samchain/econo-pairs-v1 huggingface dataset:
**  1 – A year of stabilisation Last year, I had talked about the three challenges for growth: uncertainty, isolationism – particularly the United States – and impatience, which is hampering sustainable reform efforts. None of these has disappeared. But French growth is holding up at 1.3% in 2019 despite a slowdown at the end of the year, and we are expecting 1.1% in 2020. And we can practically rule out a US or European recession in 2020, which was often feared last year. These initial signs of economic stabilisation, highlighted in our latest December Eurosystem Staff projections, reflect a relative decline in trade uncertainties. If this stabilisation materialises, it should result in a stabilisation of monetary policy. This means two things: Seen from today’s perspective, like the markets do, it is [therefore] reasonable to expect that over the coming months our policies and interest rates will remain stable. The year 2020 will be all the more conducive to conducting the strategic review of our monetary policy under Christine Lagarde, focusing particularly on the key issue of our inflation target. Stabilisation of regulations too, for banks and insurers. This is important for you, as it is for me, even though we do not always understand it in exactly the same way. We mustn’t get carried away – there will not be a Basel IV –, or backtrack: we must transpose in Europe the Basel III international agreement concluded in December 2017.

We need to take a more sophisticated, integrated, and purposeful approach to prepare our workforce for the future of jobs. This is why MAS and IBF commissioned Ernst & Young to study the impact of data analytics and automation – the two most immediate technologies – on jobs in the financial sector. The study takes a three to five year time horizon. It reviewed 121 distinct job roles in the financial industry, examining how data analytics and automation are likely to change the individual tasks in these 121 job roles. It identified the additional skills that would be necessary to perform these new tasks. The study took nine months to complete and the findings have been validated extensively with more than 80 industry participants. Many of you here contributed to this study. You will be hearing from Ernst & Young later on the study findings, and Minister Teo will speak more on this, including how the industry, the labour movement, and government are coming together to put into action the key strategies emerging from the study. I want to make three key points that I think are worth keeping in mind:  1/3  BIS central bankers' speeches  First, the biggest impact of technology is to transform jobs rather than to destroy existing ones or create new ones. Second, our strategy to help finance professionals must address skills, jobs, and careers in an integrated manner. Third, workforce transformation must become a core business capability for all financial institutions. Let me elaborate.
Svante Öberg: Monetary policy’s Catch-22 – uncertainty Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, to invited guests at the Sveriges Riksbank, Stockholm, 6 December 2011. *  *  *  Monetary policy has to be based on forecasts. But our ability to make forecasts is almost non-existent. This is what I call the Catch-22 of monetary policy.1 This is, somewhat incisively, what my speech is about. One can also describe it as follows. Monetary policy acts with a lag and must therefore be based, at least partly, on forecasts. The problem is that our forecasting ability is very limited – small at one year ahead and almost non-existent at two and three years ahead. We should therefore put more energy into analysing the economy’s initial position and making forecasts for the coming year. Further ahead it is more a question of producing possible scenarios for economic developments. I intend to devote this speech to the subject of how to view uncertainty in monetary policy. I shall begin by describing my own earlier experiences of forecasts and uncertainty. I shall then go on to describe the uncertainty in the Riksbank’s forecasts. After this, I shall discuss how one should view uncertainty and monetary policy, first in theory and practice, and then in nine suggestions for monetary policy. I shall conclude with some reflections on monetary policy and summarise my main message.

Svensson, “Inflation targeting”, in B. M. Friedman and M. Woodford, (eds. ), Handbook of Monetary Economics, vol. 3, pp. 1237–1302, Elsevier, 2010. BIS central bankers’ speeches  3  account the mean value for the forecast: the uncertainty over future shocks does not affect the optimal monetary policy (in technical terms one says that certainty equivalence holds). The uncertainty then does not affect the decision on the repo rate, but it does affect target fulfilment. However, there are several aspects that mean that one cannot rely on the results obtained in this type of model. The Riksbank reports a main forecast that is not merely a model forecast; it is based on both models and judgement. It is not easy to explicitly report all of the assessments and deliberations behind the overall results. However, it is possible to do this within the framework of a formalised model like the Riksbank’s macro model Ramses.11 But of course, this is not a perfect description of reality. There is uncertainty over both the structure of the model and its parameters. Other models would probably reach other results with regard to the most appropriate monetary policy. Another question concerns the nature of the forecasts. The forecasts the Riksbank now reports are in principle intended to be unbiased forecasts. But as Goodhart and Rochet pointed out in their evaluation of the Riksbank’s work, these assumptions do not hold in reality.12 In practice, longer-term forecasts are rarely unbiased. They can rather be regarded as possible scenarios contingent on certain external conditions.
Our own forecast for the interest rate has the advantage that it is produced together with the forecasts for GDP, inflation, employment and so on. Moreover, market expectations can vary substantially over time, which can lead to the information content in the macro forecasts as a whole declining. The evaluators also consider that the Riksbank’s schedule for the different stages in the monetary policy process does not correspond to how the forecasting and policy-making work is carried out since the new repo rate path was introduced. In their view, the changes have meant that, in practice, the actual interest rate decision has been brought forward. They therefore recommend that the Riksbank should announce the monetary policy decision and  2  BIS central bankers’ speeches  interest rate path earlier, namely directly after the meeting of the Executive Board that is held a couple of days after the second monetary policy group meeting. However, we consider this proposal to be difficult to implement. Although the analyses and forecasts are largely complete by the second monetary policy group meeting, the monetary policy decision is made at the monetary policy meeting and not before then. Any reservations against the decision are put forward at this meeting, too, and not earlier. In conclusion, let me once again thank Professors Goodhart and Rochet for their valuable contribution to our continued work on both monetary policy and financial stability.

We at the Riksbank prefer to present our more detailed views on the evaluation during the consultation rounds, so today I intend to make a few more general comments. Regarding financial stability – we need clear legislation and efficient institutions I do not believe that anyone would still doubt that the risk of a financial crisis is a very real risk that we must learn to live with and to manage in the best possible way. It is probably also quite clear what is at stake here – a financial crisis could entail substantial costs for society. We must therefore learn from the experiences of the crisis and ensure that we are as wellequipped as possible to face any new crises in the future. This requires in an initial stage taking an overall approach to both crisis management and crisis prevention work, something that the government’s recently-appointed financial crisis commission has been tasked to deal with. Ultimately, the goal is to establish effective legislation and efficient institutions. The financial crisis that we have lived with over the past few years has tested institutions and legislation to breaking point, in Sweden and abroad. This has highlighted some old weaknesses in the legislative framework, and we have also discovered some new deficiencies. Even before the Committee on Finance’s evaluation was published, the Riksbank pointed out a number of weaknesses that require attention in a proposal to the Riksdag.1 It is therefore gratifying that Goodhart and Rochet clearly point out largely the same weaknesses.
To put it in terms of mental time travel, in the pure rational expectations world memory of past experience, with all its attendant imperfections, does not play a role in the formation of expectations whereas in an extrapolative world it does pretty much all the work. Some research and casual observation suggest that a mechanical assumption of extrapolative expectations does not fit reality.15 True, there are many instances of ‘momentum’ in markets that rational expectations cannot explain.16 But there is also plenty of evidence that markets and investors do also factor news into prices. The much criticised theory of rational expectations was a reaction to ‘[t]he implicit presumption in these … models … that people could be fooled over and over again,’ as Robert Lucas said in 1995 in light of winning the Nobel Prize for this work.17 Lucas was commenting in the context of inflation surprises – but the same holds true for other areas like debt default.18  13  See, for example, Shiller (2007) I am using extrapolative expectations here in a broad way to mean expectations that are based on the past experience continuing. There is a broader question of whether expectations reflect learning and adapt – that is, learn from the past without assuming that the future will follow the past. 15 Kahneman and Tversky (1973) famously shows how humans are neither rational nor mechanical in making predictions, rather applying (oft-mistaken) judgment.

The level of debt, in contrast, seems to matter much less as an indicator of a turn in the financial cycle, though it does seem to matter as an indicator of the extent of the correction and the consequent damage to the economy.24 We also have a wide range of other economic and financial indicators, such as asset prices and credit conditions. We can estimate how far these are above or below an equilibrium value to help us make an assessment of where we are in the financial cycle. And, of course, macroprudential policy makers need to apply their judgment. The Financial Policy Committee of the Bank of England uses all of these approaches to make its assessment of the level of risk or, to put it another way, where we are in the financial cycle. And we use that assessment to inform our stress test of the core banking system so that the test becomes more severe, with higher losses and greater stress, when we judge the risks in the financial system are getting higher. But we would, in my view, benefit greatly in this area from a better understanding of how the expectations of the future that inform financial sector risk-taking are formed, the ability to use that understanding in modelling the financial cycle and better real-time information on the evolution of expectations.
This could lead to unintended consequences that can make the financial system less, rather than more stable. In a dynamic world, regulation and supervision should be agile, pragmatic and dynamic and able to respond to changing conditions in a timely manner. A bit of uncertainty ought to be tolerated. But at the same time, we should not hesitate to reverse course should a particular rule prove to be ineffective. Rules are never meant to remain relevant in perpetuity. It never does. It always run its course. It is from this perspective that regulators must have the courage to change course. In addition, from another perspective, the importance of proportionate regulation and supervision cannot be overstated. This is an area where I think we must continue to work in developing and refining the approaches to proportionality and support more inclusive insurance markets. In the larger scheme of things, as regulators we cannot ignore the broader objectives of supporting economic growth and improving the overall welfare of society. Equally important, with environmental, social and governance considerations, becoming an important criterion and increasingly adopted by investors, the ethics and sustainability of insurers’ activities will be important factors in creating shareholder value. Consumer welfare and wider social impacts alongside profits will constitute key metrics by which performance is measured. This is only appropriate, as maintaining public’s trust and confidence is a good business strategy.

It is my hope that policy makers and financial service providers will utilise this information to develop strategies that will lead to the expansion and improvement of financial access for our people. BIS Review 115/2006  1  In Conclusion – May I emphasise that the nation is looking forward to the findings of the FinScope Zambia 2005 Survey which will help us fully understand the financial landscape in Zambia and therefore open up new market segments and allow us expand accessibility to financial services in Zambia necessary for reducing poverty. The report of the FinScope Zambia 2005 Survey will be posted to the Bank of Zambia website, www.boz.zm, for public information. Thank you. 2  BIS Review 115/2006
BIS central bankers’ speeches  1  Long term prospects for the hedge fund industry remains positive Nonetheless, if we look beyond the immediate economic challenges, the long term prospects for the alternative investment industry remain positive. A number of studies have identified a growing interest from institutional investors for yields in the alternative space. In the 2012 Towers Watson Global Pension Asset Study, asset allocation to alternatives in the seven largest pension fund markets has increased from 5% in 1995 to 20% in 2011. In another recent study, McKinsey estimates that global alternative investments across the retail and institutional segments doubled in assets under management between 2005 and 2011, to reach $ trillion. This represents a compound annual growth rate of 14% over this period, exceeding the growth of the traditional asset classes. Specifically in the hedge fund space, institutional investors have increased allocations to hedge funds significantly over the last decade, from only $ billion in 2002 to approximately $ trillion as of end 2011. Looking forward, institutional investors in the major markets have indicated their intent to increase allocations to almost all alternative classes, including hedge funds. Increased institutional participation will drive growth as hedge funds become an important part of the investment landscape. To meet the demands of institutional investors and global regulatory standards, hedge funds have taken steps to beef up their risk management and compliance functions.

17  Figure 10  Probability of MPR hikes implicit in market assets (*)  Breakeven inflation, 5 in 5 years (percent)  (percent)  2,4  2,4  100  1,8  80  1,2  60  0,6  40  0,0  0,0  20  -0,6 ene.16 16  -0,6  0 16 Aug.16  U.S.  1,8  Germany  1,2  Japan  0,6  jul.16 Jul. ene.17 17  100 Fed (Dec.17)  80 60  Fed (Jun.17)  40 20  ECB(Mar.18) 16 16 Oct.16 Dec.16  0  17 Feb.17  (*) Fed fund future contracts are used for the Fed; OIS for the ECB. In parentheses, the month at which the hike is expected. Source: Bloomberg. Figure 11 Exchange rate (1) (2) (accumulated change since January 2013, percent)  60  60  OER  45  45  30  30  15  15  MER-X RER  0  0  -15  -15 Multilateral dollar  -30 13  14  15  16  -30 17  (1) Increase (decrease) indicates depreciation (appreciation). (2) March 2017 data contain information up to the statistical cutoff date. Sources: Central Bank of Chile and Bloomberg. 18  Table 2 International scenario 2.015 €  2016 (e) Dec.16 Report  Mar.17 Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates United States China Eurozone Latin America (excl.
-1.5 1991  1996  2001  2006  2011  2016  2021  Two-quarter averages. Sources: ONS and Bank calculations. A more obvious contributor is the pace of hiring in the public sector. Since the beginning of the pandemic employment in public services has risen by over 4% (Chart 17). Some of this could be temporary – people hired for “track and trace”, for example, or to administer vaccines. However, based on the spending plans in the November Budget, the OBR expects overall employment in the public sector to carry on growing, by a further 3% over the next three years. If some of the recent hires are temporary they look set to be replaced by others7. In the summer, it looked as though the remaining numbers in the furlough scheme might also be part of the answer. On the face of it, in July, there were still 1.6 million private-sector jobs – around 6% of the total – still in the CJRS. In principle, all these people were ready and able to come back fully into employment and quench the growing thirst for labour. But even then it was puzzling that more of them hadn’t already been re-employed: even when furlough costs were paid in full by the taxpayer it would presumably have been cheaper for firms just to pick up someone on furlough than to go looking for someone else and post a new vacancy. That puzzle became more acute once firms were required to contribute progressively more to those costs.

The second important factor is understanding the nature of the largest shock to the economy in the recent term and how it interacts with the countercyclical role of the exchange rate. The surge in tourism has been one of the main drivers of GDP growth in recent years. In part, the tourism industry utilises infrastructure and capital that were underutilised before growth in tourism took off; therefore, the impact on the level of domestic demand was less pronounced than it would have been if the surge had necessitated an immediate increase in investment. Now, however, we have probably reached the endpoint as far as this is concerned. In addition, increased tourism brings with it foreign currency inflows that, other things being equal, will push the exchange rate upwards. This will cut into activity elsewhere, shift demand outside the domestic economy, and reduce inflation. To a degree, then, after full employment is reached, an automatic counterweight develops, offsetting the pressures caused by growth in tourism. Third, global economic developments have remained favourable to us. Terms of trade for goods and services have improved in recent years, and foreign currency prices of imports have fallen. Fourth, a larger share of income is being channelled towards savings than has often been the case in the past. Last year, gross national saving – the share of GDP not used for private or public consumption – was nearly one-third of GDP, one of the highest national saving rates in our history.
Bruno Gehrig: Global economic trends and their implications for financial market infrastructures Speech by Prof Bruno Gehrig, Vice-Chairman of the Governing Board of the Swiss National Bank, at the 11th International Securities Services Association (ISSA) at the UBS Executive Development Center, Wolfsberg, 12 June 2002. *  *  *  Ladies and Gentlemen, th  It is an honour and a pleasure for me to have the opportunity to give the opening speech at the 11 ISSA Symposium. I am delighted that you have chosen Switzerland as a venue for your conference and hope that you feel comfortable and relaxed in this beautiful spot on the Lake of Constance. I gladly accepted your invitation although I am not an expert in your professional field. But I was, and still am, using your services rather intensively: in the 1980s as Head of Securities Sales and Trading at UBS, later on as CEO of an asset management bank, and now as investor of the currency reserves of the Swiss National Bank (SNB). I would like to use the time allocated to me to reflect on global economic trends and their implications for financial market infrastructures. Afterwards, I will outline the consequences these changes have on oversight authorities, which face similar challenges as you in your capacity as commercial service providers. Global economic trends What are the global economic trends that we all perceive in our daily business?

A second requirement - which is linked to the first one - relates to the objective of reducing clearing and settlement costs, especially the costs of cross-border securities operations. As discussed in the 4 Giovannini report mandated by the EU, domestic clearing and settlement arrangements within member countries seem to have reached a level of cost efficiency, which is - by and large comparable to what DTCC (Depository Trust & Clearing Corporation) in the US has achieved. By contrast, the whole cross-border domain is far from being cost-efficient, mainly due to fragmentation in terms of market infrastructures and practices, as well as differing legal, tax and accounting frameworks. The obvious question is, therefore, how to realise efficiency gains in the cross-border context. One way - and probably the most appealing one - is to consolidate market infrastructures. Within the European Union, there are currently more than 20 Central Securities Depositories. Although consolidation seems unavoidable, it is less clear how to achieve it and which model best suits integrated financial markets. Should priority be given to vertical or to horizontal integration? On the one hand, vertical integration presents some advantages. Since trading, clearing and settlement occur within the same organisation, this reduces legal and operational risks. On the other hand, vertical integration may entail cross-subsidies, which disguise the effective costs of trading, clearing and settlement. In addition, this model may also tend to rely on rents, as it is impossible for users to switch between providers.