samchain/econo-pairs-v1 huggingface dataset:
Savings are encouraged by strengthening the financial system and delivering positive real interest rates through appropriate monetary policy measures. The Central Banks’ contribution to promoting investment will be somewhat indirect and will mainly arise from the business confidence that would be generated as a result of maintaining low inflation and minimising the macroeconomic risks. Currently, the Central Bank managed Employees’ Provident Fund (EPF) plays a significant role in supplying both equity and debt capital to the private sector as well as the Government, while generating optimum long term returns for members. The Central Bank will continue to fulfill this role and supply equity and debt capital in 2007 by carefully evaluating investment opportunities and a gradual diversification of investments. In addition, the service provided to the presently active two million members will be enhanced through a comprehensive reengineering programme of the EPF by fully automating its operations, using electronic means to update the member accounts in real time. The Central Bank will also actively explore the possibility of introducing a unified voluntary contributory social security scheme for over three million informal sector workers. This will provide a social security to these workers, while generating large scale savings and funds for investment as well. BIS Review8/2007  13  In keeping with the vision of the Central Bank, access to finance by all segments of the population will be improved through continued development of the finance sector.

If confirmed, this should serve to improve confidence and preclude the more negative economic scenarios, although it will take time for the attendant effects on activity to become apparent. 2  As regards the euro area inflation outlook, the ECB forecasts a very modest rise this year of 0.3%, with a recovery to 1% in 2021 and 1.3% in 2022. However, these values are well short of the medium-term price stability target, defined as inflation rates below, but close to, 2% over the medium term. The latest flash estimate for the euro area Harmonised Index of Consumer Prices, referring to October, shows annual inflation of -0.3%, weighed down by the recent appreciation of the euro, low energy and services prices, and the temporary impact of the VAT cut in Germany. Core inflation held at an all-time low of 0.2% in October, unchanged on September. It is worth noting that 35% of the headline inflation components recorded negative growth rates, and around 70% of the components grew at rates of less than 1%. Consumer expectations have held on a downward path since March, while the metric derived from financial markets (five-year swaps) declined slightly to 1.16%. Meanwhile, the long-term expectations of the Survey of Professional Forecasters held stable at around 1.7%. The situation I have just described is, therefore, one of a fragile and uncertain recovery in the euro area, in which some of the downside risks for our baseline scenario, which were identified just a few months ago, are materialising.
Gent Sejko: Bank of Albania’s engagement in financial education Address by Mr Gent Sejko, Governor of the Bank of Albania, at the opening ceremony of the Money Week 12-18 March 2018, Tirana, 12 March 2018. * * * Dear Mr Pedrazzi, Dear students, teachers and friends of the Global Week, Like in previous years, I have the pleasure to welcome you today to our central building, and thank you for your participation in the Money Week 2018. This is a special year as it marks a decade of Bank of Albania’s engagement in financial education, which meaningfully started with a Memorandum of Cooperation signed with the Ministry of Education. Over these years, financial education and financial inclusion have increasingly held a significant place in our work, in designing and implementing numerous educational projects. They are dedicated to different age groups, and consist of a variety of initiatives ranging from training and brochures to the high school elective module “Personal Finance in Your Hands”, the educational package for the elementary schools and the Albanian Money app. Moreover, the Museum of the Bank of Albania, our utmost effort in this regard, offers/provides a multifunctional space, where visitors may not only learn more about the monetary history in Albania and the central bank, but also deepen their financial literacy and expand their financial awareness. As a result of all these valuable experiences, we have been able to participate with dignity in the Money Week, which, in 2018, is celebrated in more than 135 countries.

The activities that will take place during this Week seek to draw the attention of the children and young people to the significance of personal finance and the impact of well-informed decisions on the personal success of each one of us individually, and of the whole society. 1/2  BIS central bankers' speeches  Like in any other educational activity of the Bank of Albania, beyond the message that we want to convey, we consider that the inspiration, originality and pro-active thinking are determinant elements for an effective comprehension of a complex, at the same time practical, topic such as finances. We may proudly say that all the submissions for the contests are characterised by these elements, thus demonstrating that, though challenging, the financial education of children and young people may be and is possible. Moreover, their work and commitment is an incentive to us to introduce more ambitious projects and expand this activity, geographically, each year. The contests for students from nine-year schools and high schools have been welcomed and the number of participants has been higher each year. This year, around 55 nine-year schools, 14 high schools, 8 universities and over 1000 pupils and students in 14 cities were involved. This success is also owed to the teachers and professors, whose passion has contributed to materialising all these efforts.
It still took a long time before government oil revenues yielded surpluses that could be set aside for future generations. Norway’s sovereign wealth fund received its first capital deposits in 1996, a quarter century after the government started earning money on oil. Until then, oil revenues had been spent as they were earned – and at times in advance (Chart 4). 4  NORGES BANK  Chart 4 The path to NOK 10 000 billion. In billions of 2020-NOK  1)  Periodic contributions to the GPFG  GPFG value  10000 8000 6000  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  10000 Oil revenue spending Government oil revenues Net transfers to GPFG Value gains  8000 6000  4000  4000  2000  2000  0  0  1971-1995  1996-2009  2010-2019  2019  1) GPFG at 30 September 2019. Sources: Ministry of Finance and Norges Bank  The picture changed when the cash flow from oil activities reached new heights around 2000. It became clear that future revenues would be much higher than anticipated. The fiscal rule, introduced in 2001, provided for a gradual phasing in of oil revenues into the economy. By limiting government spending of oil revenues to the real return, the path was paved for building up substantial government financial wealth. In the next years, the cash flow from oil production was far larger than the transfers to the central government budget, mainly owing to high oil prices. Transfers have been smaller in the past decade.

Chart 14 Strong growth in public demand. Public consumption and investment. Share of mainland GDP. Four-quarter moving average. Percent 36  36  35  35  34  34  33  33  32  32  31  31  30  30  29  29  28 1990  1995  2000  2005  2010  2015  28 2020  Source: Statistics Norway  14  The main responsibility for restructuring rests with the business sector. The recent years’ improvement in cost competiveness is a good starting point for stimulating growth in new activities (Chart 15). In combination with moderate wage settlements, the krone depreciation has made it cheaper for foreigners to buy goods and services from Norway. At the same time, higher import prices have given Norwegian customers an incentive to shift demand towards domestic producers. Thanks to inflation targeting and a floating exchange rate, cost adjustment took place much faster than would otherwise have been the case. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  Chart 15 Is Norway competitive enough? Labour costs.1) Index. 2013=100. Trade deficit. Share of mainland GDP. Percent 120 13 12  Trade deficit excluding oil and gas (l.h.s.) Labour costs in a common currency (r.h.s.)
Investors, on the other hand, were attracted by the relatively higher return in times of low investment rate levels and by the sense of security provided – among other things – by the assessment of rating agencies. The ultimate outcome was that instead of dispersing risks associated with bank lending, securitisation had the opposite effect of concentrating them in the banking system, with harmful consequences for financial stability. The size of the financial sector is another aspect which deserves close scrutiny. When the financial system grows too large it may eventually lead to a misallocation of resources. Of course, it has to be acknowledged that developed credit markets are important for business start-ups. However, while finance is a crucial element for the Schumpeterian process of creative destruction, the recent financial crisis has also highlighted the role that large financial markets play in downside risk. A growing number of academics and opinion makers are questioning the theory that the effect of financial markets on growth is always positive and increasing. The relationship may well be non-linear: when of reasonable size, financial markets do help allocating resources efficiently and promote economic growth. However, as they grow larger, it may well be that financial markets may exert a decreasing marginal contribution to growth. In extreme cases, as the size of financial systems exceeds some threshold, their effect on growth could even turn negative.

The Swedish economy is unquestionably beset by problems of a structural nature and it is not inconceivable that a link exists between the exchange rate and some of these problems, for example the structure of taxation. If it is true that the lack of industrial renewal which seems to be discernible in the statistics from the Seventies and Eighties still applies, this is another factor that can affect the exchange rate. The discussion would benefit, however, from more specific arguments and a thorough analysis. For one thing, it is by no means clear that the structural problems in Sweden are so much greater than those in Germany, for example, that this could account for the krona’s depreciation against the German mark. For another, it seems remarkable that long-term problems of this kind would affect the exchange rate so suddenly. Another argument ascribes the weakening of the krona to discrepancies between Sweden’s inflation target and the monetary policy strategy of the ECB. This, too, seems unlikely. The monetary policy differences seem to be slight. Since the beginning of the Nineties, moreover, inflation in Sweden has been below the EU average; in recent years this situation has been accentuated, with Sweden as one of the countries with the lowest inflation in Europe. In conclusion, it can be noted that for much of the period with a flexible exchange rate the krona has been weaker than was considered desirable. In the early years this was mainly due to a lack of confidence in economic policy.
And notwithstanding the current squeeze on the availability of credit (and withdrawal of many products), households have also benefited from a significant expansion in the range of saving and borrowing products compared to the position 20 years ago. 14 The practical examples described above clearly demonstrate the benefits of financial innovation. Enhancing the capability to transform and transfer risk, and thus improving the matching of the supply of risk products to the demands of end investors offers the prospect of lower risk premia and greater financial efficiency. And that in turn should lower the cost of capital for firms and improve the ability of households to smooth their lifetime consumption and to insure against unexpected outcomes. 4  BIS Review 93/2008  15 Taking an even further step back, there is a beguiling vision of financial innovation taking us closer towards a world of more complete and efficient markets for state-contingent contracts. The ability to decompose and trade the distribution of many dimensions of fundamental risks creates a potential lattice of efficient risk prices which can then, by arbitrage, be used to price efficiently the combinations of these risks embedded in “natural assets” and in “synthetic assets” structured to meet investor demand. Section 4: Frictions and Market Imperfections 16 The previous section described how financial innovation has widened the range and choice of financial products available to corporates and households to facilitate improved risk management. But it also noted the potential importance of market imperfections and frictions in the provision of such contracts.

Nigel Jenkinson: Financial innovation – what have we learnt? Speech by Mr Nigel Jenkinson, Executive Director, Financial Stability, Bank of England, to the Reserve Bank of Australia Conference on “Lessons from the Financial Turmoil of 2007 and 2008”, Sydney, 14-15 July 2008. This speech is co-authored with Adrian Penalver and Nicholas Vause. *  *  *  Section 1: Introduction 1. At last year’s conference, we presented a paper highlighting the profound impact of rapid financial innovation, deregulation and capital market integration on the performance, risk and management of the global financial system. We particularly noted the benefits of financial innovation. 1 We argued that the development of new financial instruments has created opportunities for households and corporates to improve their management of financial risks and has facilitated the smoothing of consumption and investment over time and across different states of the world. But we also emphasised that the breakdown of barriers to the supply of financial products and the large volume of risk pooling and shifting within and across borders has increased the network interconnections within the global financial system. That has added to the system’s complexity. And we underlined that understanding and addressing the corresponding evolution of financial system risks poses major challenges for financial institutions and for financial stability authorities. 2. The past year has seen these potential major challenges turn into real practical problems.
03.12.2019  Low interest rates for longer. Profitability and risk appetite in the Spanish banking sector 15th Banking Industry Meeting/IESE Pablo Hernández de Cos Governor  Ladies and gentlemen, good morning: First I would like to thank the organisers, and, in particular, Professor Juan José Toribio, for their invitation to participate in the 15th Banking Industry Meeting. In October the Banco de España published its Autumn 2019 Financial Stability Report. As usual, this report identifies the main risks to financial stability in Spain and their recent behaviour. The analysis shows that the balance of risks to financial stability has worsened since the publication of the Spring report and identifies three main risks: the global economic slowdown and geopolitical uncertainty, low bank profitability, and the legal risk for banks derived from the potential consequences of the outcome of pending court action. The worsening of the risks to the stability of the Spanish financial system in the past half year is due in particular to the downward revision of the global economic outlook. Indeed, this year global GDP growth is expected to be the lowest since the international financial crisis; in addition, the balance of risks to this growth is tilted downward, mainly as a result of the continuing high level of geopolitical uncertainty. The downward revision of economic forecasts in the past year has been across the board, but has especially affected the euro area and emerging market economies, and Spain has not been immune to this trend.

6  See, for example, Galbraith, J. and G. Tkacz, “How far can we forecast? : Forecast content horizons for some important macroeconomic time series”, Department of Economics Working Paper 13 (2006), McGill University. BIS Review 138/2007  3  out forecasting memory with the time series models. We were better than the model up to one year ahead and we had a forecasting memory four quarters ahead. Forecasts for employment If we instead look at employment forecasts, we believed that employment would rise more in 2003 and 2004 than it actually did (Figure 2). Instead, productivity growth was repeatedly stronger than expected. But on the other hand, employment has been stronger than expected in our assessments over the past year. The forecasts we have made for employment growth are on the whole more accurate than those of the time series model and the forecasting memory stretches eight quarters ahead (Figure 6). If, on the other hand, we only look at developments over the past two years, the Riksbank has succeeded in forecasting employment about as well as the time series model. This means that we have not succeeded in adding any further information on top of what the simple model can capture. How is the relationship between employment forecasts and outcome? The correlation is almost 0.9 one year ahead and just over 0.4 two years ahead (see Figure 9). The correlation is stronger than for GDP and agrees with the picture we obtained when we compared the forecasts with the time series model.
They promote a form of moral hazard that can sow the seeds of instability and of costly fluctuations in the real economy”. In practice it is difficult to know whether an “imbalance” does contain the seed of a future negative demand shock on a scale that would leave inflation below the target for some considerable time, or whether it will unwind of its own accord. The fact that growing imbalances might cause sharp deviations of inflation from target at some point in the future, raises the possibility of a trade off between deviations of inflation from target over the next  BIS Review 68/2002  15  year or so and deviations of inflation from target further ahead. That, I believe, is the right way to think about the challenge to monetary policy posed by asset price movements. Although there are no simple answers I hope I have shown that inflation targeting is enough, provided that one thinks carefully about the horizon over which policy can hope to affect inflation. The second challenge for monetary policy over the next decade is the possibility of deflation. That prices are now rising at the slowest rate for decades is, of course, a positive achievement of which the Bank is proud. But is the real threat now deflation? It is important to recognise that falling prices of manufactured goods is not the same as general deflation.

For participants to acknowledge that such actions are questionable would in fact require the activation of slower, more effortful “System 2” thinking. The initial transgression may be small, but the culmination of many small transgressions can result in a set of behaviours which would normally be unacceptable becoming the norm, and an undesirable culture becoming ingrained. This is a version of the old proverb that one bad apple spoils the whole barrel. But the initial argument that it is just the case of “a few bad apples” is no longer credible. Instead it seems that there were deep rooted problems in the nature of FICC markets that resulted in practices that would be unacceptable elsewhere. As the Archbishop of Canterbury put it at a recent panel on ethics and finance at the IMF: “bad business models can corrupt good people.” Perhaps there is something also wrong with the barrel? The characteristics of the Fixed Income Currency and Commodity markets So what are the distinctive characteristics of FICC markets, and how might they have contributed to these problems? First and foremost, the FICC markets are notable for their heterogeneity. That reflects a key role of many FICC markets in providing bespoke instruments, tailored to meet the needs of investors and issuers. For example, while there are just under 2,500 publicly listed equities in the UK, there are over 11,000 different UK corporate bonds. In the US the disparity is even starker, with more than 36,000 bonds compared with just over 5,000 listed stocks.
Mervyn King: Rebalancing the United Kingdom’s economy Speech by Mr Mervyn King, Deputy Governor of the Bank of England, to the British Chambers of Commerce National Conference, London, 23 April 2002. *  *  *  For a decade now, the British economy has grown at an average rate of close to 3% a year, just above its long-run trend rate. The spare capacity created by the recession of the early 1990s has gradually been used up. Unemployment has more than halved from over 10% in early 1993 to around 5% now, on the internationally standardised measure. And growth has been more stable than for decades. But overall this stability has concealed the contrasting fortunes of different sectors in the economy. Since 1997 household spending on consumption has risen, on average, by 4% a year in volume terms. It is most unlikely that consumer spending can continue to rise at this rate. The trade deficit has widened sharply in recent years, reaching some 3% of GDP at the end of last year. And the increase in the trade deficit would have been even larger had it not been for an improvement in the terms of trade, the ratio of export to import prices, which rose by 8% over the past five years. The result of the widening trade deficit, and the improvement in the terms of trade, is that domestic demand has been able to grow faster than output.

In the long run, the higher levels of both employer and employee National Insurance contributions will result in lower growth of real take home pay - that is simply the price of better public services. Real incomes need not fall but, for a short time simply grow more slowly than otherwise. Indeed, if productivity growth rose, then real wages growth need not fall at all. Profits may bear some of the brunt in the short run, but over the longer term the adjustment will be to wages because firms will need to earn the going rate of return on new investment. It remains to be seen whether the additional National Insurance contributions will lead to attempts by firms to push up prices to recoup the higher employers' contributions and by employees to push up wages to offset their higher contributions. The commitment of the MPC to keeping inflation on track to meet the target, and its track record since 1997, should help to anchor expectations of inflation to 2.5%, thus encouraging the adjustment to occur without a rise in inflation. It is certainly helpful that the increased contribution rates have been announced well in advance so that expectations of real wage rises can adjust. In recent months the rate of increase of average earnings per person has been extremely low, partly because of a fall in average hours worked. For the economy as a whole, average earnings rose by only 0.9% in the year to February - the lowest figure recorded since April 1967.