samchain/econo-pairs-v1 huggingface dataset:
There is not a single critical price that will constrain production or investment. Fourth, with respect to oil produced by fracking, productivity gains have cut drilling costs and raised oil production, so breakeven costs per barrel have been falling. Finally, if oil investment were to soften, this  2  2  Current world oil consumption is 92 million barrels per day (International Energy Agency, October Oil Market Report). BIS central bankers’ speeches  would lead to lower breakeven costs as resources currently in short supply – e.g., water, welders, housing and transport – became more available and less expensive. Of course, as with any forecast, there is some meaningful chance that growth will turn out to be either weaker or stronger than expected. However, I believe that the risks around this forecast are reasonably well balanced. The subsiding headwinds that I discussed earlier are the primary reason for seeing the downside risks as limited. In contrast, the ongoing geopolitical risks remain substantial. At the same time, several factors suggest that growth is unlikely to turn out to be substantially stronger than the consensus forecast. First, the upside from housing relative to the forecast is likely limited. Although there has been an impressive recovery of multi-family housing starts over the past few years, single-family housing starts are growing only slowly and are unlikely to climb much faster over the next year or two. The demand for new homes is still hindered by tight credit conditions for homebuyers.

The aim of the scheme is to defray the frictional costs of catastrophe bonds issuances. We have received keen interest from the region, with a healthy pipeline of issuers keen to tap on the grant scheme to issue a catastrophe bond here. Leading insurance brokers have expressed support for Singapore as a domicile and are working with their Asian clients for potential issuances here. b. We have also formed an industry-led Alternative Risk Transfer work-group to advise MAS on initiatives to support the development of Singapore as an ILS domicile. The workgroup will continue to provide feedback on the current ILS regime including on 3/4  BIS central bankers' speeches  regulations, tax and structures. 15 Fourth, our proximity to Asian markets allows for a deep understanding of underlying risks and needs of the sponsors. We have grown as a traditional re/insurance market due to this and it will likewise be an important consideration for Asian ILS issuers looking to tap capital markets in the region, and for capital providers that are underwriting the risks. 16 Despite this promising outlook, we recognise that ILS expertise is still nascent in Asia, and there is much scope for Singapore to learn from international best practices. We hope to strengthen Singapore’s proposition as a ILS domicile in 4 ways: a. First, we seek to explore the introduction of bespoke corporate structures for the ILS market, like the Protected Cell Company (PCC) structure, to provide more structuring options to potential issuers.
This is a riskier phase of an infrastructure investment but banks are good at doing this. However, the new capital standards for banks do not make it attractive for them to hold on to these loans on a long term basis, even though the projects at the brownfield stage are operating smoothly. At the same time, there are many other investors, including insurance and pension funds, which may be looking for less risky investments that can produce steady long-term cash flow. Therefore I can see a good opportunity for banks to offload their loans to these long-term investors. However, it is easier said than done. There are many issues that need to be tackled. Just to name a few: the large transaction size of infrastructure loans makes concentration risk of (a) collateral a more prominent issue to be addressed, say as compared to the securitisation of a portfolio of mortgage loans comprising a large number of loans but with each being relatively small in size; apart from being large in size, infrastructure loans tend to be significantly less homogenous than the other types of asset for securitisation.

Since 2017, Islamic financial institutions have also taken a leadership role in spearheading sustainable finance through the development of sectoral and activity impact-based risk management frameworks. Sectoral Guides focusing on palm oil, renewable energy and energy 1/3  BIS central bankers' speeches  efficiency activities have already been issued, and will be followed by Guides for the manufacturing, construction and infrastructure, as well as oil and gas sectors by the end of this year. Through JC3, these complementary developments are being coordinated and integrated to build a credible foundation for the financial industry to support the transition efforts. Beyond the financial sector, the JC3 also actively engages with various stakeholders on climate and transition initiatives. The formation of a new sub-committee this year, to address data gaps for climate risk analysis is another major collaboration as part of JC3’s efforts to strengthen climate risk management and scale up green finance. The JC3 is also pursuing broader engagements with key businesses to better understand transitioning issues and opportunities along the supply value chain. This will help inform the structuring of customised financial solutions for the different types of players within the entire value chain. Objectives and motivations for collaboration As a financial regulator and supervisor, it is important to be clear on the objectives and motivations for our collaborative efforts with the industry and other stakeholders. The primary goal for us is to support the appropriate consideration of climate risks in promoting resilient financial institutions.
Thus, the central bank’s inflation forecast at the policy horizon becomes the intermediate target.2 In the case of Chile, our inflation target is three percent, and the time horizon is two years. As long as this target is credible, monetary policy will not only achieve inflation stability, but will also reduce the volatility of the business cycle. Analytically, the FIT regime is based on the idea that the policymaker minimizes a loss function that penalizes both inflation deviations from the target and deviations of output from full employment. Therefore, what the FIT does is to optimize the tradeoff between output  1  A predecessor was Taylor (1998) who called this period the “long boom.”  2  In order to avoid indeterminacy or multiple equilibria, the forecast must be the central bank’s forecast and not that of the market (Bernanke and Woodford, 1997). 2  BIS central bankers’ speeches  volatility and inflation volatility. The time horizon is what makes this scheme “flexible.” The target is not achieved in the short run since it also takes the output costs of achieving the target into account. A rigid inflation target is one in which the central bank only cares about inflation, and hence the horizon would be the shortest possible, enough for monetary policy to affect output. The longer the time horizon, the higher the weight of output volatility in the loss function (De Gregorio, 2007).

In a box in one of last year’s inflation reports, for example, we found that the impact on inflation from a given output gap has decreased; one explanation for this could have to do with inflation expectations being more stable. At the BIS seminar, moreover, two papers provided indications of changes in relationships behind the prices of imported goods. That agrees with the picture we have formed in recent years. The pass-through to inflation from exchange rate movements, for example, is lower than before. This may be connected with stronger competition at various levels. It also seems clear that permanent exchange rate adjustments have price effects that differ from and are greater than those elicited by movements that are a natural part of today’s flexible regime. In any event, in the last few years there have also unquestionably been favourable effects from the deregulation of electricity and telecom markets. Even though similar changes of equal importance for the rate of price increases in the coming years are not easy to identify today, both deregulations and generally growing competition will presumably be important features in the picture of inflation. Another point worth making is that in a world where monetary policy with a more independent mandate is focused on low inflation in a growing number of countries, low inflation as such is BIS Review 107/2000  2  presumably an important factor. That is really what the textbooks teach us to expect, with their standard message that inflation is a monetary phenomenon, determined precisely by monetary policy.
Chart 28: Option implied probabilities of a rate rise and rate cut over the next 12 months Prob(rate cut) Prob(rate rise)  Riskneutral probability  100%  80%  60%  40%  20%  0% Jan.14  Jul.14  Jan.15  As a thought experiment, imagine Source: Bloomberg; Bank calculations. Notes: The swathes represent assumptions about the evolution of the wedge between SONIA policy were not set by the MPC but alternative and Bank Rate. They do not account for other sources of uncertainty such instead by algorithm. Specifically, as the presence of risk premia in option prices, and should not be treated this algorithm sets rates to as a confidence interval. For further details please see Clews et al (2000). minimise deviations of inflation from target and output from trend, using the Bank’s forecasting model, COMPASS, to simulate the effect of alternative policy paths.20 What would it suggest was the optimal policy path given these preferences and the projections in the February Inflation Report? This is shown in Chart 29. With the lower bound set at zero, the optimal path for interest rates would involve them being cut in the short-run towards zero for around a year, before then roughly following the market yield curve. This results in inflation and output returning to target sooner than in the February Inflation Report, at the cost of a slight over-shoot thereafter. Even without any asymmetry in risks to the inflation outlook, a case can be made for policy easing today.

Since the last monetary policy assessment, the exchange rate and interest rate conditions have changed substantially. This has considerable repercussions for the inflation and growth outlook in Switzerland. Global economic outlook I will now present our assessment of the global economy. The international economic environment is developing largely in line with our previous expectations. The global economic recovery is continuing. In the fourth quarter of 2014, growth in the US remained above potential. The favourable momentum of the economy there is also reflected in the sound growth in employment. The economy picked up somewhat in the euro area. This was primarily due to strong quarterly growth in Germany. In Japan, too, demand increased. By contrast, economic developments in the major emerging economies were mixed. Consumer price inflation edged down worldwide due to lower oil prices. In many advanced economies, inflation moved into negative territory at the beginning of 2015. During the course of the year, the growth of the global economy is likely to firm gradually. Several factors are supporting this growth. First, the significant decline in oil prices is helping to increase demand. Second, monetary policy in the advanced economies remains very expansionary. The euro area, in particular, is likely to benefit from the further decline in interest rates as well as the marked depreciation of the euro. Recently, an easing in European banks’ lending conditions, which were very restrictive, has also been observed. BIS central bankers’ speeches  1  Despite these favourable developments, the outlook for the global economy is still uncertain.
The crisis is also expected to have lasting effects on our economy, as both the level and the growth rate of potential output are most likely reduced for a longer time. Turning to price developments in the euro area, according to Eurostat’s flash estimate, annual inflation increased to 1.5% in March, from 0.9% in February. This was higher than expected. While this does not change our assessment, it is important to understand whether the surge in inflation in March is temporary or more lasting in nature. This is difficult to assess without a breakdown of developments in the overall HICP, which will only become available tomorrow (16 April). However, it seems reasonable to consider energy and food prices as the main drivers behind the higher than expected inflation outcome in March. Looking ahead, we expect inflation in the euro area to remain moderate over the policyrelevant horizon. The outcome of our monetary analysis confirms the assessment of low inflationary pressures over the medium term, with money and credit growth remaining weak. At the same time, we need to monitor price developments in the more dynamic regions of the world very closely, as well as the evolution of commodity prices and their potential impact on global inflation. Notably, a multi-speed recovery of the world economy, with some regions growing fast, while the recovery in others remains rather slow, has the potential to exert upward pressure on prices.

Over the past six months: •  the level of unconfirmed trades has fallen substantially, for probably the first time since the inception of the credit derivatives market,  •  the practice of assigning positions without the knowledge or consent of all counterparties has stopped, and the market has adjusted with relative ease to a regime that now ensures that firms actually can capture their exposure to their counterparties,  •  there has been a dramatic increase in the share of active participants in these markets that are able to use the automated confirmation platforms, and a significant increase in the share of transactions conducted on those platforms,  •  the length of time between trade dates and confirmation is becoming shorter,  •  industry participants are making progress toward an agreement on a settlement process for credit events that will build on the approaches taken in the Calpine and Dephi cases and reduce the risk of price dislocations in cash markets given the large size of notional derivatives positions relative to the value of the underlying obligations, and  •  the Depository Trust and Clearing Corporation announced a plan to establish a "trade information warehouse" for all OTC derivative transactions that would provide for a centralized repository of derivatives contract terms and specifications, which will, in a more fundamental way, improve all aspects of the post-trade cycle.
What has been done so far I shall begin by examining progress to date. At the time of the outbreak of the international financial crisis the Spanish economy and banking system had seen more than ten years of real estate expansion, excessive private indebtedness and continual competitiveness losses. Such imbalances had been generated in an environment characterised by very low interest rates and dominated by the absence of any significant structural reforms in relation to public spending, pensions, the labour market or savings banks. After ten years building up imbalances it was inevitable that the economy would have to adjust and reforms were essential to restore growth and employment as soon as possible. If we examine what has happened during the two and a half years since the collapse of Lehman Brothers, it is clear that our country’s economy and banking system have both made considerable progress in terms of adjustment and restructuring. The private sector has made progress in reducing its imbalances at a faster rate than in other countries with similar problems: the external deficit fell from 10% of GDP at the beginning of the crisis to 5% last year and Spain has even managed to turn some long-standing deficits, such as those in trade with the European Union and in non-tourism services, into surplus.

For example, around a quarter of those in temporary work say they could not find a permanent job and over 10% of part-time workers say they could 12  not find a full-time job. A Skills and Employment Survey published just last week found around 1.7 million  workers might be suffering from high levels of anxiety about their uncertain hours of work. 13  One of the side-effects of structurally-higher job insecurity is a reduced willingness to add to that uncertainty by moving job. If so, this would mean “twisters” are fewer in number than in the past and that stickers are at 11 12 13  Note that data for pay growth for “stickers” and “twisters” is annual, with latest estimates to 2017. Taylor (2017). Skills and Employment Survey (2018). 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  an even greater pay disadvantage to twisters as their outside option has lost value. In short, job insecurity reduces workers’ pay power and weakens upward pressure on pay. Empirical evidence is consistent with that. Even after controlling for different occupations and locations, self-employment has been found to result in a wage discount for workers of around 15%. 14  Temporary  contract workers face a wage discount of around 5-6% and agency workers of around 2 ½%. contract workers suffer a wage discount of around 7%.
This despite the fact that the nominal wage increases remained at 3% this year while being as much as 8% during the comparison period. Neither should we forget the deterioration in living standards that Swedish wage earners and the Swedish people experienced compared with other European countries during these years. Sustainable improvements in productivity due to a “new economy”? Developments in IT and biotechnology have taken place very quickly in Sweden. Telecommunications and pharmaceuticals are hi-tech products, which are growing quickly in Swedish exports. Exports of telecommunications products have more than doubled since 1995 and pharmaceuticals have risen by 80%. The economy is undergoing a restructuring towards these areas which releases us to some extent from the cyclical dependence on pulp, paper, steel and engineering products which are our traditional export goods. However, most important perhaps are not developments in these industries per se. Although they are growing rapidly, they are still of rather small size. The computing consultancy industry has doubled during the 1990s but still only accounts for 80,000 employees, or around 2% of employment. The BIS Review 126/1999  2  sector “radio, TV and telecommunications products” is approximately the same size. Industry as a whole has recovered from under 18% of GDP in 1993 to 22% in 1998. No, the really important effects of the new technology will probably take place outside the hi-tech and knowledge-intensive industries. Personal computers, mobile telephones, the Internet, and other IT can increase productivity within broad segments of the Swedish economy.

This process too can have contributed to a better relationship between inflation and growth although it is difficult to prove that this is the case. However, I am to say the least doubtful about a new economy in the sense of new technology leading to a sustainable increase in productivity. Wage formation - a challenge The strong upswing the Swedish economy is now undergoing is borne up both by domestic and international demand. Private consumption is expanding rapidly, at the same time as export is recovering and the public sector is beginning to demand labour again. In the present situation, it is considered that there are unused resources in the economy, but when growth increases the use of resources and inflationary pressure will naturally also increase. As has been said, the Riksbank must assess how strong growth in demand can be permitted without inflationary pressure compelling interest rate rises. A current theme is the discussion on changes in the relationship between growth and inflation, which I have taken up in general terms. Another very important part in the inflation process is wage formation and I find here that it is justified to give prominence to the risk that evident imbalances between different categories of wage earners can lead to the positive development we are now seeing being prematurely interrupted. The collective agreements that have recently been concluded do not give any particularly great cause for concern. Wage increases have been around 3% per year.
Unless the financial industry can rebuild the public trust, it cannot effectively perform its essential functions. For this reason alone, the industry must do much better. As was discussed earlier, in the U.K., seven of its largest banking institutions have recently founded the Banking Standards Review Council under the leadership of Sir Richard Lambert, who joined us today. I would strongly encourage the largest institutions based here in the United States to work to develop collaborative solutions aimed at improving culture and rebuilding the public trust. The key role for senior leadership Correcting this problem must start with senior leadership of the firm. The “tone at the top” and the example that senior leaders set is critical to an institution’s culture – it largely determines the “quality of the barrel.” As a first step, senior leaders need to hold up a mirror to their own behavior and critically examine behavioral norms at their firm. Sustainable change at any firm will take time. Turning around a firm’s culture is a marathon not a sprint. Senior leaders must take responsibility for the solution and communicate frequently, credibly and consistently about the importance of culture. Boards of directors have a critical role to play in setting the tone and holding senior leaders accountable for delivering sustainable change. A healthy culture must be carefully nurtured for it to have any chance of becoming self-sustaining. Firms must take a comprehensive approach to improving their culture that encompasses recruitment, onboarding, career development, performance reviews, pay and promotion.

-  •  These new areas will allow Islamic banks to reduce their exposure to the real estate sector, and to take advantage of the stronger growth potential of the emerging market economies. There are gaps to be filled in structured trade finance and in funding for infrastructural projects as the emerging markets grow, and as global finance consolidates. Third, Islamic finance can also seek to meet the increased demand for simpler and more transparent products and ‘back-to-basics’ finance. Investors are now much more circumspect about complex products and their risks. The crisis taught investors worldwide not only about the damage they can face from the risks that are known and unsurprising, but of the risks of ‘what we do not know’. Islamic finance, with its focus on transparency, price certainty and risk-sharing, can ride this wave of demand for simpler and more basic investments. However, Islamic finance will have to overcome a few important challenges in order to grow its share in global finance and contribute to cross-border finance. These include the need to reduce fragmentation in Islamic finance markets due to differences in accepted standards of Shariah compliance between regions, jurisdictions, and in some cases even domestically within jurisdictions. This has hampered the flow of liquidity between jurisdictions, and is in part why there is yet no Islamic equivalents to the international money and bond markets. There is considerable progress being made to address these challenges.