samchain/econo-pairs-v1 huggingface dataset:
Levels of savings If we follow the consumption smoothing theory, individual savings behavior is driven by the life-cycle: individuals tend to increase their savings as they earn more and then decrease their savings until they actually become negative when they retire and earn less, thus leading to a hump-shaped pattern for their accumulated wealth. Consequently, as the proportion of the aged population increases, private savings, as a proportion of income, should decrease. However, this decline may be gradual with the negative impact of ageing on the levels of savings prevailing in the longer run. Structure of savings In terms of structure, the fact that elderly people account for an increasing share of the population could change savings habits and have an impact on the demand for certain classes of assets. In particular, given that elderly people are more risk adverse, this could increase the already high demand for low-risk assets. Investment The standard production function exhibits two productive inputs: labour and capital. If the labour force tends to decrease or decelerate because of demography, then the production process may become more capital intensive, leading to a fall in the productivity of new capital and, in theory, a decline in the rate of capital return. Investment could be less dynamic and negatively impact potential growth. This would in turn have an adverse impact on the real interest rate, so that domestic savings and investments would balance.

The knock-on effects of distress at one of the current large global players would presumably be much bigger. Conclusions Let me briefly conclude, ladies and gentlemen. Central banking and payment systems are inextricably linked. Central banks all around the world are involved in payment systems and market infrastructures in many different ways owing to their roles and responsibilities in  BIS Review 130/2007  5  relation to monetary policy and financial stability. Indeed, payment systems disruptions would not only affect financial stability, but may potentially also have an impact on monetary policy implementation. Central banks have found ways of safeguarding price stability, while at the same time ensuring the smooth functioning of the payment system, by drawing a clear line between providing intraday liquidity for payment system purposes and providing credit for monetary policy implementation. Moreover, the sufficient availability of collateral is important today as a contribution of central banks to financial stability. The roles of central banks in the field of payment systems are changing in a number of ways as a result of progressing globalisation, increasing complexity, and the emergence of new players and services: •  The approach of central banks to analysing financial stability is changing. A comprehensive view of the key sources of risk and vulnerabilities facing the payment systems and market infrastructures cannot be formed without taking due account of developments at the global level, such as the emergence of cross-border payment systems and offshore centres.
It is the ability of capital markets to efficiently mobilise financial resources that has made possible the large investments needed for the Industrial Revolution of the 18th century, and the risk capital that funded the global Internet Revolution more recently. Like other markets, capital markets are prone to volatility as demand and supply fluctuate. But unlike other markets, turbulence in capital markets can have far wider consequences on the rest of the economy. From the Wall Street Crash of 1929 to the Global Financial Crisis of 2008, we have seen how dislocations in capital markets can have devastating effects on financial stability, economic growth, and the welfare of citizens. Capital markets must therefore be regulated, but in a way that does not unduly undermine their efficiency and effectiveness. This morning, I want to share with you Singapore’s approach to the regulation of capital markets. Why we regulate capital markets We can think of the capital market as an ecosystem comprising four key components:   one, issuers – those who issue securities to raise capital;    two, investors – those who invest in these securities;    three, intermediaries – those who advise issuers or investors and facilitate the trading of securities;    four, infrastructure – the platforms or systems through which securities are traded. Each component of this ecosystem is prone to market failure – hence the need to regulate.

Apart from our continuous efforts to put in place a conducive platform, it is also crucial for market players to maximize their readiness to grasp the opportunities brought by the development of Islamic finance in Hong Kong. After all, market players will be the ones who drive the growth of the market ultimately. So, I highly encourage you all to gear up for the new opportunities ahead of us. On this, I am pleased to note that some financial institutions have already started to get ready by mobilizing their staff in the Middle East or Malaysia to Hong Kong, as well as providing training to their staff in Hong Kong. The fact that you are here today is also a good indication that you are keen to prepare yourselves. I hope you would take the most out of this workshop. 14. Thank you. BIS central bankers’ speeches  3
The Spring Budget Bill noted that in many households it is still not profitable for unemployed persons to seek a job or for those in employment to work longer hours because of the way the tax and benefit systems are designed. These marginal effects have, moreover, increased since 1991. The system of wage agreements also has a bearing on the possibility of combining price stability and satisfactory employment growth. The fact that several agreements concluded at the national level do not include any individual pay adjustment guarantees, or very low ones, should increase the possibility of determining wages locally and gearing them to productivity development in various sectors. The cross-sector agreements that have been concluded, including the Industry Agreement between about 20 labour market organisations, include rules that reduce the risk of periods without valid pay agreements and the risk of conflicts. This is also a change which should help to improve wage formation. Let me conclude with a classic quotation from a previous president of the US Federal Reserve, William McChesney Martin. He is supposed to have said that the role of the central bank was to “take away the punch bowl just when the party gets going”. That is one way of putting it. The central bank is always on its guard, always ready to pounce! But look at the story from another angle. It is in the guests’ own interests not to let things get out of hand.

With economies and markets always moving between equilibria, it is the journey that matters. By working together we can make that journey as pleasant and as prosperous as possible. The need to work together extends beyond policymakers to all in the City. So I am delighted to take up co-presidency of Heart of the City with you, Lord Mayor. This umbrella group for City charities, co-founded by Eddie George fourteen years ago, is a great example of how cooperation and social responsibility can be at the heart of business, building the social capital necessary for vibrant and inclusive capitalism. Fiona, you are to be commended for the energy and enthusiasm you have brought to your role – as well as the excellent hospitality you have provided tonight. So let me invite everyone here to rise and join me in a toast of good health and prosperity to “The Lord Mayor and the Lord Mayor’s Consort”, Fiona and Nicholas Woolf. References Del’Ariccia, G, Igan, D, Laeven, L, and Tong, H (2012), “Policies for macrofinancial stability: how to deal with credit booms”, IMF Staff Discussion Note 12/06, June. IMF (2014), World Economic Outlook, April. Lim, C, Columba, F, Costa, A, Kongsamut, P, Otani, A, Saiyid, M, Wezel, T and Wu, X (2011), “Macroprudential policy: what instruments and how to use them?” IMF Working Paper No. 11/238, October. 8  BIS central bankers’ speeches
Using a nationwide information campaign, we were able to inform the public about the new 50-franc note’s design and security features in a very short time. This campaign helped members of the public across the country to familiarise themselves quickly with the new banknote. When new banknote series are issued, the demand for information is always greatest at the launch of the first denomination. Third, the return rate of the old 50-franc notes is within the expected range. We anticipate that, six months after the launch date, around two-thirds of the old notes in circulation will have been exchange  BIS central bankers’ speeches  3

Crucially we now have a credible framework for setting monetary policy to meet the inflation target in the medium term. Monetary policy cannot prevent the short-run ups and downs of economic cycles. In the current climate, the Committee believes that, if Bank Rate were set to bring inflation back to target too quickly, the result would be unnecessary volatility in output and employment. Instead we are focused on returning CPI inflation to the 2% target in around two years, when the present sharp rises in energy and food prices will have dropped out of the CPI inflation rate. We judge that in order for inflation to return to target it will be necessary for economic growth to slow this year, reducing the pressure on supply capacity of the economy and dampening increases in prices and wages. But the risks to both the upside and downside remain large and the MPC will continue to make its judgement about the appropriate level of Bank Rate month by month. The next year is not going to be comfortable for anyone and we already hear calls to change the system, the target, and our focus on inflation. But the new framework and the independence of the Bank was designed for difficult times as well as for plain sailing. I hope we can look to you and other businesses for support in doing what is needed to bring inflation back to target. BIS Review 80/2008  5  6  BIS Review 80/2008  BIS Review 80/2008  7
From a cyclical perspective, a proposal to ensure that banks implement countercyclical capital buffers was part of the recent consultations and is also pending approval by the Federal Council. The proposal foresees that the ultimate decision to activate or modify the capital buffer requirement will lie with the Federal Council. This decision will be made on the basis of the SNB’s proposal and the FINMA’s response to it. Finally, in order to enhance the SNB’s capacity to assess the stability of the financial system and to take appropriate measures, the Bank has also called for improved access to information on financial institutions. VI. Conclusion  The preceding discussion has, I hope, clarified some of the complex interactions between price and financial stability. Within the Swiss legal framework, I am convinced that the central bank has been given an appropriate mandate. In order of priority, the SNB must ensure price stability, while taking due account of the developments of the economy. It must also contribute to the stability of the financial system. One important lesson to emerge from the analysis of the recent crisis is that an interest rate policy cannot be the sole, or even the main instrument, used to promote financial stability. It is imperative that central banks be endowed  20  6  Borio (2011). BIS central bankers’ speeches  with alternative “macro-prudential” instruments. This assessment is not only the product of careful application of the “Tinbergen principle”, according to which one needs as many instruments as one has objectives.

Every one of them suggests that, while low interest rates might be the natural consequence of price stability, they may ultimately compromise financial stability. The first hypothesis, is that hedge-fund and wealth managers, who tend to be paid according to the nominal returns on their investments, might be prone to taking additional, possibly excessive, risks when interest rates are low and, as a result, they might receive lower levels of compensation.11 To the best of my knowledge, empirical studies which support or dismiss this claim have been yet to be carried out. The second hypothesis12 is that low interest rates increase the value of the collateral backing up loans. Banks thus have less incentive to monitor their clients’ loans.13 This view is empirically better documented, but the supporting evidence is ambiguous.14  8  Bean (2006). 9  Borio and Zhu (2008). 10  See, for example, Altunbas, Gambacorta and Marqués-Ibáñez (2010). 11  Rajan (2005)  12  Dell’Ariccia, Laeven and Marquez (2010)  13  Note that this theory closely resembles Ben Bernanke and Mark Gertler’s “financial accelerator” model. However, in this model the increase in collateral value prompts investors to borrow more whereas in the model of the “risk-taking channel”, increased collateral value induces banks to monitor their existing loans less. BIS central bankers’ speeches  3  Finally, the third hypothesis is that banks with access to cheaper external funding increase their leverage to achieve higher returns on equity.
At the present point in time, however, we know neither if nor when such an accession scenario will become a reality. But even in the event that accession negotiations with the EU were started relatively soon, for example as early as 2008, and proceeded rather swiftly, transition periods would still apply. Even if such negotiations were concluded as early as 2011, for example, and if they entailed the adoption of the euro, Swiss banknotes would remain in circulation at least until 2015. The National Bank is thus compelled to tackle the development of new banknotes as a precautionary measure. This step has become necessary because of the development of new technologies and the typically high demands on the design quality of Swiss banknotes. Both aspects necessitate an adequate preparation period. Our current decision to intensify the preliminary work already under way was decisively influenced by the awareness that the work can be halted at any time, whereas it is impossible to initiate it or catch up on it within a short period. The National Bank's decision must, therefore, not be mistaken for a statement on its European policy; it is solely a precautionary measure. Banknote security With progress being made in counterfeiting technology, a note-issuing bank, which has to ensure the security of its banknotes, must always strive to maintain a technological advantage over counterfeiters, or copy machines and scanners.

Switzerland is to be represented as an entirety, as a country open to the rest of the world and also as a meeting place for the world. The focus should not be on any individuals, inventions or achievements. Much rather, a basic attitude and its manifestations should be conveyed: Switzerland as a platform for dialogue, progress, humanitarian commitment, exciting experiences, creativity and the search for practical approaches to solutions within organisations. It is envisaged that these topics will be dealt with through the lens of economics, education, research and development, human rights, tourism and recreation, culture and, lastly, sports. Six topics have to be depicted, namely the activities of negotiating and exchanging, teaching and researching, helping and mediating, enjoying and relaxing, creating and designing, and deciding and implementing. Each of these topics will be assigned to one denomination of the new banknote series. The artistic representation must emphasise the topics rather than specific events or institutions. The traditional portrayal of personalities and the depiction of institutions and previous achievements should be dispensed with. The illustration of a university, for example, should not serve as a self-portrayal but could symbolise “progress”. As previously, the banknote series should form a “family” both with regard to content and design. In other words, although each banknote type must have its own characteristics, they must at the same time share sufficient features to be easily recognised as part of the new series.
It endorsed the account I have read from the Approach Document, but added one important further condition, namely that we do not wish to see non-EEA branches undertaking critical retail banking functions (like taking deposits) beyond de minimis levels unless there is some good reason and importantly there is a very high level of assurance on resolution. In particular, we think that new non-EEA branches should stick to straightforward wholesale banking, of the type that supports world trade and capital flows. Resolution will be a key deciding factor in the PRA’s judgements, and it is thus where we will place emphasis when forming a view on our risk appetite towards branches operating in the UK. We will therefore expect assurance from the home state regulator over the recovery and resolution plans and assess if the plans adequately cover the UK branch’s activities. For banks with small UK activities we will expect to gain a level of assurance that is relative to the scale of the UK activities. The PRA’s policy towards branches is part of our general approach set out in the light of the experience of the crisis. It places emphasis on recovery and resolution, and we will expect very clear and credible assurances from the parents of banks wishing to operate as branches and from the home state authorities.

Why does this historical detour matter? The five or six years since the outbreak of the financial crisis have seen signs of a reversal of some aspects of the greater openness we had seen in the 1980s and 1990s. And probably none more so than the decline in crossborder bank lending. Moreover, the UK experience in terms of lending has been amongst the more pronounced. But again, does this matter? My answer is yes. First, because many of us do believe in the economic benefits of free trade and capital flows, as well as the contribution of migration to balancing supply and demand in the economy. Second, and closer to home, the City of London and its financial markets benefit hugely from, and are at the hub of, the open world economy. For example, whatever you think about the more troublesome recent innovations of banking, basic trade finance remains a core, simple and essential service provided by banks, and the City has for a very long time been a leading centre for providing this finance to support world trade. International wholesale banking is therefore an important part of maintaining and developing the world economy, just as it was in the nineteenth century. Yet, we have to recognise that in the last five or six years of the crisis we have gone backwards. Cross-border bank lending has declined more sharply than overall lending – home preference has set in.
In the case of monetary policy, it is essential that it should be completely geared to the ECB’s mandated objective of keeping inflation at very moderate levels, and in this respect I think that the ECB is fully complying with its task. It would have been very negative if the European Central bank had fallen into the temptation of forgetting its objective of containing inflation, attempting to alleviate the painful adaptation by households and firms to the very substantial increases in commodity and oil prices that we have experienced. Fortunately, there is complete confidence that the ECB will ensure that inflation returns to its target level, and this is helping to somewhat reduce the uncertainty surrounding the financial system, growth and other variables. In the case of budgetary policy, one positive element of the Spanish case is its favourable starting position. This is based on the notable budget surpluses recorded in recent years and on the sustained decline in the ratio of government debt to GDP to 36%, a very low figure in comparison with other developed countries. This initial situation has made it possible for automatic stabilisers (i.e. the reduction in revenues due to the slowdown and the increase in spending on unemployment as a consequence of the rise in the numbers of unemployed) to be allowed to operate freely, providing a significant counter-cyclical component in the adjustment phase.

But if there is a perception starting to spread that the inflation target is irrelevant and should be scrapped, we have, given our mandate, an obligation to bring this up to discussion and point out that we consider it to be a problem. When it comes  10 See, for instance, Calmfors (2018) and Calmfors et al. (2019). It should be pointed out that there are studies indicating a certain amount of wage flexibility with regard to changes in unemployment at a regional level, see Carlsson et al. (2019). 11 [17]  down to it, Sweden is not the only country with an inflation target of 2 per cent and an industrial sector exposed to international competition. Important to have perspectives on the krona development Let me now go over to the other area I wish to delve deeper into; the exchange rate and development of the krona. When Sweden introduced an inflation target in 1993, we chose an exchange-rate regime at the same time. As I just pointed out, a fixed exchange rate and an inflation target with a floating exchange rate are two different ways of trying to provide the economy with a nominal anchor, that is, a benchmark for price-setting and wage formation. An inflation target tries to steer expectations in the economy directly, while a fixed exchange rate tries to steer them indirectly, by virtue of it becoming more costly if price increases and wage growth are higher than abroad.