samchain/econo-pairs-v1 huggingface dataset:
Second, the problem needs to be addressed at sector level, or even for each individual borrower. Specifically, our risk assessment models must incorporate this sectoral dimension and consider the potential reallocation of resources between activities, sectors and businesses that will inevitably occur.14 The methodological difficulties involved in incorporating these dimensions are significant. Third, the time horizon of climate risks goes far beyond the two or three year one that is traditionally the most relevant for monetary policy and financial stability. On this issue, it is again important that we succeed in overcoming the “tragedy of the horizon.” And that we anticipate the materialisation of such risks. In addition to this task of raising awareness and encouraging financial institutions to incorporate climate risks into their analysis, the question sometimes arises as to whether financial regulators should also study the possibility of introducing reforms to speed up the process. In my opinion, financial regulation cannot and should not take the lead in this process, and even less stand in for the possible inaction of other actors; its role must be limited to accompanying the decisions taken by other authorities, which, as already mentioned, have much more appropriate instruments for these purposes. Our mandate, as financial regulators, is to safeguard the economy’s financial stability and this must be the fundamental objective.

Thank you very much for your attention. 8
Finally, since wage growth is generally very fast at the start of a person working life, and then quite steady towards the end, it will tend to lessen as the share of the employed population approaching retirement age increases. These deflationary pressures may be strong, although, admittedly, the empirical evidence on the effects of demographic change on the inflation rate is not yet conclusive. 8  As for the implications of demographic changes on structural change, the link is also clear. We do not demand the same basket of goods and services over our entire life cycle. Moreover, our comparative advantage at performing across different productive tasks also changes with age. Thus, it will not be surprising to see changes in the sectoral and occupational distribution of economic activity, both through demand and supply channels. The most cited example is the increase in the demand for health and other non-market services, which in Europe are typically provided by the public sector. But there is also a negative association between the weight of the old population and the share of the manufacturing sector, both in GDP and in employment terms. This negative association can be observed across countries and also over time, and does not disappear when other factors, such as stage of development or female labour force participation, are taken into account. Thus, we should be prepared to witness significant changes in the sectoral and occupational composition of economic activity as demographic changes (and the associated technological transformations) accelerate in the coming decades.

For example, the scenarios considered by the UN Population Projections, built upon different assumptions on fertility, mortality and migration, suggest that the dependency ratio in Europe could range between 43% and 52% in 2050 and between 35% and 61% in 2070, versus today’s ratio of 29%. In sum, the uncertainty over these demographic projections is sizable, and the more distant the horizon, the greater this uncertainty is. Yet acknowledging our limited ability to produce precise forecasts about the future should not lead us to trust in the more benign scenarios eventually materialising. In fact, in the realm of demographic projections uncertainty travels in both directions. While some scenarios point to more moderate population ageing, for instance as a result of higher fertility, others suggest that the dependency ratio could be substantially higher than projected in the baseline. In fact, in countries such as Spain and the United Kingdom, it has not been uncommon to under-predict life expectancy in successive projection rounds. Against this background of demographic change, it is worth examining the multiple effects that an ageing population may exert on the macroeconomy, including the macroeconomic policies that governments and policy-makers implement as a result. 5  Macroeconomic implications  Demographic changes come with wide and profound economic consequences. Most relevant for macroeconomic policies are, at least, three such consequences. One is the implication of a smaller and older working-age population for potential growth and inflation.
118 Trillion and Counting: Taking Stock of the World's Capital Markets, February 2005, and Mapping the Global Capital Market 2006, Second Annual Report, January 2006. Nelson, Edward, 2003. The future of monetary aggregates in monetary policy analysis. Journal of Monetary Economics 50, pp.1029-1059. Nelson, Edward, 2006. Ireland and Switzerland: The jagged edges of the great inflation. Federal Reserve Bank of St. Louis Working Paper Series 2006-016A, May revision. Reynard, Samuel, 2006. Money and the great disinflation. Swiss National Bank Working Paper Series, 2006-7. White, William R., 2006. Is price stability enough? Bank for International Settlements Working Papers n.205. 4  BIS Review 107/2006

Moreover, while these feedback loops were important in setting into motion self-reinforcing losses and deleveraging, it was also the interactions amongst them, through joint exposure to common risk drivers and network linkages, that contributed to the multiplication of losses. Let me now turn to the second part of my talk which I will focus on the policy approach to deal with procyclicality. 2  BIS Review 160/2009  A good starting point to discuss policy is to recognize that business cycles are a normal feature of market economies and their existence – especially the interaction of the three cycles – can not be eliminated. The best we can do is to recognize the cycles and find ways to manage them in a way that markets continue to function without risking systemic instability. Reflecting this, it is clear that the objective of policy is to reduce the amplification of the cycles and their interactions by limiting the build-up of excesses. A common wisdom at this time is that policy should aim to limit the build-up of excess in the good time and ensure that the system has adequate capacity or buffers to manage the downturn in the bad time. But because the build-up of financial excess tends to be a result of many factors, some of which are not related to financial institutions, therefore, a broader approach to policy is needed so that many measures, both macro and micro, are used to help solve the problem.
As to their specification, a key principle that should be followed in economic policy design is that each of the authorities’ targets should have a differentiated instrument to avoid any clash between them (the so-called “Tinbergen principle”2). The aim of maintaining financial stability with this aggregate perspective therefore demanded having one’s own tools. And, given that financial conditions can amplify the fluctuations of the economic cycle (e.g. more extreme and volatile movements in output prices, making it more difficult for agents to foresee their future economic situation) and also macroeconomic imbalances (e.g. activity highly concentrated in sectors that are not the most productive), a macroprudential approach to financial system regulation and supervision can conceivably mitigate the accumulation of these types of risks or reduce the cost of their subsequent materialisation. Specifically, macroprudential policy is entrusted with ensuring the soundness of the financial system in the face of systemic risk. This is, namely, the risk that financial instability becomes  1  Brunnermeier et al. (2009). 2  See Tinbergen (1956). 2  so widespread that it hampers the functioning of the system to the extent that economic growth and the welfare of the population are adversely affected. The “macro” prefix to this policy thus refers, on one hand, to the fact that it adopts an aggregate approach for the financial system as a whole; and, on the other, that it seeks to regulate the financial cycle, since this may amplify the economic cycle.

“The EU’s Open Strategic Auto no my fro m a central banking perspective. Challenges to the mo netary po licy landscape fro m a changing geo political enviro nment”. Occas ional Document, IRC Wo rkstream o n EU’s Open Strategic Auto no my. 2  Baldwin, R., Freeman, R., and Theo do rakopoulos, A. (2022). Ho rses fo r co urses: Measuring fo reign supply chain expo sure. NBER No . w30525. 3  M. Khalil and M.-D. Weber (2021). “Chinese supply chain sho cks”. MPRA Paper No 110356. 4  Ciani, A. and M. Nardo (2022). “The position of the EU in the semiconductor value chain : Evidence o n trade, fo reign acquisitio ns, and o wnership”. Wo rking Paper in Eco nomics and Finance 2022/3, April, Jo int Research Centre. 2  Trade in energy goods is a prime example of concentration. In 2020, the EU imported 60% of its energy, with four countries providing 70% of gas imports, of which 40% came from Russia. The consequences of a highly concentrated supply of a key raw material are readily visible today. Last year’s surge in gas prices (which was much sharper in the EU than in the United States), the drastic reduction in supply from Russia and the difficulties in replacing gas with other energy sources have all exerted strong inflationary pressures and have created one of the main risks for the European economy in the short and medium term.
Ladies and Gentlemen, Since I have been given the floor I now wish to take this opportunity to briefly share with you the Zambian experience with regard to the microfinance market. Despite its land-based wealth, Zambia faces very significant development challenges. The rapid structural adjustment process that took place during the 1990s has had a harsh impact on our people, with the result that poverty is now widespread in our country. Currently, a significant number of the 10 million or so Zambians strive for survival on far less than one US dollar a day and like in many other African countries there are high HIV/AIDS rates and indebtedness which have contributed to persistent low economic performance. Thus, our government’s focus with assistance from cooperating partners has to increasingly be on poverty alleviation via income generation and micro enterprise stimulation, using small business development and microfinance as mechanisms to improve household standards. Following the structural adjustment period, particularly from the early 1990s, affordable and publicly funded rural financial services have collapsed. A private microfinance movement, though still in its infancy, has had to emerge offering modern microfinance services. Today in Zambia we have an interesting blend of microfinance institutions that are private sector, for-profit firms, and non-profit, non-governmental organizations (NGOs). Although expansion is much slower in rural areas, growth is evident along the line of rails and the peri-urban areas of our country.

Invited Guests, Ladies and Gentlemen, In 1999, a survey of the microfinance market in Zambia was conducted to determine the status of the microfinance market and its players, and the basis for establishing regulation and supervision of the industry. The survey revealed that although most microfinance institutions were exceptionally weak, they had the potential to grow as an industry and to provide sustainable financial services to the majority Zambians. The results of the survey enabled us to recognize that appropriate legislation, regulation and supervision were essential to assist this young industry to grow and be able to find investors, expand and provide sustainable services to an increasing number of low-income groups. Accordingly, we have placed our focus on the establishment of a regulatory and supervisory framework that would encourage responsible growth and create a safe, sound, stable and efficient environment in which microfinance institutions can operate. The regulation development process that we have adopted has been a regular system of consultations with stakeholders and various interested parties. We have managed to achieve this through public and focus group discussions and one-to-one meetings with key players in the market. Further, we have also made consultations with supervisory bodies, practitioners and other stakeholders from other countries at various workshops as well as regional and international training forums. I am happy to note that some of the countries we have been sharing ideas with are represented at this forum.
BIS central bankers’ speeches  5  Spanish banks’ attributed profits in 2014 increased by close to 34%, continuing the recovery initiated in 2013. Despite the backdrop of declining credit and low interest rates, net interest income rose by almost 5% owing to financing costs falling at a swifter pace than the return on financial products. Also, the containment of operating expenses and the decline in asset impairment losses have contributed to the improvement in results. However, the persistence of the environment of very low interest rates and the presence of a significant volume of non-productive assets will continue to bear down on the income statement. That will lead banks to reflect on a sustainable business model, involving the application of new technologies, new activities and an office and staffing structure better tailored to attaining this model. In December 2014, the top-quality common equity tier 1 (CET1) capital ratio of our banks stood at 11.8%. This ratio rises to 13.6% for total capital. Both figures amply exceed the regulatory minimum levels. Even if the standards scheduled to be in force from 2018 – when Basel III becomes fully applicable – were to be applied, these percentages would remain above the minimum levels (9.9% and 12.1%, respectively). Moreover, the recourse by banks to Eurosystem funds continues to fall. Notwithstanding this positive assessment, Spanish banks must continue strengthening their capital and their loss-absorption capacity in order to withstand the new macroeconomic environment, heightened competition and the new, more demanding and complex regulatory framework.

Jean-Claude Trichet: The financial crisis and the role of central banks – the experience of the ECB Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the international symposium marking the 50th anniversary of Bank Al-Maghrib, Marrakech, 29 May 2009. *  *  *  Dear Governor Jouahri, Dear Governors, Ladies and gentlemen, It is an honour and a great pleasure for me to be a speaker at this celebration marking the 50th anniversary of the Bank Al-Maghrib. I would like to congratulate Governor Jouahri on this occasion, and wish him and the staff of the central bank all the best for the future. The Eurosystem has a well-established framework for dialogue with the Bank Al-Maghrib, the Euro-Mediterranean Seminar. This forum regularly brings together the governors of Eurosystem central banks with those of the “Barcelona Process: Union for the Mediterranean”. The Euro-Mediterranean Seminar has, since its first meeting in 2004 in Naples, strengthened our dialogue by addressing various topics relevant to central banks around the Mediterranean. The Bank Al-Maghrib and Governor Jouahri have contributed to this fruitful exchange of views and will no doubt do so at the next meeting in March 2010 in Cyprus. In addition, the Bank Al-Maghrib has close bilateral relations with some of the central banks in the Eurosystem and in particular with the Banque de France on various aspects of technical assistance. We are living in a very challenging time. Morocco, like all countries worldwide, has been hit by the global crisis.
In the OECD countries, especially in the US, there is solid growth with low inflation, BIS Review 112/1997  -4-  while we are seeing signs of broad-based recovery in Europe. Only in Asia have we seen a slowing of growth, but the growth rates have still been high by world standard and last year Japan grew by 3.6%, the fastest since the late 1980s. 15. Second, because of high global liquidity and low inflation, asset markets around the world are at record levels. Capital flows have increased with globalization, and added to record high stock and bond prices. The fact that Europe has recently raised interest rates, and the Fed is considering whether to pre-emptively raise rates to prevent wage-push inflation, has made the financial markets much more nervous despite the growth environment. This explains why the financial volatility in Asia has become global in nature. It is very flattering to know that Hong Kong can move even the mighty US and European markets, as much as the other way around. 16. Third, Asian fundamentals, and especially Hong Kong fundamentals, are strong. But there have been different degrees of strength in Asia with respect to the fundamentals. The adjustments in exchange rates of currencies in this region reflect partly the market perception of fundamentals. But as I said recently at the Per Jacobsson lecture, there is no perfect exchange rate regime.

In any case, the need for a physical presence with a large branch network in the provision of financial services may soon become a thing of the past with the advancement of telecommunications and information technology. It is still early, I think, to come to a definitive view, but the prospects are that electronic money and the use of the internet for banking and other financial services are breaking down geographical boundaries. Barriers to entry and restrictive practices may lead to the diversion of business to offshore markets in locations with liberal practices. 7. The second area concerns financial intermediation in the international dimension, involving the flow of savings into investments across international boundaries. Hong Kong as a financial services centre has a business role of providing the markets, in banking, debt and equity, supported by other efficient financial services and the rule of law, to facilitate the international flow of funds in this region. Our markets have the freedom, the liquidity and the integrity to attract international investors managing institutional savings to come here and those in need of funds to raise them here. The opportunities in this region, in particular in China, are enormous, and international investors would have a preference to operate in markets in which the rules of the game are transparent and familiar to them, and are of internationally accepted standards. And that means coming to Hong Kong. 8.
The securitization markets have shrunk since the financial crisis and the Federal Reserve has further reduced the amount of available securities by snapping up trillions of dollars in bonds in recent years.” Let me repeat that last clause: The Federal Reserve has further reduced the amount of available securities by snapping up trillions of dollars in bonds in recent years. To be precise, $ trillion of Treasuries and asset-backed securities were purchased under QE3, on top of the $ trillion purchased under the previous rounds of quantitative easing. To be sure, we have instituted programs to counter this problem: We have developed sophisticated operations whereby we sell assets in our portfolio and promise to buy them back at a later period. This is known as our overnight reverse repurchase agreement (ON RRP) facility, and its net effect is to shift longer-term securities out of our portfolio and into the hands of market operators. This has expanded the traditional reach of our New York desk, where the aggregate portfolios of the 12 Federal Reserve banks are traded under directives given it by the FOMC. Thus the Fed's reach – some would say intrusion – into trading markets has been expanded. Now, let's bring together these observations with the thought I asked you to hold earlier. It strikes me that given current circumstances, it would do no harm to start slowly trimming our holdings by letting them roll off as they mature.

I am going to talk about Texas tonight, this being my annual report on the status of the Texas economy. I will walk you through a series of slides that illustrate the strength of the Texas economy, a series of economic records we have set this year, and to provide a balanced view, some of the growing pains that we are encountering. But first, I want to make a comment on monetary policy. Thinking outside the box It strikes me as timely for the Fed to consider implementing one of the possible options under the “normalization principles” the FOMC articulated in September: allowing our security holdings to run off as the bonds in our massive portfolio mature. 1 Before you jump out of your skin at this “radical” thought, let me ask you to consider the following. The 10-year Treasury note has rallied in price and declined in yield to 2.29 percent. German 10-year bunds, the equivalent market-anchoring European security, are trading to yield 0.74 percent; the Japanese 10-year yields 0.42 percent. The spread between the U.S. and the German sovereign yields is slightly narrower than it was at the end of third quarter 2014, but it remains historically large and attractive for investors. 2 Hold that thought.