samchain/econo-pairs-v1 huggingface dataset:
As well as being a year that saw a considerable strengthening of fiscal and macroeconomic discipline in Europe, 2012 also saw significant progress towards a banking union. Why has a banking union suddenly become such an indispensable and urgent project? Simply because we are now certain that many of the problems we have experienced, could have been avoided with a banking union. A banking union is necessary for the smooth functioning of a monetary union for the following three reasons: •  It breaks the link between banks and sovereigns by bringing banking supervision and crisis management to the federal level. With the banking union, banks will be considered as euro area institutions over and above their nationality; it will ensure that credit conditions in the euro area will not depend on where you are but on who you are, which is what should be expected of an efficient financial market. •  It allows re-integration of the European banking system. A supra-national supervisor is in fact better placed to assess the risks of cross-border activities and therefore to protect and encourage such activities; it is not subject to national biases that can lead to the temptation of economic introversion. It is therefore more credible and strengthens stability and confidence in the area;  •  Moreover, it restores the full efficacy of monetary policy.

We cannot simply assume that people want to work more, even if an increased labour input will result in higher income and greater prosperity. It is natural to use some of the increase in prosperity for leisure. The considerable share of part-time employment may reflect choices that individuals do not necessarily want to change. BIS Review 20/2002  9  On the other hand, if we increase our labour input to the level in Sweden, without reducing productivity, our future income would increase by more than the increase resulting from a doubling of our petroleum wealth. The structure of the tax and pension system influences the choice between work and leisure. Lower tax rates on employment income could boost labour input. The pension system is also of significance to labour input, as it influences employers’ labour investment decisions. The expansion of the labour force is coming to a halt. At the same time, the number of old-age and disability pensioners is rising rapidly. Twenty years ago, there were nearly three persons in the labour force for every pensioner, whereas in 20 years, there will be fewer than two. Although life expectancy is high, the average retirement age in Norway is steadily falling. For men over 50, the average retirement age fell from nearly 67 in 1970 to a little more than 63 at the end of the 1990s. For the entire labour force, including all age groups, the average pension age in the National Insurance Scheme was down to 58.
For instance, the Riksbank is one of few central banks to publish its own forecast for the policy rate and possibly the only central bank where the minutes state which Board member has said what during the monetary policy meetings. 1  Inflation has been low for longer in Sweden than in many other countries In recent years, international interest in Sweden as an object of study has been more due to economic developments here, and to the measures the Riksbank has taken, rather than the changes in the monetary policy framework. Despite the Swedish economy developing relatively well since the global financial crisis 2008-2009 (see Figure 1), inflation began to fall earlier in Sweden than in the rest of the world. This has meant that inflation has undershot the target and been lower than in many other countries for a long time (see Figure 2). This has in turn contributed to the Riksbank considering it necessary to cut its policy rate below zero,  * I would like to thank Mikael Apel for his help in writing this text, Elizabeth Nilsson for translating it into English,  Goran Katinic for help with the slides and Björn Andersson, Gina Bayoumi, Claes Berg, Charlotta Edler, Gabriela Guibourg, Marianne Nessén, Marianne Sterner and Anders Vredin for their valuable comments. 1 Another completely fresh example is the Riksbank’s thoughts on introducing a digital currency (see Skingsley, 2016). 1 [20]  which only a few other central banks have done so far.

The difference would be that we open up for the possibility that it could take longer than we previously assumed, without making monetary policy more expansionary. ... but the aim of the policy would not change If we were to find ourselves in such a situation it would not mean that we were suddenly to start conducting a completely different policy and begin raising the repo rate, for instance. There would still be reasons to conduct a policy that is as expansionary as possible, to avoid taking longer than necessary to attain the target. However, one consequence would be that the Riksbank's communication became very important. The damage in a situation where monetary policy can no longer be made more expansionary, despite inflation being expected to undershoot the target for quite a long time, will be much less if the general public can be convinced that the target has not been abandoned, that it is merely a question of taking longer than normal to attain it. Clarifying this would be a difficult but hopefully not impossible task. Here it is important to realise that inflation can be controlled by the central bank in the long run. Inflation is ultimately, as is often put, a monetary phenomenon and determined by how expansionary monetary policy is on average (see Figure 12). Digitalisation, globalisation and other structural changes can push down inflation during certain periods of time, and these periods can very well be quite long. However, the effects of structural changes on inflation do not last for ever.
What matters is not just sound economic policy, but effective leadership, a collective response from the people, social cohesion and political will, to see difficult changes through and make them work. Economic reforms around the world Japan Japan is my first example of an economy transforming itself fundamentally. For two and a half centuries up to the middle of the 19th century, Japan was ruled by the Tokugawa Shogunate. It was inward-looking and insular. The Tokugawas only allowed coastal vessels that could not make ocean voyages. Foreigners landing on Japanese soil, even if by accident, faced severe punishment. But in 1853 Commodore Perry arrived in Tokyo Bay with a quarter of the US navy - the "Black Ships". This demonstration of US military supremacy forced Japan to open itself up to foreign trade and influence. BIS Review 19/2003  1  Behind its closed doors, Japan had fallen behind the West. It became clear that the Tokugawa regime was not able to lead the country into the new era. So in 1867 a group of young samurais led a coup to overthrow the Shogunate. They restored the Meiji Emperor, and ruled Japan in his name. The reformers were determined to make Japan a strong country again. They made a decisive break from feudalism and set about systematically modernising the country. Their strategy was to learn from the West and set Japan on the path of industrialisation. They succeeded brilliantly. Within 40 years, the Japanese Navy defeated the Russian fleet in battle (1904-1905).

Without that sense of group interest, we could not have cut employer CPF rates, nor restored our competitiveness in a way that few other countries could do. This collective response continues to be critical. In our current remaking, the key changes are in our mindsets, and the main driver of change is private initiative and enterprise. To succeed, the change must come from the people themselves. In this process, the government can only play an encouraging and facilitating role. The additional challenge for us is that this time, the motivation for remaking ourselves is less obvious. Previously we were catching up from behind, but now we are at developed country standards of living. Why do we need to sacrifice what we already enjoy? Yet if we do not accept the sacrifices and change, not only will we not make progress, but we will even likely lose what we already have. No union leader who has visited Shanghai doubts this. It is the reality that we must get home to every Singaporean. Social consensus and political will Fourth, reform and restructuring is never a purely economic exercise. Success depends critically on social and political factors. Economic reforms are not painless. There will be winners and losers, at least in the short-term. Therefore there must be political support for the changes, a willingness to accept the pain of the transition, and a confidence that those adversely affected will be helped. This depends on a feeling of shared nationhood, of going through thick and thin together.
Risks in the payment system  • Legal risk - Uncertainty in agreements and division of responsibility  • Settlement risk – credit and liquidity risk - Credit risk is the risk of loss when the payer is unable to meet his obligations  - Liquidity risk is the risk that the counterparty is unable to meet his obligations at the agreed time  • Operational risk - Problems or interruptions in computer systems or communication lines or insufficient routines  Risk in the payment system is often divided into four categories. Legal risk is related to uncertainty about agreements and the distribution of responsibility. The Payment Systems Act shall contribute to an organisation of the systems that promotes financial stability. The act also transposes the EU Directive on settlement finality into Norwegian law. The Directive protects approved payment and securities systems against legal risk associated with the insolvency of a participant. Norges Bank has notified all important settlement systems to the EFTA Surveillance Authority, ESA, thus providing them with legal protection. The legal risk as defined above should therefore be eliminated for these settlements. Settlement risk consists of credit risk and liquidity risk. The banking industry’s transition to crediting after settlement has eliminated most of the credit risk. Liquidity risk is also limited because Norges Bank offers liquidity through the day which is only limited by the collateral furnished by the banks.

Overall, this will provide solutions that reduce the use of resources and increase efficiency in the payment system. Cost coverage through high interest margins and float implies hidden costs for customers and makes it difficult to choose correctly on the basis of product costs and features. Therefore, there should be as much direct pricing as possible. The customer who chooses among various payment instruments should bear the cost of this choice. The production of payment services is characterised by economies of scale. Development costs are high and the requirements as to operating reliability and back-up solutions for the computer systems are stringent, while the cost of producing one extra unit is low. This applies in particular to the electronic payment services. We then face a classic pricing problem that is described in economic theory. If the price is set equivalent to the cost of producing the last unit (marginal cost), which in a certain sense is "correct" pricing with regard to efficiency, the manufacturer will not fully cover his costs. The manufacturer must then cover the remaining costs with the profits from other services. Innovation and development of new products are important driving forces behind increased efficiency in the payment system. In order to finance development activities, banks and producers of payment services must have a certain profit. Both direct pricing of payment services and other income may generate this profit. If the profit is to come from direct pricing, the income must cover more than the production costs.
When activity picked up after the pandemic and inflation accelerated, it was necessary to normalise the interest rate level. Both the aim of stabilising inflation and the aim of stabilising the real economy implied a markedly higher policy rate. Chart: Monetary policy trade-offs Further out, the trade-offs between inflation and employment are likely to become clearer. In our projections, the output gap declines and turns slightly negative in the course of next year. [8] Inflation abates but remains above the target throughout the projection period. The fact that inflation remains above target in the projection reflects the fact that we also put weight on employment in the trade-offs. If our sole concern had been to rapidly return inflation to target, we would have set the policy rate higher. Chart: Cost shock - monetary policy trade-offs  The surge in energy prices since winter can be viewed as a cost shock. A cost shock is a price rise that is caused by conditions other than the level of economic activity. What does the economics literature say about how monetary policy should respond to such a shock? Let me illustrate this with the aid of a textbook model. [9] I look at a situation where the economy is initially in balance, but inflation rises due to a cost shock. Under a flexible inflation targeting regime, the central bank will weigh the rise in inflation against the aim of high and stable output and employment.

And so, as you battle against the incoming surge while you try to exit the MTR train (probably beneath a poster exhorting courtesy); as you are almost decapitated entering the lift by the person with his finger permanently on the doors-close button; as you are tripped over by the ubiquitous Hong Kong trolley being raced in and out of the pedestrian crowd; as your boss explains that, although vacation leave is of course an entitlement, it would be rather inconsiderate of you actually to take any; as the waiter throws you into a seat at Mr Wong's table, thrusts the napkin onto your lap and demands rather than enquires whether you'd like a drink - all before you've had a chance to explain that it is not in fact Mr Wong whom you have come to join; as the taxi appears deliberately to accelerate through the large puddle right by where you are standing; as your lunch guest spends the entire meal fiddling with his mobile phone, making it quite clear that he resents having been invited to a restaurant where he is not allowed actually to talk into it; as you discover that the dignitary who has agreed to propose the toast at your modest office-opening ceremony can in fact stay for only five minutes because he or she has to hasten along to your main competitor's gala dinner; if you are feeling increasingly stressed by all of this, just relax and console yourself that this is Hong Kong, and Hong Kong wouldn't be where it is if people had never been in a hurry to get on with things.
The substantial decreases in “credit to the Treasury” item and overall net domestic assets, and the large increase in the Central Bank’s net foreign assets, are the result of these policies. Here, of course, we should take account of the damage done by the Russian crises. The capital outflows connected with these crises caused net foreign assets to decrease, which in turn produced an increase in domestic assets. Even so, the source of the latter increase was not the increase in public sector credits but mainly the increase in Central Bank funding to the banks. Another aspect of the Central Bank’s monetary program is related to exchange rate policy. The proposal to conduct exchange rate policy in accordance with the inflation target has important 1  BIS Review 109/1999  implications for expectations. First of all, it signalled to the market that the Central Bank endorsed the government’s inflation target. Since the public can monitor the exchange rates daily, exchange rate policy becomes an important tool for moving the public’s inflation expectations towards the government’s inflation target. Of course the continued success of this policy requires the authorities to set a realistic inflation target, which is to say an inflation target consistent with the public sector’s proposed budget balance. Besides influencing inflation and inflationary expectations, exchange rate policy directly affects the external sector. A stable real exchange rate policy puts the Central Bank in a neutral position in this respect.

This is based on significant differences that exist, between the core-crisis countries and the countries affected by contagion, in the relative strength of the economic fundamentals, the state of the banking sector, and the perception of risk by investors. However, beyond the initial recovery, sustained economic decoupling will be difficult without a major restructuring in the sources of growth which, in the case of Asia, calls for a reorientation of the growth driver from exports to domestic demand. Making this transition safely in this era of globalized finance will be the next important challenge for emerging markets in Asia. In the past ten years, the share of domestic demand in the region’s GDP fell by 6.3 percentage point, and the share is now 12.3 percentage point below its peak in 1994. Moving the ratio back will require major restructuring in both the demand and the supply sides of the economy, which needs to be supported by policies that redirect economic incentives from savings to domestic consumption and investment. Such task is gigantic. Chief amongst the polices needed to support this transition will be the development of the region’s financial system, to ensure an efficient intermediation of savings into productive investment. This is really the key issue where the challenge and the constraint to economic decoupling lies. One of the prime reasons underlying the current global imbalance is the limited capacity of the financial systems in emerging markets to generate investment from their local savings.
Such a strong figure is based on strong corporate profits, favorable financing conditions, the progressive exhaustion of output gaps and good prospects for growth. Private consumption remains robust, with annual growth in a range of 6.5%-8% for several quarters already. Consumption rests on the sustained growth in salaried employment, a substantial drop in the unemployment rate and favorable financial conditions. This, despite higher energy prices and deteriorated consumer expectations. Exports of goods and services have also continued to gain strength, going from an annual average growth rate of 4.3% in the second half of 2006, to 9.4% the first quarter of this year, to 11.8% the second quarter. Among these, agricultural-forestry and manufacturing products stand out, with volumes growing around 10% annually in the first half this year (Figure 1)  BIS Review 97/2007  1  Figure 1: Contribution to GDP growth (real annual change, percentage)  (*) Goods and service exports minus goods and service imports. Source: Central Bank of Chile. Renewed dynamism of output has come hand in hand with a remarkable improvement of the labor market, with significant job creation and an important reduction in the seasonallyadjusted unemployment rate. The main news has come from the inflation side. In effect, in the past six months, the prices of non-perishable foods (e.g., grains, oils, powdered milk) have shown sharp rises. More recently, there was another unexpected and unusually large rise in perishable foods, which was weather related and should be temporary, together with increases in energy prices rates, including liquid fuels and electricity.

On the positive side, net financial wealth of households has increased by 15 per cent since 2003 – it was estimated at € billion in June. On average, households have considerably more assets than liabilities, which suggests that household debt is within sustainable levels. So do you disagree with claims that we've started living beyond our means? As long as people can manage their finances, if they do not keep accumulating debt and repay their debts to banks, there does not seem to be a problem at the level of households. BIS Review 152/2008  3  At a national level, the picture is different – we still have a tendency to spend more than we earn as evidenced by the current account of the balance of payments and the fiscal position, which both show a deficit year after year. The prospects for changing this behaviour, at least at this point in time, do not seem very encouraging. These days we are seeing a growing chorus of people calling on the government to run an even larger deficit and to increase the public debt further. During a seminar last June, you said that automatic compensation for inflation, especially at the national level, was counterproductive. The government has calculated its COLA at over € a week. What do you make of it? When you have countries with wage indexation schemes that link wages to past inflation, there is always a danger of the two feeding on themselves and the creation of a wage-price spiral.
Sir Andrew Large: A framework for financial stability Speech by Sir Andrew Large, Deputy Governor of the Bank of England, at the International Conference on Financial System Stability and Implications of Basel II, Istanbul, 18 May 2005. * 1. Introduction  i)  Vulnerabilities in Financial Stability  *  *  It is clear that rapid growth in size, complexity, and diversity of global financial markets has added new dimensions and challenges to the process of maintaining financial stability. Traditional concerns remain that unwise credit exposure can result in insolvency, and systemic instability. But today there are a new series of hazards. Credit risk transfer has introduced new holders of credit risk, such as hedge funds and insurance companies, at a time when market depth is untested. Systemically significant issues could increasingly arise from market related risks, or from single point of failure risks in the market infrastructure as ever greater volumes of transactions pass through. Equally the growth of derivative instruments and advent of a range of new asset classes, despite added dispersion and better risk management, have added to the risk of instability arising through leverage, volatility and opacity. No wonder that those involved in financial stability work have much to think about! ii)  Introducing a Framework for Financial Stability  The purpose of my remarks today is not to analyse these threats.

Ladies and Gentlemen, Banks which do not make investments to take advantage of the new technology may find themselves losing customers to the better-quality or lower-cost products of banks that do. Investing in IT however, entails high cost and an uncertain payoff. The changes brought about by IT - new products, more sophisticated customers, changing cost structures, and enhanced competitive pressures - have all combined to transform the structure of the banking industry. And with further development of new technology, the industry will likely continue to evolve. Advances in IT have also resulted in new database technology and data-mining techniques that can expand the range of services that banks may offer their customers. The winners will be those who are able to harness on the capability of ICT in making strategic decisions - in terms of enabling better alignment of businesses, enhancing organisational capacity and capability such as in risk management, and building better customer relationships. Today, decisions on ICT investments demand a more thorough assessment, extending beyond the cost implications, to include better human resource redeployment, more efficient work flow process and system interface, expandability of the technology platform and the level of complexity to users and customers. BIS Review 33/2002  3  As banking institutions continue to adopt greater sophistication in the application of ICT, efforts must also be intensified to develop ICT-savvy employees and to increase customers’ understanding and acceptance of the new approaches.