samchain/econo-pairs-v1 huggingface dataset:
In the event of an adverse oil price shock, a good core inflation measure will only rise by the amount of second round effects on other goods prices. There are effectively two transmission channels from a rise in headline to a rise in core inflation. Higher headline inflation can adversely affect longer-term price expectations. Rising headline inflation can therefore give rise to expectations of higher prices across the board. Alternatively, consumers can attempt to compensate their oil price related purchasing power losses by demanding higher wages. Such consumer behavior can trigger adverse wage- and price-setting behavior which would require a response from monetary policy authorities in an effort to preserve price stability. 5. Monetary policy implications  The response of monetary policy to oil shocks is therefore a function of the extent to which higher oil prices feed through to higher core inflation rates. In the event of a mere spike in headline inflation in the aftermath of an adverse oil price shock, it would be unwise for a central bank to force a reduction in aggregate demand to lead headline inflation back to its target. Instead, the appropriate policy stance is to “look through” the temporary rise in headline inflation. On the other hand, a central bank must remain vigilant and look out for possible signs of second round effects from a rise in oil prices. Despite high and volatile oil prices, there are few signs of underlying inflationary pressures building up in the world economy so far.

This would involve the replacement of regional currencies with a single one, implying a single monetary policy for participant states. A key concern, therefore, is whether it would work. Or whether the pressures would be so intense as to make an Asian monetary union unworkable from the outset. At the heart of this question is the degree of real economic convergence between potential members. Using the Maastricht criteria as a reference point for the degree of nominal convergence among Asian economies suggests that Asia is far from ready to cope with a single monetary policy. In 2003 only six Asian economies were able to keep their budget deficits below 3% of GDP, and only five had government debt levels of less than 60% of GDP. Only five economies had inflation rates within 1.5% of the three economies with the lowest rates. As for long-term interest rates, only six had bond yields within 2% of the three economies with the lowest interest rates. Perhaps more fundamentally, the degree of real economic convergence among Asian economies is a lot lower than it was between European economies prior to the formation of monetary union.
It has a world-class technological infrastructure, which is continually being improved. And equally important, London has an unwavering commitment to openness and to welcoming the establishment of foreign firms. In particular, the regulatory framework in London has proved sufficiently adaptable to maintain confidence in financial institutions and markets without stifling innovation and risk-taking. The new Financial Services Authority in London is committed to continuing this approach. BIS Review 11/1998  -3-  All these factors help to explain the size of the financial sector based in London. And foreign firms are continuing to move their operations, and in some cases their head offices, to London. I would like to acknowledge the contribution to London’s success made by American firms such as JP Morgan, Goldman Sachs, Morgan Stanley, Merrill Lynch, Citibank and Chase. And many Continental European firms have recently also made major investments in London, including ABN AMRO, Paribas, Dresdner and Deutsche. This shows how global financial institutions in the top rank regard London as the place to be, irrespective of whether the UK participates in EMU. You will have noticed that these factors have little to do with the question of the base currency used either in the UK or in Continental Europe. The City thrives on liquid markets regardless of currency, and it will thrive on the euro. Measured in these terms, the introduction of the euro represents an opportunity for London. We cannot of course be complacent about London’s position. London does not hold its pre-eminent position as of right.

Mr. Clementi explains how London’s banks and markets will help to forge links between the euro area and the rest of the world Speech by the Deputy Governor of the Bank of England, Mr. David Clementi, before international bankers and members of international organisations in New York on 10/2/98. Despite all the uncertainties of the last few years, I think that it is now well understood that the euro is going to be introduced on 1 January 1999. As you all know, the United Kingdom is not going to adopt the euro as its domestic currency from the start. But the euro is likely to become the core currency for the European wholesale markets in London. The City of London is Europe’s leading financial centre; and the introduction of a major new currency on the Continent of Europe means that London must have all the necessary trading, payment and settlement infrastructure, and be fully part of the conversion. London will be ready for the euro. What I want to do today is to explain - with my colleague, John Townend, and Sir David Walker, head of Morgan Stanley in Europe - how London’s banks and markets will help to forge links between the euro area and the rest of the world. And we also want to discuss the broader question of how the euro will affect the European financial landscape. We hope that EMU will be a success. The British Government is in favour of joining EMU in principle.
Egil Matsen: US Senate Democrats’ Special Committee on the climate crisis Opening remarks by Mr Egil Matsen, Deputy Governor of Norges Bank (Central Bank of Norway), at the meeting, Washington DC, 17 October 2019. * * * Chairman Schatz, I thank you for inviting Norges Bank, together with other NGFS-member central banks, to the U.S. Senate Democrats’ Special Committee on the Climate Crisis. I appreciate the opportunity to discuss climate-related economic and financial risks and relevant central bank strategies to address those risks. Norges Bank’s mission is to promote economic stability by conducting monetary policy and monitoring the financial system. Our central bank also has the responsibility for managing Norway’s SWF, the Government Pension Fund Global (GPFG), in accordance with a mandate issued by the Ministry of Finance. A feature common to both of these mandated responsibilities is the identification and management of risk. In addressing these risks, we should always work within our mandates. For central banks that means taking a comprehensive view of factors impacting the economy and the risks we face, while upholding market neutrality and preserving our independence. Climate risk, the economy and financial stability The scientific basis for climate change is widely accepted. The physical impacts of climate change and measures to mitigate its impact, will affect all parts of the economy and have consequences for the financial system. Consequently, climate risk is a relevant consideration for central banks.

A common basis of information and analysis may facilitate assessment and comparison of climate risk in individual institutions, and lead to a more correct pricing of risk. International cooperation could be fruitful in this work, including in the NGFS context. Responsible investment at Norges Bank In its role as the GPFG’s owner, the Norwegian Ministry of Finance specifies the investment universe, benchmark index, risk limits, and requirements. Norges Bank shall make investment 1/3  BIS central bankers' speeches  decisions and exercise ownership rights independently of the Ministry. Within this framework, Norges Bank works on climate risk across the GPFG’s three asset classes – listed equities, listed bonds, and unlisted real estate – within a general framework of objectives. By end-June 2019, the total market value of the fund was close to USD 1.1 trillion, corresponding to more than three times mainland GDP of Norway. The United States is by far the greatest receiver of funds, amounting to 41 percent of the total. To spread risks and capture global growth, the assets were invested in over 9,000 companies in more than 70 countries. We benefit from free and open markets that enable an efficient global allocation of resources. The objective is to achieve the highest possible return with acceptable risk. Responsible investment supports this in two ways. First, it seeks to improve the long-term economic performance of the investments. Second, it seeks to reduce the financial risks associated with Environmental, Social and Governance (ESG) practices of companies in the portfolio.
4.1  Innovative and diversified Swiss international trade  Looking at the structure of Switzerland’s international trade will allow me to dispel some wellestablished preconceptions about the Swiss economy. If I asked you to list some core Swiss economic sectors, you would probably mention banks, watches and chocolate. But Switzerland is much more than that. The Swiss economy is in fact highly diversified. For example, the share in total value added of the sector comprising financial, insurance and  BIS central bankers’ speeches  3  business services is smaller than the EU average (20.3% vs 26.2% in 2012, according to OECD figures). By contrast, the share of the manufacturing sector is significantly larger. Overall, the amount of goods and services that Switzerland sells abroad is equivalent to half of its Gross Domestic Product (GDP). Goods dominate export activity but, with a share of one-third, the contribution of services is by no means negligible. The export intensity is significantly above the OECD average. Switzerland is surpassed by the Benelux countries, however. Part of the gap with the Benelux reflects the extensive re-exports of imported goods generated by the activity of the world-class ports in Belgium and the Netherlands. Admittedly, access to the sea is not a key comparative advantage of Switzerland… In order to maintain competitiveness, the Swiss export sector has gone through profound structural changes during the last decades. First, there has been a shift in the composition of the export sector (figure 4).

In the euro area, meanwhile, the ECB made it clear that additional monetary stimulus would be required. A tangible sign of these diverging patterns was the substantial weakening of the euro against the dollar. With the clear prospect of a significant QE programme in the euro area, the pressure on the minimum exchange rate intensified hugely at the beginning of 2015 – especially in the last few days leading up to the SNB’s decision on 15 January. Against that backdrop, the minimum exchange rate became unsustainable and the SNB had no choice but to discontinue its policy. By maintaining the minimum exchange rate for longer, the SNB would have run the risk of losing control over its balance sheet. This, in turn, would have hampered its stability-oriented policy in the future. Once you have arrived at such a conclusion, you have to act swiftly. Speculative position-taking against the minimum exchange rate could easily have caused the SNB’s balance sheet to double within a few months. We would subsequently have been compelled to discontinue the exchange rate floor under even greater pressure, with all the consequences for our balance sheet and the Swiss economy that this would have implied. The costs of maintaining the floor would have been out of all proportion to the benefits. As a consequence, the Swiss economy is now dealing with very difficult exchange rate conditions. In an interdependent world with highly integrated and liberalised capital markets, the strengths of an economy like Switzerland can, paradoxically, turn into a major challenge.
Øystein Olsen: Economic perspectives Annual address by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), to the Supervisory Council of Norges Bank and invited guests, Oslo, 14 February 2013. The underlying data series can be found on the Norges Bank’s website. *  *  *  Introduction Life was blessed for these people, living in a small capital in a small country, geographically outside the world; geographically, but not economically. The bright springs bubbled up as never before (...). They were sent sparkling to the sky by popping corks over tables set for a feast (...) But all those who lived by the banks of the bright springs knew that they could not spring eternal.1 Johan Borgen’s portrayal of Norway as it was almost a hundred years ago could also serve as an apt description of today’s Norway, even though the environment was entirely different at that time. Five years after the financial crisis started in earnest, growth is weak and unemployment high in many countries. The economic situation in Norway stands in stark contrast to developments abroad. Norway’s economy is still growing and unemployment remains low. There is a tendency to see ourselves as a country apart. Norway’s oil and gas resources provide an economic base that few other countries enjoy. Income levels are among the highest in the world and the people of Norway are generally highly educated. Our access to natural resources makes a significant contribution to our prosperity.

However, the period of moderation in monetary growth has as yet been too short to allow a definitive assessment. Against this background, the Governing Council continues to hold the view that the information from the first pillar does not thus far point to risks to price stability. Nevertheless, the persistence of excess liquidity in the economy could become a concern once the economic recovery in the euro area gathers pace. As regards the second pillar, the trough in economic activity was in all likelihood reached at the end of last year. Further information received over the past few weeks, i.e. surveys, financial market and leading indicators, strengthened the expectations of a recovery in the course of this year. While some uncertainty remains as regards the precise pattern of the recovery, not least in the context of a substantial increase in oil prices, the latest evidence has reinforced our previous assessment. Real GDP growth rates in the euro area should again be in line with potential growth later this year. Domestic factors support the recovery. First, a reversal of the past inventory drawdown is under way and real disposable income growth is expected to benefit from lower rates of inflation. Second, financing conditions are favourable. We also expect the stronger international environment to play an important role in stimulating euro area exports, and both domestic and external factors should foster investment. Finally, the positive outlook for the euro area economy is very much supported by sound fundamentals and the absence of major imbalances.
Thus, for instance, only 77% of the hotel establishments that had opened in August 2019 did so in the same month in 2020, and only slightly over 40% of hotel rooms offered were taken up. On the information available, it is even possible that tourist activity may have worsened in September, given the high level of cancellations of prior reservations, the step-up in the year-on-year decline in air traffic and the downturn in spending using cards issued by non-residents. And, evidently, the latest pandemic-related developments in Spain do not contribute to brightening the outlook for these sectors of activity in the coming months. 2  Beyond the short term, the outlook for the Spanish economy, as for other countries, is shrouded in uncertainty, linked to how the pandemic evolves. This is why the Banco de España opted, in its publication dated 16 September,2 to present more than one scenario in relation to the possible course of the economy over the next two years, as it had already done last April and June. In this case, two scenarios were released. They share a common assumption about an effective medical solution being found and widely distributed among the population as from the second half of 2021. That is in line with the time horizon which, despite the high uncertainty, epidemiologists appear to be tentatively viewing as most realistic. The difference between the two scenarios lies in the assumptions made about the course of the epidemiological situation in the coming quarters.

The impact of the PEPP and of all the other measures on financial conditions is substantial, but it is also important to assess their effect on economic activity and, ultimately, on inflation in the euro area, given the ECB’s price stability mandate. Although it is still too soon to assess the macroeconomic effectiveness of the programme, the preliminary estimates of the Banco de España’s experts suggest that the PEPP will have considerable positive effects on the rate of growth of GDP, employment and inflation, in the euro area as a whole and in Spain. Indeed, the cumulative impact on GDP growth is expected to be somewhat 11  greater in the case of the Spanish economy, primarily because the programme is estimated to have had a greater impact on the reduction in the cost of sovereign debt in Spain.3 However, it is difficult to quantify the degree of financial and economic deterioration that would have ensued had the PEPP not been implemented. One of the main effects of the monetary policy decisions has been to avoid severe disruption in the financial markets that could have generated an even more profound and persistent economic crisis, with potentially dire effects on capital market stability. To conclude, the monetary policy measures adopted by the ECB in response to the COVID-19 crisis have had a stabilising effect on financial conditions and on economic activity, both in Spain and in the euro area overall.
1  The impact of the COVID-19 crisis on the Spanish economy  To put the discussion on corporate sector risks and vulnerabilities in context, I will first briefly review the impact of the COVID-19 crisis in Spain. The Spanish economy has been one of the hardest hit by the pandemic among advanced economies, with GDP experiencing unprecedented quarter-on-quarter declines of 5.2% and 17.8% in the first and second quarter, respectively. In the third quarter, economic activity is expected to have partially recovered, with the latest information pointing to a weakening in growth momentum since the end of July as a consequence of the worsening of the health crisis over the summer months. Looking ahead, the Spanish economic outlook continues to be highly dependent on epidemiological developments, about which much uncertainty remains. In any case, the latest Banco de España forecasting exercise points to a large GDP fall in 2020 as a whole, which could range between 10.5% and 12.6% depending on how the pandemic evolves and, therefore, on the severity of the measures needed to contain it. In either of the two scenarios considered, this contraction in GDP would be followed by a fairly dynamic recovery in 2021 and 2022. This recovery, however, is expected to be incomplete, meaning that, by the end of the forecasting period, Spanish GDP would still be below its prepandemic level. 2  Firms’ liquidity risks and the economic policies implemented to tackle them  Let me now discuss the main risks that firms are facing in this challenging environment.

When a home falls greatly in price, the household becomes unable to move without realising major losses. Individual households can then find themselves in particularly dire straits. A couple of days ago, Finansinspektionen presented a report on housing loans in Sweden.2 Encouragingly, this report showed that the mortgage ceiling introduced in 2010 may have dampened indebtedness and risk. At the same time, it can be noted, for example, that over half of new loans approved have no amortisation requirements whatsoever. Of the remaining loans, almost half must be amortised over a period of 50 years or longer. A large percentage of the loans being issued at present will remain for a long time. To a certain extent, these entail risks that the banks will also have to manage in several decades’ time. The higher capital adequacy demanded by the Ministry of Finance, Finansinspektionen and the Riksbank for the major Swedish banks should be seen in light of this. The banks need to lend a little more of their own money and slightly less of other people’s. This would mean that they would be able to bear losses more easily and would reduce the risk of future costs for all of us, as citizens. The European Commission is concerned about developments in Sweden The European Commission is also concerned about the high debts accumulating among Swedish households.
The alternative to the e-krona, increased regulation, could be difficult and expensive One conceivable alternative to the introduction of an e-krona would be for central government to intervene with increased regulation of the payment market to ensure safeguard objectives that private agents may not see as important but which are important for society. These include objectives such as general accessibility, resilience and innovative capacity. However, achieving both efficiency and security via regulation on a market like the payment market may be complicated. Allow me to explain why. In general, we usually consider competition to be good for achieving cost-effectiveness and innovation on a market. However, this does not apply to all types of market. In economics, we talk about ‘natural monopolies’. These arise on markets where major investments in infrastructure are needed and where the cost of serving an additional customer is low. A common example of such a market is the water system, where large investments are needed to lay water pipes and extend sewage systems. It would not be efficient to have two different companies digging up the streets and competing to supply water. In addition, once a system is in place, it is difficult for a competitor to enter the market and thus a monopoly arises. 12 See, for example, Tobin, J. (1985). ”Financial innovation and deregulation in perspective”. Keynote paper presented at Bank of Japan and BIS, CPSS (2003) “The role of central bank money in payment systems”. 13 Arvidsson, N., Hedman, J. and Segendorf, B.

Firstly, we understand that the industry is in the midst of finalising a recent independently-conducted Customer Satisfaction Index (CSI) that will be a means to gauge the insurers’ performance against the enhanced insurance industry’s Customer Service Charter which was introduced in January 2018. This survey includes minimum service standards that reflect the guiding principles for good customer service. The results of the CSI survey is expected to be finalised by end-2018. I would urge you to familiarize yourself with the Customer Service Charter of your principal insurers and use it to guide you in your dealings with customers so as to ensure good customer experience. Secondly, the Bank is at a fairly advanced stage of finalising the policy document on fair treatment of financial consumers. This will address the Bank’s increased expectations on financial institutions, including insurers, to cultivate a culture of fair dealing and responsible behaviour. The onus will be on insurers to ensure agents observe new standards to exercise due care, skill and diligence in dealing with financial consumers. We should expect principal insurers to accord greater emphasis on the importance of (1) providing clear and concise product information to customers to enable them to make informed choices, (2) offering products that are appropriate to the customers’ needs and financial circumstances, and (3) providing individualised advice that is in the best interest of the consumer. Let me conclude.