samchain/econo-pairs-v1 huggingface dataset:
Second, an increase in the pace of productivity improvement may have made it possible for output to grow more rapidly without adding to inflationary pressure. On the face of it, however, there is little evidence for this hypothesis. Productivity in the private sector - measured as output per hour worked has grown at an annual rate of around 2 ½ % since 1995, around the average rate in the period 1980-1995. In the United States, private sector productivity growth increased from 1 ½ % in the earlier period to almost 3% after 1995. It is striking that productivity growth in the private sector was higher in  BIS Review 61/2004  1  Britain than in the United States for most of the past quarter of a century, although our level of productivity remains inferior. Only in the past few years has American productivity accelerated. No such change is yet visible in the official data for the United Kingdom. It is possible that the effect of productivity improvements, especially the temporary boost to profits, was obscured by the impact of the rise in sterling since 1996 and by global competition which have lowered prices and compressed margins. So it is too soon to dismiss the possibility of an acceleration in productivity similar to that experienced in the United States. Indeed, productivity growth has increased to more than 4% over the past year.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Eden Project, Cornwall, 12 October 2004. *  *  *  A year ago I described the period since the early 1990s as a non-inflationary consistently expansionary - or “nice” - decade; a period in which growth was above trend, unemployment fell steadily, and inflation remained low and stable. The ups and downs of the economy were much smaller in the nice decade than in any previous historical period. Will this stability last? To answer that question it is necessary to understand the causes of our new-found stability and, in particular, the link between growth and inflation. In the long run there is no trade-off between the two. Monetary policy determines inflation and the supply capacity of the economy determines the rate of growth. In the short run, however, it is reasonable to suppose that when the economy is running at above-normal levels of capacity utilisation there is upward pressure on inflation, and the opposite to hold when the economy is running below capacity. Such, at least, is the conventional wisdom. But over the nice decade inflation was much less sensitive to movements in output and employment than in the earlier inflation-prone 1970s and 1980s. Inflation barely moved despite substantial falls in unemployment.
At the heart of those distortions lay turmoil in the government bond market – the largest capital market in the euro area. The government bond market is extremely important for price formation in other capital market sectors – for bank and corporate bonds, for example. Spreads between the yields on the government bonds of euro area countries increased to levels that, in a number of cases, significantly exceeded those justified by fundamentals. Yields on Spanish and Italian ten-year government bonds incorporated premia of more than 6 and 5 percentage points respectively relative to German government bonds. Even at the short end of the yield curve, distortions could be observed: in July 2012 the yields on Spanish and Italian two-year government bonds peaked at 6.6% and 5.1% respectively, while the ECB’s main refinancing rate was 0.75% at that time. Those spreads could, in part, be attributed to concerns by market participants regarding the sustainability of public finances. Fiscal reasons alone did not provide a full explanation, however, because the rapid rise in spreads in the first half of 2012 was not accompanied by an equivalent deterioration in those countries’ fundamentals. At the same time, there was an acute risk that contagion would affect other euro area countries, pointing to systemic risks that were not limited to specific countries. A key factor driving those developments was fears in the markets regarding an involuntary break-up of the euro area – i.e.

For no less than 12 years before the launch of the euro, six of the twelve currencies which now make up the euro – and represent almost two thirds of euro-area GDP - had proven remarkably stable, and were not realigned within the ERM. This high degree of confidence also stems from the acknowledged efficiency of the operational set-up of the Eurosystem, which is based on the principle of decentralisation stipulated in the Treaty. The Eurosystem is a team. The European monetary team now comprises the ECB and the national central banks of twelve Member States, following the  BIS Review 96/2001  1  Bank of Greece’s entry on 1 January 2001. All the members of the Eurosystem work in close co-operation. c)  The credibility of the Eurosystem lies, fundamentally, in its stability-oriented monetary policy strategy. The Maastricht Treaty has given us a mandate for maintaining price stability. We have decided to be as clear and as transparent as possible by providing a clear definition of price stability: that is to say a year-on-year increase in the overall Harmonised Index of Consumer Prices (HICP) of the euro area of below 2%. The aim of the single monetary policy is to ensure medium-term price stability, therefore creating a favourable monetary and financial environment for economic growth. Price stability offers an anchor for wage negotiators, and is a necessary factor for competitiveness, which is in turn essential for achieving balanced and therefore sustainable economic growth. The euro area is however a complex financial and economic zone.
This is in line with international developments in recent years, resulting in Central Banks being entrusted with a single main objective, i.e. to promote price stability. Price stability was set as the primary objective of monetary policy because inflation is above all a monetary phenomenon. There is little point in setting objectives for monetary policy which it cannot achieve. Applying monetary policy to achieve price stability also contributes to economic stability. This, in turn, is a prerequisite for future growth in the economy and making the most efficient use of its scarce resources. Other public authorities, industry and interest groups also need to adapt their decisions to accord with this inflation targeting.

However, the reverse can also apply: stock market developments also have some significance for the shaping of monetary policy. The price of  2/7  various assets, such as shares, is important in itself for the dynamics of a country’s growth and inflation trends. If, for instance, share prices rise, this stimulates household consumption and corporate investment, and vice versa. This in turn affects price trends. Thus, the stock market, like the housing market, can affect the Riksbank’s monetary policy decisions. Since the 1960s and 1970s, Swedes have been saving more and more in shares, both directly and via mutual funds and insurance, and the market has developed considerably during this period. The return on shares has been very good, seen over the past 30 years, but it has also been something of a roller coaster ride. Here I am thinking of periods of overvaluation, which have been followed by sharp price falls, for instance in connection with the financial crisis and the later IT bubble. Despite these periods of falling share prices, the percentage of shares in household wealth has increased, and stock market developments have thus become increasingly important for households’ consumption decisions and for inflation. Another reason to be interested in the stock market is its significance for efficiency and thereby for growth. An efficient securities market fulfils many important functions, for instance, as information bearer, channel for risk management and as mediator of capital.
Contrary to the dynamics one would expect of an idealized perfect market, however, short-term rates have consistently traded at levels below the IOER rate, and Treasury bill and repo rates have occasionally gone negative, particularly when financial stresses increase the demand for very safe assets. Since IOER is available only to depository institutions holding balances at the Fed, many other money market participants cannot access it, either because they don’t earn interest on Fed account balances (like government-sponsored enterprises, or GSEs) or don’t have Fed accounts at all (like money market funds). Without such access, these institutions may have less bargaining power and may have to leave funds unremunerated at the Fed or place funds in the market at sub-IOER rates. This creates a potential arbitrage opportunity for banks, which can earn a spread between their costs of funds and their earnings on reserves, but not for other cash lenders. However, uncertain or rising balance sheet costs – likely related to new regulatory changes, including higher capital requirements, leverage ratio and liquidity requirements, and changes in the FDIC’s insurance fee assessment scheme – may have altered banks’ cost-benefit evaluations and tempered their willingness to arbitrage the differences in rates. Additionally, banks are reportedly unable to attract substantial funds because of lenders’ concerns regarding credit risks associated with uncollateralized lending and because lenders often distribute their investments among several banks, making their supplies of funds relatively insensitive to the interest rates offered by individual banks.

However, the facility’s value in terms of monetary policy implementation wouldn’t necessarily be determined by the amount of usage. If the facility increases bargaining power for market participants, it could conceivably provide an effective floor for short-term rates, giving the Desk tighter control of money market conditions even with usage of the facility that’s low on average. At its September 2013 meeting, the FOMC unanimously approved a resolution that allowed the Desk to start an operational test of fixed-rate, overnight reverse repos.17 The exercise, which began on September 23 and is authorized to run until January 29, 2014, entails the conduct of a daily overnight, fixed-rate reverse repo auction in order to assess operational readiness to carry out such transactions. It therefore allows the Desk, its wide range of counterparties, and the tri-party clearing banks to utilize and fine-tune their procedures for end-to-end processing of trades, from posting of the rate to running operations, moving cash and collateral, unwinding the trade, and integrating information with accounting systems. Like other technical exercises, this one isn’t intended to materially affect the current level of shortterm interest rates. Accordingly, for the purposes of the exercise, each counterparty’s participation is capped.
Along the way we have used three different assumptions for the policy rate – that it will remain unchanged, that it will develop according to market expectations, and, accordingly, that it will develop in the way we ourselves find most likely. Reasons why we want to present our own interest rate path Making its own forecast for the policy rate provides the central bank with a better tool for influencing expectations among households, companies and agents in the financial markets. In the cases where our view differs from the market view, we no longer need to take the rather circumstantial route via qualitative assessments of market pricing. Additionally, it becomes easier for us to show not only what we are thinking but also how we are thinking – it will be simpler to communicate how we view the driving forces behind economic developments and what monetary policy can achieve. If we succeed in communicating our view of how we think, then it will be easier for others to make good assessments on a continuous basis of how new information should affect the future development of the interest rate. This should reduce the fluctuations in the interest rate that are due to speculations regarding the Riksbank’s intentions. One aspect that may not have been given so much attention is that it has become simpler for households planning their private economy to form an impression of what the Executive Board considers to be a suitable development for the interest rate in the future.

…and here at home Sweden has also been affected by the turbulence in the financial markets, albeit to a much lesser extent than, for instance, the United Kingdom, Germany and the United States. The fact that Sweden has been affected despite not being, as it were, involved in the problems that started the unrest is not so remarkable. We are a part of the global financial system and not an isolated northern outpost. The Riksbank governs the short-term rate that applies for one day, the so-called overnight rate, and this has remained stable around the repo rate. In brief, the Riksbank’s method of steering interest rates has worked well. But the interbank rates with slightly longer durations have risen, although not as much as in some parts of the world. This is primarily a question of different effects from the uncertainty in the financial markets, such as rising risk premiums. On the whole, the Swedish financial system and the interbank market have nevertheless functioned well. 6  BIS Review 106/2007  What is the role of the Riksbank? What does the Riksbank do when there is unrest in the money market? One of the most important tasks is to continue to ensure that the economy develops in a stable manner. We have to conduct our monetary policy so that we attain the inflation target of 2 per cent. Where possible, when the price stability objective allows scope for this, we should also ensure that production and employment develop in a balanced manner.
Yet there was almost no perceptible response of nominal pay and domestic prices. Economists attributed this decline either to the change in monetary regime itself, or – more often – to greater flexibility in the labour market. Chart 7: Lower sensitivity of wages to real income shocks during inflation targeting period  Rolling coefficient on wedge between consumer and output prices using 18-year regressions. Dotted line shows coefficient estimated by Layard, Nickell and Jackman (LNJ) on 1956-85 sample. Source: Layard, Nickell and Jackman (1991), ONS and Bank calculations. But it was hard to be confident about these estimates. Labour-market flexibility isn’t set in stone. In a speech in 20066, Charlie Bean suggested that increased ease of migration, in both directions, might have reduced the sensitivity of real wages to shifts in labour demand. It’s possible that, by adding a degree of friction to  5 Layard, Nickell & Jackman (1991), ‘Unemployment: Macroeconomic Performance and the Labour Market’. 6 Bean (2006), ‘Globalisation and Inflation’. Bank of England  Page 14  the inflow and outflow of migrant workers, the combination of Brexit and the pandemic have made the labour market less adaptable than it was a few years ago. There may be other reasons why susceptibility to second-round effects can vary. During the one period in which higher import prices seriously impinged on real incomes, following the financial crisis, unemployment was also much higher than it is today.

This corporate claims philosophy should be documented and communicated to all staff for adoption as a common corporate value that is perceptible to the public. Secondly, the challenge of detecting and preventing insurance fraud, which is a crime against all segments of society and not a victimless crime as perceived by many. Due to the long supply chain and participation of numerous stakeholders, especially in the general sector, insurance fraud is easily committed and is a major source of leakage for the industry, thereby hiking up claims costs. Insurance fraudsters are also adept at hiding behind the protective shield of jurisdictional boundaries. In this regard, the insurance industry can leverage on the work of the US based International Association of Insurance Fraud Agencies Inc., which plays an important role in tracking down the insurance fraudsters. In order to mitigate insurance fraud in the industry, an effective claims information system is critical to enable early detection of fraud. The infrastructure of such a system must support the free exchange of information in a timely manner with access provided on an enterprisewide scale for business intelligence function to facilitate the management and analysis of raw data and the reporting of trends according to specific parameters. The reports would assist insurers and loss adjusters in detecting and preventing insurance fraud and effectively minimize leakages. Thirdly, the challenge is in ensuring the health of the entire claims management value chain.
But one point I would stress is that whatever we decide upon, it will be designed to strengthen the current framework, and there is nothing that is being proposed that should give reason to hold off on the implementation of Basel III and other recently agreed reforms. BIS central bankers’ speeches  5  Enhancing the effectiveness of both micro- and macroprudential supervision Not surprisingly, the Committee’s agenda in the past few years has been dominated by policymaking. In 2012, implementation also came to the fore. But it is perhaps stating the obvious that effective supervision is the key to ensuring that regulation, once implemented, continues to work as intended. Only if supervisors are given the tools they need to act can they effectively perform their role. As the policy reform agenda moves towards completion, and the new rules are rolled out by national regulators, the Committee will increasingly turn its attention to enhancing supervisory practices. Enhancing microprudential supervision The Committee has a great deal of guidance on supervisory matters already on issue. However, much of this was developed before the financial crisis and will benefit from being updated to reflect lessons learned in recent years. Given the general applicability of much of this material, the benefits of this work will also extend well beyond Basel Committee member countries. As with all multi-year projects, this will require prioritisation. Near-term attention is likely to be given to operational risks (internal controls and information technology), governance, supervisory colleges, stress testing and dealing with weak banks.

•  Use of microprudential tools for macroprudential purposes: The Committee will oversee preparations for the countercyclical buffer, as well as exchange information on the wider range of microprudential tools that have been used for macroprudential purposes (eg sectoral adjustments to risk weights, stress testing requirements, loanto-value limits or varying margin requirements). Concluding remarks Since the financial crisis, the Basel Committee has accomplished a great deal. But we still have work to do to complete the overhaul of the regulatory framework and fully factor in all of the lessons learned. We also need to see whether we have the balance right when it comes to simplicity and risk sensitivity. That work is going to keep the Committee busy for at least the next two years. But that is far from the end of it, because, as I have noted a number of times today, our policy work will not generate its full benefits if not implemented in a full, timely and consistent manner. So our implementation monitoring work is equally important. And then even when  6  BIS central bankers’ speeches  the new standards are implemented, we will need effective supervisors to ensure that they are adhered to. This is an area where the Committee has the potential to do much more, particularly once the policy pipeline begins to slow. In other words, the Basel Committee will continue to provide you with much to talk about – at this meeting and those in the future! BIS central bankers’ speeches  7
Conference at the Académie des sciences morales et politiques Paris, 19 June 2023 Governance of public expenditure and public services: is there any hope left? Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 of 19 Dear Chairman, Dear Permanent Secretary, Dear Academicians, Ladies and Gentlemen, It is an honour for me to speak before you today and I wish to warmly thank your Chairman and my esteemed predecessor, Jean-Claude Trichet. This year, your collective discussion focuses on the theme of "Good governance". Six years ago, at the invitation of Michel Pébereau, I had the opportunity to use the theme of "Reform" to reflect upon international financial regulations. Today, I will tackle a different aspect: good governance in the public sphere. I would like to thank a number of people who are committed to this cause and who have been kind enough to be here today. As the head of a public institution and a fervent supporter of the public service – and also as a citizen – I consider this to be an essential matter. France appears to be drifting towards a "strange defeat", or, at the very least, a gloomy resignation, reflected in constantly increasing government expenditure and public debt (I), together with diminishing intellectual investment in economic optimisation and public management strategies. (II) There is also a growing feeling that essential public services are continuing to deteriorate. In the face of this public crisis, is there any hope left?

The combination of big data analytics, cloud computing, artificial intelligence and blockchain is transforming the way financial products are designed and distributed. For its proponents, this transformation is promising better consumer experiences, a better financing of the economy and a better efficiency of the financial system. Beyond those promises, cutting-edge technologies also lower the barriers to entry into the financial sector for Tech firms and make it possible to unbundle financial services into an array of distinct core functions such as channeling payments and money, providing financing, sharing risk and allocating capital. This new competition also implies that incumbents’ business model should be prepared to adapt: the unbundling of services will challenge business models built around the logic of an exclusive and comprehensive customer relationship possibly involving elements of cross subsidization; more mobile customers could limit the ability to cross-sell products; and higher deposit volatility may unbalance the funding of maturity transformation. That said, FinTechs are the talk of the town but BigTechs are the real deal. On the one hand, frankly, FinTechs already had a huge and positive impact on the financial sector by developing new solutions and proving that these solutions bring value. However, overall, with a market capitalization of $ bn worldwide, Fintech start-ups have been 1/4  BIS central bankers' speeches  so far more a complement to existing financial actors, through integration or partnership, than irresistible rivals to incumbents.