samchain/econo-pairs-v1 huggingface dataset:
12  Anders Åslund: The Group of 20 must be stopped, Financial Times November 27, 2009. 13  Article IV, Section 3 (a) of the IMF Articles of Agreement. 6  BIS Review 22/2010  I would emphasize certain key principles:   First, systemically important countries need to collaborate effectively on consistent economic policies. Their success is vital not only for their own good, but also for that of others, including small open economies.   Second, this collaboration should be anchored in a multilateral and statutorybased system of representation, for example through constituencies, where smaller countries would participate, even if indirectly.   Third, the constituencies should have rotating representation, where small countries, at least periodically, could participate directly. Without such a global order, the interest in contributing to international efforts is certain to diminish. There can be no taxation without representation. Thank you. BIS Review 22/2010  7

On the other hand, what effect would it have on confidence in the inflation target if we allowed a long time for the adjustment? How long can inflation deviate from the target without this affecting confidence and without the inflation target being perceived as meaningless? These are difficult questions that I know we at the Riksbank are not the only ones to be reflecting on. I would very much like to hear your thoughts and reasoning on this. Safeguarding confidence in the inflation target is of central importance for monetary policy. I therefore believe that the best means of managing these concerns is to be open and clear with regard to the analyses produced and the decisions made on the basis of these analyses. I believe that this will in the long run create the best conditions for the policy to be accepted and to win confidence. Thank you! 6  BIS Review 25/2006
The need and benefits of living on reclaimed land have been accepted and the focus is on strengthening the infrastructure to sustain this. Similarly, financial integration is a choice. Countries decide to become financially integrated because the perceived benefits of doing so outweigh the costs. Moving forward sustainably requires going beyond coping with capital flows to living with them. This involves developing and leveraging on fundamental economic strengths to enhance countries’ resilience to external shocks. A diversified export base focused on high value-added products and services translates into higher margins and pricing power, and hence less sensitivity to swings in the exchange rate. At the same time, developing a firm domestic consumer base will solidify economies’ internal strength and lessen the dependence on external demand. Much can also be done on the financial side. Deep and liquid markets would help to absorb swings in capital flows without overly large price movements. The availability and widespread usage of risk management instruments, particularly foreign currency hedging, would mitigate the negative repercussions from asset price volatility. Outward capital flows by domestic investors can enhance stability as international asset holdings can provide an important buffer during periods of volatility. Last, but not least, limiting leverage in the banking system can go a long way in cushioning the economy from external shocks. In most cases, exchange rate flexibility will be an indispensible part of living with capital flows.

Article 123 of the Treaty on the Functioning of the European Union prohibits any form of monetary financing of public debt or deficits; Article 124 forbids privileged access to financial institutions by the public sector; and the “no-bail-out clause” in Article 125 precludes that one Member State becomes liable for the liabilities of another Member State. These articles are based on sound economic principles. Monetisation would inevitably lead to higher inflation, with the well-known costs to economic prosperity. Transfers between euro area Member States would – particularly in the absence of far more rigid fiscal rules and sanction mechanisms at European level – risk creating significant moral hazard effects in the beneficiary countries, and would thus further undermine the long-term economic stability in the euro area. Also, the ECB has long warned against the third option – the restructuring of sovereign debt in the euro area. The exchanging of debt, as in the case of Greece, should remain a unique event. In this respect, it must be noted that the contagion effects of such measures are difficult to control, as has been demonstrated by the high volatility of financial markets over the past year. In addition, debt restructuring does not in itself address the underlying economic fiscal and structural imbalances. There is only one way of solving the sovereign debt crisis in the euro area countries: governments should pursue policies of strict fiscal consolidation and far-reaching structural reforms so as to address macroeconomic imbalances and return their countries to sustainable paths of growth.
The IMF should not thus provide unlimited and unconditional financial support, its catalytic role remaining a core element of  BIS Review 49/2001  3  financial crisis resolution. As a consequence, IMF financial assistance should be ex ante limited in terms of quotas. Access above these regular limits should be exceptional and allowed only in cases of systemic risks. However, if short-term financing is the bulk of IMF lending role, the IMF should also promote macro-stability, including structural matters relevant for macro-economic policies. As a consequence, the IMF needs a medium and long term surveillance and medium and long term facilities for adjustments to take hold. -  2. As regards its role in crisis management, the IMF could concentrate on agreeing with the crisis country a program which ensures adjustment and financing over the short and medium-term: ·  This means, for example, that IMF conditionality should cover short and medium and long term issues. The Asian crisis has led to an extension of IMF conditionality to structural areas, mainly as regards financial systems restructuring issues. This extension was somewhat criticised but I do not share such views: including structural matters in the IMF conditionality is clearly in line with IMF missions as regards financial stability and should reinforce its efficiency. In that respect, the review of IMF conditionality under process should not mean, in my opinion, that it should necessarily be weakened, by focusing only on short term macroeconomic variables.

In view of the high growth rates in recent years and considering that we had moved towards a situation where resources were becoming increasingly strained, we in the central bank concluded last autumn that it would be healthy for the Swedish economy if activity were to slow down somewhat to a more sustainable rate. In principle, an economic slowdown to a more sustainable growth rate can happen either as a spontaneous slackening of activity, for instance coming from an international disturbance, or via a monetary policy adjustment, or from a combination of the two. For a while now there have been clear signs of a slowdown in the U.S. economy. In the Euro area, too, activity has been somewhat weaker than expected. In Japan it looks as though a recovery will be further delayed on account of the problems that have already beset the country for a long time. Moreover, the weaker growth in the United States may have a regional effect on Southeast Asia. Accordingly, it is now becoming increasingly clear that a global economic slowdown is tending to adjust the expansion of demand in the Swedish economy towards a more sustainable growth path. However, it remains to determine the extent to which the international slowdown will sufficiently dampen the previous unduly rapid expansion in the Swedish economy. On the other hand, it cannot be ruled out that the downturn in the U.S. economy will be more pronounced than various observers count on at present.
This would be problematic were it to occur because inflation expectations are an important driver of actual inflation. If inflation expectations become unanchored to the downside, it would become much more difficult to push inflation back up to the central bank’s objective. Japan’s difficult experience indicates the importance of avoiding such an outcome. For this reason, we closely monitor inflation expectations. Inflation measured by the PCE deflator has been running below the FOMC’s objective since May 2012. A concern is whether these persistent underruns in inflation may be beginning to weigh on inflation expectations. Some surveys of inflation expectations have softened recently. For example, the University of Michigan measure of median long-term household inflation expectations – that is, expected  2  BIS central bankers’ speeches  inflation at a five-to ten-year horizon – is currently at 2.6 percent. This is near the very bottom end of its range over the past two decades. The New York Fed’s Survey of Consumer Expectations also shows softness. The median of 3-year inflation expectations has declined over the past year, falling by 22 basis points to 2.8 percent. While the magnitude of this decline is small, I think it is noteworthy because the current reading is below where we have been during the survey history. Up until July 2014, the median largely stayed in the range from 3.2 to 3.4 percent, and from July 2014 to July 2015 it remained near 3 percent.

To ensure price stability over the medium term against this backdrop, the SNB resorted to unconventional measures. We lowered our policy rate well into negative territory and intervened in the foreign exchange market, at times considerably. This led to a marked expansion of our balance sheet (cf. Chart 1). The use of foreign exchange market interventions was necessary given that the strong appreciation of the Swiss franc was a direct source of the deflationary pressure in Switzerland. Furthermore, the scope for buying domestic bonds was limited given Switzerland’s relatively small capital market. By lowering our policy rate to −0.75% and extensively intervening in the foreign exchange market, we were able to ensure price stability even in these difficult years. Although there were phases when inflation slipped into negative territory, it always returned relatively quickly to positive values. There are two points worth noting in this regard. First, the phases of negative inflation did not lead to a de-anchoring of longer-term inflation expectations. These remained consistently between 0% and 2%, i.e. in the range that the SNB equates with price stability. This can be seen in the inflation expectations of companies in Switzerland (cf. Chart 2). Although their short-term expectations tracked the development of inflation, their longer-term expectations remained stable even when inflation was temporarily negative. The companies regarded the recurring phases of negative inflation as one-off events. Although inflation has been very low on average over the past 15 years, companies have not perceived the decline in inflation as a trend.
To cross-check the projections for potential output and thus the output gap, we also look at alternative indicators of pressures in the economy. The wage gap measures the difference between actual wage growth and the growth that over time is consistent with the inflation target, and is an indicator of labour market tightness. With an estimate of 2 per cent productivity growth, wage growth of 4.5 per cent over time will be consistent with an inflation target of 2.5 per cent. In the chart, the wage gap up to 2000, i.e. before the introduction of the inflation target, is defined as the difference between wage growth in Norway and in other countries. As we see from the chart, there appears to be a close relationship between this wage gap and the output gap as it is measured by Norges Bank. If we look at developments in employment in relation to trend growth (measured as a percent of the population in employable age groups), we get a similar path. 5  2  Norges Bank has chosen, in keeping with ordinary practice, to use a smoothing parameter, ? = 100 in the annual data. BIS Review 6/2004  We also consider credit growth to be an indicator of public demand. Growth in credit which over time deviates from growth in nominal GDP may indicate that the level of activity in the economy is higher or lower than normal.

At the end of 2022, the COVID-adjusted level of potential output (the black line) is 4.2 percent below the pre-pandemic projection for the fourth quarter of 2022, with nearly half of that shortfall explained by the COVID shock measure and the remainder a permanent change in the natural level of output (the gold line). In summary, according to the model estimates, the main longer-term consequence from the pandemic period is a reduction in potential output, but the imprint on r-star appears to be relatively modest. Importantly, there is no evidence that the era of very low natural rates of interest has ended. The Future of R-star? These estimates indicate that r-star today is about where it was before the pandemic. But where is it headed in the future? Of course, this is impossible to know with any certainty. One way to gauge how forecasters perceive the future of r-star is to use forecast data to estimate it. Figure 5 shows the HLW-based estimates of r-star in the U.S. through the end of 2024. It uses published data in the first quarter of 2023. The May 2023 Blue Chip forecasts for inflation, GDP, and interest rates are used as proxies for data from the second quarter of 2023 through the fourth quarter of 2024. The resulting estimate of r-star is about ½ percent in the first quarter of 2023, and subsequently falls to slightly below zero. Evidently, the value of r-star implied by private forecasts is, if anything, even lower than today's estimate.
Unconstrained by a diagnosis of who was to blame – and considering the mounting downside risks – the speed and scale of the policy response was free to match the dimensions of the unfolding shock. I won’t review all of the actions that the Fed has taken over the past month – they are well documented elsewhere – but I would like to note of the breadth of activity to stabilize the financial 1/4  BIS central bankers' speeches  system and to support the flow of credit, both within and outside banking system. To that end, I’ll describe a few of the lending and credit facilities that the New York Fed is charged with standing up to supply credit for households, businesses, and state and local governments: Commercial Paper Funding Facility By the middle of March, unusually high funding needs and pullbacks by key lenders of short-term funds led to surging rates in the market for commercial paper, or short-term IOUs issued by businesses and municipalities. Interest rates on longer-term commercial paper, in particular, rose to levels not seen since the financial crisis of 2008. Many issuers were reportedly unable to place commercial paper with a term of longer than a week, leading to increased risk that companies would not be able to fund basic operational needs, such as meeting payrolls or financing inventories.

In the same period, inflation has at times relatively declined, but it was impossible to maintain a permanent recovery that could be identified as price stability. During the period between the first half of the 1970s and the early 1980s, studies and applications to fight inflation and to maintain price stability in developed economies intensified, whereas inflation accelerated due to the financing of public deficit by the Central Bank. In the second half of 1980s, the inertia arising the Central Bank meeting public deficits brought about abandoning of discipline in public expenditure changes in production-consumption behavior together with inflation and deterioration in the social structure. In the early 90s, apart from relatively short-term periods of stability, lax fiscal policies continued to be implemented along with monetary policies aimed at preventing a possible crisis. Price stability was not a priority, moreover, inflation entered a selffulfilling cycle. It is a fact that during this 30-year period, price stability was not the main objective and the necessary structural arrangements for maintaining economic stability, including price stability and sustainable growth, were not taken into consideration. This period of long-term chronic inflation brought with it a lot of negativity. As it is known, price stability is the sine qua non for maintaining economic and social stability. The extent of the damage to the economy as well as political and social structure of a country caused by failing to achieve price stability is clearly in the in the state of the country during this period and in the experiences of other countries.
I see commitment to this basic “blocking and tackling” as essential to financial institutions’ continuing to be competitive – and relevant – in the digital world. While the legacy issues need to be addressed in the near-term and quickly, we can’t hold off on addressing the vast number of issues around cyber – since cyber is upon us now. Information technology and cybersecurity The area where I will spend most of my time discussing today is cybersecurity. Suffice it to say that as I think about the kinds of risks that might cause the next crisis, cybersecurity is the one that worries me the most. While I will focus my remarks on the financial sector, my concern is not limited to the financial sector. This is much bigger than just banks or financial institutions; it includes many other sectors as well. As it relates to the financial industry in particular, the interconnectedness of firms continues to pose a particular risk to financial stability; from trading systems to settlement activities, we are at risk of a major disruption to financial stability. During the last financial crisis, we began to get a glimpse into the challenges faced as a result of interconnectedness and systemic failures. Years later, we are still faced with some of the same challenges, with only a limited view into the true complexities behind how firms are linked, connected, and ultimately intertwined to form the fabric of the financial industry.

The additional risk to keep in mind here is the growing number of unregulated firms operating in and competing in this arena. As the industry moves to overcome the risks associated with cybersecurity, you have to consider the additional vulnerabilities you are exposed to through non-regulated entities that will not be subject to the same guidance and standards. The big question lies in how you, as an industry, ensure that the ‘industry as a whole’ is safe, not just regulated entities. 4. One size does not fit all  Just as firms are diverse in size, complexity and product offerings, so too are technologies, processes and systems. While some firms house all technology work internally, others outsource the entire function or a significant part of it to third-party vendors. In addition to the variety of systems used and approaches to information security within firms, as I said earlier, we have an entire subsystem that supports the financial sector and ultimately connects every firm to some extent. In response to this, we are working under the  4  BIS central bankers’ speeches  assumption that there will not be a one-size-fits-all solution and the approach taken will need to be comprehensive and flexible enough to be adopted by all types of firms. 5. We are in this together  Cybersecurity is an area where I believe our interests are aligned and our shared goal is twofold.
The plenary session will encompass all members of the SRB, which – on top of the ones just mentioned – will include  6  BIS central bankers’ speeches  one member appointed by each participating Member State, representing the national resolution authorities.9 The fact that the ECB will be an observer in the Board, with no voting rights, is supported by the ECB. This accurately reflects the need to have the supervisor involved in resolution matters, while maintaining the necessary separation of institutional responsibilities between the supervisory and resolution function in the Banking Union. The decision-making within the Board is designed to enable taking resolution action in the interest of stability within the euro area and of the Union as a whole. In particular, decisions in the executive session should be made by consensus. If the executive session is not able to reach a joint agreement by consensus, the Chair and the permanent members will take a decision by a simple majority. By reaching a decision either by consensus or by a majority, efficient a European decision-making should be ensured.10 Decision-making in resolution It is important that the decision-making process in the SRM allow for timely and efficient decision-making, if necessary, within a very short time such as a weekend. It is therefore welcomed that the decision-making process in the SRM is capable of this, in spite of the fact that it may involve both the Commission and the European Council. Let me describe this process as simply as I can.

This is the consequence of two types of processes. First, the adjustment, in the form of balance-sheet recession, that the crisis represented. Second, by the structural problems created by ageing populations, globalisation, energy and environmental risks and decreasing returns of technological progress recently underlined by Robert Gordon16. In this context, the attention that will have to be given to the other form of political legitimacy referred by Scharpf gains accrued importance. This calls for greater participation by citizens in European decisions. In some ways, it may stand-out as contradictory with the search for effectiveness linked with the first form of legitimacy requiring stronger central deciding bodies. To understand the great difficulty in addressing this issue, we could establish an analogy with the political trilemma of the world economy, as recently stated by Dani Rodrik17: “we cannot simultaneously pursue democracy, national determination and economic globalization”, but I will not enter into such complications. I will recall, however, that in this context, we should never forget that Europe is unique: it is neither a nation nor a state. Political life and legitimacy continues to take place mostly at the level of nation-states. This implies that to foster legitimacy we have to act on the two levels the European and the national by giving for instance, the European Parliament a stronger euro area dimension and encouraging greater engagement of national parliaments in euro area discussions. Conclusion Let me conclude.