samchain/econo-pairs-v1 huggingface dataset:
In this context I define the “new economy” as an increase in the potential growth of the economy. In the last few years, the growth of the American economy has surpassed most forecasts. Not only has the rate of growth been high in historic terms during the present upswing - around 3.5% per year on average since the end of 1991 - it has besides been very stable and unusually long lasting. At the same time, unemployment has fallen to near 4%; levels this low have not been witnessed since the 1960s. However, in distinction to previous booms, there has been no increase in the rate of inflation and the underlying rate of inflation has been more than halved since 1991, from over 4% to 2%. Public finances have improved considerably, from a deficit of 5% of GNP in 1991 to an expected surplus of around 1% this year. Looking at productivity per hour worked in American business, which is perhaps the best measure of how good a country’s growth potential is in the longer term, this has risen sharply, by over 2.5% on average since 1997; this figure can be compared with an average growth of productivity of around 1.5% over the period 1974-96. A substantial part of the improved productivity of labour can be explained by very high investments - so-called “capital deepening” - not least in computer equipment. In spite of the fact that unemployment has continued to fall throughout the period, the growth of productivity has been impressively high.

In the course of the very powerful upturn in the American economy, significant imbalances have built up at the same time. Among other things, the deficit in the current account has never been as great as it is now, and recently consumption has been increasing more rapidly than household incomes, which means that the savings ratio has been at a record low. Sooner or later these imbalances will need to be corrected. However, a discussion of how this might come about lies beyond the bounds of what I intended to talk about this evening. Are there traces of a “new economy” in Sweden? –  Since Sweden switched from a fixed exchange rate to an inflation target, monetary policy has been designed so as to reach this target and thereby create credibility. Monetary policy has succeeded in stabilising prices and at the present time long-term inflation expectations approach the Riksbank’s target of 2%. The changes in fiscal policy, which have entailed among other things a reform of budgetary procedures and the imposition of a ceiling on public expenditure, have had positive effects. This is manifested, for example, in the budget surpluses now being produced. Overall, we have made good progress towards achieving macroeconomic stability and therefore appear to fulfil the requirements for “good economic policy”, even if we have fulfilled these for a considerably shorter time than the USA. –  If, on the other hand, we look at structural factors, our problems were perhaps also worse from the start.
We reviewed these issues related to the development of the national payment infrastructure during the panel discussion, and my colleagues answered all the questions and spoke on our plans. This is really a crucial area. Winding up, I would like to say that we will continue our efforts to ensure price and financial stability, maintain the resilience of the financial sector, and enhance financial inclusion. Despite the pandemic, this topic also remained relevant for us since people even in small localities should have access to basic services. We have achieved significant progress in each of these areas. Today, I would like to thank the Seventh State Duma for the really enormous contribution to the advancement of financial laws. You have adopted many essential laws. I would like to mention a few very complicated major legislative changes enabling us to develop a modern financial sector meeting the needs of Russian people and companies. In 2017, the State Duma approved the law on banks’ financial resolution. Without this law, it would have been impossible to avoid losses for households and businesses that kept their money with several very large but, unfortunately, hopelessly impaired banks. I would like to reiterate that when we allocated funds for their resolution, this was not to provide financial aid to the banks’ owners and management, but rather to protect the funds of the banks’ depositors. Russia has completed the reform in compulsory motor third-party liability insurance. There were many discussions and doubts about it.

Some 12 percent of the Bronx workforce – a painfully high share – is jobless and less than a fifth of its adult population hold a college degree. The seeming disconnect between the pace of job creation here and high unemployment reflects commuting patterns. Many Bronx residents work in Manhattan and other places where job trends have been less favorable. In addition, not all jobs in the Bronx are filled by borough residents. High unemployment and low average levels of education help explain why the per capita income here is less than two-thirds of the national average. A quarter of the population here lives below the poverty line, more than double the national rate. Reducing poverty and raising the graduation rate are clearly major challenges for policymakers here,2 even though the Bronx, like the city, seems headed in a promising direction. How are families here doing in reducing their debt to more sustainable levels? Let me tell you what our special consumer credit panel reveals about the Bronx.3 Families here, as renters, carry relatively little debt. However, it worries me that in contrast to falling debt levels elsewhere, Bronx residents have not reduced their indebtedness during the last two years. Also troubling is the 17 percent of household debt in the Bronx that is seriously delinquent: roughly double the rate in the state and nation. Plus, the number of delinquencies is still climbing here, even though they are falling in the state and nation.
Mohamed S Fofana: Bank of Sierra Leone Charity Trust Fund Keynote address by Mr Mohamed S Fofana, Deputy Governor of the Bank of Sierra Leone, at the Scholarship Award Ceremony of the Bank of Sierra Leone Charity Trust Fund, Freetown, 25 January 2008. *  *  *  Mr Chairman Members of the Board of Trustees of the Bank of Sierra Leone Charity Trust Fund Board of Directors and Management of the Bank of Sierra Leone Officials of the Ministry of Education Heads of Commercial Banks and other Financial Institutions Members of the Fourth Estate Distinguished Guests, including the Awardees Students and pupils It is my honour and privilege to warmly welcome you all to the Scholarship Award Ceremony of the Bank of Sierra Leone Charity Trust Fund. The idea of a Charity Trust Fund was conceived by the Bank of Sierra Leone in the wake of the devastation caused by the decade old civil conflict in every sector of our society, the education sector, being key. We were convinced that the future for a better Sierra Leone and a decisive turnaround in the state of the economy, lie largely in education taking its rightful place in the development plan. As the nation’s Central Bank, we have a pivotal role to play in the development aspirations of the country. That is why as a corporate body, we have recognised our responsibility in the discharge of our duties to honour our corporate social responsibility.

We are therefore doing all in our power to compliment the efforts of the Government and other well meaning partners to help foster economic and social development. To this end, our corporate social responsibility is focused on providing a stimulus that will help promote excellence in every aspect of our development, but more so in EDUCATION. By supporting the education sector, our aim is to achieve the following: •  contribute towards the development of the human resource base required to drive economic activities in the country. In this regard, our objective is to open doors leading to abounding opportunities for future generations in our own small way. We hope that by providing for those who have the ability to achieve academic excellence but cannot do so for lack of financial support, we can help restore the academic prowess for which Sierra Leone was known in the continent. We would therefore assure everyone, not only those in secondary schools, but also institutions and individuals who have the talent and the commitment to demonstrate outstanding performance, that you will get our attention and support, if you are deserving. Mr Chairman, Distinguished Guests, Ladies and Gentlemen, it is only recently that the Bank of Sierra Leone has taken up the responsibility of helping in the pursuit of excellence especially in education, as a vehicle of development in Sierra Leone.
Yet despite this narrowing of the gap between the contributions of national and external demand to growth that I have referred to before, the expansion of the Spanish economy in 2006 has essentially been underpinned by the buoyancy of domestic spending. In particular, gross capital formation has retained considerable strength, while only private consumption and government consumption have slowed slightly in the year to date. The somewhat less dynamic behaviour of private consumption in the first three quarters of 2006 is a result of the interplay of numerous factors whose effects, in some cases, have tended to counter each other. The losses of purchasing power caused by the high inflation rates in the first half of the year have affected household disposable income and, therefore, they will have tended to reduce consumer  2  BIS Review 117/2006  spending. Further, the increase in borrowing costs following the successive rises in official interest rates by the ECB must have curtailed the spending capacity of some sectors of households. Conversely, intense job creation - running at a rate of over 3% - and the notable rise in household wealth are factors that should have sustained the growth of private consumption. Regarding household wealth, it should be pointed out that, although house prices have begun to show signs of slowing, there have continued to be very significant stock market rises in 2006, outpacing those in recent years, which were already considerable. As I mentioned earlier, gross capital formation has been very robust throughout 2006.

That is due in particular to the property market boom, on which the recent structural changes in the economy, including immigration, have had a bearing. Consequently, the financial position of the sector as a whole is fairly sound. The trend of indebtedness in the past ten years has been sufficiently significant as to identify it as one of the risks to consider in the essentially favourable scenario of the Spanish economy. The Banco de España should signal this fact, particularly in a setting in which credit continues to show signs of being very buoyant. But, at the same time, we cannot ignore the fact that the financial position of households and firms is healthy and provides a sound basis for adaptation to the interest rate levels in keeping with the recovery in economic growth in the euro area. The solvency of the Spanish financial system is a further guarantee for the maintenance of stability in the economy as a whole. In sum, the outlook for growth in the Spanish economy in the coming quarters is, in my view, relatively healthy. And economic policies can contribute to providing continuity to this expansion in the medium term, defusing some of the risks highlighted. In that connection, it will be essential to restrain demand impulses and improve supply-side functioning.
But, as any self-respecting asset manager would tell us, past performance is no guide to the future. This is especially true in an industry as large and as rapidly changing as asset management, with asset portfolios becoming less liquid and more correlated and investor behaviour becoming more fickle and run-prone. Future illiquidity pressures in financial markets, generated by asset management distress or wholesale portfolio reallocation, may  5  4  Figure represents total assets, adjusted for equal and offsetting liabilities and non-controlling interests and excluding intangible assets and goodwill, as of June 2013. BIS central bankers’ speeches  be larger and more potent. In other words, Black Swan risk in asset management may be real and rising (Taleb (2007)). Pro-cyclicality In practice, such adverse financial market dynamics are more likely to arise from asset managers behaving in a correlated fashion, perhaps because they face a common set of constraints or sources of stress. In this respect, it is possible to identify a set of market-wide conventions or regulatory practices which have the potential to drive common behaviour among asset managers and their institutional client base. These have the potential to turn idiosyncratic market frictions into systemic market failures. Around a year ago, the Bank began working with some academics and industry practitioners to explore these dynamics. In particular, it focussed on evidence of pro-cyclicality among insurance companies and pension funds (ICPFs) – their potential to amplify, rather than damp, the risk cycle through their portfolio choices.

2  Personal Financial Assets are defined as financial assets that are held by households, rather than companies or other institutions  3  The growth in AUM may be overstated by increased coverage of the source data over the period. 2  BIS central bankers’ speeches  From an end-investor perspective, both of these trends are understandable. Yet they also potentially carry risk implications, both for end-investors and for the financial system as a whole. For example, the shift towards illiquid assets heightens market risk for investors. And the move into passive and tracking strategies increases the potential for investor herding and correlated market movements (Bolognesi and Zuccher (2008)). Both potentially have implications for financial markets dynamics and systemic risk. Turning to the liabilities side of the balance sheet, here again some important trends are at play. Among the most important is the progressively greater share of investment risk being put back to end-investors, with commensurately less being borne by intermediaries and companies. One clear example is found in the pensions industry, with the structural shift away from Defined Benefit (DB) and towards Defined Contribution (DC) pensions. Here in the UK, the proportion of DB schemes offered to new members has fallen from 31% to 14% since 2008. Contributions to DC funds have been roughly twice as large as those to DB funds since the early part of the century.
For the statisticians among you: I have voted in 38 MPC meetings since I joined the Bank. In this time there were 9 occasions when I did not vote with the majority – 7 times I voted for a rise when rates were maintained, and twice I voted to maintain rates when they were reduced. In concluding this section on debt, I should say that I am moderately encouraged by the present trends. The rates of increase in domestic debt have recently slowed, and continue to do so [Chart 7]. I do take some comfort from this adjustment, which now seems to be in train. In policy terms I would like it to continue so that leverage continues to adjust downward as incomes rise. And if there were signs  of a reacceleration in debt per capita, it would once again weigh on my mind, and perhaps, if I were still there, on my policy decision. Chart 7: Annual growth rate of household debt Per cent  24 21  Unsecured borrowing  18 15 12  Total borrowing  9 6  Secured borrowing 3 0 94 95 96 97 98 99 00 01 02 03 04 05  Source: Bank of England  Labour market Throughout my time on the MPC we have been thinking about the reasons behind what seems to be a remarkably benign labour market environment with little pressure for higher wages, and yet with levels of unemployment that are at their lowest since the mid-1970s.

Institutions that are able to embrace new technological developments and offer customers additional services will benefit from this new integrated market. In a competitive and integrated economy, a forward-looking view is required so that retail payments have a level of safety and efficiency that is comparable with the best national systems in place today. Undoubtedly, this approach will considerably influence the balance of power on the European market of payment services, as well as on our local market. The proposed mechanisms will favour consolidation processes in the sector of payment infrastructure providers, and possibly also in the banking sector itself. SEPA stands for (S)Speed, (E)Efficiency, (P)Positiveness and (A)Automatisation. It is important that the SEPA project is not viewed just as a “one-shot operation”, but rather as a continually evolving project that fosters European integration, seeking to improve all aspects of the euro area retail payments market on an ongoing basis. The SEPA will also make a notable contribution to the socalled Lisbon Agenda, which aims at fostering competitiveness and ensuring the continuous development of the European economy. The National Bank of Poland, as a forward-looking and acting institution, which supports development of the Polish banking sector, has been participating, for two years now, in the TARGET system, and is now proceeding with intensive preparation for the transition  BIS Review 29/2007  1  to the new platform – TARGET2.
However, buoyant market liquidity could also reflect excessive risk appetite, indicating that liquidity risk could be under-priced, as well as high leverage. To the extent that high risk appetite is an important determinant of market liquidity, the current favourable liquidity conditions could suddenly, and unexpectedly, fade away, if there were a loss of confidence or an abrupt and lasting increase in risk aversion. This could expose several underlying vulnerabilities in the financial system on which I will elaborate later on. Global financial institutions Turning to global financial institutions, with the exception of the fact that the hedge fund industry has grown further in size, all other backward-looking indicators suggest that potential risks to financial stability posed by hedge funds have not changed materially since the December 2006 FSR. However, market risks posed by hedge funds remain. They arise largely from information which suggests that over-capacity, and indeed over-crowding, could be taking place in the sector after a simultaneous increase in the number of funds and a reduction of profitable trading opportunities over the last couple of years. On the one hand, as illustrated in the chart on the left of slide 7, average hedge fund returns have been on a downward trend since the early 1990s. This trend could point to overcapacity and to a consequent lowering of the amount of profitable investment opportunities available, although other explanations are also possible.

Comparing the current assessment with that presented in the December 2006 FSR, the main scenario for euro area financial stability remains broadly favourable:  BIS Review 69/2007  5  •  The current macroeconomic environment is benign and global and euro area economic activity it is expected to remain robust;  •  In February and March 2007, the resilience of the financial system was tested by the third significant burst of market volatility in two years, which it comfortably weathered;  •  Euro area credit quality, overall, remains high and should be underpinned by a favourable economic outlook;  •  Pockets of vulnerability in the euro area household and corporate sectors have most likely increased, but, on average, financial positions remain sound;  •  The profitability of euro area financial institutions further improved and solvency is comfortable relative to regulatory requirements.
I want employees to speak up. That’s why, at the start of my tenure as president, I made it clear that I wanted the “best idea to win,” regardless of where it originated or whether it contradicted something that I thought. In some instances, that will require people to admit mistakes. In that regard, I have to set the example that we all make mistakes, and that recognizing and addressing them head on—and, importantly, learning from them—is the best approach. A few years ago we created a new group at the New York Fed called Integrated Policy Analysis. Its purpose was to consolidate teams from many parts of the organization to develop a more integrated view of the economic and financial environment to help inform our policy responsibilities. I was a strong advocate for the idea. But, after two years of effort, it became clear to me and others that it was not working as well as we had hoped. There were a lot of reasons for that, and in the end we dissolved the group and reassigned the work and staff. I let our employees know that I took a calculated risk and it didn’t work out. By doing this, I aimed to show that when things do not go as planned, the best approach is to address it, not to be silent. I hope that, when our people are confronted with disappointing results in their work, they will do the same.

2/3  BIS central bankers' speeches  I mentioned earlier that we also need to reform incentives in order to encourage people to speak up. This is hard. I’ll share with you some of the change we have made at the New York Fed, recognizing that we do not have a monopoly on good ideas, nor can we claim to have a perfect culture. Skip-level meetings are common, and occur for the purpose of providing forums for sharing ideas. They are also a signal that escalation of problems matters to us. We offer training for new employees that emphasizes the importance of cognitive diversity and speaking up. We evaluate employees on their level of engagement with colleagues and their willingness to share insights. So, part of getting promoted is contributing diverse views and raising your hand. We have created programs to encourage peer recognition of good ideas, including backing for actionable initiatives selected by staff. This resulted, for example, in ideas like a “share your story” series to create institutional memory of past experiences and lessons learned. None of these ideas is a panacea. And, I know that we have not yet achieved our goal: a culture in which employees perceive that, by raising their hands and challenging what may be an orthodoxy or conventional wisdom, they are contributing to the mission of the New York Fed. I hope, however, that with the right incentives and good leadership models, we can move closer to that ideal state: an organization characterized by fresh ideas and open dialogue.