samchain/econo-pairs-v1 huggingface dataset:
The Government will continue to pursue policies that would spur growth and assist in lowering inflation below the target. Distinguished Guests, Ladies and Gentlemen, at this juncture, I wish to talk about your role as insurance brokers in economic growth, as the remarkable economic gains that I have outlined above would not have been possible without your contribution. In my humble understanding insurance brokers are independent intermediaries who provide the link between clients and insurance companies. By performing this function, your firms are important economic agents acting in the best interest of clients by providing them with sound and impartial professional and practical advice regarding insurance services. 2  BIS Review 72/2006  The intermediary role that you play undoubtedly makes you critical in the growth of the Zambian economy in general, and the insurance services sector in particular. The advice that you provide to your clients is important because it promotes a more competitive market within the insurance industry. This may includes an analysis of the most suitable firm, the various types of cover on the market and importantly a fair price for the given product. In some instances, you even go as far as carrying out surveys on various insurance products, negotiating prices of those products for your clients and presenting reports to insurance underwriters. Ladies and Gentlemen, with your contribution, and that of other stakeholders, Zambia could easily achieve the national socio-economic goals in the medium to long-term.

This has been as a result of Government’s sound macroeconomic management and the critical contributions that various sectors of the economy have made, of which the insurance sector is a part. Let me once again thank you for inviting me to share my thoughts with you on the role that your noble profession plays in this economy. On our part as Bank of Zambia, we shall keep on facilitating the development of, among others, the insurance sector by continuing to improve macroeconomic conditions that are critical to the expansion of your businesses. In turn, it is expected that other sectors of the economy will benefit and contribute to accelerated economic growth and development that the country is craving so much for in order to reduce poverty. May I, at this juncture, point out that in order to facilitate your work, you may track some of the developments in our economy on the Bank of Zambia website, which you can visit on www.boz.zm. You can also contact us directly for any information you may require on the economy. I thank you for your attention. BIS Review 72/2006  3
That will give the bank the ability to evaluate and then drain out any excess liquidity in the system. Unlike the US, we do not need to develop new techniques to drain cash. The Bank can do that, for example, by issuing one-week Bank of England bills as it did in 2008/09. Conclusions In this speech, I have commented on why the asset purchases were undertaken and how well they worked. I have described some of the complicating factors in designing, implementing and maintaining the operations. Finally I have covered some of the issues we will face when we eventually come to sell the assets – noting that it is possible that we yet might purchase more. The unconventional journey is not over yet! 6  BIS Review 135/2010  BIS Review 135/2010  7

That may well be the perspective at desk level, but I suspect it is unfair to many CEOs, who have a  2  As the failure of Hong Kong’s futures clearing house demonstrated in 1987, very bad things happen if a central counterparty fails. Many lessons were drawn. BIS Review 71/2009  3  clear interest in the health, safety and soundness of the system. And if some didn’t recognise it before, they will now – as their predecessors did in the relatively recent past. The key industry associations can also play a constructive role in this whole area – as, indeed, they have in the past. This crisis would have been even worse if ISDA and others had not overseen the introduction of the collateralisation of derivatives-related counterparty credit exposures amongst the dealer community. But there are lessons about extending collateralisation, and standardising terms in vanilla instruments, beyond the dealer community in some circumstances. The debate is not just about clearing houses and post-trade infrastructure. The financial community must also be open to more trading in core, vanilla markets going via exchanges or other well-designed and open trading platforms. If well constructed, that could help to preserve liquidity when times are tough. We would, for example, like to see serious consideration of whether the corporate bond markets could benefit through something along those lines. Bank capital instruments The insurance industry is involved, one way or another, in everything I have touched on this morning.
As is known, our banks comfortably passed the test, confirming the favourable results of the restructuring and recapitalisation programme carried out in 2012 and 2013 with the agreement and assistance of our EU partners. The comprehensive assessment of significant euro area banks was twin-pronged, entailing an asset quality review and stress tests to determine banks’ resilience in hypothetical adverse scenarios. The results obtained by Spanish banks were favourable. First, I should highlight the fact that Spanish banks are those with fewest adjustments to make as a result of the asset quality review which, unlike the stress tests, is not based on hypotheses but on a detailed balance sheet review. As regards solvency, only one bank stood slightly below the thresholds set in one part of the exercise and, in any event, that same bank had already adopted capitalstrengthening measures in 2014 on a scale far exceeding that needed to cover the shortfall identified. In the course of 2014, both the ECB and the national authorities made a significant effort to address the challenge posed by adaptation to the new supervisory framework. In this respect, to make our joint work easier, the Banco de España has reorganised its Directorate General of Banking Supervision, creating a structure that mirrors that of the ECB’s SSM. In 2015, its first year of operation, the SSM has defined a list of priorities, bearing in mind the environment and the main risks to the banking sector. These include most notably profitability.

Though it’s also been rising, price  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  inflation for (largely non-tradable) consumer services is currently close to its average during the inflation targeting period. Another indication is that we’ve seen similar surges in inflation in many other developed economies as well (Chart 3). This is a global phenomenon. And what’s striking is that this has happened even though global (UK-weighted) economic activity has only just returned – and in several individual countries has yet to return – to pre-pandemic levels (Chart 4). In the UK, in the third quarter of the year, output in the private sector – the part of the economy that actually sets prices – was still 2% lower than it had been at the end of 2019. More often than not higher inflation is associated with stronger, not weaker, economic activity. At least if you consider the last eighteen months or so as a whole, taking account not just of the resurgence this year but the huge contractions in 2020, that’s not what’s happened on this occasion. Chart 3. Inflation has risen significantly in many countries... UK  Euro area  US  Chart 4.
Given the fact that Iceland is not a member of the European Union, membership in EMU is out of the question. Nevertheless, the establishment of EMU will affect Iceland, particularly in the longer term. A few facts may be mentioned: first, the European Union is an important trading partner, but the absence of Denmark, Sweden and the UK from the EMU means that only about a third of our external trade is with EMU countries at present. Once the three countries join EMU, which we expect them to do, the share of EMU countries in our external trade will rise to above 60%. Second, we expect that our economic performance will be measured by the markets against the criteria developed for the EMU countries. Third, we expect that a successful EMU will bring beneficial effects to Iceland in the form of increased demand for our exports and reduced transaction cost in external trade. Fourth, it might become a greater challenge to operate our own currency. One could, for example, envisage that a currency like ours would be increasingly subjected to pressures from international investors seeking to diversify portfolios, adding currencies on the edge of the euro area and closely linked to it. This could conceivably lead to increased volatility and consequent potential instability down the road. The immediate effects on Iceland of the establishment of the EMU have not been significant. However, the entry of Denmark, the United Kingdom and Sweden into the EMU will markedly change our situation.

As FEMR recognised, while fines and sanctions have roles in deterring misconduct, they will not, on their own, bring about the cultural change needed. We must move from an excessive reliance on punitive ex post fines of firms to greater emphasis on more compelling ex ante incentives for individuals, and ultimately a more solid grounding in improved firm culture. This starts with reducing opportunities for bad behaviour, for example, by overhauling the regulation of key benchmarks in FICC markets. It requires compensation rules that align risk and reward. In the UK, a significant proportion of variable compensation now must be deferred for a period of seven years. To address the ‘rolling bad apples’ problem, mechanisms are now in place here to ensure that when individuals move on their history will be known to those who consider hiring them. Firms will be required to share information on breaches of individual conduct rules, their fitness and propriety assessments and outcomes around subsequent disciplinary proceedings. These measures are all very constructive but they are not yet sufficient. That’s why the Bank of England supports initiatives that ensure firms and their employees take greater responsibility – individually and collectively – for their own conduct. UK authorities have used their convening powers to encourage market participants to establish standards of market practice that are well understood, widely followed and, crucially, that keep pace with market developments. Industry has responded. The Banking Standards Board is promoting higher standards of conduct and competence across the UK banking system.
BIS Review 18/2009  1  2  3  4  5 Banks  6  7  8  9  Sources: Bloomberg and Bank calculations  13  Table 1: Distribution of UK Macroeconomic and Financial Time Series Golden Decade  Long-run (a)  (1998-2007) GDP Growth (%,  Mean  2.9  2.0  annualised)  Standard Deviation  0.6  2.7  Skew  0.2  -0.8  Kurtosis  -0.8  2.2  Retail Price Inflation  Mean  2.8  3.1  (%, annualised)  Standard Deviation  0.9  5.9  Skew  0.0  1.2  Kurtosis  -0.3  3.0  Unemployment rate  Mean  3.2  4.4  (%, annualised)  Standard Deviation  0.6  3.4  Skew  1.2  1.0  Kurtosis  0.4  0.3  Earnings Growth (%,  Mean  4.2  4.5  annualised)  Standard Deviation  0.5  6.4  Skew  0.2  1.1  Kurtosis  -0.1  3.8  House Price Inflation  Mean  11.6  8.8  (%, annualised)  Standard Deviation  5.8  9.2  Skew  0.7  1.1  Kurtosis  -0.4  2.0  Change in FTSE All-  Mean  0.2  0.2  Share Index (%,  Standard Deviation  4.1  4.1  monthly)  Skew  -0.8  2.6  Kurtosis  3.8  62.3  Change in UK 2.5%  Mean  -2.0  -0.1  coupon consol yield  Standard Deviation  18.5  18.4  (basis points,  Skew  0.0  0.5  monthly)  Kurtosis  3.1  32.2  (a) The long-run time series for GDP growth, retail price inflation, unemployment, and earnings growth begin in 1857.

Pricing of this insurance is assumed to be based on the distribution of equity returns during  2  For example, Guttentag and Herring (1986a) and Herring (1999). 3  The banks themselves have been anonymised to protect the innocent. 4  BIS Review 18/2009  the Golden Decade. If the “true” distribution of returns were its long-run average, by how much would this insurance have been under-priced in 2007? Chart 10 provides some answers for a selection of strike prices for the option. The degree of under-pricing of risk is large and is larger for options designed to protect against tail risks (lower strike prices). For at-the-money options on UK equities, the insurance premium would have been under-priced by around 45%; for options well out-of-the-money – say, 50% below equity prices at the time – the mis-pricing would have been nearer 90%. This is risk underpricing on a dramatic scale. These examples are no more than illustrative. But they help illustrate that the quantitative consequences of disaster myopia were material ahead of crisis and may have contributed importantly to the price of risk being set too low. And that, in turn, helped sow the seeds of the credit boom. Network externalities Any asset portfolio is, in essence, a financial network. So the balance sheet of a large financial institution is a network, with nodes defined by the assets and links defined by the correlations among those assets.
While the current precept of risk-based supervision, as implemented by many, is still a robust and valid concept, there are many weaknesses when it comes to putting the precept into practice, as shown by the lesson of this crisis. These weaknesses include the inability to deal with complexity arising from such mechanism as securtisation, OTC derivatives, as well as the problem of procyclicality and systemic risk associated with valuation and performance management issues. Nevertheless, risk-base principle remains the key anchor to coherent  BIS Review 131/2009  1  risk management and supervision, even more so given the increasing complexity of the financial market. So, we must remain anchored to its principles. What then needs to be done is to strengthen risk measurement, management, and supervision, so that we can truly capture risk of individual institutions, overtime, and risk arising from interconnectedness of key components of the system, to safeguard financial stability. In short, we need to strengthen both micro- and macro-prudential regulations. The shift in policy paradigm from this crisis has been the increasing acceptance of the concept of macroprudential policy, which takes into account the interconnectedness within the financial systems as well as between the financial system and the real economy, that is, the issue of systemic risk and procyclicality. The proposals by G20, the BCBS, as well as international accounting standards are in line with the risk-based principle.

Consumers themselves would be more risk averse and prefer to stick with simple transactions and products. As mentioned already, regulatory framework would be strengthened, especially the use of macroprudential oversight that focuses on system-wide stability. As such, closer supervision of systemically important financial institutions, including non-banks, would be required. Finally, the microprudential oversight would also be strengthened to rectify previously identified shortcomings, particularly the Basel II framework, corporate governance, and incentive misalignment. Though it looks as if we could be in the process of creating a “new world order”, given what we have done so far in strengthening our financial sector resilience, I believe that this transition would be a smooth one and add further strength to our financial system. Needless to say, a strong financial system is the backbone of sustainable economic growth in the longterm. Thank you for your attention. 4  BIS Review 131/2009
The only periods in which persistence was lower than in the 1990s was in the early 1930s and early 1960s. 2  If index-linked contracts were widely used the relevant real rate would be the index-linked rate. And if the risk premium were determined largely in an integrated world capital market without frictions then again the real rate would be the riskless indexlinked rate. 2  BIS Review 68/2002  Table 1 Inflation in the UK Mean  St. dev  1950-1959  4.14  1.06  1960-1969  3.65  0.72  1970-1979  13.07  1.81  1980-1992  6.40  1.14  1993-2002  2.49  0.24  1950-2002  5.93  1.41  Note: Mean inflation is the total increase in the quarterly price level (RPI until 1974, RPIX after 1974) over the period indicated, expressed as a four-quarter growth rate. Standard deviation is calculated on quarterly inflation rates (not annualised) over the period indicated. Data up to 2002 Q3. Source: Bank of England calculations based on ONS data.

Øystein Olsen: Oil and the Norwegian economy – the challenges ahead Speech by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), at a lunch hosted by Danske Bank Markets, New York City, 27 March 2015. *  *  *  Accompanying slides can be found on the Norges Bank’s website: Slides (PDF). It’s a great pleasure to be in New York City again and an honour to be invited to give a lunch presentation here today. As Norges Bank, a week ago, published its latest monetary policy report, the economic outlook and the considerations behind the interest rate decision naturally warrant some attention in my speech today. First, however, I would like to give some background information on the economic policy framework in Norway, focusing on the sovereign wealth fund – the Government Pension Fund Global – the fiscal rule and Norges Bank’s foreign exchange transfers to the fund. Norway is a small, open, natural resource-rich economy. About a quarter of our GDP is related to oil and gas extraction, and a large share of our petroleum production is exported. The oil and gas industry has played a vital role for the strong growth in our economy over the past 40 years. When the first oil was brought to the surface in 1971, GDP per capita in Norway was lower than the average for a western economy. The picture has reversed since then. We have gradually caught up to the wealthiest nations.
As a general rule, then, the further into the future a commitment extends, the vaguer it tends to be. Along these lines, the FOMC periodically reiterates its commitment to do what it is legally mandated to do: pursue full employment, price stability and a stable financial system. But getting from there to an actual prescription for the funds rate isn’t straightforward. If it were, FOMC meetings wouldn’t take eight-plus hours of discussion and hundreds of pages of briefing materials. Delphic forward guidance is less binding than Odyssean guidance. Like the responses of the oracle of Apollo at Delphi, it is more obscure, more enigmatic. It amounts to saying, “Here’s what we think we are going to want to do if the economy evolves as we currently expect.” Delphic guidance clarifies your current thinking about future policy without making any promises – even contingent promises. Our current FOMC statement is chock-full of Delphic guidance.

The economy is operating far below its productive potential – leaving the level of output, income and employment much lower than they would be if the economy’s unused  BIS central bankers’ speeches  3  resources were put to work. One summary statistic says it all – the unemployment rate is unacceptably high at 9 percent. Given my outlook, the decline of unemployment over the next year is likely to be modest. Furthermore, we also continue to face significant downside risks, mostly related to the stress in the eurozone. In a speech yesterday at West Point, I highlighted the need for our nation to deploy a full set of economic policy tools to secure the recovery and build for the long term. This includes monetary policy, but also requires policies to help repair housing markets, fiscal policy that supports growth in the short and long run, and structural reforms that increase competitiveness and support a shift in the pattern of economic activity toward a more sustainable growth path than that which prevailed during the last business cycle upswing. Regional economic conditions How is the recovery proceeding in the state and the region? As I mentioned, the New York Fed produces economic activity indexes to help monitor conditions in New York State.1 Based on our index, the downturn in the state’s economy ended in November of 2009. Since then, I would describe the state’s economy as recovering at a moderate pace, although there appears to have been a pause in September.
But the Chancellor also made it clear that the British Government is not opposed to euro membership as a matter of principle; it will make its decision on pragmatic, economic, grounds, and submit that decision to Parliament and to the British people in a referendum. The Chancellor recognised that - barring some fundamental and unforeseen change in economic circumstances - it was unrealistic to think that a decision could be made during the lifetime of the present Parliament - which could extend to May 2002. But he stressed that in the meantime the United Kingdom should prepare - both for the euro’s introduction on the Continent on 1 January 1999 and for our own eventual participation. BIS Review 23/1998  -3This statement was the first by a British Government to declare for the principle of monetary union. It implies that the United Kingdom is to be regarded effectively as a “Pre-In”. It recognised that the single currency will affect us whether we are in or out of it, and that it is clearly in our national interest to play a full part in ensuring that the euro is successful. This, in my view, provides a solid foundation for a continuing, positive and constructive relationship between the United Kingdom and those EU member states that do participate in the first wave of the euro.

Some people here on the Continent who share this concern are inclined to argue that if a euro-participating country were to find itself in this situation - and given that it would have no macro-economic way out, for example, through exchange rate adjustment, or monetary relaxation, or fiscal stimulus beyond the limits of the Stability Pact - it would then have an overwhelming incentive to take the sort of supply-side measures which have proved so difficult to implement hitherto. I am not sure that you can necessarily rely upon that making life very much easier. But what I think this discussion points up, is the broader conclusion that if the euro is to go ahead in current conditions, as I assume that it will, then supply-side flexibility will become more crucially important that ever across the whole euro area. The Chancellor of the Exchequer announced last October that the United Kingdom would exercise its opt-out and not participate in the first wave of euro membership. That was a disappointment to some of our European partners. But it was a considerable relief to others, because UK participation from the outset would certainly have complicated the project - not least because of the substantial cyclical divergence between ourselves and the major countries on the Continent.