening more customer service points. It seems obvious, however, that the size attained by the branch network and central services at their peak did not match foreseeable developments in the banking business. On the liabilities side, there were also imbalances.

Financial crises have arisen on many occasions through history, and not least the extensive financial crisis the world experienced 2007-2009 reminds us that financial crises can be extremely costly and that government measures can sometimes be necessary to stave off a total meltdown in the economy. 4 Some banks are quite simply “too-big-to-fail”. It is in the light of the banking system's inherent instability, combined with its significance for the economy as a whole that we should regard the need for special supervision, regulation and other measures to make the system more  4 See, for example, Reinhart and Rogoff (2009). 2 [14]  robust. As I mentioned in the beginning and I shall soon develop further, this is one reason why we need a central bank with an appropriated foreign currency reserve. In Palmstruch’s day, it was the depositors who rushed to the bank and caused a liquidity crisis. Unlike the 17th century, there is now in most parts of the world some form of obligatory protection for depositors’ money, a deposit guarantee. This reduces the risk that a bank’s depositors will rush off and empty their accounts if the bank's financial strength is suddenly called into question. The fact is that deposits from private individuals are now usually regarded as the banks’ most stable source of funding. But then we should know that the banks have for a long time also funded themselves through short-term and volatile borrowing on the international capital markets. 5 I shall develop this a little further soon.
Plosser, Charles (2018), “The risks of a Fed balance sheet unconstrained by monetary policy”, in M. Bordo, J. Cochrane, and A. Seru: The Structural Foundations of Monetary Policy, Hoover Institution  10 [16]  Rachel, Lukasz and Thomas Smith (2015), “Secular drivers of the global real interest rate”, Bank of England Working Paper No 571 Sims, Christopher (2016), “Fiscal policy, monetary policy and central bank independence”, Jackson Hole Symposium, Federal Reserve Bank of Kansas City Sveriges Riksbank (2009), “The monetary base – the Riksbank changes statistical definition”, memorandum, 16 April Sveriges Riksbank (2012), “Securities portfolio in Swedish kronor”, press release, 10 May Sveriges Riksbank (2014), “The Riksbank’s operational framework for the implementation of Monetary Policy – a review”, Riksbank Studies Sveriges Riksbank (2017a), “The long-term repo rate”, article in Monetary Policy Report, February Sveriges Riksbank (2017b), “The Riksbank’s experiences of publishing repo rate forecasts”, Riksbank studies, June Walsh, Carl (2017), Monetary Theory and Policy, fourth edition, MIT Press Woodford, Mark (2000), “Monetary policy in a world without money”, International Finance 3, 229-260. Yu, Edison (2016), “Did quantitative easing work?”, Economic Insights, First Quarter 2016, Federal Reserve Bank of Philadelphia  11 [16]  Figures Figure 1.

There were deposits from both banks and the state, as well as currency loans which funded some of the country’s foreign exchange reserve. There are several explanations why the balance sheets looked different in different countries. To a certain extent, it depends on the monetary policy regime. For example, the need to maintain a foreign exchange reserve may depend on whether the country has a fixed or floating exchange rate. To a certain extent, it depends on history and previous monetary policy regimes. The size of the gold reserve can often be explained by previous links between the currency and the gold, and the currency reserve can be a remnant from previous regimes with a fixed exchange rate. The way the balance sheet looks is also influenced by what tasks the central bank has and how profits and risks are distributed between the bank and its owners. 2 Figure 3 shows that many central bank balance sheets, including the Riksbank’s, have grown rapidly after the financial crisis. But how will the balance sheet develop when monetary policy is normalised? Should central banks strive for a lean balance sheet or is there reason to let balance sheets remain large? This review shows that there is no “normal” balance sheet that can be seen as an obvious benchmark. The development will instead be determined by central banks’ analysis of, for example, how the size and composition of the balance sheet interact with interest rate policy in normal times.
However, when the rate of increase remains at a high level, my concern increases that imbalances are being built up, which may later on check demand and inflation. This risk has been taken into account in the monetary policy decisions in recent years. The costs of increasing interest rates at a slightly faster rate than is motivated by the inflation forecasts made by traditional means must also be considered. My opinion is that when GDP growth has been strong, the risks in the housing and credit markets have carried greater weight in the decisions, and vice versa when the economy has been weaker. Inflation is low and stable… Let me begin by reminding you of why we have our current framework. The attempts during the 1970s and 1980s to keep employment up by means of a very active stabilisation policy led to sharply rising central government debts and high inflation. This laid the foundation for the current broad agreement that economic policy should not attempt to fine tune demand in the economy and that price stability should be the long-term objective of monetary policy. Price stability creates favourable conditions for  BIS Review 62/2006  1  households’ and companies’ decisions. It contributes to channelling savings to economically profitable investments, which benefits growth in the long term. In Sweden, as in the rest of the world, the rate of increase in consumer prices has been low for the past ten years, and inflation expectations have stabilised around 2 per cent in many countries.

Today I intend to give my views on these issues. I shall concentrate on the role played by elevated asset prices and indebtedness with regard to developments in demand and thereby price stability. Let me begin with a brief summary of my speech: •  Many central banks are worried by rapidly growing house prices and lending over long periods of time. The historically very low interest rate levels could create unrealistically low expectations of interest rates in the future. However, it is difficult to determine whether this development actually increases the risks to demand and inflation and whether – and how – monetary policy can in this case take these factors into account. •  These risks cannot be captured by the traditional models and forecasting methods normally used by central banks, which means that opinions differ as to how the central banks should act. Should we react in advance to subdue possible negative effects, or should we wait until a possible correction takes place? •  My opinion is that we must make the best possible assessments and act in advance to try to prevent the risk of large corrections leading to significant falls in demand and to lower inflation further ahead. •  There are both cyclical and structural factors which could motivate high growth figures for loans and house prices in Sweden over a period of time.
While communication is an advice that is frequently used, we made a good use of that beyond mere courtesy. We acknowledged that financial development was following a certain pattern. Financial institutions like all other businesses adopt marketing strategies and stick to such strategies in all markets. What this means for us is that once new product are developed and tested in other markets, they will follow the same pattern of marketing in other markets as well. In the years that preceded the crisis, financial institutions started the practice of lending in exotic currencies, offering very low interest rates and being without any economic relation with the borrower activity. Being aware of these developments, from previous communication with other central banks in the region, we were alerted to spot the first sign of such behavior in our economy. Therefore at the first signs of such credits, we discussed with the management of our banks and stopped administratively lending in these currencies for all unhedged borrowers. On a systemic level, I do believe the recent experience highlighted some issues that need to be looked more carefully in the future. I will highlight here only three of them.   The policies that facilitated the capital inflows into economies of the region were not followed by actions which could have provided the needed liquidity when these flows reversed or stopped. Countries of the region did not benefit from the swap agreements or similar arrangements that would allow us access to short term liquidity.

The euro has experienced a similar episode recently. This situation seems to be about to correct itself, now that more and more signs point to a closing of the growth gap between the United States and continental Europe. Thus, the potential appreciation of the euro is more than ever a topical question. This potential clearly reflects the economic soundness, dynamism and strengths of the euro area, supported by the structural reforms under way. As these winning cards, if I may say so, are now materializing more and more clearly, I am confident that market participants will soon share our analysis. 5  BIS Review 52/2000
But then a common currency  BIS Review /1998  –2–  of the region, not the dollar, will be agreed upon and the first step in this direction is to have a strong real. Responsibility I have been in the government since the beginning of 1995. I feel myself responsible for what has been done during this whole period. Pedro Malan has a key role in the government. Few Brazilians have his international credentials. He has good relations with men that make this world of international finance. His continued presence is essential to consolidate this transition period. But we should care about policies rather than names. Malan and I are carrying out a mission. Devaluation of the real No economy in the world could sustain a devaluation in real terms of 40%. The difficulty in maintaining a devaluation of that magnitude is that inflation would resume. The exchange rate has overshot, but it will come back, appreciating as time elapses. Currency Board I would like to stress my opposition to the idea of adopting a currency board in Brazil. This subject has already been examined and the government has decided against it. The Brazilian economy is not dollarised and I believe it would be a disastrous policy option. Brazil tried a similar regime in 1906. Nowadays, money supply in the expanded concept (M4) comes to $ billion, while international reserves reach $ 36 billion. To implement this regime we would have to dollarise and lengthen the maturity of these deposits.

This government is definitely committed to avoid such measures. Future The devaluation of the real will improve the fiscal balance, as it will permit interest rates to fall in the future. Foreign investors will return, sustaining economic growth. My optimism is not foolish. The next six months will be very hard. I am optimistic on what will take place after that. Unemployment I believe that the unemployment rate has to do more with the overvalued exchange rate than with the level of economic activity. Enterprises were being crushed. BIS Review 10/1999
This methodology incorporates a risk-focused approach, that enables it to strengthen preventive measures without forsaking the objectives of solvency and stability. There are no doubts that in the current context of deceleration in the world economy, distortions and tensions in global financial markets and an increasingly uncertain economic outlook, to have a sound and securely managed banking system is of paramount importance. Only on that premise will we be firmly placed to meet the fresh challenges arising from the new financial environment. BIS Review 56/2008  5  And, in this context, the Spanish experience provides us with final lesson: that any process of financial liberalisation or rapid innovation has to be accompanied by the application of appropriate regulatory and supervisory measures. Thank you for your attention. 6  BIS Review 56/2008

Stablecoins broadly comprise a digital financial asset that purports, by one means or another[9], to maintain a stable value, a ledger system, usually a distributed ledger, for recording and transferring ownership. These are supported by exchanges for trading the coins and custody arrangements for storing them. At present, they are issued by a variety of non-bank entities. So far their use has been confined to facilitating trading and other transactions in the world of crypto assets but there are proposals to introduce them for other payment purposes in the economy and for cross border use in competition with money issued by commercial banks and conventional payment systems[10]. Stablecoins offer the possibility of greater efficiency and functionality in payments. But they currently sit outside most of the regulated framework and it is extremely unlikely that any of the current offerings would meet the standards for robustness and uniformity we currently apply both to commercial bank money and to the existing payment systems that transfer commercial bank money between the parties to a transaction. The Financial Services and Markets Bill will give the Bank powers to regulate operators of systemic payment systems and systemic service providers using “digital settlement assets”, including stablecoins that are used, or are likely to be used, for payments, at systemic scale in the UK. It will also give the FCA powers to regulate the issuance and custody of fiatreferenced stablecoins for conduct and market integrity.
In the UK, the question is whether labour productivity will reverse any of its poor performance. These questions mean it makes sense for policy to test the extent to which supply performance is “endogenous” to demand.1 This is one of the main advantages of the forward guidance employed by both the Bank of England and the Federal Reserve. Last August the Bank’s Monetary Policy Committee made an easy call: we wouldn’t even begin to think about raising interest rates until the unemployment rate fell to 7%. Given the weakness of the UK recovery and the flexibility of the labour market, we could expect that considerable slack would ensure that the MPC was not taking undue risks with inflation as policy encouraged faster output and employment growth. To be clear, the Bank continues to be mindful of the risks posed by sustained exceptionally loose monetary policy. In some advanced economies like the UK, these risks relate mainly to housing markets. In emerging market economies, they centre on the volatility of capital flows. Across the financial sector, a low for long environment risks complacency, excessive risk taking and undisciplined underwriting. In all cases, authorities can and should look to macroprudential policy tools to manage these risks so that monetary policy can remain focussed on its objective of establishing the conditions for a sustained recovery while maintaining price stability. Given the powers and remit of the Financial Policy Committee, the Bank of England is exceptionally well-positioned to coordinate macroprudential and monetary policies.

It is not just that nearly three quarters of a million more people are out of work than before the crisis; another three quarters of a million more people are involuntarily working part time. The effect of this slack in the labour market is evident in wage inflation, which is at around 1% so that, even with weak productivity, unit labour cost growth remains below 2%. The fact that underemployment is exerting downward pressure on costs also reflects better than expected performance on the supply side of the labour market. In the jargon, the extent to which high unemployment has caused hysteresis seems to have been less than in past recessions. It now seems likely that the rate of unemployment consistent with stable inflation in the medium term is somewhat lower than the MPC assessed back in August.2 In part that is because rates of transition into jobs, even for those who have been unemployed for more than a year, have been sustained at high rates, minimising the extent of skill atrophy. In addition, other measures of slack in the labour market, such as involuntary part-time working remain high. 2  “Monetary policy, trade-offs and forward guidance” Bank of England Monetary Policy Committee, August 2013, p 34.