samchain/econo-pairs-v1 huggingface dataset:
Since the labour market is becoming ever more global, the demographic changes will be increasingly influential on local labour markets. According to UN estimates 3 , Europe’s population in 1950 was 547 million, in 2005 – 728 million, and is bound to decrease to 653 million in 2050, under the assumption that the present trends, including migrations, do not change significantly. It is estimated that over the next 45 years, when the European population drops by 75 million, the Asian population will grow by 1.3 billion, and the African population – by over a billion. At present, the share of the Asian, European and African population in the worlds’ population is 60%, 14%, and 11%, respectively. In 2050, according to UN projections, the respective shares will reach 57%, 21% and 7%. Fifty years ago, the number of Europeans exceeded that of the Africans by threefold; in fifty years, this trend will reverse. What do the data show? In my opinion, there are three vital and far-reaching conclusions to be drawn. Firstly, the Asian population will account for over a half of the world’s population, and if the economic growth continues to significantly exceed the growth dynamics in the US and Europe, Asia will become the world’s economic centre. Secondly, the share of Europe in the world's population will decrease threefold over a hundred years, i.e. in the period from 1950 to 2050.

8  BIS Review 64/2006  countries transferring their jobs, following a few years of domination of the UK in Europe, was Germany, whereas India continued to be the leader among the countries which provided destination for the off-shoring process. Following India was the Czech Republic (before China and other Asian countries), where quite a number of jobs were shifted from Germany and Portugal. In light of the data, Poland’s attractiveness as a destination of the off-shoring process is growing gradually, whereas that of Hungary is going down. Table 3. Off-shoring in the EU The country to which jobs wereJob destruction (in number ofJob destruction in the EU workplaces) in the EU in theJanuary – November 2005, due shifted period 2002 - 2003 through off-to off-shoring shoring China  3361  3077  India  9458  5470  Asian countries  3786  3271  Czech Republic  780  3890  Hungary  1110  772  Poland  120  2676  Total  33151  31942  Source: European Restructuring Monitor, own calculations  Numerous available analyses have revealed that off-shoring is bound to grow and increasingly concern the services sector 16 . For instance, in the years 1980 – 2002 trade in goods and services grew annually by 6.9%. According to the forecasts by McKinsey Global Institute, in the years 2003 2008 off-shoring of services to countries with low manufacturing costs will grow at a rate of 30% per annum. In 2003 the global trade in services stood at ca.
Norges Bank’s mandate provides a basis for the conduct of monetary policy: “Monetary policy shall be aimed at stability in the Norwegian krone’s national and international value, contributing to stable expectations concerning exchange rate developments. At the same time, monetary policy shall underpin fiscal policy by contributing to stable developments in output and employment. Norges Bank is responsible for the implementation of monetary policy. Norges Bank’s implementation of monetary policy shall, in accordance with the first paragraph, be oriented towards low and stable inflation. The operational target of monetary policy shall be annual consumer price inflation of approximately 2.5 per cent over time. [...]” The responsibility for implementing monetary policy is delegated to Norges Bank pursuant to the Norges Bank Act and the appurtenant Regulation. The Bank sets interest rates based on our interpretation of the Regulation. In our interpretation, we give weight to the Government’s rationale for the Regulation, to the purpose as expressed in the first section, and to our knowledge about the relationships between the interest rate, the exchange rate, output, employment and inflation. The first sentence in the mandate refers to the value of the krone. Stability in the krone’s internal value implies that inflation must be low and stable. Low and stable inflation contributes to economic growth and to stability in financial and property markets. The Regulation also states that monetary policy shall be aimed at stability in the Norwegian krone’s external value, contributing to stable expectations concerning exchange rate developments.

Svein Gjedrem: The conduct of monetary policy Comments by Mr Svein Gjedrem, Governor of the Central Bank of Norway, on the Norges Bank Watch 2006 report, Oslo, 9 March 2006. The  Charts in pdf-format can be found on the Norges Bank’s website. Please note that the text below may differ slightly from the actual presentation. The speech does not contain references to the next Inflation Report or the monetary policy meeting on 16 March. *  *  *  I would like to thank the CME for again providing a thorough review of Norges Bank’s conduct of monetary policy in the Norges Bank Watch report. I am also pleased to be invited to comment on the preliminary Norges Bank Watch 2006 report. It is an extensive report that discusses a number of issues. The report discusses Norges Bank’s conduct of monetary policy in 2005 and the previous years, but also focuses on some aspects of our interpretation of the mandate for monetary policy. I will comment first of all on the relationship to the Regulation on Monetary Policy. As last year, the report emphasises the objective of stabilising the nominal exchange rate. It points to the reference to the exchange rate in the Regulation on Monetary Policy. Last year’s recommendation that the Regulation should be printed in its entirety in each Inflation Report is reiterated.
The oil companies have therefore enjoyed stable operating parameters over the last 15 years, although this sector is also faced with the challenge of finding new solutions in response to the sharp shifts in market conditions that we have witnessed recently. This will once again require forward-looking strategies and willingness to compromise. 5  BIS Review 20/1999  The government’s supervisory tasks are substantial. Confidence in the banking system in critical situations may also be contingent on the government’s willingness to provide financial backing. There is a fundamental conflict between these two roles and the government’s role as bank owner. People must be confident that the government does not conceal its own mistakes when intervening in the face of a crisis in the banking system should this again prove necessary. It is virtually impossible to establish such confidence if the government is also responsible for the crisis through its ownership. State ownership in the banking industry has been maintained with a view to ensuring stable national ownership. It seems that, in practice, most comparable countries attach importance to having large financial institutions with a national anchor, but most of them avoid state ownership and the associated conflicts of interest. We should also be able to do this. However, I would like to stress that a greater number of foreign financial institutions could also be advantageous. Foreign institutions will normally be larger and more diversified than Norwegian institutions. This could generate better and cheaper services in the Norwegian market.

The 1999 national budget estimates that in 20 years the central government’s net wealth will have risen to 120–130% of GDP. Financially, the state will thus be well equipped to cope with the higher expenditure associated with an ageing population. So far this year, the oil price has averaged slightly more than NOK 80 per barrel. The chart shows allocations to the Petroleum Fund with oil prices of NOK 110 and NOK 90 per barrel in the years ahead. An oil price of NOK 90 will alone result in a substantially smaller surplus than previously anticipated. In this scenario, the Petroleum Fund will peak at 75% of GDP in 2015. The bottom line in the chart shows a different scenario. We are still assuming an oil price of NOK 90 per barrel – in other words, one that is not especially low under present circumstances. In addition, we have assumed a further reduction in the budget surplus, equivalent to 0.5% of GDP, each year for the next 10 years. The combined effect is that after 10 years the budget surplus will have declined by about 5% of GDP compared with the other calculations. BIS Review 20/1999  14  This may seem substantial, but is no greater than the changes in the budget balance that we have seen previously. In the previous downturn, the government reduced its surplus by slightly more than 5% by means of an active countercyclical policy – and that was only during a five-year period.
Throughout  6  BIS central bankers’ speeches  history, we have seen countless examples of regulation arbitrage undermining the efficiency of financial regulation. This was the case in Sweden not least in the 1970s and 1980s, when the combination of a loan cap and a negative real interest rate gave rise to great incentives for regulation arbitrage, which led to the emergence of a “grey” credit market. Macroprudential and microprudential policy also need to be coordinated Macroprudential policy is also linked to other policy areas, not least to microprudential policy. Unlike macroprudential policy, which focuses on stability in the financial system as a whole, microprudential policy focuses on the stability of individual financial institutions and on consumer protection. Decisions in microprudential and macroprudential policy thus differ; they derive from different motives and are based on different types of analysis. To a certain extent, however, the tools for microprudential and macroprudential policy can complement each other. Microprudential policy establishes certain minimum requirements aimed at ensuring that individual institutions are sufficiently resilient to the risks they encounter. On top of these are then placed the macroprudential requirements, which aim to counteract risks at systemic level and which can also be time-varying. Often, the same tools are used for both purposes, and in this case it is fairly clear that the tools can complement each other. However there are also situations where microprudential and macroprudential policy can come into conflict with each other.

Like public companies, and  BIS Review 102/2000  6  no doubt many of you here who are directors of public companies, we are working hard to ensure full compliance with the Turnbull report. Personnel policies Finally I would like to mention the changes we have made to our personnel policies. I have already indicated that the changes imposed by the 1997 proposals, together with the changes brought about by a changing environment, placed a heavy demand on the flexibility of our workforce. We have needed to increase the analytical capacity of the Bank, in part by additional recruitment of economists. Indeed we are among the largest employers of professional economists in the country. We have also substantially upgraded our programmes under which individuals are able to go back to full-time education supported by the Bank to obtain the Masters, and in some cases Doctorate degrees, that we need to keep us at the forefront of thinking on economic and financial issues. We have reorganised the rank structure within the Bank. For some time, we had two broad categories of staff: officers and officials. Counter-intuitively, the officials were senior to the officers, rather like the Civil Service of many years ago when Administrative Grades were senior to the Executive Grades. We have merged the officers and officials grading into one structure, taking out several layers while we were at it - although I would have to admit that the Bank remains a formidable hierarchy!
The inadequacies of banks’ liquidity management became apparent when some markets for long-term debt securities (including ABS, ABS CDOs, etc.) experienced a sudden re-pricing, resulting from the fact that risks were not properly reflected in their prices. Banks faced  BIS central bankers’ speeches  1  substantial liquidity outflows and shortages owing to their excessive exposure to these instruments and their excessive reliance on short-term and volatile secured market funding sources. In the US, this phenomenon mainly materialised as a “run on repo”;1 in the euro area, it resulted into drying up of foreign currency funding, severe strains in bank unsecured funding, and/or a reduced access to repo through clearing houses. In all cases, the central bank had to step in and to expand its liquidity provision to banks. What does this imply for liquidity regulation? Regulations should start from first principles, and we therefore have to identify the market failures or negative externalities that liquidity regulation aims at addressing. I consider that there are three main objectives for liquidity regulation: a) to reduce the impact of uncertainty on the bank risk profile, b) to build up liquidity buffers and c) to mitigate the systemic characteristics of a liquidity crisis. Maturity transformation gives rise to liquidity risk since, by definition, a bank engaging in maturity transformation cannot honour sudden and large withdrawal requests by depositors. They may face similar difficulties if interbank market lenders refuse to roll over their loans.

In addition, the Government owns substantial assets that it could sell in order to speed up the reduction of gross debt, including its stake in the banks.6 How Iceland would stand vis-à-vis the other Maastricht criteria, such as those pertaining to inflation, interest rate differential, and ERM II membership (for two years prior to accession) is also largely in the hands of the authorities. Through fiscal restraint, they could also contribute to the convergence of long-term interest rates. The social partners could promote low inflation by exercising restraint in wage settlements. Finally, the shorter end of the interest rate spectrum is determined by the market’s self-fulfilling expectations concerning membership itself and by the decisions of the Central Bank. Although a number of arguments indicate that currency union membership would suit Iceland well, it is not certain that a majority of the electorate will vote in favour of European Union membership in a national referendum. The fact that a number of EU member countries are in  5  Intervention would normally be sterilised in order to prevent undesirable effects on money supply. Hence the impact on the exchange rate is unlikely to be large or lasting. 6  According to current targets, the authorities aim to reduce gross public sector debt to 70% of GDP by 2015. 4  BIS central bankers’ speeches  financial distress, not least those permitted to join the EMU through rather liberal interpretation of the Maastricht criteria, does not increase the likelihood that the referendum would pass.
Some of these are “left-overs” from the first bilateral agreements, some are new issues which have been raised by either the EU or Switzerland. The EU wanted the adoption of anti-fraud measures and the creation of a tax system in Switzerland which would allow the EU to adopt a regime of exchange of information between tax authorities. On their side, the Swiss sought an improved cooperation in the areas of internal security and asylum policy. The negotiations on seven out of the ten issues have now been substantially completed. We hope that this second round of negotiations will be concluded this year, provided that the right balance can be struck in the overall package. You may well be asking yourselves: why doesn’t Switzerland simply join the EU instead of following the bumpy path of bilateral agreements ? The reason is that there is still no consensus in Switzerland on the question of EU membership. Winston Churchill used to say to his chauffeur: “Drive slowly. We are in a hurry”. These words could apply to Switzerland’s policy on Europe. Eleven years ago the Swiss people voted “no” to entry into the European Economic Area, because many saw this as a first step towards EU membership. Two years ago a referendum aimed at speeding up the process towards EU membership was likewise roundly rejected. Since any further moves would clearly lack political support within the country, EU membership is not on the Swiss agenda at the present time. There are many reasons for Switzerland’s scepticism.

Dimitar Bogov: The Needs Analysis Programme for the National Bank of the Republic of Macedonia Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the presentation of the Needs Analysis Programme for the National Bank of the Republic of Macedonia in the process of accession to the European System of Central Banks and the Eurosystem to the public, Skopje, 22 January 2013. *  *  *  Your Excellency Ambassador Orav, Honorable Director General of the International and European Relations at the ECB, Mr Moss, Ladies and gentlemen, distinguished guests, media representatives, It is my great pleasure and honor to greet you today at the National Bank of the Republic of Macedonia for the public presentation of the Needs Analysis Programme for the National Bank of the Republic of Macedonia in the process of accession to the European System of Central Banks and the Eurosystem. First, I would like to thank the EU for the financial assistance provided and to express my special gratitude to the EU Delegation in our country for the given support in obtaining the project. Also, I would like to express my gratitude to the ECB for the efforts and readiness to carry out the project with the NBRM and to the national central banks of the Eurosystem involved in the project for their willingness to contribute to its implementation.
In the future, we may well end up in the opposite situation with the repo rate being set higher than justified by this particular part of the economy. Longer fixed-rate periods desirable It is difficult to determine how large a proportion of variable interest rates is desirable in an economy, but I suspect that we have gone too far in that direction in Sweden. And by this I mean from the point of view of systemic risk. For an individual household there may be good reasons for choosing a variable interest rate, but for the economy as a whole it would probably be good if we could limit the proportion of variable rates. This can be achieved in different ways. In some countries, regulations have been used to either limit how large a proportion of the mortgage may have a variable interest rate or how much a variable interest rate may increase during the maturity of a mortgage. In other countries, long fixed-rate periods have become the norm without the need for regulations. The fact that this has not happened in Sweden indicates that the financial markets are not working well enough for some reason. This may, for example, be due to the lack of a market for mortgage bonds at really long maturities, or of regulations concerning how mortgages with long fixed-rate periods can be paid off prematurely.

The proposal on stricter amortisation regulations presented by Finansinspektionen (the Swedish Financial Supervisory Authority) last week corresponds to an amortisation rate of 78 years during the first decades of a mortgage. Swedish housing investments have averaged approximately 3 per cent of GDP over the last ten years compared to almost 6 per cent in the euro area (European Commission 2014a). According to the European Commission (2014b) Sweden has the most strictly regulated rental market in the EU and moreover, because of low property taxes and generous interest-rate deductibility, the strongest tax incentives for owner-occupied housing. In recent years, over 70 per cent of new mortgage borrowers have chosen variable interest rates and only a few per cent have fixed their interest rates for more than five years. In many other countries, it is usual to fix interest rates for between 10 and 30 years. Much of this is described in more detail in Riksbank (2014a). 2  An important explanation of the high level of saving is collective pension saving, see Nilsson et al. (2014). BIS central bankers’ speeches  1  Large debts and variable interest rates make the households vulnerable However, despite these and other mitigating arguments, I think it is clear that there are risks associated with the Swedish housing and mortgage markets. That the households have bloated balance sheets, with both large debts and large assets, makes them vulnerable to shocks.
Being in a currency union can amplify fiscal stress, and increase both the risks and consequences of financial instability. In the situation just described, fiscal policy would ideally help smooth adjustment to the external shock. But its ability to do so could be limited by the budgetary impact of the falls in output, prices and wages. To maintain credibility, fiscal policy  1  Mundell (1961). 2  Commission of the European Communities (1990). 3  The elimination of currency risk within the area reduces uncertainty over future prices for firms and consumers, helping them to make better decisions about how much to produce, invest and consume. These benefits are hard to quantify, but probably important. It also avoids inefficiencies that can arise when the exchange rate fluctuates for non-fundamental reasons (Mundell 1973, Buiter 2000). 4  A substantial literature has sought to measure the impact of currency unions on trade flows, starting with Rose’s (2000) surprising estimate that they are associated with a tripling in trade flows. Subsequent work suggests smaller impacts. In relation to the Eurozone, a survey by Rose (2009) concludes that “EMU has raised trade inside the Eurozone by at least 8% and perhaps 23%”. De Grauwe and Mongelli (2005) survey the broader ways in which currency unions promote integration. 5  If wages and prices can adjust instantaneously then the adjustment to shocks can happen costlessly via movements in prices and wages, so there is no cost to losing exchange rate flexibility.

By determining the conditions for the banks’ deposits in and borrowing from the RIX system, the Riksbank can affect the overnight rate, that is the interest on overnight loans between the banks. BIS Review 51/2008  3  Deposit and lending rates set the limits for the overnight rate When the payment system closes for the day and trade between the banks in the overnight market has been concluded, the banks’ accounts in RIX must be in balance. This means that the banks must finance their deficits or invest their surpluses. The banks have two alternatives for achieving this. They can either balance their respective deficits and surpluses against one another on the overnight market, or they can use the Riksbank’s deposit and lending facility. The latter means that they can deposit in or borrow from the Riksbank overnight at interest rates published in advance. These are known as the deposit and lending rates, which are 0.75 percentage points below and above the repo rate respectively. This difference creates an incentive for the banks to firstly borrow from and deposit funds with each other at a rate of interest in this so-called interest rate corridor. One could thus say that the deposit and lending rates set the limits for the overnight rate. How does the Riksbank ensure that the overnight rate is stable? But we do not leave it at that. The facilities ensure that the overnight rate remains within the corridor.