samchain/econo-pairs-v1 huggingface dataset:
There are three relevant dimensions of economic stability: price stability, financial stability and macroeconomic stability, including the health of public finances. In all these areas, we have made substantial progress in recent years. During the crisis, the ECB took all appropriate measures to ensure that price stability provided an anchor in an uncertain and volatile economic environment. As for financial stability, the establishment of the European Stability Mechanism and the launch of banking union, with its Single Supervisory Mechanism and Single Resolution Mechanism, have been milestones in this respect. As a third dimension, the crisis has shown us the kind of existential threat to monetary union that can be brought about by the build-up of excessive imbalances, i.e. by the lack of fiscal and macroeconomic stability. New growth will not be generated by new debt. Sound fiscal policies are essential for growing out of debt. Therefore, the existing rules should be applied in a credible manner. That said, we cannot claim “mission accomplished”. What has been achieved so far is not enough. The answer to the remaining challenges could take the form of a “convergence process 2.0”, which should have an agreed timeline and milestones. But convergence can only be sustainable if it is associated with a commensurate deepening of integration, if it is a race towards best practice institutions and policies rather than towards mere nominal outcomes.

An insurance company like GE Life, which is located in the heart of a dynamic growth region, is well-positioned to capture the growing opportunities. Achieving sustainable long-term growth, however, is highly complex. Among the many segments in financial services, the life insurance industry has probably the longest time horizon. The industry takes on assets and liabilities that literally last a lifetime. Good actuarial data and analysis provide an important basis for risk pricing and management. But future trends and developments such as increasing longevity or medical breakthroughs are harder to predict. Hence, a sound framework on asset-liability management and a continual focus on risk management are critical. At the same time, markets are changing and innovating rapidly. Competition comes from many sources, while the needs of customers will continue to evolve. To keep up with the competition, intermediaries have to continue to invest in research and development, and provide value-adding products and services in risk management, underwriting, actuarial analysis, investment and financial advice. This is especially important in the context of Singapore’s maturing population who will need good retirement planning services in order to remain financially independent through their golden years. Another key implication of the long time horizon is the special relationship with the policyholder. In general, both the insurance company and the policyholders are entering into a long-term financial commitment. In any long-term relationship, the quality of trust is of utmost importance. This relationship of trust can only be sustained by good advisory and sales practices.
Nevertheless the qualitative assessments and quantitative impact studies converge toward the understanding that the global regulatory changes will impact the availability and cost of funding in the EM in transition period. The financial structure in the EE is rather simple, and dominated by the banking system, the retrenchment of credit financing might impair growth prospects and the potential for job creation in the emerging markets. BIS central bankers’ speeches  1  Although the reforms process is quite comprehensive and there are probably many channels through which it can translate to the EE, still there are some key channels that I would like to highlight. The first point of transmission refers to Basel III capital requirements. To provide adequate coverage of banks’ risks exposure with capital, focus is placed on enhanced risk coverage (especially trading book), higher quality and quantity of the regulatory capital, and constraints on leverage. Overall, it appears that banks in emerging markets are well capitalized with relatively low reliance on hybrid capital instruments, with traditional business and no significant exposure to risks related to trading book, so significant direct impact of the new capital requirements is not expected. But the indirect effects are perceived as important, with possible adverse impact on the access to financing and the growth potential. Some of the important indirect implications are very well being pinpointed by the IMF (April, 2013) in its scrutiny on impact of the global regulatory changes on the CESEE countries.

The 1992 tax reform streamlined the tax system and tax rates were substantially reduced. It became easier for investors to find projects that yielded high returns. State-ownership policy in Norway was changed to introduce a clearer division of roles and healthier commercial principles. And not least, the EEA Agreement provided access to the European Single Market for most of the Norwegian business sector. When oil prices fell again in 2014, Norway was better prepared. But as a nation, our income has nonetheless been reduced by the fall in oil prices and we should be cautious about introducing measures that will increase consumption. Reasonable measures in a period of restructuring are those that promote economic growth over time, without crowding out private enterprise. Monetary policy can facilitate restructuring. And it is able to do so because there is confidence that inflation will remain low and stable. With low and stable inflation, a weaker krone and higher import prices will not pass through to wage growth and inflation, as was the case after the fall in oil prices in 1986. On the contrary, the depreciation of the krone over the past couple of years has compensated for more than a decade of high cost inflation. This has improved the competitiveness of Norwegian firms – in foreign and domestic markets. In addition, lower interest expenses are easing the burden for many households and firms. There is still room for manoeuvre in monetary policy.
David Bailey: Operational resilience - next steps on the Prudential Regulation Authority‘s supervisory roadmap Speech (virtual) by Mr David Bailey, Executive Director for International Banks Supervision of the Bank of England, at the UK Finance Webinar “Operational Resilience: Beyond", 28 April 2022. * * *  Introduction Good morning everyone and I’d like to thank my colleagues at UK Finance for inviting me to speak today, the first opportunity I have had to speak at a UK Finance event since I took up my post as Executive Director for UK Deposit Takers Supervision at the Prudential Regulation Authority (PRA) last September. Given that, I’m going to focus on one of our highest supervisory priorities at the moment, Operational Resilience (Op Res). It is a particularly timely moment to be discussing the topic as it has been just over 12 months since our Op Res policy was published. Since then firms have been on a journey towards the end of March deadline that recently passed to identify their Important Business Services (IBS), set impact tolerances, and start mapping and testing to ensure they can remain within those impact tolerances. From our initial Discussion Paper in July 2018, through the follow up to our Consultation Paper in December 20191, and the close and collaborative work on implementation last year, I’d like to thank UK Finance and its members for their open engagement on this policy.

Findings on Important Business Services identification On IBS, our current view is that firms have generally made positive progress against our expectations for identifying these services. This is good to see and reflects well on the sector as a whole. We also know that firms have taken a wide variety of approaches to the granularity with which they have identified their IBS. To illustrate this I will use a couple of examples of different approaches we have seen. These represent only a small subset of the IBS that firms’ submitted but I think illustrate the point. So, taking payment services as one example, we saw that some firms have identified all types of payments as a single business service, whilst others have split out different types of payment (for example payments made via individual systems including BACS, CHAPS and Faster Payments). Others have gone in a different direction, for example differentiating services for credit card payments versus debit card transactions. We have seen similar themes in other areas, such as services to do with lending. Here some firms have taken a granular approach – for example listing services such as “obtaining a loan” and separating different types of loan – while other firms have kept their IBS at a higher level or gone in different directions by identifying different types of products and/or the split between preand post-trade execution.
I sometimes come across the description that the new structure for cash management has resulted in irresponsible privatisation and outsourcing. This is not true. Instead, it is a question of achieving the greatest possible economic efficiency, not least by creating a sound incentive structure. Those of you who have followed this work know that the path to greater efficiency proved to be more winding than we had initially estimated, and a good deal more challenging. However, we now appear to be well on the way to attaining a more efficient organisation for cash management, together with the banks. With the old organisation, where the Riksbank determined where the depots would be located, there were many transports to the Riksbank’s depots to retrieve and deposit banknotes merely for the purpose of avoiding the cost to the banks of holding banknotes. The new model, which is being launched at present, means that the banks will open their own cash depots and that they will receive interest compensation for the banknotes they hold in these depots. The banks can now establish as many depots as they themselves consider necessary, taking into account, for instance, security and  BIS Review 33/2006  1  efficiency aspects, and locate these depots in regions they consider suitable. This should lead to a reduction in the number of cash transports to and from the Riksbank's offices. So far, three pilot cash depots have been set up to test different systems. These are located in Härnösand, Malmö and Kristianstad.

Egil Matsen: Climate change, climate risks and Norges Bank Speech by Mr Egil Matsen, Deputy Governor of Norges Bank (Central Bank of Norway), at Norges Bank, Oslo, 8 November 2019. * * * Accompanying charts of the speech. Introduction This autumn, news reports have included a hurricane in the Bahamas, a typhoon in Japan and large-scale wildfires in California. Many lives have been lost, and the economic losses have been substantial. While we should be cautious in attributing single weather events to global warming, climate research points towards an increase in extreme weather events and natural disasters in the years ahead. What we have seen so far may be a forewarning of what is to come. Chart: The temperature is rising Global warming is one of the greatest challenges of our time. The global average temperature has increased by about 1 degree Celsius above pre-industrial levels. It is widely accepted that climate change is largely human-induced. Greenhouse gas emissions must be drastically reduced if the temperature goals of the Paris Agreement are to be reached. Putting the necessary measures in place has proved to be demanding. From an economist’s standpoint, a carbon tax would be the most effective way to reduce greenhouse gas emissions – the polluter must pay. However, carbon taxes and other measures are often met with opposition. Costs are imposed locally, while the gains from lower emissions are enjoyed by all. The temptation is to be a free-rider. In addition, the consequences of current emissions will largely be borne by future generations.
With financial growth and innovation, we have seen a dramatic increase in the complexity of the risk management challenge. The frontier of innovation inevitably advances somewhat ahead of the pace of improvements in the risk management and supervisory infrastructure. The models used to inform credit judgments, to measure exposure, and to price risk in the newest instruments and trading strategies are by definition less grounded in experience. The process of assigning fair or market value is much more subjective and less amenable to objective verification. Consensus on the appropriate accounting treatment is less well established. As the complexity of risks has grown, so have the demands on firms to understand how exposures might evolve, especially in times of market stress. As an example, basis risk - in which hedged positions only partially offset one another - is an increasingly important concern for many firms, especially those that deal in complex products such as options. Assessing and managing these more complex risks requires risk management tools with a commensurate level of sophistication. In particular, the further development of techniques for stress testing and scenario analysis and of methods for translating stress test results into concrete risk management outcomes are important areas for additional progress. The risk management challenge is complicated by the nature of the institutions at the core of the system. Large, diversified financial institutions comprise many separate, highly specialized business units, each of which can have its own approach to tracking and managing risk exposures.

Indeed, this became the norm across the income statement. Thus, ordinary profit rose by more than 30%8 year-on-year in the first quarter, with increases of 9% both in net interest income and fee and commission income. Meanwhile, impairment losses fell by 12.5% compared with March 2021. It must be noted, however, that the full economic and financial impact of the war in Ukraine did not materialise in the first quarter of the year. As regards the cost of bank funding, the average cost of liabilities9 has fallen since the onset of the pandemic, down to 0.5% at end-2021. The latest data available point to a change in trend, albeit with these costs holding below pre-pandemic levels (slightly above 1%) for now. In particular, wholesale market funding costs rose in the initial months of 2022. Indeed, expectations of interest rate rises have fed through to wholesale market interest rates on long-term bank debt (a measure of funding costs) more robustly than to the Overnight Index Swap (OIS) rate.10 Thus, banks’ credit risk spread has widened. Banks stepped up their debt issuance in 2021 to comply with prudential and resolution requirements, with issuances of Tier 2 instruments and contingent convertible bonds  8  By contrast, in 2022 Q1 net profit fell by 30% compared with the same period a year earlier, but this was due to the almost € billion recorded in extraordinary gains in March 2021 as a result of the merger at CaixaBank.
Those SME financing fault-lines have been clearest at times of financial stress. During the Global Financial Crisis, many UK SMEs struggled to access bank credit on reasonable terms or, in some cases, at all. Constrained credit to companies was, in turn, a potent factor behind the UK’s anaemic subsequent recovery. These same fault-lines were re-exposed during the Covid crisis. The good news, this time around, was that large numbers of loans – in excess of one and a half million of them – were made to UK businesses by UK banks in the space of a few months. The bad news is that the vast majority of these loans would not have been made at that speed without a 100% guarantee from Government. Only by effectively nationalising SME lending were the Macmillan gaps bridged in crisis. Over the years, several initiatives and institutional fixes have been attempted to close the Macmillan gaps. These include the British Growth Fund (BGF), the British Business Bank (BBB) and Innovate UK. While individually helpful, none of these has had either the scale financially, nor the scope regionally, to close the Macmillan gaps. Fintechs, using new data and new technologies, have sought to bridge these gaps with some success but, realistically, are likely to do so only slowly. To my mind, what is needed to bridge the Macmillan gaps, durably and comprehensively, is the equivalent of a UK Development Bank, operating on a decentralised basis.

Policies are needed to address the structural strains in the demand side (at household level), while structural reforms are still needed on the supply side as well. 1  Voinea, L. and Monnin, P. (Feb. 2017), “Inequality Should Matter for Central Banks”, Blog of the Council on Economic Policies, https://www.cepweb.org/inequality-should-matter-for-central-banks/  4  Figure 1. Home ownership percent 100 90 80 70 60  50 40 30 20 10 0 RO LT SK HU BG PL LV EE CZ ES SI PT CY FI  IT BE IE SE NL UK FR DK AT DE  Source: ESRB Report on Vulnerabilities in the EU residential real estate sector - 2016  Figure 2. Household gross debt-to-income ratio  Figure 3. Household mortgage debt-to-income ratio  Source: ESRB Report on residential real estate and financial stability in the EU, 2015  5  Figure 4. Overcrowding - Households with dependent children RO  70 LV PL  overcrowding %  60  BG  HU SK  50 IT  LT  40 CZ  30  AT  EE  20 DE  10  DK  SE  UK FR NL  IE BE  55  60  65  70  SI ES  FI CY  0 50  PT  75  80  85  90  95  100  homeownership % Source: Eurostat  Figure 5. Average no. of rooms per person No.
Table 1  World growth (annual change, percent) Average 90-99  Average 00-08  2009  2010 (e)  2011 (f)  2012 (f)  World at PPP  3.0  4.0  -0.6  5.0  4.1  4.4  World at market exchange rates  2.8  3.0  -2.0  3.6  3.0  3.7  United States  3.2  2.3  -2.6  2.9  3.0  3.2  Eurozone  2.2  2.0  -4.1  1.7  1.3  1.5  Japan  1.5  1.4  -6.3  3.9  0.8  2.3  China  10.0  10.4  9.2  10.3  8.9  8.7  Rest of Asia  5.6  4.9  0.1  7.6  4.5  5.0  Latin America (excl. Chile)  2.7  3.7  -2.0  6.4  4.2  4.2  Commodity exporters  2.7  2.9  -1.0  2.8  2.6  3.0  Trading partners  3.1  3.6  -0.3  5.9  4.4  4.6  (e) Estimate. (f) Forecast. Sources: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts, the International Monetary Fund and statistics institutes of the respective country.

As for the inflation forecast used in this Report’s baseline scenario, a large part of the change responds to the direct impact of the fuel price increase. In the case of non-perishable foodstuffs, actual inflation data for the last few months show an increase that reflects December’s projections. The baseline scenario assumes that it will continue to rise at annual rates in the order of 4 to 5 percent during 2011 (figure 10). Thus, the Board foresees that annual CPI variation will return to the tolerance range during the second quarter of 2012 and will stay at 3 percent until the end of the year. This forecast assumes that the propagation of price increases in foodstuffs and oil will follow historic experiences. It also assumes that the economy will grow at a pace consistent with its capacity, limiting the propagation of these shocks to other prices and to labor cost pressures. Private inflation expectations are similar to those described in the baseline scenario. March’s Economic Expectations Survey (EES) shows an inflation rate at December of this year of 4.4 percent. The Financial Operators Survey for the second half of March shows inflation one year ahead at 4.4 percent. These two figures are slightly higher than they were in December 2010. For the medium term, expectations also rise and the EES of March foresees inflation two years ahead at 3.2 percent (figure 11). With respect to end-of 2010, breakeven inflation figures derived from financial asset prices have also increased for all the different terms.
On this occasion, I would like to inform the Commission of three advances on the subject. The first one refers to the follow-up of the recommendations of the Independent Evaluation Panel, whose final report we submitted to this same Committee in September 2019.6 Said Panel made an assessment of the Bank’s performance in fulfilling its constitutional mandates of controlling inflation and preserving stability, and concluded that the CBC is “a high quality and very professional Central Bank,” whose “policy analysis and conduct meet high standards, comparable to those of inflation-targeting central banks in advanced economies.” It also noted that its management “has been exemplary by emerging market standards and has been able to keep medium-term inflation expectations anchored at around 3 percent.” Together with the above, the Panel made 40 recommendations for improvement in the areas of monetary policy communication, economic modeling, financial stability, and corporate issues. In this regard, I would like to inform the Commission that in the coming days a Collaboration Agreement will be signed with the Commission for Financial Market, which will complete the implementation of all the Panel’s recommendations validated by the Board and which do not require legal amendments. In particular, this agreement establishes coordination protocols in key areas for both institutions, such as information exchange and coordination of stress tests, regulatory initiatives, situations that pose threats to financial stability, monitoring of financial market infrastructures, know-how sharing, and technical assistance. Annexes on information exchange and stress tests will be signed together with the general agreement.

In the case of oil, long-term price estimates have fallen in recent years, pulled by both the arrival of new drilling and production technologies and the projected fall in demand. In this market, the entry of shale oil brought down average global oil extraction costs. In addition, the “green wave” would discourage the demand for oil compared to projections of a few years ago. However, it is expected that a price of around USD 60 per barrel will be sufficient to balance out the market in the long term (Table 3). V.  Sensitivity and risk scenarios  The central scenario is built using a set of assumptions, as I have just described, which shape the projections. Sensitivity tests can be performed on said assumptions that, while keeping GDP growth in the foreseen ranges, require a somewhat different monetary policy action. These scenarios form the MPR Corridor (Figure 19). On the one hand, it is possible that demand will expand more than expected, either due to a greater willingness of households to consume—in a context of a gradually deconfined economy—or due to fiscal transfers exceeding those already considered. In the latter case, tax, liquidity or public investment measures could be added, prompting an even more procyclical fiscal policy behavior. In such a situation, higher inflationary pressures would lead to the need for an earlier withdrawal of the monetary stimulus, which is reflected in the upper bound of the MPR Corridor.