samchain/econo-pairs-v1 huggingface dataset:
Moreover, although the ECB’s supervisory decisions are formally adopted by its Governing Council – which also defines monetary policy – these are prepared and pre-agreed by an independent Supervisory Board, meaning that the Governing Council acts only under the principle of non-objection. Hence, when defining the institutional model of the banking union, the European legislator has set great store by preventing conflicts of interest between micro-and macroprudential supervision and monetary policy, on one hand, and between supervision and bank resolution, on the other. The aim is to mitigate the risk of monetary policy, geared to maintaining price stability, being tainted by considerations relating to financial stability, and to separate as far as possible the policies aimed at preventing solvency crises, which are pursued by the Single Supervisory Mechanism, from those geared to managing such crises, which are the remit of the Single Resolution Mechanism. The appropriate functioning of this model, based on the principle of separation, nevertheless requires the intense cooperation and coordination of the different authorities involved. In the case of the interaction between monetary and prudential policies, the necessary cooperation arises from the complementarity, at least in the medium term, between macroeconomic stability and financial stability and, above all, from the potential impact of the instruments available in one area on the objective pursued in the other.

We already did the same successfully under the SMP, which has now come to an end. Barely a year after the announcement of OMTs, the positive effects are obvious, and this development has certainly also been enabled by the reform efforts as a whole. First, banks and firms regained access to the capital market. Second, the spread between the yields on Spanish and German ten-year government bonds fell from more than 6 percentage points in July 2012 to just under 3 percentage points in May 2013. At the same time, the premium on Italian bond yields was halved, down from more than 5 percentage points. One further sign of the normalisation of developments – one that is important for German savers – is the fact that yields on German government bonds increased by around one-quarter of a percentage point over the same period. Third, TARGET balances – which are an important indicator of fragmentation within the euro area – have declined noticeably. They are down by € billion – around 25% – compared with their peak in 2012, so they are now back at the level observed at the end of 2011. In conclusion, we can see that the announcement of OMTs significantly contributed to the stabilisation of the situation. Firms, banks and households throughout the euro area benefited from this measure. Destructive extreme scenarios were ruled out and the damaged transmission mechanism was, to a certain extent, repaired.
The second challenge relates to the set of fiscal exit strategies that would put fiscal policies around the world on a sustainable path. In many countries, including the United States, budget deficits have widened sharply and the level of public debt is growing faster than gross domestic product (GDP). This trend is unsustainable. The third challenge is how to rebalance global consumption and investment to support continued strong growth in the emerging world and a sustainable recovery elsewhere. In my view, sustainable global growth requires a shift toward a higher consumption share in the emerging world matched by a shift away from consumption in the United States. These three challenges are interlinked. Without regulatory reform, we will not have the robust and resilient financial system that we need to match savers and borrowers around the world. Without fiscal consolidation, financial market participants will balk at providing the funds needed to close the gap between government revenue and spending. In addition, without rebalancing the composition of global demand, long-run economic growth will likely be weaker. Weaker long-run growth will lead to excessive unemployment and less government revenue, which, in turn, will make it more difficult to put fiscal policies on a sustainable course. Turning to the first challenge of regulatory reform, the key issue is how to ensure that we take the right steps so that the type of financial crisis that occurred never happens again. From my perspective, I have several concerns about where the regulatory reform process is heading.

The Government has given the Financial Policy Committee the power to implement limits on the flow of lending at certain debt-to-income limits in respect of new owner-occupied residential mortgages. This gives the FPC a tool to target overall household indebtedness should it consider that it posed a risk to financial stability. What does the last financial cycle tell us about sustainability? Putting all of this together, it seems reasonable to conclude that since the 1980s there have indeed been long lasting forces that pushed down on both the risk-free interest rate and the spread that lenders charge. This lowered the rates charged to borrowers and raised the price of houses. It will also have raised the sustainable level of debt. But it is not at all clear that in future these forces will raise the level of sustainability further. There is much uncertainty and discussion now about further downward shifts in the real interest rate as a result of secular stagnation and lower potential economic growth. But though such effects, if they occur, may continue to push down the risk free interest rate, they will as I have said, also push down income and are therefore unlikely to improve sustainability. Judgments about sustainability are difficult. The household debt to income ratio has come down materially since the crisis – back to its 2004 level of 135%. The debt service ratio shows a similar picture. It is back to 2001 levels.
Foreign direct investment has helped total factor productivity in recent years, yet if wages reach too high levels, attracting investment may become a problem. We therefore need to ensure that wage levels are compatible with attracting investors, but at the same time acknowledging that, at least in certain areas, wages need to go up at present, in order to mitigate the labour force drain that affects the private and public sectors alike. However, pay rises in the private sector should not be triggered only by an increase in public sector wages. While raising the minimum wage has been necessary, we should be very careful not to hurt employers, as they represent an important engine of the economy. The key is, in my opinion, to increase wages at an adequate, sustainable pace, in order for Romanians to ultimately benefit from an improved living climate reflected in a higher purchasing power, but also from preserved macroeconomic equilibria, as well as higher-quality public goods – especially highways connecting different regions of Romania, but also our country with the West. After all, wages are not the only side of the emigration story. 4. KEEPING THE EXTERNAL DEFICIT IN CHECK The wage matter is also closely linked to the topical issue of ensuring a balanced external position. To the extent to which the upward path of wage costs is too steep, it gets very difficult to preserve competitiveness, not only on external markets, but also on the domestic market.

If the Romanian companies are unable to gain market shares in the tough competition with rivals on both aforementioned markets, the gap between imports and exports widens, causing the deepening of the trade deficit and hence of the current account deficit; the latter is already at a level that raises concerns, also in terms of its financing by flows deemed stable (such as FDI and European funds), which have no longer fully covered it. Romania’s sizeable external imbalance is singular in the region in terms of size and trend. It owes to the faster growth of domestic absorption than that of domestic output, as well as to nonprice competitiveness issues of the Romanian economy manifest in certain production sectors. Relevant from this perspective is the unfavourable comparison with Czechia, Poland and Hungary, three countries where, the same as in Romania, monetary policy is managed under the inflation targeting strategy and there is a floating exchange rate in place. 3/4  BIS central bankers' speeches  Speaking of the exchange rate, I cannot help mentioning that the hasty adoption of Government Emergency Ordinance No. 114 at the end of last year contributed, through the uncertainty created on the market, among others, to an episode of moderate depreciation of the domestic currency in January 2019. Thus, the relative stability of the exchange rate of the leu, which we have all got used to, was a bit affected.
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.

John C Williams: Bridging the skills gap Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the "Skilling the Gap: Building Local Talent for InDemand Careers", Columbia-Greene Community College, Hudson, New York, 21 October 2022. ***  As prepared for delivery Thank you for that kind introduction. I'm so pleased to be here-especially at this time of year, when the autumn colors light up the region. In fact, my wife and I have fallen in love with this area-so much so, that we are now splitting our time between Columbia County and New York City. Of course, I'm not just here as your neighbor. Part of my job as president of the New York Fed-one of the best parts-is to meet with business and community leaders from across the Federal Reserve's Second District. This gives me the opportunity to see and hear the challenges they face. And throughout the Second District-which includes New York State, Northern New Jersey, Southwestern Connecticut, Puerto Rico, and the U.S. Virgin Islands-the issues I hear about consistently have to do with labor shortages and the skills gap. Employers can't find enough skilled workers-and workers can't obtain the skills they need to move up the economic ladder. Before I go any further, I will give the standard Fed disclaimer that the views I express today are mine alone, and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System.
In the context of the end of the long cycle of high commodity prices, this policy framework helped the economy to walk the path of the necessary adjustments it had to make, which required low real interest rates and a depreciated currency. Thus, although inflation soared in the years 2014 and 2015, monetary policy was eased, because despite the higher inflation, we saw that medium-term pressures were pushing down. This countercyclical operation of monetary policy was accompanied by a policy of structural fiscal balance that allowed the budget’s automatic stabilizers to act. The combination of both elements and their rigorous application throughout the cycle allowed to attenuate its inherent volatility, and therefore its social costs. But as the fiscal policy framework assumes a rather passive role for it, monetary policy has been, and will continue to be, the first line of defense. The continuity of the monetary policy framework and its fiscal counterpart over sixteen years has proven effective during booms and busts, passing difficult economic and political tests. Thus, the continuity with the outlines that our Central Bank has built is not only an expression of its soundness as an institution, but a logical course of action, when its objectives have been clearly achieved. Continuity provides a sound base to face new challenges and to build and strengthen the institutions.

Most recently, after OPEC agreements and announcements by other producers that they would limit production, it is trading around 55 3 / 19  BIS central bankers' speeches  dollars per barrel. I now turn to our projections and associated risks. In the baseline scenario of the MP Report I present today, this year’s growth is estimated at 1.5%. As I said, this is the lower bound of the range we estimated in September, considering the slower growth foreseen for the fourth quarter. About 2017, the slower initial pace, in a context of higher risks and still very pessimistic confidence levels, we foresee that activity will take longer to resume near-potential growth. Accordingly, our growth estimate for 2017 has been adjusted to a range between 1.5% and 2.5% (1.75% to 2.75% in September). This higher growth in 2017 compared with 2016 is based on the fact that the economy does not present any imbalances, the mining sector will not to repeat the sharp drops of previous years, and investment will post some increase after three years in a row falling in annual terms. The effects of these changes will be seen more clearly in the second half of the year. All this, in a context where the fiscal consolidation announced by the government continues and monetary conditions remain expansionary. Excluding inventories, domestic demand will grow 2% in 2017. Just as in 2016, we expect private consumption to boost expenditure, considering a further gradual adjustment of the labor market and lower inflation driving real wages.
In the past two years, more than RM 100 million in fines were meted out for breaches under the purview of Bank Negara Malaysia and the Securities Commission Malaysia. A study led by the University of Malaya and the AICB in 2014 revealed that 43% of employees within the Malaysian conventional banking sector “had observed or had first-hand knowledge of wrongdoing in the workplace”. I believe that the survey findings which the FSPB will present later today will reveal that not enough has improved since then. It is crucial and timely that we take the ethical challenge seriously in Malaysia. We must ensure that the unflattering history that we have seen elsewhere does not repeat itself here. As stewards of the people’s money, the finance community must step up to the moral obligation we owe to our society. Making sense of ethics We have seen some shocking behaviour around the world of finance in recent years. The examples I have relayed are replete with “greed”, “dishonesty” and “recklessness”. We are led to consider – how can respectable and well-educated human beings behave in this way? In answering this question, I find the work of Philip Zimbardo on the psychology of evil to be very helpful. Ethics is a slippery subject. Concepts like professionalism and integrity are inherently subjective. As financiers, we often feel – out of our depth – when dealing with issues of human behaviour. We tend to be more comfortable with hard numbers and data.

The Federal Government and the central bank of the USA have channelled funds worth over 787 billion dollars into banking and the private sector. In the European Union, the fiscal stimulus amounts to 1.8% of GDP and to 225 billion euro. Banks have received direct support and state guarantees in the amount of 393 billion euro. Such massive intervention has put brakes on the rate of recession. The past couple of months' stabilisation in the global economy has come at a high price. Major economies face rapidly expanded fiscal deficits and central banks' balance sheets and total volume of base money have promptly increased. Therefore it cannot be said for sure whether the current "green shoots" refer to a new growth cycle. Only structural reforms and maintaining confidence in fiscal and monetary policy can help the economy out of the crisis on a more permanent basis. When speaking about this year's forecasts, the EU economy as a whole is expected to undergo a 4% recession. Small economies which are more dependent on exports and international capital flows suffer from the crisis disproportionally more. Sweden and Finland, our close neighbours, can expect a recession of up to 4.7%. As we know, the global financial crisis and the collapse of markets caused serious difficulties to several new Member States.
On the other hand, given the high level of capacity utilisation and movements in the exchange rate, there is a danger that higher production costs will increasingly be passed on to prices. Should economic momentum remain unchanged or should movements in the Swiss franc result in a further relaxation of monetary conditions, further increases in the interest rate are likely in the months ahead. Economic outlook The international environment has a strong impact on economic developments in Switzerland. According to the IMF forecasts, the global economy is poised to grow at a sustained rate of approximately 5% in 2007. While the economic activity in the United States has been satisfactory, it is a little less dynamic than expected. By contrast, the economic situation in Europe is clearly healthier than we had expected. This encouraging development has had a favourable impact on our economy. Economic activity in Switzerland continued to be dynamic in the first months of the year. In the first quarter, gross domestic product (GDP) was up by 3.2% saar, exceeding the long-term average growth rate by a significant amount. The strong economic performance assisted the recovery of the labour market. Employment was up in industry as well as in the construction and service areas. As a result, unemployment figures dropped further and the unemployment rate fell below the level of 3%. Demand indicators were still trending upwards, which should result in a renewed drop in unemployment in the months ahead.

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While these are welcome developments, they have to be accompanied with the necessary financial education to enable safe and effective participation in the financial sector. From the regulators perspective, it means ensuring the regulatory and supervisory system is robust enough to cater to the evolving needs of the financial system, whilst at the same time safeguarding financial and economic stability. Conclusion Allow me to conclude with an analogy of the nine-dot puzzle. The puzzle, which appeared as early as 1914, proposes an intellectual challenge of connecting nine dots by drawing four straight lines without lifting the pencil. As many may know, the solution is simple, but can only be found by drawing lines outside the imaginary box formed by the dots, thus popularising the term “thinking outside the box”. The heart of the challenge lies in overcoming the imaginary boundary or border we perceive. The potential for international banking remains vast, if utilised appropriately. As the world ponders on how best to connect our economies together and the role of international banking in this aspiration, let us not be afraid to consider new perspectives, to search beyond traditional borders – real or imaginary. Only then, can we truly realise the benefits of an international banking model that is sustainable, inclusive and without borders. 3/3  BIS central bankers' speeches

Moreover, we have seen a common theme running through incidents that have occurred – the dash for cash in 2020, the Archegos Collapse, the LDI pension fund issue, the nickel metals case – namely that for firms to understand and respond to the  4/6  BIS - Central bankers' speeches  full risk implications they would have had to observe and respond to a much larger picture of risks than they did observe, and from that came potentially larger risks. There is a challenge of breadth and depth in the NBFI world. It is a very large and disparate landscape with many activities and entities. As a result, we have to survey a lot of ground to look out for risks. But in order to understand these risks, we need to get into the detail, hence the depth issue. LDI was a good case study of this. The LDI fund world comprised 85% of the larger so-called segregated funds, and 15% of the smaller pooled funds. Our stress testing work focussed on the 85%, but the problem arose in the 15%. In some ways the issues around NBFI bear a striking resemblance to ages old challenges in finance, such as leverage, and inter connectivity with other parts of the financial system, creating the scope for spill-overs and systemic consequences. But the heterogeneity of the landscape means that there is no single magic number for leverage as we have with banks, and the inter connectivity can be hard to map, reflecting the recent incidents.