samchain/econo-pairs-v1 huggingface dataset:
And as the liftoff proceeded and the vapor trail started to decline over the horizon following the curvature of the Earth – I really could see clearly that the world was truly round. Maybe that’s a good metaphor for my New College experience! My only truly unpleasant memory here was one literature course (student taught, I might add) in which I received an evaluation that essentially noted that I could not read, write or think. I like to think that was a bit harsh, but everyone is entitled to their own opinion! New College truly is a special place. I like to call it “graduate school for undergraduates” because it really is a place that encourages students to intellectually engage, learn, think and communicate. The unstructured format of evaluations and contracts rather than grades is not for everyone – some folks need more structure. But I see that you have made it through and I congratulate you for that – it is an important milestone in your life. BIS Review 71/2010  1  Today, I want to talk about two issues: the economy you face as you graduate, and some advice – call it “lessons learned” – that might have some value to you as you contemplate what you are going to do with the rest of your life. The economy you face as new graduates The U.S. economy is recovering and we are now seeing the first signs of significant employment growth. Thus, this is a better year to graduate than last.

I didn’t really start my career until I went to work for the Federal Reserve Board at 28 after graduate school and didn’t begin working on macroeconomics until I joined Goldman Sachs when I was 33. When I entered the job market from New College in the fall of 1974 – the economy was in recession. I interviewed for many jobs, and I was told that I was overqualified for a few and  2  BIS Review 71/2010  under qualified for many. I eventually got a job as a methods analyst, which is essentially an internal efficiency consultant. It wasn’t much, but it was a start and I went from there. My second bit of advice is to take the time to find out what really interests you. This means you may want to try a few different things before settling on a particular career path. When I left New College I certainly didn’t know where I was headed. I only made the decision to become a professional economist two years later when I was deciding between law school and economics. And I didn’t decide to opt for more policy-related work rather than become an academic until I entered the job market from Berkeley five years later. The important point is that if you like what you are doing, you almost certainly will be successful at it. My third bit of advice is to be true to yourself.
Monetary policy transmission could not work properly without such a system. At the same time, it is equally important that the financial system itself is not a source of excessive risk for the rest of the economy. Our efforts are thus concentrated on increasing resilience by mitigating systemic risk. To ensure this, we work closely with the Financial Market Supervisory Authority, FINMA, the Federal Department of Finance and various international standard-setting bodies. A great deal has been achieved in our country so far. One of these achievements is the countercyclical capital buffer (CCB) 7, which has recently generated a number of headlines. As you know, the SNB has, for the time being, decided against proposing the activation of the CCB. There are two reasons for this. First, as I have already mentioned, we have observed some indications of a possible slowdown of price momentum in the market for residential real estate. Second, two other measures came into effect at the beginning of June – stricter capital requirements for mortgages and a revision of the self-regulation rules for mortgage lending. However, this is far from an all-clear for the real estate market – I want to underline again that the risk of a further build-up of imbalances followed by a significant price correction is  5  Cf. SNB press release, 27 August 2012. 6  Cf. SNB, Financial Stability Report, 2011 and 2012  7  Cf.

Compromise solutions have been mentioned, such as issuing a parallel currency, IOUs … All these measures can be found in the non-standard toolbox that any government might consider when it runs out of other options. But they all come at a high price. Whether they are needed or not is something that only the Greek Government can decide. Would capital controls in Greece help to stabilise the situation? BIS central bankers’ speeches  1  That is one of the many measures I was referring to. The Treaty says that there is free movement of capital, but exceptional measures can be authorised. In Cyprus these measures were considered necessary, but it’s difficult to speak generally. In an extraordinary situation, each country has to call on exceptional measures as the case requires. Talking about them beforehand could have negative effects on the markets. Can Greece default within the euro area? I don’t want to theorise concerning the destiny of Greece. If you take a look at other examples, there have been defaults in the United States and other monetary unions, with no political consequences. What matters is European countries’ perception of political cohesion and their willingness to remain together. The more the euro area is seen as a mere cooperation between sovereign states, the less you can imagine it making the extra effort necessary to remain united. And the more you believe the euro is more than a single market, the more you will believe that we are willing to defend it with all possible means.
But coincident with lower risk are lower returns to banks’ activities, due to the combined effects of stricter regulation, misconduct fines, low levels of interest rates and increased competition. This leaves banks a riskier proposition for equity investors than before the crisis, as the residual claimant on profits. But, by and large, improved solvency standards have reduced risk among bond-holders and depositors in banks. “By and large” because, accompanying these changes in banks’ capital standards, has been a move towards putting losses from default onto bond-holders. This can be seen in the evolution of the implied “support ratings” given to banks by rating agencies. In 2010, holders of the major UK banks’ debt enjoyed around 4 notches of implied ratings uplift owing to expectations of government support (Chart 12). By 2016, that had fallen to less than one notch of support. A similar pattern is evident among other global banks. Calibrating Regulatory Standards  Is the calibration of these new regulatory standards too tough, too lax or just right? That has been among the most animated of the regulatory debates over the past decade. One standard for comparison is historical experience. There has been a significant evolution in the levels of both capital and liquidity ratios of the major banks over the past century.

Page 3 sur 5 However, beyond traditional financial regulation, international cooperation should be developed in three areas, three cornerstones of the regulation of digital finance. First, cybersecurity is a sine qua non for a reliable and sustainable digital future. It is a clear priority of the G7 French Presidency next week in Chantilly. Second, regarding data protection, financial supervisors and authorities in charge of privacy have to invent new ways of cooperation to address data issues that have become central to financial services. Third, regarding competition and anti-trust policies, situations where “the winner takes most” while staying outside the scope of financial regulation should be adequately anticipated and addressed. “Stable coin” projects, including Facebook’s Libra, are a case in point. “Stable coins” are quite different from speculative assets like Bitcoins. However, regulators will have to keep a very close eye at the global level, and believe me, we will do it. France, as Chair of the G7 this year, has created a dedicated task force. Our aim is to formulate a response that is common to all jurisdictions, and holistic on all the issues. And to quote only two of many requirements: it is imperative that the projects comply with anti-money laundering regulations; the anonymity of the users creates heightened risks. In addition, if issuers of stable coins also want to offer banking services such as deposits, financial investments and loans, then they will have to obtain a banking license in all countries where they operate. Otherwise it would be illegal.
As I mentioned earlier, the problems in the US subprime market had widespread and profound effects on the international financial markets. These loans had been packaged together with other securities into structured products and sold to investors around the world. The uncertainty over where the potential losses were created a general distrust between the banks and a general increase in risk aversion. The former was expressed in a rise in the differences between interbank rates and risk-free government bonds, what are known as TED spreads. The latter was expressed in, for instance, rising credit spreads (see figures 7 and 8). For a few weeks now we have seen signs that the tensions in the credit market have eased. The credit spreads have declined and the cost of insuring against losses has fallen (see figure 9). Other signs are that the banks have been able to sell off loans from their balance sheets. They have also been able to strengthen their own capital, although a large part of this process still remains. The stock markets have also recovered. The uncertainty in the interbank market has prevailed longer; the TED spreads have remained high but have fallen over the past few days. In Sweden the TED spreads have also risen, but unlike other countries the markets have continued to function without any intervention from the Riksbank. Despite the fact that there are positive signs, it is still too early to assume the danger is past.

Prices of owner-occupied apartments also fell during the autumn, but have since stabilised. Employment and household incomes are of the utmost importance when it comes to movements in the property market. According to the Riksbank’s most recent forecast, employment is expected to continue rising this year, albeit at a slower pace than last year. Following a strong rise last year, around 4 per cent, households’ real disposable incomes are expected to increase by a good 2 per cent over the coming years. Given this outcome, there is little risk of a fall in house prices to the same extent as is happening in the United States, for example. In Sweden savings are also high to start with, unlike the United States where they have fallen to historically low levels. There is always a risk that house prices, and also other asset prices such as shares, which have been pushed up by exaggerated optimism or speculation, could plummet. It would appear that Swedish price movements can be explained by fundamentals, and that the speculative element has happily been conspicuous by its absence. As property often functions as collateral for loans, a large fall in prices would affect the banks. In addition, developments in the property market affect demand in the economy. Rising house prices mean that households can take on new loans to increase their consumption. Correspondingly, falling house prices can contribute to subduing demand in the economy.
Our educational programme, comprising school visits and curriculum materials, has developed dramatically over recent years and is now reaching around a third of schoolchildren across the UK.39 This economic and financial knowledge is crucial. We hear a lot these days about our knowledge-based economy and with good reason. Like human evolution, our economies are evolving in ways which give prominence to digital over physical assets. Intellectual property (the brain) is often more important than physical property (the body), and software (neurology) is often more important than hardware (biology), in driving growth in our companies and economies.40 The rapid emergence of a knowledge-based economy has important implications for educational institutions. They were designed, in the UK in the 19th century, as factories for the manufacture of knowledge on an industrial scale. At the time, they worked well. In an increasingly knowledge-based economy, this suggests these knowledge-factories will become even more important in the future than they have been in the past. 39 40  Carney (2018), Haldane (2018b). Unger (2019). 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  That is the right answer but for the wrong reasons. What will be needed in future is not improved knowledge-factories producing more knowledgeable students. What will be needed instead are creativity-academies producing a more creative workforce. In future, we will not need people simply to get from A to Z - Alexa is faster and cheaper at doing that. We need people who can navigate everywhere.

On the other hand, should it appear likely that inflationary pressure is sustained at a higher level into the medium term, then it is clear what our mandate would require us to do. The MPC has the tools at its disposal to tighten monetary conditions, both in the form of raising Bank Rate and by selling the assets that we bought in 2009 as part of the quantitative easing programme. 8  BIS Review 91/2010
RIX-RTGS is a Real-Time Gross Settlement-based service. What characterises such a service is that each payment is settled immediately and individually. This differs from a deferred-based service where payments are settled after a certain time span, gross or net. Real-time gross settlement, together with the fact that funds are exchanged on central bank accounts, eliminates credit risks. Further, as RIX also offers intraday loans to banks that temporarily lack funds, liquidity risks are reduced. RIX and its current services have contributed to financial stability and served the Swedish banks well for a number of years. However, the requirements to a modern central bank payment system develop over time. Increasing globalisation leads to growing demands for harmonisation. New functionalities are requested, and more participants raise the operational burden and risks. Also, new types of threats arise, especially related to cyber-attacks, which need special attention in terms of security measures. With this background, the Riksbank recently decided to take preparatory steps towards using the Eurosystem’s future T2 platform for the next generation of RIX. T2 will replace the Eurosystem’s current RTGS system, TARGET2. It will include a number of enhanced services compared to TARGET2 and be based on the global ISO 20022 messaging standard. What is more, like TIPS, T2 will be able to facilitate payments in several currencies – that is, among them perhaps the Swedish krona. T2 will be launched in November 2022. Importantly, as a twin decision, the executive board concluded to initiate a similar process regarding TARGET2-Securities, T2S.

Also ‘clipping’, that is, shaving off part of the material, was fairly widespread. This led to a phenomenon that many years later became known as Gresham’s law. It says that in commerce ‘bad coins’ drive out ‘good coins’ as the latter are kept for saving purposes. Mistrust in the coin system, or even its entire breakdown, was often the unhappy consequence. Another issue was the plethora of mints that continued to grow in number as technology spread. Fast forward, and at the mid-medieval period it had become fashionable for every European kingdom and principality to issue its own coins. With production costs lower than the coins’ value, this was a useful source of income to finance the frequent wars at the time. But with multiple coins drifting around and uncertainty about their true value, it was essentially a mess. However, where there is chaos innovative minds see opportunities. During the 12th century, in the northern part of Italy, a new type of institution emerged. These specialised in exchanging foreign coins for local ones, not unlike present day foreign exchange dealers. This reduced the problem with the many coins causing much confusion. Even more advanced, some of the new institutions started to swap coins for bills of exchange that could be used in local trade. 3 [15]  The medieval coin-exchange providers brought banking to Europe, it is often said. Initially, they only handled deposits, as charging interest was viewed as usury by the powerful church.
Not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving. The first thing to note is that federal fiscal policy in 2013 has been unusually contractionary. At the beginning of the year the payroll tax cut expired while tax rates on higher income households were raised, a series of taxes associated with the Affordable Care Act took effect, and spending was reduced due to the sequester and the gradual winding down of foreign military operations. According to the Congressional Budget Office, the cyclicallyadjusted or full-employment budget balance increased by roughly 1 ¾ percentage points of GDP in fiscal year 2013. Over the past 50 years there have been only two other episodes of fiscal contraction of this order of magnitude, and both of those occurred when the unemployment rate was substantially lower than it has been of late. Under current law, the amount of federal fiscal restraint will decline in 2014 and then decline further in 2015. At the same time, the sustained contraction in spending and employment by state and local governments appears to be over.

However, the compound annual rate of growth over that period has only been around 2 ¼ percent, close to prevailing estimates of the economy’s potential growth rate. Thus, we have made limited progress in closing the substantial output gap that was created during the recession. A similar conclusion is drawn from an assessment of labor market conditions. Although the unemployment rate has declined by about 2 ¾ percentage points since peaking at 10 percent in October of 2009, a significant portion of that decline reflects the substantial decline of the labor force participation rate over that period. It should also be noted that since the previous business cycle peak at the end of 2007, the decline of the labor force participation rate has been more than accounted for by a decline in participation of people in the prime working age of 25 to 54. The inflation data are also consistent with this overall picture of an economy operating well below its full potential. Total inflation, as measured by the personal consumption expenditures (PCE) deflator, has been quite volatile in recent years due to sharp fluctuations in energy prices. Core inflation, which excludes the volatile food and energy components and thereby may be a better guide as to underlying inflation, slowed from around 2 percent in early 2012 to just above 1 percent in mid-2013. In recent months it has shown signs of stabilizing, but remains well below the FOMC’s expressed goal of 2 percent for total inflation.
In the decade before 2007, bank paybills, broadly defined, grew at broadly the same rate as shareholders’ profits. In the 10 years before the crisis, for the global banks, profits attributable to shareholders averaged 60% of the paybill. For the big UK banks, profits were about 75% of the paybill. Since the crisis that picture has changed markedly. In 2013, profits attributable to shareholders were down from 60% to around 25% of the large global banks’ paybills in 2013. Put simply, shareholders have gone from getting 60 cents for every dollar in pay for staff to getting 25 cents per dollar. Across the big UK banks in 2013, the fraction had fallen to just 2% – ie to 2 pence per pound paid to staff. Averages, of course, mask some very different performances by individual institutions. But it is noticeable that, since the crisis, for the industry as a whole, employees have received a larger share of a smaller pie relative to shareholders. And in the UK, due in no small part to one-off factors, this effect has been particularly pronounced. UK banks’ returns on equity would have been nearly 6 percentage points higher in 2013 if the ratio of staff costs to the sum of staff costs and shareholders’ profit had been at its 2000–07 average. The sluggish adjustment in pay may well reflect the expectation that returns in banking are set to increase in the future. There are good reasons why they may do so.

However, given that vulnerabilities on these markets are still high, the resilience of the banking system remains crucial. In January 2022, the Federal Council approved the SNB’s proposal to reactivate the countercyclical capital buffer. This buffer will come into effect at the end of September and will contribute to maintaining banking system resilience. Page 1/1
Most importantly, we are in an exciting time for the GMS when the AEC draws closer. As most GMS countries are members of the AEC, the GMS will significantly benefit from the growth opportunities of the AEC in the coming years. 4. With integrated markets being forged under the AEC, this will greatly benefit the GMS through a more interconnected production base. Let me give you three key examples where I see this will materialize: 5. First, on the tariff reductions. Much has already been completed here, with the group of ASEAN-6 countries,2 including Thailand, having already removed tariffs for almost all of our products since 2010. The plan according to the AEC Blueprint, will see CLMV countries’ tariffs being removed by 2015. The benefits will of course multiply throughout production and distribution chains of the region. The increase in trade and related investments will naturally spill over to peripheral areas such as southern China, which has strong trade ties with the region as part of the GMS. 6. Second, on trade logistics facilitation. This is another crucial element to complement tariff reductions to reduce costs and time in order to facilitate cross-border trade. One of the key initiatives under this area is the “ASEAN Single Window”, which will streamline customs procedures and expedite cargo clearance. Owing to this, cross-border traders can save both costs and time for customs clearance region-wide. 7. Third, on payment systems linkages.

The limited development of equity markets and sizeable home bias in portfolios have significant consequences for the appropriate functioning of the monetary union. Indeed, they set a limit to the capacity of risk-sharing mechanisms in the euro area, compared for instance to the United States. 12  Conceptually, risk-sharing is closely linked to the capacity of EMU to withstand shocks. It can be seen as the ability of countries to diversify the impact of idiosyncratic shocks among other Member States through private channels (i.e. savings and capital markets) and public channels (i.e. fiscal transfers). In Europe, in the absence of a significant public budgetary instrument and of well-developed and integrated capital markets to diversify the impact of idiosyncratic shocks, the credit channel is the only way of cushioning shocks across the euro area countries. Nevertheless, this channel is not strong enough to offset the weakness of other channels. Despite the initial expectation when the euro was launched that many banks would provide retail services across the euro area, firms and households rely mainly on their domestic banking systems. Cross-border wholesale banking flows rose notably from the onset of EMU until the start of the crisis, but reversed abruptly afterwards. Finally, the fact that the ultimate backstop for deposit insurance still depends on national governments -implying a fundamental misalignment between liability and control- does not contribute to achieving greater integration.