samchain/econo-pairs-v1 huggingface dataset:
To achieve such remarkable success, these countries reformed their tax and benefit systems by reducing, for example, the tax wedge on labour income and by enforcing job search rules more strictly and a better monitoring of eligibility for unemployment benefits. They also increased the flexibility of their labour markets. What all these countries also have also in common is that they have significantly reduced product market regulation. This leads to the second prerequisite for higher potential growth: increasing competition in order to establish efficient and well-functioning product markets. 8  Work beyond 65 years of age is being encouraged through a 2% increase per annum in the final pension. 9  See, for example, V. Genre, R. Gomez-Salvador and A. Lamo (2005): “European Women: Why do (n’t) they work?” ECB Working Paper Series, No 454, March 2005. 10  See A. Annett (2006) “Lessons from successful labour market reformers in Europe” IMF euro area policies: selected issues, August 2006. 4  BIS Review 18/2008  Increasing competition Many studies point to the potential that increasing competition has to increase employment and to boost productivity trends by improving production efficiency and by enhancing the incentive to invest and innovate. 11 In the European Union, significant progress has been made in strengthening competition and increasing economic integration over the last two decades. The initiative of the single market has brought sizable benefits for the EU’s economy.

In these three countries labour market institutions are currently assessed to be more flexible than in Luxembourg, Italy, France, Germany, Belgium and the Netherlands. This should help achieve a balance of employment protection that gives both stability – encouraging workers to invest in firm-specific skills – and mobility – allowing for reallocation between productive and non-productive sectors.1 These same countries have also introduced several measures to help connect wage levels more closely with actual productivity developments. The link between collective bargaining and economic conditions has been strengthened by the possibility for more firm-level agreements. In Greece, wage floors have been significantly reduced to boost youth employment creation; in Portugal, they have been frozen and overtime pay considerably reduced. Wage indexation has become less prominent in Spain and in Cyprus it has been abolished. In all these countries the labour market reforms have started to have an impact on private sector wages. Private sector compensation per employee has fallen significantly in Greece since 2011, correcting what was an unsustainable increase prior to crisis, and it has also started to adjust in Spain, Portugal and Cyprus in 2012–13. I fully recognise the difficulties this process creates, yet this has to be set against the need for wages to adjust to reduce unemployment and restore external competitiveness. We are expecting that that these positive effects will dominate going forward and help employment to begin recovering in the near future.
Timothy F Geithner: Challenges in risk management Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Institute of International Bankers Luncheon, New York,18 October 2005. *  *  *  Thanks for giving me a chance to address this meeting of the Institute of International Bankers. Your presence in our markets adds greatly to the competitiveness and dynamism of the U.S. financial system. The major international institutions contribute not just depth and liquidity to our markets, but also bring new ideas and global perspectives on developments here and abroad. And the Institute has played an important role in fostering dialogue among international bankers and policymakers on issues of mutual interest. You are meeting at a time when the financial markets reflect a substantial degree of confidence about the future—confidence in the stability of future macroeconomic outcomes and confidence in the strength of many of the world’s major financial institutions. Against this backdrop, I thought it might be useful to talk about our hierarchy of concerns and priorities in the supervisory process, particularly those that relate to the financial strength of the major intermediaries and the functioning of the markets in which they operate. I should note that we, of course, have a broader set of related supervisory responsibilities and a broader agenda of specific concerns.

1/3  First, the greater role of hedge funds and other unregulated entities in our financial system today requires more attention by the major banks and investment banks to counterparty risk management. The greater diversity of participants in risk intermediation is probably on balance a positive thing for our financial system. Hedge funds, private equity funds and other kinds of investment vehicles help to disperse risk and add liquidity. Their greater prominence in our markets, however, means that banks and investment banks face a heightened challenge in managing the risks involved in their exposure to these firms and in understanding the firms’ ability to weather conditions of stress and their impact on market conditions in those circumstances. The degree of the systemic risk presented by the growth in the leveraged, unregulated financial institutions depends in part on how well the major dealers manage these challenges. Market practice in these areas has improved significantly since 1998, but progress has been uneven across the dealer community, and competitive pressures have caused some erosion in counterparty discipline relative to the risks in exposures.
Figure 14  CPI inflation forecast (1) (2)  Core inflation forecast (1) (2) (3)  (annual change, percent)  (annual change, percent)  5  5 5  5  4  4 4  4  MP Report Sep.20  3 2  3 3 2 2  MP Report Jun.20  1 0  MP Report Sep.20  18  19  20  21  22  MP Report Jun.20  1 1 0 0  18  19  20  21  22  (1) Plotted for 2018 is the annual changes in the CPI and CPI minus volatiles obtained by splicing the series with base 2013=100 with the monthly variations of the 2018=100 basket as from February 2018. See Box IV.1 of the March 2019 MP Report. (2) Gray area, as from the third quarter of 2020, shows forecast. (3) CPI minus volátiles. Sources: Central Bank of Chile and National Statistics Institute (INE). 19  3 2 1 0  Figure 15  MPR corridor (*) (percent)  3.5  3.5  3.0  3.0  2.5  2.5  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0  0.0  20 Corridor  21 Confidence interval: 33%  FBS  22  EES  Confidence interval: 66% Forward  MPR (*) The corridor is constructed following the methodology in Box V.1 of the March 2020 MP Report.

Survey data available up to September confirm the weakening in the euro area’s growth momentum, while remaining consistent with a modest economic expansion in the second half of the year. Looking ahead to 2015, the outlook for a moderate recovery in the euro area remains in place, but the main factors and assumptions shaping this assessment need to be monitored closely. Domestic demand should be supported by our monetary policy measures, the ongoing improvements in financial conditions, the progress made in fiscal consolidation and structural reforms, and lower energy prices supporting real disposable income. Furthermore, demand for exports should benefit from the global recovery. At the same time, the recovery is likely to continue to be dampened by high unemployment, sizeable unutilised capacity, continued negative bank  BIS central bankers’ speeches  1  loan growth to the private sector, and the necessary balance sheet adjustments in the public and private sectors. The risks surrounding the economic outlook for the euro area remain on the downside. In particular, the recent weakening in the euro area’s growth momentum, alongside heightened geopolitical risks, could dampen confidence and, in particular, private investment. In addition, insufficient progress in structural reforms in euro area countries constitutes a key downward risk to the economic outlook. According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.3% in September 2014, after 0.4% in August. Compared with the previous month, this reflects a stronger decline in energy prices and somewhat lower price increases in most other components of the HICP.
One is that the macroeconomic instability resulting from this type of development could make it more difficult for the Riksbank to stabilise economic activity and inflation in a sustainable manner. It is therefore hardly remarkable that the Riksbank has tried to counteract it, and it is difficult to see that this is something outside of our mandate, as some have claimed. Another reflection is that, as the problems with a trend of rising household debt and housing prices affects many parts of the economy, it is necessary for several policy areas to cooperate to be able to achieve a lasting solution. Regardless of what measures are taken, neither monetary policy that leans against the wind nor macroprudential policy are sufficient on their own – and probably not even these two combined. Other policy areas, and especially housing policy, need to be included in the equation. This is something that the Riksbank has highlighted and discussed on other occasions and I do not intend to discuss it further here.17 A third reflection is that when it comes to the risks of a development of this type, the critics have not been very clear, in my view.

The starting point in revising laws is therefore to ensure that the governing laws allow for the conduct of Islamic finance business. A closely related goal is to consider removing elements in existing laws, including the non-regulatory laws, which may render the conduct of Islamic finance business uncompetitive or inefficient. Initial considerations would involve changes to ensure that Islamic finance is placed on a level playing field with conventional finance. The purposes and objectives of the governing laws for Islamic finance are known to be largely similar to conventional finance from the financial regulation standpoint. Notwithstanding this, an ideal approach is devising a legal framework for Islamic finance that sanctions the statutory obligations for Shariah compliance in the governing law. This approach however, may not be feasible as preference for religions concerns can be seen to be contradictory to the principles of secularism and parity of beliefs rights in certain jurisdictions. We may need alternative approaches. I will revisit and elaborate on these points in greater detail at a later part of this speech. In Malaysia, the new Central Bank of Malaysia Act 2009 explicitly codifies the duality of the Malaysian financial system which shall consist of the conventional financial system and the Islamic financial system. In this regard, Malaysia has taken the approach to enact regulatory laws that are, at least for banking and takaful (Islamic insurance) industry, separate from conventional finance as the legal foundation for the conduct of Islamic finance business.
At the last meeting of the Federal Open Market Committee (FOMC), it was decided that the amount of Treasuries and mortgage-backed securities (MBS) we have been purchasing should each be pared back by $ billion, so that we would be purchasing a total of $ billion a month (in addition to reinvesting the proceeds of maturing issues we hold) rather than $ billion per month. In addition, it was noted that “if incoming information broadly supports the Committee’s expectation(s) … the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings.” And it was made clear that the FOMC expects it will hold the base rate that anchors the yield curve – the federal funds rate, or the rate on overnight money – to its present near-zero rate well past the time when unemployment is reduced to 6½ percent. I was pleased with the decision to finally begin tapering our bond purchases, though I would have preferred to pull back our purchases by double the announced amount. But the important thing for me is that the committee began the process of slowing down the ballooning of our balance sheet, which at year-end exceeded $ trillion. And we began – and I use that word deliberately, for we have more to do on this front – to clarify our intentions for managing the overnight money rate. As an economist would say, “on net” I was rather pleased with the decision taken at the December FOMC meeting.

There are some details that impacted our balance sheet, which I have omitted so as not to bore you or entangle you in the entrails of central bank operations: For example, liquidity swaps with other central banks declined from a peak occasioned by the financial crisis of $ billion the week ended Dec. 10, 2008, to $ billion the following March, thus somewhat mitigating the growth of our balance sheet over that period.3 From my perch, I considered a balance sheet of $ trillion and a base lending rate of 0-to-1/4 of 1 percent more than sufficient to stimulate not just the housing market but the stock market, too, thus placing us on the path of what economists refer to as “the wealth effect” – the working assumption that rising prices for homes, stocks and bonds floats the income boat of all Americans. I basically said so publicly on March 26, 2009, in a speech to the RISE Forum, an annual student investment conference. At the time, the S&P 500 was priced at 814, the Nasdaq at 1,529 and the Dow at 7,750. The mindset of investors at that moment was summarized at an earlier FOMC meeting by one of my most esteemed colleagues at the Fed, who quipped that in looking at the balance sheets of most financial institutions, “nothing on the right is right and nothing on the left is left”.
Thomas Jordan: Challenges for the SNB in extraordinary times Introductory remarks by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 20 June 2008. *  *  *  Around the world, the effects of the financial crisis on the implementation of monetary policy and the composition of central banks’ balance sheets are becoming more and more apparent. On the one hand, conventional monetary policy has all but exhausted its options, and unconventional measures are being increasingly used. On the other hand, some central banks are having to manage the illiquid assets which they took over in an effort to stabilise the banking system. Both of these situations also apply to the Swiss National Bank. Therefore, after giving a brief assessment of the developments in the international financial markets, I will turn my attention to the unconventional monetary policy measures being taken by the SNB. I will then move on to discuss the SNB StabFund. To conclude, I will look at the risks facing the SNB that are associated with these activities. Situation in the international financial markets Although the first few weeks of the year saw stock markets around the globe experiencing their lowest levels in many years, the surprisingly positive results from the US banking sector in mid-March prompted a turnaround in market sentiment. Stock markets have since been recording strong price gains. Other financial market segments also saw a significant recovery.

While some future moderation can be expected in the light of tightening financing conditions and slower economic growth, bank borrowing by euro area non-financial corporations grew  2  BIS Review 57/2008  at an annual rate of 15.0% in the year to March 2008, and the flow of loans in recent months has been strong. For the time being, there is little evidence that the financial market turbulence seen since early August 2007 has strongly influenced the development of broad money and loans. Continued strong loan growth to non-financial corporations suggests that the availability of bank credit to euro area firms has not been significantly impaired by the financial turmoil thus far. Further data and analysis will be required in order to obtain a more complete picture of the impact of the financial market developments on banks’ balance sheets, financing conditions and money and credit growth. To sum up, a cross-check of the outcome of the economic analysis with that of the monetary analysis clearly confirms the assessment that upside risks to price stability prevail over the medium term, in a context of very vigorous money and credit growth and with no significant signs of supply constraints on bank loans. The economic fundamentals of the euro area are sound, and incoming macroeconomic data continue to point to moderate but ongoing real GDP growth. However, the level of uncertainty resulting from the turmoil in financial markets remains high.
And consequently I think that from the authorities’ point of view we need to discuss whether the level of the risk weights is reasonable or whether it needs to be raised – perhaps by establishing a floor for the risk weights the banks use when calculating their capital adequacy. The third priority concerns ensuring that public authorities stand ready to use the tools we currently have at our disposal to cool down the mortgage market. Finansinspektionen has already taken a stand by introducing a cap on the loan-to-value ratio. On our part it would involve using our possibility to require that the banks hold reserves with the Riksbank. By linking the size of the minimum reserve requirement to lending to the housing market, lending to mortgage customers would become relatively more expensive than lending to other  3  The risk weight of a loan is the risk that the borrower will not be able to meet his or her obligations. Minimum Capital Ratios are set in relation to the total loan multiplied by the risk weight. BIS central bankers’ speeches  5  sectors. And in this way it should be possible to steer the banks’ lending away from the mortgage market. We at the Riksbank are currently investigating what operational and technical requirements need to be met to launch a minimum reserve requirement for this purpose.

The first reason relates to a possible reason why loan losses in Sweden have historically been low; namely that in times of difficulty the public sector has helped maintain the household sector’s debt-servicing ability through the Swedish social insurance system. In practice, this means that when the household sector’s debt-servicing ability is shaken, it affects firstly the individual, secondly public finances and only thirdly the lenders. This could mean that the banks lack an incentive to fully take into account the risks entailed in excessive credit-granting and high loan-to-value ratios. To put it another way, the risk weights we currently have for mortgages may be “correct” from the banks’ business point of view, but they are potentially too low in society’s broader perspective. The second reason for questioning the risk weights is that they are backward-looking. And as we all know, history doesn’t always repeat itself. This is one reason why I am concerned, despite the Riksbank’s own stress tests showing that the Swedish banks would not suffer particularly large loan losses, even if the situation in the mortgage market worsened significantly. One can’t help wondering whether it is reasonable that Sweden’s risk weights are among the lowest in Europe, while our households are among the most indebted. And their debts are increasing. I don’t think it is reasonable.
It is vital that the commitments made to achieving balanced budgets by 200304 be firmly followed up in the Member States concerned. A continuation along the path of fiscal consolidation is essential, as is vigilance in ensuring strict adherence to the medium-term plans and rigorous implementation of the procedures of the Stability and Growth Pact. Equally, the expected recovery should be seen as an ideal opportunity to strengthen efforts towards implementing comprehensive structural reforms – in public expenditure and revenues and product, labour and financial markets. Heads of State and Government confirmed this objective during their recent meeting in Barcelona. If implemented vigorously, such reforms could increase the growth of real GDP and employment on a sustainable basis. Past improvements in the functioning of markets, together with wage moderation, have contributed to strong employment growth and a considerable reduction in unemployment. It is therefore clearly in the interest of all countries to continue to rigorously implement the agenda agreed in Lisbon and recently confirmed in Barcelona. We are now at your disposal for questions. 2  BIS Review 22/2002

Will an inflation targeting regime lead to a larger or smaller risk of imbalances building up compared to a monetary targeting regime? These highly relevant questions are being asked by a number of central banks in emerging markets that have recently been forced to abandon a fixed exchange rate policy that was no longer sustainable. The papers to be presented at this conference will hopefully throw some light on a number of the questions I have raised here this morning. I look forward to learning what our distinguished guests have to say on these matters. 3  BIS Review 51/2000
Thus, even though inflation is currently somewhat below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually. This judgment is supported by the fact that financial conditions have eased, rather than tightened, even as the FOMC has raised its short-term interest rate target range by 75 basis points since last December. But, the upward trajectory of the policy rate path should continue to be shallow, in part because the level of short-term interest rates consistent with keeping the economy on a sustainable longrun growth path is likely to be considerably lower than it was in prior business cycles. The FOMC recently launched the process of balance sheet normalization—in which an increasing proportion of maturing Treasuries and agency mortgage-backed securities (MBS) repayments are allowed to run off the Federal Reserve’s balance sheet. While this process also should exert some monetary policy restraint over time, I believe the impact will be quite modest. Not only was this shift in policy widely anticipated, but we also have seen that the impact on the level of long-term interest rates has been small as expectations have adjusted. The economy has made great strides in recovering from the Great Recession, as the unemployment rate has fallen from 10 percent to 4.2 percent, aided by accommodative monetary policy. Measures of underemployment have also improved considerably and are near pre-crisis levels.

As we all move forward to strengthen the global financial system, we stand ready to cooperate with African central banks, a critical component of which is building strong relationships of trust and understanding. Our participation in these meetings are an important part of furthering our partnership and we look forward to a more comprehensive and sustained engagement going forward. 2/2  BIS central bankers' speeches