samchain/econo-pairs-v1 huggingface dataset:
This can be described as the difference between what a family will need to maintain its level of consumption should a breadwinner, or one of the breadwinners, passes away, versus the amount of financial resources including life insurance coverage. A Geneva Association report1 in 2014 estimated that for the US alone, the life protection gap was a staggering $ trillion. In 2012, the LIA estimated the gap in Singapore to be about $ billion2. Patrick mentioned this as one of the priorities for LIA and highlighted that a follow-up “attitudinal study” will be conducted. I understand that LIA’s 2017 Protection Gap Study will be released later this month. The case for adequate life insurance protection is a strong one. So why is there such a large protection gap? Let me highlight a few possible reasons. 1/5  BIS central bankers' speeches  (1) One factor is that life insurance involves the rather unpleasant topic of death, a morbid subject that many avoid. (2) Another common feedback is that many people find it difficult to properly ascertain their insurance coverage, given the difficulties in projecting long-term financial needs. (3) Yet another perception is that life insurance policies are both expensive and complex. There is also a belief that agents would rather sell more lucrative investment-linked policies compared to term life policies.

The European Commission estimated that if Member States achieve their targets, R&D activities will rise by 50% in 2025, generating an increase of between 2.6% and 4.4% in GDP on the basis of conservative assumptions (see report from European Commission “Implementing the renewed Lisbon strategy for growth and jobs: A year of delivery” (2007)). 6  BIS Review 18/2008  euro area, and are crucial to maintaining and ensuring the competitiveness of the individual European companies over the medium to long run. We should keep in mind that in a context of monetary union, not only fiscal policies, but also price competitiveness and unit labour cost developments across countries should be continuously and closely monitored. III. Conclusions  Ladies and gentlemen, I would like to conclude by stressing a few points. Europe is in the process of reforming its economy so as to adapt to the challenges of globalisation, technological change and an ageing population. Significant progress has already been made as reflected by the notable rise in employment growth over the last decade. Monetary Union has been effective – and hugely successful – in supporting growth through a credible monetary policy that delivers price stability in the medium run, hence contributing to lower financing costs in the euro area through a reduction of risk premia. It has also given a further impetus to resolute European integration, particularly in financial markets. The challenges ahead are a reminder that European integration is a dynamic process and that it will bring about deeper structural transformations.
In addition, these prices are significantly more volatile in Spain than in the euro area as a whole. 5  See M. Pacce, A. del Río and I. Sánchez (2022). “The recent performance of underlying inflation in the euro area and in Spain”, Analytical Articles, Economic Bulletin 3/2022, Banco de España. 6  This difference is attributable not only to the larger increase in these prices in Spain, but also to this component's greater weight in Spain’s consumption basket. By contrast, the contribution of transport-related items was slightly smaller than that observed in the euro area, due to both the lower inflation observed in Spain and their smaller weight in the aggregate. 2  8. Compensation per employee grew by 4.8% and 3.4% in the euro area and Spain, respectively, in 2022 Q2, figures markedly lower than actual inflation.7 As a result, households have lost considerable purchasing power. Profit margins are holding relatively stable at aggregate level. In Q2 the ratio of the GDP deflator to unit labour costs was similar to pre-pandemic levels both in Spain and the euro area. Figures from the Banco de España's Central Balance Sheet Data Office also point to a slight reduction in firms’ profit margin (defined as the ratio of the gross operating profit to sales) between 2021 H1 and 2022 H1.8 However, this change belies very high heterogeneity across sectors and firms. 9.

9  For example, around 18% of extracted energy products (gas and coal) and 9% of oil products consumed in the EU are imported from Russia, compared with just 3% and 2.5%, respectively, of those consumed in Spain. 10 See J. Quintana (2022). “Economic consequences of a hypothetical suspension of Russia-EU trade”, Analytical Articles, Economic Bulletin 2/2022, Banco de España. 4  The decline in activity is also reflected in the adverse performance of international trade, which began to decelerate in spring. In addition, although suppliers’ delivery times and bottlenecks have improved, the latter’s effects remain significant. In parallel, most commodity prices have tended to moderate since mid-year in view of the prospects of a global economic slowdown, among other factors. Overall, the financial markets consider that the likelihood of a global recession has risen significantly. In particular, there is concern about the possible effects of the current simultaneous tightening of monetary policy in numerous geographical areas. The individual decisions of each central bank are fully justified because inflationary pressures are very high and persistent in each of their jurisdictions. However, this raises the question of whether, in such an interconnected world, simultaneous tightening could lead to an excessively restrictive monetary policy stance worldwide, especially for emerging market economies.11 2. Recent developments and outlook In H1 the economy has benefited from the easing of COVID-19 restrictions The aforementioned recessionary forces are not yet reflected in the euro area’s economic data for the first half of the year.
The first concerns the low inflation rate, the second the significance of inflation expectations and the third the expansionary monetary policy. Inflation below target – several reasons for this Let’s start with inflation: Why is it so low now and therefore also far below the target? What are the reasons for this? 2  The Figure shows the period 2010–2012 as a whole, although there were several wage bargaining rounds during this period. 3  For natural reasons, there are no wage data available for 2015 yet. BIS central bankers’ speeches  3  On an overall level, one can say that the low inflation is explained by the weak international demand in recent years and the weak domestic activity. This development reflects the fact that the recovery following the financial crisis has been unexpectedly sluggish – perhaps less so in Sweden than in many other countries. The low inflation is not just a Swedish phenomenon. It has also fallen or developed surprisingly weakly in many other countries in recent years, and other central banks have also found it difficult to attain their inflation targets. In Sweden, companies appear to have found it unusually difficult to pass on their cost increases to prices. There are also signs that inflation may have been held back by increased competition and uncertainty over the development of the economy. Furthermore, electricity prices have been unexpectedly weak over the past year. In addition, the oil price fell heavily during the second half of 2014.

The Riksbank is still prepared to do more to ensure that inflation rises towards the target if this is necessary. The exchange rate is floating – and highly volatile In other words, the exchange rate has considerable significance for inflation trends. The Swedish krona has floated since 1992. There are several factors that affect a floating exchange rate. Differences in rates of inflation in Sweden and abroad and differences in interest rates between Sweden and the rest of the world are two such factors. Net trade in goods and services is another. Differences in economic growth and monetary policy are also significant. It is very difficult to predict how the exchange rate will develop. One reason for this is that different factors have different significance at different points in time. Figure 7 shows how the value of the Swedish krona has developed in relation to an index of international currencies, the KIX. The greater the significance a foreign currency has for Swedish foreign trade, the larger the weight it is given in the index. The curves in the figure can be interpreted as showing what the foreign currency costs in Swedish krona. When the krona weakens, the foreign currency costs more and the curve rises. The KIX index is the exchange rate the Riksbank considers most important. The Swedish krona showed an appreciation trend from 2010 until the first part of 2013. However, there were substantial variations. From the beginning of 2014, the trend has turned, and the krona has weakened.
Notwithstanding the success of foreign exchange markets in processing the initial referendum news, the second lesson comes from the flash crash. It emphasises that central banks need to deepen their understanding of the features of modern market structures that exacerbate these vulnerabilities and why they seem to be occurring across a broader range of markets. In particular, we need a deeper understanding of the potential for flash events to have longer-lasting consequences than has been the case so far. That would increase the potential systemic costs of flash events and increase the case for some form of public policy response. In the Bank’s context that helps explain why the Financial Policy Committee is seeking to examine the potential implications of these developments for financial stability. I am sure that there are many broader lessons from 2016 that OMFIF will help us all work through, and look forward to benefiting from those insights, but for now, thank you.

Here I will explain how our analysis of market structure shaped the design of the Bank’s corporate bond purchase scheme, and how the scheme may have affected the functioning of the market. In both cases our understanding of these markets, informed by market intelligence, analysis and our own experience in previous operations, has been both tested and improved as the Bank has responded to events. Section 1 – Sterling’s headline days during 2016 The foreign exchange markets are core to the broader financial system, processing enormous volumes of transactions and relied upon by a broad range of economic participants from corporates to individuals. The structure of these markets has evolved markedly in recent years, with electronic trading playing an ever greater role, while the amount of balance sheet devoted to this activity by intermediaries has fallen. Benefits of the broader trend towards greater speed and electronification, common across a range of markets, include a reduced cost of transacting – and hence better value for end-users – but these structural changes as a whole have also led some to question whether markets are now less resilient in periods of stress. 1  2  The value of sterling fell by 17% against the US dollar over 2016 , largely as market participants digested the impact of the EU referendum decision on its long-term sustainable level.
In particular, potential real GDP growth in the U.S. appears to have declined in recent years – held down by slower productivity growth and demographic factors that are causing the workforce to grow more slowly. This is the main reason why I have cut my estimate of the longer-run federal funds rate in recent years. And I’m not alone. In the FOMC’s September Summary of Economic Projections, the median projection for the long-run federal funds rate was 3 ½ percent, 50 basis points below the level of two years earlier. My discussion about short-run r* and long-run r* has implications for how I think about monetary policy. The likelihood that we face a situation where the short-run r* is depressed, the economy is growing only slightly at an above-trend pace and inflation is too low relative to our objectives, suggests that we need to think carefully whether the time is right to begin to normalize monetary policy. Additionally, the likelihood that long-run r* is lower than it has been historically, suggests that after lift-off the upward trajectory of the short-term rates is likely to be quite shallow. Another factor that weighs on the timing and pace of normalization is risk management. What are the relative costs of going too early versus too late? As I see it, there are risks on both sides, and I think this explains why reasonable people can differ as to the appropriate path for the policy rate. Consider the two main risks of normalizing too quickly.

First, we could just be too optimistic about our growth and inflation forecasts. Second, we could be right about our forecasts, but the rise in short-term rates could provoke an outsized tightening of financial conditions that might cause the economy’s forward momentum to slow more than we anticipate. In either case, the economy would not be growing fast enough to put increased pressure on resources. In such circumstances, underlying inflation might not rise and inflation expectations could become unanchored to the downside. Consequently, not only might the FOMC be forced to reverse course and ease monetary policy, but the efficacy of additional stimulus measures could be attenuated by the fall in inflation expectations. Avoiding a Japan-like experience in which inflation expectations have become unanchored to the downside should be an important consideration in the conduct of monetary policy. On the other side, there are several risks of delaying the start of lift-off and normalizing more slowly. The first one is that the unemployment rate could fall to an unsustainably low level that is not consistent with our long-run price stability objectives. Monetary policy works with long and variable lags, so overheating is a risk. If overheating did occur, the FOMC might need to tighten monetary policy more aggressively in order to keep inflation from significantly overshooting its 2 percent objective. In such circumstances, the risk of a recession would probably climb significantly.
Now a lot of people think that, because our objective is defined in terms of an inflation target, controlling inflation is all that we at the Bank of England actually care about. We’re often described as a lot of “inflation nutters”, or even as “pointy-headed industrial hooligans” who don’t care at all about real economic activity or jobs – and I don’t think these epithets are necessarily intended as terms of endearment! That view I have to tell you is profoundly and fundamentally wrong. 1  BIS Review 19/1999  The implication, of those who take that view, is that they think there is a trade-off between inflation and the rate of economic growth; they think that if only we would let up a bit on controlling inflation then we could all enjoy higher activity and lower unemployment and rising living standards, which are, of course, the really good things of economic life. At the very least, they say, if you were a bit less manic in your pursuit of low inflation, we could avoid some of the worst damage that is currently being inflicted upon agriculture, upon large parts of manufacturing, and even some service sectors. And that might even be true for a time. The trouble is that, in anything other than the short term, it would be likely to mean more rather than less economic damage, and lower rather than higher growth and employment.

We dismantled the import barriers protecting our industries, which forced them to hold their own against global competition. We also had to overhaul our labour relations. We had inherited the adversarial style of labour-management relations from the British. Worse, the communists had infiltrated the unions and used them to foment unrest and chaos. After independence, with the Communists defeated, the government worked with the unions and employers to alter the nature of industrial relations. In 1968, we passed the Employment Act and the Industrial Relations (Amendment) Act, to vest the power to hire and fire clearly with employers. We replaced the old adversarial approach with a cooperative tripartite relationship based on trust and confidence. This was institutionalised in 1972 with the setting  BIS Review 19/2003  3  up of the National Wages Council. Since then we have enjoyed harmonious labour relations, a precious and unique advantage in attracting foreign investments to Singapore. Unlike other emerging Asian economies like Korea and Taiwan, we also opened the door fully to MNC investments. It was the fastest way for us to create jobs, penetrate overseas markets and bring in Western and Japanese technologies. Other countries in the region eventually followed, making Southeast Asia a major production location, which in turn benefited Singapore. These remaking and growth strategies succeeded, and brought full employment and steadily rising incomes. Over time, we moved into higher value-added activities. After two decades of robust growth, Singapore had transformed itself into a newly industrialised economy.
Limited spare capacity in the Norwegian economy and persistent external inflationary pressures may lead to inflation accelerating further. On the other hand, the rise in interest rates and high inflation may cool down the housing market and curb household consumption faster than currently envisaged. There is also a risk of a sharper slowdown in global growth. The future path of the policy rate will depend on how the economy evolves. We cannot make any promises about the policy rate. The promise we can make is that we will continue our efforts to fulfil the mandate of keeping inflation low and stable and to promote economic stability. 1 A new set of forecasts was not prepared for the monetary policy meeting on 17 August. Updated forecasts will  be presented when Monetary Policy Report 3/22 is published on 22 September. 3/3  BIS central bankers' speeches

We don’t want three years of boom followed by three years of bust. Second, the country’s potential growth rate should be high enough to continuously raise the people’s general standard of living. And, third, growth should maximize inclusiveness. By this I refer to maximizing the exposure of everyone to economic development, both in terms of participation in the development process and in the sharing of its benefits. This would lessen the problem of inequality, and foster social harmony. That said, I wish to underscore that, even though growth is the most visible factor, growth alone is not sufficient but sustainability and inclusiveness are also crucial to ensure long-term economic success. Looking at economic strengths and weaknesses in the context of these three success factors should provide for a better understanding of the role of central bank and policymakers in advancing the economic development agenda for Thailand. Indeed, these success factors entail three corresponding fundamental responsibilities for policymakers. The first responsibility is to ensure continued macroeconomic stability, which is a prerequisite for economic sustainability, by gearing our economy towards operating at the potential level. Second is to raise the people’s standard of living by expanding the potential growth rate of the economy. Third, to maximize inclusiveness, we have to ensure the equal exposure to economic opportunities for all. Ladies and Gentlemen, Let me start with the first success factor, namely economic sustainability, which I consider to be Thailand’s most important strength. After the 1997 crisis, Thailand has no longer experienced the current account deficit problem.
Recently some funds have invested in “alternative” assets such as hedge funds, private equity and infrastructure, and structured credit. Shares in closed-end funds are traded like other equities. The funds may issue their own debt to obtain leverage. They may also issue different classes of shares with different entitlements to income or capital receipts from the underlying investments. CP (Commercial paper) conduit. A SPV that issues CP backed by financial assets originated by one or more sellers. They are generally supported by liquidity facilities provided by their sponsor or a third-party bank. DPC: Derivative product company. A bankruptcy-remote structure that houses credit risk from long-dated derivative transactions. They are typically wholly-owned subsidiaries of financial services companies. In general, DPCs sit between their sponsor and an external counterparty in derivative transactions and protect the counterparty from the potential default of the derivative seller (the sponsor). Monoline insurance companies. Monoline insurance companies provide protection against a specific type of risk (typically credit risk). Originally developed in the 1970s to provide US municipal bond holders with credit guarantees (or  BIS Review 44/2007  7  “wraps”), over the past few decades they have diversified into the ABS and CDO markets (particularly the highly-rated senior tranches). SIV: Structured Investment Vehicle. A SPV that funds a diversified portfolio of highly rated assets by issuing short-term commercial paper, medium-term notes etc. In general, there is a maturity mismatch between their assets and liabilities. They aim to generate a positive spread between their return on assets and funding costs.

A distinction is typically drawn – including in the Bank’s Financial Stability Reports 2 – between a “fast fuse” risk, in which credit is abruptly repriced; and a “slow fuse” risk, in which cheap credit leads over time to overleveraged borrowers and so to vulnerability to a deterioration in the global economy. As time passes, attention has perhaps been shifting to the longer-fuse risk, given signs of a pick up in aggregate corporate sector leverage and gradual dilution of covenants in loan terms and conditions, most obviously recently in so-called “covenant-lite” transactions in the leveraged loan market. 3 But, in contrast to global imbalances, no one can say with complete conviction that a lower risk premia environment is definitely unsustainable, which may contribute to explaining why few market participants seem prepared to bet on the time or scale of any correction. In terms of the second dimension – the probability that any adjustment would be disorderly –market practitioners at least seem to regard “low risk premia” more seriously than “global imbalances”. Resolution of the problem of global imbalances could come in various ways, not all of which need involve an abrupt correction in asset prices or further movements in nominal exchange rates. For example, the US might obtain greater competitiveness through a depreciation in the dollar’s real value if inflation in China and elsewhere were to be relatively high for a period.