samchain/econo-pairs-v1 huggingface dataset:
However, after deducting the effect of certain defence-related payments outstanding from previous years, as well as the possible spending arising from liability associated with legal proceedings relating to the insolvency of the toll motorways, this item is projected to grow only very moderately this year and over the next few years. Under these plans, therefore, the downward trend in public investment as a proportion of GDP, which has already lasted more than a decade, would continue. Interest payments are expected to continue to decline as a result of the expected favourable developments in financing conditions, although at a more moderate rate than over the last two years. The increase in revenues included in the Stability Programme is based mainly on the measures approved in December last year in Royal Decree-Law 3/2016. Notable among these is the amendment to corporate income tax to broaden the tax base, the increase in duties on alcoholic drinks and tobacco products, the increase of 3% in the maximum social contribution base and the 8% increase in the minimum wage. Notwithstanding the positive impact of these measures, achievement of the government’s medium-term revenue target is subject to some uncertainty, as revenue will need to perform more favourably relative to activity than it would if the historical relationship between these two variables were to remain unchanged.

The prolongation of the Spanish economy’s current growth phase over the coming months will essentially be based on the strong pace of expansion of national demand, although the external sector will continue – as seen since 2016 – to maintain its positive contribution. In particular, buoyant employment and the favourable conditions of access to credit are boosting household consumption and the pick-up in spending on residential investment and on equipment. 3/8  In the medium term, there will foreseeably be a gradual convergence towards more moderate growth rates, as a result of the disappearance of certain factors that have contributed to boosting activity. Such factors have been the declines in oil prices, the moderation of financing costs, supported by the ECB’s monetary policy, and the expansionary fiscal policy stance over the two-year period 2015-2016. As in the euro area as a whole, since late last year the year-on-year rate of change of the CPI has been highly volatile; it stood in May at 1.9%, the outcome – as earlier stated – of energy price fluctuations and, also, of the effect of the Easter holiday week in April, given that in 2016 Easter fell in March. These temporary factors will progressively peter out in the coming months, although the average rate for the year is expected to stand at around 2%. In 2018 and 2019, in the absence of further shocks, the rate of increase of the CPI might settle below this reference.
For example, while ML models could alter banks’ trading and retail businesses – enabling them to make better decisions more quickly – the opacity, however, of these models may also make them more difficult for humans to understand. Boards, senior management and staff in firms may consequently need different skills to operate an effective oversight, risk and control environment. 2  Breslow, S., Hagstroem, M., Mikkelsen, D., Robu, K (2017) Arnold, M (2018) Sirignano, J., Sadwhani, A., and Giesecke, K (2018) 5 Institute of International Finance (2018) 3 4  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  III. CHANGING THE METHODS BY WHICH WE SUPERVISE  Advanced analytics are also likely over time to lead to changes to the way we do our jobs as supervisors. To see how, it is perhaps easiest to go back to the basics of what prudential supervision actually is. Our approach to promoting safety and soundness is based upon forward-looking judgement-based supervision, in which we identify the key risks facing firms and set supervisory strategies to mitigate them. Described as a business process, it can be broken down into a number of simple steps: 1) rulesetting and reporting; 2) analysis and monitoring; and 3) setting and communicating a supervisory strategy to mitigate identified risks. Each of these aspects of supervision is amenable to automation, machine learning or AI to some extent.

With respect to rule setting, for example, a project is underway to use advanced analytics to understand the complexity of the PRA rulebook.6 We hope to use the results to identify ways to simplify our rules to make them easier to comply with. The PRA Rulebook contains 638,000 words –77,000 words longer than War and Peace in English translation. The complexity of the language used can make the text difficult to read. Another layer of complexity is added because of cross-references and links between different parts of the Rulebook, requiring the reader to refer backwards and forwards, disrupting reader flow. Figure 2 is a visualisation of the Rulebook. Each node is a part the PRA Rulebook. Each line between the nodes is a cross-reference in the text. When parts of the rulebook are linked together, tweaking one part can have unintended consequences for others. We can quantify the interconnectedness of different parts of the rulebook using the PageRank algorithm, the same algorithm used by Google’s search engine. A higher score implies greater connectivity of a particular part to other parts. Happily, most parts of the rulebook are self-contained and ‘‘structurally simple’. ‘Looking further into the future, a bigger win might be to automate the rulebook entirely. Regulated banks are required to submit large quantities of data to regulators. The cost of collecting and reporting data to meet regulatory requirements is a significant burden to both regulators and regulated firms. Regulatory data collections also have significant time lag s, normally 4 to 6 weeks.
For instance, if there existed a global financial market, capital should flow from the developed countries to the developing ones. This is, however, not the case, as noted by Robert Lucas 19 , and the “Lucas puzzle” named after the author was formulated. There have been numerous works that attempted to resolve this puzzle. One of the most recent works, which presents a panel analysis of nearly a hundred countries in the period 1970-2000, has shown that the prevailing reason for the lack of capital flow from wealthy to poor countries are institutional factors. 20 or instance, improving the quality of operation of institutions in Peru to catch up with Australia would mean a four-fold increase in foreign investment, and improving the quality of operation of institutions in Turkey to catch up with the UK would increase foreign investment by 60%. Another puzzle, which over some time made challenging the fact that globalization of financial markets was actually taking place possible, was the “Feldstein-Horioka puzzle.” 21 Both authors in their famous  17  Too big to fail, too complex to fail. 18  “Rozwój systemu finansowego w Polsce w 2004 r.”,NBP Warsaw 2005, pp. 275- 286, 303-314. 19  Lucas R. “Why doesn’t Capital Flow from Rich to Poor Countries”, American Economic Review 80, 1990. 20  Alfaro L., Kalemni-Ozcan S., Volosovych V. “Why doesn’t Capital Flow from Rich to Poor Countries? An Empirical Investigation”, University of Houston Working Paper, November 2005.

Page 1/3  • In addition, the development of crypto-asset and DeFi comes with significant policy challenges for public authorities, that were highlighted in our discussions today: o First, they raise the question of how to regulate market players, which are not easily captured by existing regulation as they either lack central authority or may require close coordination between several regulatory and supervisory agencies due to the variety of their activities. o Second, the rise of these new assets has led central banks to reflect on the appropriate balance between public money and private assets and the way in which access to public money could be ensured in the digital era through the issuance of Central Bank Digital Currency. The second takeaway is that private players identify substantial benefits associated with distributed ledger technologies and consider that an appropriate regulatory framework would help make the most of these technologies. •  But we know from experience that public authorities need to act quickly, while this ecosystem is still nascent, to guide its development in a way that suits our public policy objectives. We are now at a tipping point. If we do fail to act, there is a risk that inefficient, fragmented, monopolistic solutions could develop in a silo mode, harming financial stability. But if we act early, we can foster the development of an innovative ecosystem, which will improve the efficiency of post-trading processes and infrastructures.
The fiscal rule is a binding commitment policymakers have imposed on themselves and is intended to foster long-termism and predictability in fiscal policy. Norway’s floating currency, which normally appreciates in good times and depreciates in bad times, also has a stabilising effect. The advantage of this effect is most evident when economic developments are weak. For example, many southern European countries that have adopted the euro are currently facing considerable challenges. To improve competitiveness, wages in these countries must fall or at least rise much more slowly than in other European countries. This only occurs when unemployment is high. With a flexible exchange rate, competitiveness can also improve when the domestic currency falls in value. A flexible exchange rate can thereby reduce fluctuations in employment and output. On the other hand, the foreign exchange market can be mistaken, driving the exchange rate away from the path indicated by fundamental conditions. Herd behaviour and market psychology can contribute to fluctuations and instability. In spring 2001, the Norwegian government and parliament defined a formal inflation target for monetary policy. The task of achieving the target was delegated to Norges Bank. Norges Bank sets the interest rate on banks’ deposits and loans from the central bank. This interest rate determines banks’ lending and deposit rates and the level of interest rates in general, as well as the price of the loans you take out as students. The interest rate is set with the objective of ensuring low and stable inflation.

In the preceding 15–20 years, the global economy was characterised by solid growth, greater economic stability than earlier and by low and stable inflation. The period is often referred to as “the great moderation”. A consensus was forming that wide fluctuations in the economy, as had been the norm, were a thing of the past. The US economist and Nobel Prize winner in economics Robert E. Lucas expressed a commonly held view in a speech he gave in 2003: “[...] macroeconomics in this original sense has succeeded: Its central problem of depression prevention has been solved, for all practical purposes, and has in fact been solved for many decades.” 11 Autumn 2008 was to become a reminder that we should be on our guard against established truths and consensus. If history has taught us anything, it is how little we actually know. So, if I were to offer some advice to those of you about to embark on your economics studies, I would first and foremost say this: be inquisitive and ask questions. Learn enough to be able to doubt. And since I have the chance for a word with you “in private” I would like to seize the opportunity to put in a good word for mathematics. A wealth of information and complex problems often make it difficult to see the essence of an issue and to distinguish what is important from what is not. And this is where mathematics can be helpful. Mathematical models and formulas simplify complex relationships into manageable quantities.
Therefore, the Basle Committee has quite rightly advised that regulators and banks should approach it with caution even with regard to the simplest approach to Basel II. We commenced our journey one year ago, together with the industry, and we will move slowly, but steadily, towards full implementation of the basic approach, hopefully in 2008. We will, however commence our test runs in parallel with Basle I in 2006, fine tuning our systems for full compliance as we go along. This would be in line with the widely accepted policy that countries should adopt the options and approaches that are most appropriate for the state of their markets, their banking systems, and their supervisory structures. In Sri Lanka, as in most countries, the banking sector enjoys predominance in our financial system. As is to be expected, the financial environment, domestically, is becoming more innovative and competitive to meet the sophistication of peer foreign banks and the needs of investors and consumers. This naturally increases their risk profile. Increasingly, therefore, our remit as regulators is to ensure an efficient risk management framework and the adequacy of resources to mitigate risk. Against this background, therefore, Basle II is synonymous with good risk management, not only of the core risk of credit default, but of a wider range of risks such as market risk and operational risk in Pillar I .

If the fixed-income market is to perform its important function, more is needed than participants who set prices for the various assets. There must also be participants who trade actively at those prices. Neither must the counterparty risks be perceived as unduly high because that may deter participants from trading. Moreover, the market must be capable of handling large volumes without this by itself having an appreciable effect on prices. In other words, the market should be adequately liquid. Why is liquidity important for monetary policy? The answer is that in a liquid market, relevant news shows up quickly in interest rates. An adjustment of the Riksbank’s repo rate, for example, has a rapid pass-through to the short market rates, as well as to somewhat longer rates. This applies, of course, in so far as the repo rate adjustment takes the market by surprise. If market participants instead understand how the Riksbank interprets new information in the form of macroeconomic outcomes, they can draw conclusions about the Riksbank’s future actions. News is then reflected in the formation of interest rates at the time when the macroeconomic outcomes are known. The relevant interest rates also react quickly to various forms of information from the Riksbank. Somewhat longer interest rates may be affected, for instance, when we publish a repo rate forecast, a so-called interest-rate path that presents the Riksbank’s assessment of the future development of the policy rate. The conditions for good market liquidity include low transaction costs, management of counterparty risks and market transparency.
But it explains the bold and decisive steps taken by European governments, together with the International Monetary Fund (IMF), to begin to address market concerns. It also explains why after a rapid deterioration of public finances in Europe, collective monitoring of fiscal discipline and peer pressure experience a revival. Arguably, more importantly, several countries have embarked on a path that entails much needed structural reforms. This public debt crisis is multi-layered. It is clearly a crisis of market confidence and as such a liquidity crisis. The trigger was a classic fiscal crisis combined with severe competitiveness problems in the periphery of the EU. However, it is also an institutional crisis. The institutional mechanism to ensure fiscal discipline inside the Eurosystem was clearly insufficient. Obviously, part of the fiscal imbalances and the resulting build-up in public debt were directly related to the financial crisis and its aftermath. One part of the fiscal expansion can be explained by the direct fiscal effects of the measures taken to stabilize the financial system. Another part is explained by the drop in revenues and increases in social benefit payments in response to the post-crisis recession. According to recent IMF calculations, this accounts for about fifty percent of the increase in debt levels globally since the outbreak of the crisis. The other roughly fifty percent are unrelated to the financial crisis and its effects on the broader economy. 3 To put it differently, some countries had simply lived beyond their means well before the financial crisis erupted in 2007.

8  See Monnet, Jean (1976): “Memoires”. BIS Review 87/2010  5
The decision-making process now evolves around decision-making by a committee rather than relying on individuals as in the past. In some of the committees, well-qualified individuals from outside the Bank of Thailand have been invited to be members. Between each committee, emphasis has been put on the ability to communicate and exchange information. The change in this decision making process has resulted in the implementation of policies based on collective decision-making, accuracy and up to date information, most importantly, the co-ordination between the committees has helped reduce policy inconsistency. On monetary policy, following the change to a floating exchange rate system, there was a need for a new monetary policy framework. On this issue, the Bank of Thailand believes that the Inflation Targeting framework, which is being used today, is very appropriate to the present conditions and is well suited for Thai economic and monetary structures. Keeping inflation at a low level is an important pre-condition in maintaining economic stability of the country in the long run. Most importantly, under this framework, the Bank of Thailand must set clear monetary policy targets, be transparent in its decision-making, and accountable for its policies. The Bank of Thailand Monetary Policy Board announces its decision every six weeks, and so far has published two Inflation Reports. At present, the new monetary policy framework has been accepted at a certain level. More importantly, for it to be highly successful and efficient, the Bank of Thailand must be independent in implementing its policies.

Ladies and gentlemen, The economic crisis, which occurred in 1997, caused the Bank of Thailand to review its role and task as the central bank of the country. This review pointed to a number of weaknesses in the Bank of Thailand's work in the past. As a result, the Bank has embarked on a comprehensive restructuring and modernisation programme aimed at improving the works of the Bank of Thailand to best serve the roles and responsibilities as a central bank. The strategy focused on 4 aspects, namely organisational structure and work process, human resource management, decision marking process, and database and information technology. The Bank of Thailand started the restructuring programme at the beginning of 1999 with the revamping of the management levels. Emphasis was placed on shorter lines of command, which facilitate fast and effective problem solving. The organisation is divided into five main business groups; namely, monetary stability, financial institution stability, corporate support services, financial institution rehabilitation and strategic capabilities. Objectives, roles, and responsibilities of each group are clearly stipulated. In 1999, the modernisation programme put the main emphasis on improving the work process.
Households that save in banks or invest in other forms of financial assets make funds available to others. Banks convert some households’ savings into loans for other households wishing to finance house purchases, for instance. If we look at the household sector as a whole, savings accounted for about five per cent of household disposable income in 2004,1 which has been the level of saving for the past few years. These are funds that are channelled to the business sector in Norway or abroad to finance investment there. There may be various reasons behind a decision to save. In many cases, the objective is to spread consumption evenly through the course of a lifetime. Another reason may be the desire to leave behind an inheritance. For most people, the level of income will fluctuate through life. Most of our income is earned while we are economically active. Once our working career is over, we will have little to live on if we have not set aside capital as we earn or have secured our retirement by some other means. A hundred years ago, a common way of “saving” for old age was to have a large number of children. A large family increased the probability of some of the children growing up and being able to support their parents when they were old. By looking after family property, and perhaps expanding it, subsequent generations could also be provided for.

Variables are selected according to the number of Bloomberg alert subscriptions, but data on consumer prices, producer prices and wages are excluded. BIS central bankers’ speeches  9  Chart 7: Interest rate reaction to FOMC meeting 18/9/2013(a) UK  Change since 12pm (bps)  US  15  Bernanke's conference ends  10  FOMC  5 0 -5 -10 -15 -20 -25 -30  12:00 15:00 18 Sep 2013  18:00  21:00  08:00 19 Sep  11:00  14:00  -35 17:00  Source: Bloomberg. (a) 1-year OIS rates, 2-years forward. Chart 8: Sensitivity of UK interest rates to economic news(a)  Sensitivity of UK 2y1y government yields to UK economic surprises  Basis points per one standard deviation surprise  Sensitivity of UK 2y1y government yields to US economic surprises  10 8 6 4 2 0 -2 -4 -6 -8  2006 - 08  2009 - Apr 2013  May 2013 - latest  Aug 2013 IR 14 Oct 2013  -10  Sources: Bloomberg and Bank of England calculations. (a) Based on bi-variate regressions of daily yield changes on the daily average surprise in the variables within the Economic Surprise Indicators. The diamond shows the regression coefficient and the bars indicate plus or minus two standard deviations.