samchain/econo-pairs-v1 huggingface dataset:
Indeed, economic studies of disasters in the U.S. and other advanced economies find that the longer-term effects on national economies have typically been negligible. Given the resilience of the U.S. economy, I expect the long-run effects of Sandy to be similarly small. Even before the storm, though, the pace of U.S. economic growth was disappointing – averaging only slightly above a 2 percent annualized growth since the recovery began in mid-2009. As a consequence, the national unemployment rate remains unacceptably high, and its decline during the recovery has been grudging. In addition, too many people are discouraged from looking for work. This has depressed the participation rate and held down the official unemployment rate. Moreover, 5 million workers have been unemployed for six months or more. While job growth has picked up some recently, its pace has been insufficient to materially change the labor market picture. In terms of activity, there are a few bright spots. For example, the growth rate of consumer spending was a bit firmer in the third quarter. Another area showing improvement is the housing market. Housing starts and sales of new and existing single-family homes are trending up gradually. Nationally, home prices have finally begun to rise. However, on a more negative note, business fixed investment spending fell some in the third quarter and new orders for nondefense capital goods suggest continued softness. Overall, manufacturing activity remains weak. This manufacturing slump stems from slower growth abroad and uncertainties about how the fiscal cliff in Washington will be resolved.

12  BIS Review 112/2008  Chart 1: Premium on unsecured interbank lending (Libor-OIS)  Chart 2: Selective effective rates and Bank rate  Basis points 140 1 month  3 month  6 month  Per cent 9.0  PNFC overdraft rate  120  8.0  100  7.0  80  6.0 5.0  60 Bank rate  40 20  3.0  Household mortgage rate  2.0  0  1.0  -20 2002  2003  2004  2005  2006  2007  2008  0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008  Chart 3: Credit condition survey(a)- large corporates  Chart 4: CPI and the capital goods deflator  Net percentage balances(b)  Cheaper credit  Percentage changes on a year earlier 10  80 Spreads  Loan covenants  4.0  8  60  6  40 20  CPI  0  4 2  -20  0  -40  -2  -60 Dearer credit  -80  Capital goods  -100 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 2008 2007 2008 2007  -4 -6  1989 1991 1993 1995 1997 1999 2001 2003 2005 2007  (a) The blue bars show responses over the past three months. The red diamonds show expectations over the next three months. Expectations balances have been moved forward one quarter so that they can be compared with the actual outturns in the following quarter.
Rising wealth ought to stimulate consumption and low interest rates ought to lead to saving being dampened, as well as affecting the demand for loans. Instead, the aggregated picture seems to be that loans have been channelled to saving in financial assets. One explanation may be that my generation has stepped up saving in financial assets, partly because the stockmarket fall eroded a part of our retirement capital. What role do loans and house prices play in monetary policy? The Riksbank has the statutory objective of maintaining price stability, defined by the Executive Board as a CPI increase of 2 per cent plus or minus 1 percentage point. This is the target that governs the construction of monetary policy. Normally we aim to achieve the target within a two-year period. However, as we have described in a Clarification of monetary policy published in 1999, there are sometimes reasons to allow a little longer to reach the target. When we make monetary policy decisions, we take into account how indebtedness and house prices may affect future demand and inflation. The extent to which short-run variations in the interest rate affect property and other asset prices is highly uncertain. Buying a house is a long-term decision and short-run, cyclically determined variations in the interest rate ought not to have more than a very marginal influence on rational households’ propensity to take house mortgage loans. 1/5  One of the most important factors for developments in house prices in the longer term is household income.

We therefore consider that the high oil price will subdue international growth to some extent in the coming year but will not entail any dramatic adjustment. However, the difficulty in assessing the effects of the high oil price does make this a central element in our picture of risks. Uncertainty still also prevails about the consequences of the saving imbalances in the world and above all the large deficit on the US current account. An adjustment of current-account balances would probably involve a weakening of the US dollar’s real exchange rate, through either lower US inflation relative to the rest of the world or a fall in the dollar. An adjustment of the imbalances would  4/5  also be likely to raise the very long-term interest rates. If these changes were to occur quickly and unexpectedly, there would be a risk of decreased world market growth. The Swedish economy Signals of an economic slowdown last spring were also evident in Sweden but in June we counted on the dip being temporary, with a subsequent renewal of growth. So far, the new statistics since then seem to confirm our assessment. The second-quarter national accounts show that growth strengthened about as much as we had expected. An acceleration seems to have begun in the growth of private consumption, accompanied by a continuation of the last year’s upswing in investment, with a spread from residential construction to the corporate sector in general.
This can be expressed as the central bank having responsibility for price stability, but, just as much, it is a matter of ensuring that there is an efficient payment system in the country. As I said, there is an international debate on the importance of being able to cut policy rates to far below zero, and it is being discussed how this could be achieved in practice with various technical solutions. 12  See, for example, Rogoff (2020). 13 See, for example, Brunnermeier and Koby (2018). 9 [13]  Something possibly missing from this discussion is how the general public’s confidence in their country’s own currency/means of payment would be affected. If one unit of saved currency suddenly gives less than one unit of currency back, what would happen to the public’s willingness to hold that currency? Negative real interest rates are certainly nothing new, and this phenomenon has not been linked to any undesired effects on behaviour. Consequently, according to economic theory, negative nominal interest rates should not be any different as it usually assumes that it is real interest rates that are important to our decisions to consume or invest. However, this assumption is not undisputed, and there are plenty of examples to indicate that people often think in nominal terms.

Now it is time to think again and make a new attempt. 9  See also consultation responses from the Riksbank, ECB and IMF, which is to say Sveriges Riksbank (2020), ECB (2020) and IMF (2020), respectively. 9  7 [13]  Of course, principled regulation must be balanced by democratic control. Here, evaluation, transparency and insight into operations are key elements that ensure that monetary policy is being conducted efficiently and appropriately for the public good. New demands for analysis – both in theory and in practice The financial crisis entailed new demands being placed on the monetary policy analysis. The old models have been further developed over the last ten years and supplementary approaches have been given a more prominent role in central banks’ internal discussions. 10 One way of describing the implications of the new analysis is that it is more disaggregated. If focus, prior to the financial crisis, was on a single policy rate that was to carry the entire burden of monetary policy, as it were, the analysis is now more detailed. Partly this is because it places greater emphasis in how policy rate changes spread through the financial system, via various markets to other interest rates, all the way to the interest rates faced by companies and households. And partly it is because the analysis focuses on describing how measures other than policy rate adjustments, for example various types of asset purchase, affect the financial conditions, economic activity and inflation.
When the Riksbank alters the repo rate, there is an effect on total demand and ultimately also inflation through various channels within the economy. These channels are the cost of borrowing, incentives to save and wealth, as well as exchange rate fluctuations that affect imported inflation, exports, imports and capital flows. In addition, there is an effect on inflation expectations. It takes some time for an interest rate change to have an effect through these channels. The monetary policy decisions must therefore be based on an assessment of future inflation. Flexibility thanks to credibility Conducting monetary policy is not the same as flying a familiar, well-tuned aircraft. The repo rate is unfortunately a blunt instrument with regard to steering inflation, even a couple of years ahead. What monetary policy can do is to ensure an inflation rate that is over a number of years in line with the target and to contribute to reducing fluctuations in the real and financial economy. When the inflation target was announced in January 1993, the Riksbank formulated a tolerance interval around the target of ± 1 percentage point. The purpose of this was to explain that it is not within the power of monetary policy to exactly meet the target all of the time. In addition, the tolerance interval provides scope for temporary deviations from the target which may be justified by taking growth and employment into consideration.

EMBARGO: not for release before 19:30 on Wednesday 4 October 2017 Geofinance Speech given by Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer, Prudential Regulation Authority  Mansion House City Banquet, London 4 October 2017  I am grateful to Alex Holmes for his assistance in preparing this speech and to other colleagues for comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  Lord Mayor, Ladies and Gentlemen  The Prudential Regulation Authority had a bracing return from the summer break. There was no time for supervisors to compare sun-tans, which was just as well given the deathly pallor I acquired from a summer spent in London and Ireland. The only person with an even worse sun-tan than mine was a colleague who, in what I’m assured was not a political statement, took his summer holiday in Brussels. In fact, I was so desperate to boost my Vitamin D levels in September that (like a few others in this room) I headed south to Frankfurt, where I regret to inform you all that it was very sunny indeed. Yes, even the weather – a traditional safe harbour topic for financial regulators – seems to have acquired a Brexit-y tinge this autumn. It was therefore a relief to get stuck into some domestic topics when we returned from the summer.
Alternatively, the inflation outcome may deviate from the target even if the monetary policy decisions were correct because the central bank was unlucky and unexpected disruptions resulted in the wrong inflation outcome. Inflation targeting is flexible A second circumstance that means that a simple comparison of outcomes and targets for inflation is inadequate is that the Riksbank and all the other central banks that have inflation targets conduct flexible inflation targeting rather than strict inflation targeting. Under a flexible inflation targeting regime, the central bank strives not only to stabilise inflation around the inflation target but also to stabilise the real economy. Under a strict inflation targeting regime, the central bank strives only to stabilise inflation without concerning itself about the consequences for the real economy. In many situations, a conflict of objectives may arise between stabilising inflation and stabilising the real economy. Let us assume that a shock, such as a sharp rise in the oil price, has driven up inflation at the same time as production has slackened significantly. If, in such a case, the aim of monetary policy is to quickly bring inflation back to the target, a  2  BIS Review 29/2009  significant interest rate increase may be required which will dampen production even further. By quickly stabilising inflation – which would be the case with strict inflation targeting – the central bank would destabilise the real economy.

One thing is certain – and I’m sure that all my colleagues share this view: We cannot again in the next years be put in a situation where the financial sector is about to collapse in the  BIS Review 115/2010  3  advanced economies and at the global level, or a situation in which it is necessary on both sides of the Atlantic, for taxpayers to put approximately 27 per cent of GDP on the table to stabilise the system and avoid a major global depression. We cannot do that twice. The people in our democracies would not accept that. This is not, of course, to say that the 27 per cent of GDP was spent or lost, but that was the level of additional taxpayer risk that had to be put on the table, on both sides of the Atlantic. Financial Times: You said, when we saw you in December 2008, that the airbags had been taken out of the financial system. This was just after Lehman collapsed. Do you think the airbags are now being put back in the system ? Jean-Claude Trichet: I would say it remains a good metaphor for what we are trying to work out, by consensus, among the G20 countries. Financial Times: You’ve done a number of jobs which have been at the heart of the construction of the euro, and you’ve just been through the worst financial crisis in 60 years, where as you say, the financial system almost collapsed.
Hence, it is crucial to continue our common discussions with the American authorities in order to limit redundancies and inconsistencies, of information decrease the risks of regulatory arbitrage or overlaps, whilst our common objective remains the safety and soundness of financial market infrastructures. Constructive dialogue between rule making agencies is essential. 2.2 In the field of regulatory and accounting standards, I would like to point out that convergence is highly needed in order to allow users of financial reporting, especially regulators, analysts, and market participants to draw relevant comparisons between banks. –  Firstly, let me say briefly that the largest European banks have strengthened their robustness during the last two years and are, at least, as robust as their US peers1: •  1  The top European Banks have seen their revenues increase by 8.6% on average from 2009 to 2010 (up 2.5% for the main US banks over the same  The following figures are based on calculations made with a sample of 17 large European and American banks: JP Morgan, Wells Fargo, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, HSBC, RBS, Barclays, Santander, BBVA, BNPP, SG, Groupe Crédit Agricole, UBS, Crédit Suisse, Deutsche Bank. BIS central bankers’ speeches  3  period). All banks have benefited from a decline in their costs of risk (–43% for US banks and –30% for European banks, from 2009 to 2010).

First of all, regulators have been mandated to make important determinations, such as which derivatives may still be traded over the counter or which participants could be granted exemptions in clearing obligations. It is obviously essential that our regulatory efforts result in similar solutions so as to avoid creating arbitrage opportunities. Second, the scope of possible mutual recognition regimes for trade repositories and clearing houses should be carefully assessed in order to obtain a fair reciprocal treatment. The basic principle is fairly simple: a third country trade repository or clearing house could service participants or markets of other countries provided that the legal and supervisory arrangements are deemed equivalent and that international cooperation arrangements are established. But equivalence is not really easy to assess and one could understand a more conservative approach based on a systematic registration. Indeed, under such a regime, a third country trade repository or clearing house servicing participants or markets of another country would have to be registered by the competent authorities of that country and, once registered, would have to be subject to regulations and to on-site inspections, in addition to the domestic ones.
However, the Swedish banks need to retain the capital they have at present and, therefore, should not pay any extra dividends. Neither does the introduction of the leverage ratio look like being any great problem if the banks maintain current capital levels. We have looked more closely at the four major banks (Nordea, Swedbank, Handelsbanken and SEB) and, at present, none of them falls below the minimum requirement of three per cent. However, the Swedish banks are finding it difficult to comply with the new liquidity requirements. The greatest challenge will probably lie in complying with the structural requirement. Here, the banks have two alternatives – either cutting back on the commitments that require stable funding (for example lending for housing purchases) or exchanging shortterm funding for long-term funding. This second alternative could well result in the banks’ funding costs increasing, which should push lending rates up somewhat. As yet, we have no exact figure on what this may cost in terms of basis points, but we assess that, despite everything, these costs will be small. 10  BIS central bankers’ speeches  How all this will affect the banks’ customers is hard to say. In the final analysis, the question of how these costs will be divided among the banks’ owners and customers is a question of competition. But, as we are now introducing regulations to reduce the risk of bankruptcies, I think it would be reasonable to assume that the banks’ financiers will lower their expected return.

This has enabled the banks to signal to the markets that they will pay off their debts on a certain date even if formally there is no specific date on which the securities fall due. Basel III thus entails a considerable tightening up of the minimum capital requirements. I think this is excellent. I have long advocated clearer and stricter regulations. As equity is expensive in relation to other sources of funding, tighter capital requirements will reduce the banks’ appetite for risk and at the same time increase their ability to manage losses. More and better capital will thus not only soften the effects of future crises but also reduce the likelihood of them occurring at all. A clear and uniform level for Core Tier 1 capital will also reduce the scope for arbitrary interpretations. This in turn will reduce the scope for creating a non-level playing field, which should benefit global competition. BIS central bankers’ speeches  5  Counter-cyclical capital buffer In addition to the new minimum requirements, Basel III comprises a counter-cyclical capital buffer of a maximum of 2.5 percentage points of Core Tier 1 capital. 6 The buffer acts as a dynamic capital requirement, which means that it varies over the economic cycle. The idea is that the banks should build up capital in good times that they can use to deal with losses in bad times.
Norges Bank became a member of the NGFS in December 2018. The primary objective of this network is to create an arena for central banks and financial supervisors to exchange experiences and share best practices in developing environment and climate risk management in the financial sector. We consider this network to be an important meeting place to arrive at a well-considered understanding of the role and activities of central banks in this field. 3/3  BIS central bankers' speeches

I want to make every effort to see that Eesti Pank has no need to come to the Riigikogu asking for capital at a time of such crisis. It is to avoid precisely this that the central bank builds up reserves and I am glad that the Eesti Pank Supervisory Board shares this opinion. For the central bank to be financially independent, it needs to maintain and invest its assets. The current situation in the financial markets, where interest rates on sovereign bonds have fallen to very low levels, poses new challenges for the central bank as a long-term conservative investor. Eesti Pank has reacted to changes in the operating environment and has spread its risks by adding further asset classes to the investment portfolio and investing money in the sovereign bond markets of more countries than before. •  Eesti Pank’s return on its investment was several times higher in 2014 than the target set at the start of the year, and reached 22.8 million euros. Falling interest rates throughout the year made investments in bonds profitable and the increasing share portfolio of Eesti Pank meant that we earned significant income from investments in shares. As well as earning income, Eesti Pank is careful to keep control over its spending and to use its money efficiently. For this reason we have put the Maardu manor site up for sale, as we do not need it in carrying out the main functions of a central bank.