samchain/econo-pairs-v1 huggingface dataset:
This fact, highlighted many years ago by Steve Davis and John Haltiwanger in the US, was no less apparent during the great recession in the UK. Employment fell by over half a million between 2008 and 2010. But even over that period there were over nine million new jobs created, over ten million if you include job-to-job flows. On average, over the past 10 years, gross inflows and outflows into and out of employment have run at an annualised rate of around one sixth of the stock (Chart 1). As I say, this has been long understood. Nor should it be forgotten that, whatever the complicated texture underneath, the aggregate economic data still exhibit significant empirical regularities over the business cycle. Chart 2 is one example. Using annual data during the inflation targeting period, the black line plots annual growth in average earnings, less inflation expectations, against the rate of unemployment. At least until the past couple of years, when AWE growth appeared unusually weak, the fit was pretty good. Higher unemployment has gone hand-in-hand with lower real wage growth. Uncannily, the regression line was pretty much exactly the same as that identified by A.W. Phillips, using data from the classical gold standard period (1870–1913), in the 1958 paper that gave the relationship its name (that regression line is in blue). Yet, from time to time, what happens under the surface has material effects and can distort these aggregate relationships. Today I want to describe one such example, involving compositional shifts in the labour market.

What is a bit different about the recent UK experience, however, is the scale of the effects. Compared with the cycle of the 1990s, they appear to have been less positive during the recession – in the more recent downturn job losses weren’t as skewed towards the lower paid – but more negative during the recovery (the skew in net job creation has been bigger). Overall, taking the 2008–14 period as a whole, the compositional effects added around 3% less to average wages than in the equivalent six years in the early 1990s. If anything, Chart 3 hints at a break in the series long before the Great Recession, sometime in the late 1990s. It’s not clear why this occurred (I’ll later offer some slightly speculative suggestions). But the recent drag from compositional effects might help to explain a couple of recent puzzles in the aggregate data. One is low productivity growth. As we know, output per employee has been particularly weak in recent years. It fell steeply during the recession and its rate of growth has been pretty insipid since. Chart 5, plotting three-year growth rates for output and employment, is one way of expressing that. What this work on compositional effects suggests – somewhat tentatively, and only if you’re prepared to interpret it in this rather crude fashion – is that this may partly reflect a slower rate of improvement in the average “quality” of the employed workforce.
The inventory cycle is providing lots of support right now and the fiscal stimulus – which is very powerful right now – will abate as we go through 2010. 2010 is also likely to be a more moderate growth period because we still face quite a few headwinds generated by the hangover of the financial crisis. The banks are still under pressure in terms of credit losses. The shadow banking system is still impaired and securitization activity is recovering very slowly. For example, last month we saw the first commercial mortgage-backed securities (CMBS) deal in a year and a half. This means that the constraints on credit availability will take considerably more time to fully abate. If growth is subdued, this implies that the unemployment rate will stay high and inflation will stay low. If this outlook is broadly correct, this suggests that it will be appropriate to keep the federal funds rate target exceptionally low for an extended period. One risk in the outlook is that inflation expectations could become less well-anchored. This could conceivably occur for several reasons. First, people may worry that the expansion of the Federal Reserve’s balance sheet and the increase in the Federal debt will prove inflationary over time. Second, some may worry that the Congress could take actions that would call into question the Fed’s independence with respect to monetary policy and that this could cause the Fed to be less willing to tighten monetary policy in a timely way in the future.

So, for example, the holding companies of Goldman Sachs, Morgan Stanley and Merrill Lynch, which is now a subsidiary  2  See, for example, Senior Supervisors Group, “Risk Management Lessons from the Global Banking Crisis of 2008,” October 21, 2009, and “Observations on Risk Management Practices during the Recent Market Turbulence,” March 6, 2008. BIS Review 161/2009  3  of Bank of America, are now under our direct supervision. We are making sure that they have appropriate liquidity buffers and capital. Second, the Federal Reserve is working with a broad range of private sector participants, including dealers, clearing banks, and tri-party repo investors to dramatically reduce the structural instability of the financial system utilities, such as the tri party repo system. Third, the Basel Committee is working on establishing international standards for liquidity requirements. There are two parts to this. The first is a requirement for a short-term liquidity buffer of sufficient size so that an institution that was shut out of the market for several weeks would still have sufficient liquidity to continue its operations unimpaired. The second is a liquidity standard that limits the degree of permissible maturity transformation – that is, the amount of short-term borrowing allowed to be used in the funding of long-term illiquid assets. Under these standards, a firm’s holdings of illiquid long-term assets would need to be funded mainly by equity or long-term debt.
The traditional role of central banks as the lender of last resort and keeping certain markets functioning may have the side effect of increasing risk-taking in the financial sector. If banks assume that central banks will always be there for them in a crisis, risk-taking may increase, as they will nevertheless be bailed out in a crisis situation. This needs to be borne in mind when formulating the terms and conditions for the purchases. But there is also a need for regulation and supervision  22 [30]  that can increase the resilience of the financial markets in various ways. This is important to reduce risk-taking and the likelihood that central banks will need to intervene. More analysis of the impact of asset purchases is needed Central banks' balance sheets have grown and become very large since the early 2000s, see figure 5. For example, the Riksbank's balance sheet has increased from just over 5 per cent as a share of GDP before the global financial crisis to just under 30 per cent today. Central banks have bought securities, primarily government bonds, to make monetary policy more expansionary when the policy rate has been close to the lower limit, and have also bought other securities to stabilise the financial markets. There are of course strong links between these two purposes. If there are problems on the financial markets, monetary policy has less impact on other interest rates and therefore also less impact on demand and inflation.

I am aware of the debate between those who believe that central banks should take financial imbalances into account in their monetary policy decisions and those who do not. A basic structure, where monetary policy focuses on monetary stability and where other policy areas – not least the decisions taken by Finansinspektionen – safeguard financial stability is reasonable. But there will be times when interest rates are low for such a long time that risks build up that mean that 28 See Ministry of Finance (2023). 29  See Stein (2013). 30 See also the discussion in Nessén (2016). 17 [30]  monetary policy should take account of financial imbalances. I do not want to belong to any of these camps that quite categorically believe that "leaning against the wind" is always right or always wrong. However, I believe that it may nevertheless be reasonable and wise to allow monetary policy to take into account the build-up of financial imbalances in certain special situations. Some central banks, such as Norges Bank, have a clear mandate for this.31 The Riksbank considers risks associated with developments on the financial markets as long as the credibility of the inflation target is not threatened, and the fulfilment of the target for price stability and macroeconomic stability in the longer term is improved. But to prevent unbalanced developments in asset prices and indebtedness, a well-functioning regulatory framework and effective supervision are needed in particular.
In compliance with its legal duties, and pursuant to its institutional commitments in the framework of the arrangement, the Bank of Albania will continue to work on: •  Maintaining price stability, in accordance with its 3.0 % inflation target. The Bank of Albania will continue to implement its monetary policy in accordance with the targeted inflation regime and free-floating exchange rate regime. The monetary policy will remain on the easing side, aiming at enhancing transparency of communication and its effectiveness. •  Maintaining adequate foreign currency reserves. •  Supporting banking system stability, by exercising its duties as the regulator and supervisor of the banking system. Special attention, in this regard, will be given to addressing factors determining non-performing loans. For this purpose, the Bank of Albania will cooperate with the banking industry and other national authorities to swiftly address this issue. Moreover, the Bank of Albania will continue to work on improving the infrastructure that assesses and addresses risks facing the overall financial system, in the framework of recommendations left by the Financial Sector Assessment Progam. •  Completing the project for adopting the new IFRS standards on compiling financial statements. Thank You! 2  BIS central bankers’ speeches

One of my ECB colleagues in fact once put it to me that - “when we have closed off every other policy option, we will finally be forced to do the things we know that we should have been doing all along!” There are those, I know, who find our hesitation about the euro - in an economic context - hard to understand. That’s true particularly of those who have been in effective de facto monetary union with the Deutsche Mark for a long time already. But it is not just stubbornness or obstinacy on our part though we British can of course be pretty stubborn at times. In the macro-economic context it reflects a real debate about the risks and potential costs of divergence between our own monetary policy needs and those of the members of the Eurozone - which in turn depend upon the extent to which our economies really have achieved sustainable convergence, and the extent to which we are able to respond flexibly on the supply side to economic shocks or tensions between our domestic monetary policy needs and those of our European partners. As you know, the Chancellor of the Exchequer announced some three years ago that we would not join the euro in the first wave. He made it clear that the present British Government is not opposed to Euro membership as a matter of principle. It will make a decision on pragmatic grounds, based upon five economic tests.
Gross external reserves increased to $ million at end 2010 compared to $ at end 2009, which could cover six months of imports and cushion the country against external shocks. External borrowing was directed towards highly concessional loans that met rigorous criteria. The level of external debt increased from $ in 2009 to $ in 2010 but remains at modest risk and is sustainable compared to levels before our eligibility to the Highly Indebted Poor Countries Initiative (HIPC) in 2006. Following the successful completion of the IMF’s Poverty Reduction and Growth Facility (PRGF) – supported Programme in December 2009, the country adopted a successor Extended Credit Facility (ECF) programme beginning July, 2010 and was able to successfully complete the first review on 6th December 2010. Financial sector developments in 2010 Your Excellency, distinguished ladies and gentlemen, allow me to take you through the status of financial sector developments during 2010:   On the banking sector, the number of commercial banks was reduced from 14 to 13 with Procredit Bank being taken over by EcoBank, due to an increase in the capital requirements which did not fit in with the Procredit Bank’s business model.   Provisional figures for the banking industry in November 2010, reveal an 18 percent increase in total assets in the last twelve months to almost Le2.0 trillion.   The industry profits increased by 238 percent based on unaudited figures, with five of the commercial banks recording a loss compared to seven last year.

Taking into account the strategic commitment of our country for EU membership, a few years ago, the NBRM initiated this project of cooperation with the ECB in order to identify the necessary changes in the national regulation, and the needed organization and human resources of the NBRM towards achieving EU central banking standards. The realization of the project, and hopefully, obtaining of a subsequent project for the implementation of the recommendations that will arise from this programme, should enable the NBRM to carry out the process of joining the European System of Central Banks, and later the Eurosystem more easily and efficiently, once the Republic of Macedonia meets the EU accession criteria. Over the past three months, experts from the ECB and the national central banks included in the project, in collaboration with the experts from the NBRM, carried out the activities planned with the first stage of setting the benchmarks according to the European standards and best practices for the operations of the NBRM in ten areas: monetary and exchange rate policy, economic analysis and research, statistics, payment systems, banknotes, accounting, legal services, internal audit, information technology and human resources. As a result of the good cooperation of the experts, their commitment and dedication to the project, at today’s first meeting, the Steering Committee adopted the benchmarks in all planned areas, whereby, I am pleased to say that the first stage of the project has been successfully completed.
This means that we will assess the effects of these measures and adapt them, if necessary: (1) to confirm that they continue to fulfil their monetary policy objectives; (2) to ensure – within our mandate – that the relevant measures continue to support the decarbonisation path to reach the goals of the Paris Agreement and the EU climate neutrality objectives; (3) to respond to future improvements in climate data and climate risk modelling or changes in regulation; and (4) to look beyond climate and address additional environmental challenges, within our mandate. While I understand it is not a specific topic covered in today's conference, a similar commitment to fully incorporate climate-related and environmental risks applies to our banking supervision tasks and responsibilities. In addition to the climate stress test that was concluded by ECB Banking Supervision earlier this year, we will soon publish the results of our thematic review. As part of this exercise, our core banking supervision teams – Joint Supervisory Teams – thoroughly assessed to what extent banks' risk management practices for climate-related and environmental risks live up to the supervisory expectations we published in 2020. We conducted this exercise to assess where banks stand with regard to our expectations and to highlight any gaps they urgently need to close. We will also take the opportunity to identify and share best practices to help banks close any gaps identified.

There are three aspects of our collective goal [slide 7]: first, we aim to reach all members of the public, young people of course, teachers, students and financially vulnerable people, as well as all our fellow citizens over their entire lifetimes; second, we will deal with all subjects, from budgetary to financial and economic questions, in order to provide the basic knowledge required in all these fields to better understand and therefore make informed decisions; and lastly, we will use all relevant means to pass on this financial knowledge as widely as possible, including websites, efforts on the ground and partnerships. 2. The strategy is being quickly and effectively implemented [slide 8] On 24 January 2017, the dedicated financial education internet portal, "mes questions d'argent.fr", went on line. This portal is intended to become the primary information source for all our fellow citizens looking for answers to their day-to-day banking, budgetary, economic and financial questions, and a first milestone of 200,000 consulted pages has already been reached. Access through the portal is simple and quick; in three clicks users can access free content carefully chosen for its educational qualities, neutrality and freshness. We have opted for a similar approach to the Dutch "Money Wise" platform, in that it is both practical, with a limited amount of entries and materials, as well as cooperative, offering a variety of sources from all of our partners.
Importantly, the roadmap incorporates a framework where individual actions are taken forward by the most suitable expert bodies, in accordance with their mandates, with the FSB providing coordination and reporting annually on progress to the G20 and the public. Many of the building blocks are owned by CPMI and the FSB, but the IMF, FATF, World Bank and BIS Innovation Hub are also among the owners/co-owners. 6 7  Source Euromoney (2019) - https://www.euromoney.com/article/b1h6r02s16dnf9/removing-frictions-in-cross-border-payments https://www.fsb.org/2020/10/enhancing-cross-border-payments-stage-3-roadmap/ 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  The Bank of England is already making progress in a number of these areas  To bring some of these building blocks to life and to show you that there is already significant innovation underway, I will outline work the Bank of England is undertaking to address some of these challenges. The Bank is involved through a number of roles – as a payment system operator, a supervisor of firms and of financial market infrastructures, and through our overriding mission to promote the good of the people of the UK by maintaining monetary and financial stability. My focus today will be on our role as an operator, and  in particular the Real Time Gross Settlement (RTGS) service Renewal Programme of which I am the Executive Sponsor.

We know that recoveries from financial crises tend to be slow; it takes on average about eight years to reach the pre-crisis level of real per capita income following financial crises. 3 Distorted and damaged financial sectors don’t allocate resources effectively. We may not pay the price for a number of years as the boom builds up. But in the end the price we pay is large when a financial system misallocates resources in the boom and in the following bust. Real GDP per head – the best measure of our aggregate living standard – remains 1% below its pre-crisis peak. This high cost to the economy and to society is why we need not only robust regulation of financial institutions but also of the financial system as a whole. Financial stability and sustainable growth are complements. They are not alternatives. Turning back to the reallocation mechanism, there are now some positive signs. The financial sector is well into its recovery. Bank lending growth to non-financial businesses was positive in 2015 Q1 for the first time since the crisis. Beyond the banking system, the Bank’s agents are reporting private equity firms purchasing debt-laden companies and restructuring their funding. The creation of new firms, a sign of vibrancy and reallocation in the economy, increased by 30% in 2013. And labour market ‘churn’, the movement of workers between firms is almost back to its pre-crisis average having fallen sharply in the crisis. In addition, we have seen a return of business investment over the past two years.
One potential benefit of DLT-based structures is immediate clearing and settlement of securities, in contrast to the multiple-day lags that currently exist when exchanging cash for securities (and vice versa). Progress in this direction was recently achieved by a joint venture between the Deutsche Bundesbank and Deutsche Börse, which developed a functional prototype of a DLT based securities settlement platform that achieves delivery-versus-payment settlement of digital coins and securities (Deutsche Bundesbank (2016)). Whether or not a central bank should provide a digital alternative to cash is most pressing in 4/5  BIS central bankers' speeches  countries, such as Sweden, where cash usage is rapidly declining. But all central banks may eventually have to decide whether issuing CBCCs makes sense in their own context. In making this decision, central banks will have to consider not only consumer preferences for privacy and possible efficiency gains – in terms of payments, clearing and settlement – but also the risks it may entail for the financial system and the wider economy, as well as any implications for monetary policy. Some of the risks are currently hard to assess. For instance, at present very little can be said about the cyber-resilience of CBCCs, something not touched upon in this short feature. In this context, the current regulatory framework predate the emergence of FinTech companies. Therefore, it will certainly be changed and as a matter of fact it is already an evolving process in many countries, including Macedonia.

In 2016, the National Bank conducted thematic control through the development of a tool whereby banks made their own assessments of the inherent risk and appropriately determined the activities that they needed to fulfill on different levels of readiness from attacks from the digital space (primary, secondary and advanced level of readiness). Blockchain technology and impact on central banks’ activity The potential of blockchain is immense and is an issue for the central banks as well. At retail level blockchain from Central bank perspective in regards to cryptocurrencies or Central bank cryptocurrencies (CBCCs) does not exist. However, the concept of a retail CBCC has been widely discussed by bloggers, central bankers and academics. While CBCCs for retail payments remain at the conceptual stage, some central banks have completed proofs of concept for DLT-based applications. One of the reasons for the interest in DLT is that many central bank-operated wholesale payment systems are at the end of their technological life cycles. The systems are programmed in obsolete languages or use database designs that are no longer fit for purpose and are costly to maintain. Project Jasper at the Bank of Canada (Chapman et al (2017)) and Project Ubin at the Monetary Authority of Singapore (MAS (2017)) and STELLA – a joint research project of the European Central Bank and the Bank of Japan simulate real-time gross settlement systems (RTGS) on a DLT platform. The two projects Jasper and Ubin show that central bank money can be transferred on a distributed ledger in real time, in realistic volumes.