samchain/econo-pairs-v1 huggingface dataset:
Percent 16 Inflation Inflation target  14 12 10 8 6 4 2 0 1960  1968  1976  1984  1992  2000  2008  2016  Sources: Statistics Norway and Norges Bank 6. See Richard Clarida og Daniel Waldman (2008). “Is Bad News about Inflation Good News for the Exchange Rate? And, If So, Can That Tell Us Anything about the Conduct of Monetary Policy?” In: John Campbell (ed.) Asset prices and monetary policy. National Bureau of Economic Research Books, University of Chicago Press. 7. The mechanism can be described based on the Aukrust model. A weaker krone increases the wage capacity of the manufacturing sector, which sets the wage norm. Increased wage capacity can lead to higher negotiated wage increases. Since wage growth in manufacturing sets the standard for wage growth in the rest of the economy, wage growth in sheltered sectors will also increase. These sectors can more readily pass on higher costs to prices, driving up overall inflation. Higher inflation can, in turn, lead to a further krone depreciation, if the foreign exchange market does not have confidence in monetary policy. Norges Bank  Economic perspectives 2023  7  First, the world is hit by a pandemic. We know the story: Much of the economy is locked down, large-scale government support is provided, and central banks pursue a highly expansionary monetary policy. In May 2020, Norges Bank reduces its policy rate to zero.

Over the past year, we have seen fluctuations in energy prices, among other things, that are caused by the fact that clean energy is not being built up as fast as the use of fossil fuels is being phased out. We may see more similar price effects ahead. We must also be prepared for a situation where some prices might for a transitory period be higher than they will be in the longer run. The main contribution monetary policy can make to climate transition is to ensure low and stable inflation. The transition requires investments – many with uncertain earnings that lie far into the future. It is safer to make those investments in an environment of low and stable inflation. When inflation is low, it is also easier to distinguish between changes in relative prices and the general rise in prices. The signal from, for example, higher carbon prices is easier to capture. This pushes the transition in the right direction. Conclusion Over the past year, inflation has risen to a high level. Developments are reminiscent of the situation 50 years ago. Just like then, the economy has been hit by a cost shock – energy prices have soared. Just like then, the shock has hit us in an environment of strong demand and little spare capacity. But there is also much that is different. Today, we have a solid fiscal policy framework. We have a coordinated wage determination system where both parties attach importance to low unemployment and business profitability.
But in absolute terms, the cost of risks amounts to EUR 63 bn for the top 4 US banks, as opposed to only EUR 58 bn for the 11 largest European banks. –  •  Solvency ratios have significantly improved in Europe, banks have retained earnings and increased capital through various ways (new equity issues, dividends paid in new shares);  •  With Tier 1 ratios comprised between 10% and almost 18% for the main European banks, they are equivalent to the range of 11%–16% of American banks. •  Regarding now the core Tier 1 ratios, which is the measure displayed by banks for the markets, they are also pretty equivalent. Again, with ratios ranging between 8.5% and 15.3%, the main European banks are as solid as US banks (with ratios between 8.4% and 13.3%). Secondly, the differences in the leverage ratios levels mainly result from accounting discrepancies that can lead to particularly misleading comparisons: •  If we observe the leverage multiples, it is true that the figures displayed by US banks (between 10% and 14%) are lower than those of most of European banks. For the latter, the range is much wider (between 15% and 25%). •  But we all know that the measurement of the leverage ratios is significantly impacted by different accounting treatments, the main differences between IFRS and US GAAP arising from the netting of derivatives and repos. •  The example of Deutsche Bank is a case in point to illustrate this impact.

Niveaux des ratios de solvabilité et de levier des principales banques européennes et américaines  Ratios Tier 1 des principales banques européennes  Ratios Tier 1 des principales banques américaines  Source : Rapports financiers des banques  Ratios core Tier 1 des principales banques européennes  Ratios common Tier 1 des principales banques américaines  Source : Rapports financiers des banques * Pour BNPP : common Tier 1 ratio ** Pour BBVA : core capital ratio  Si le Tier 1 est défini par la réglementation, le ratio de fonds propre « core » ne l’est pas. Selon les pays et même selon les banques, on parle de core Tier 1 ou de common Tier 1 ou encore de core capital ratio. Ces termes ne recouvrent pas toujours la même définition des fonds propres car il ne s’agit pas d’une mesure réglementaire mais d’un indicateur davantage destiné au marché, sur lequel les banques disposent de plus de liberté pour son calcul et sa communication. A noter que même le core Tier 1 et le common Tier 1 ne sont pas toujours définis de la même manière par les banques. 6  BIS central bankers’ speeches  Levier des principales banques européennes  Levier des principales banques américaines  Source : Rapports financiers des banques (calculs Banque de France - SEMASFI)  2.
François Villeroy de Galhau: Climate change – the financial sector and pathways to 2°C Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Conference COP21, Paris, 30 November 2015. *  *  *  Ladies and Gentlemen, This conference organised by the 2°C initiative, the Oxford Martin School and France Stratégie for the opening of the COP21, is a major event in which I am delighted to participate. I would like to make some comments on a topic that has steadily gained ground in the climate change agenda, namely the way central banks and prudential authorities take account of climaterelated issues. This is in fact a relatively new question. We were already committed as both citizens and public policy-makers, but monetary and prudential authorities are today concerned by three broad categories of risk: –  Direct physical risks, related to the increase in both the frequency and the magnitude of extreme climatic events, which raise questions in terms of insurance costs. –  Liability risks, related to the financial impacts stemming from compensation requests from those who have suffered loss or damage due to climate change. –  Macroeconomic risks related to the transition between two production models, which can result in disorderly adjustments in sectors too heavily exposed to global warming or that become unviable due to the governments’ climate change commitment. In practice, we already observe some financial imbalances in carbon-intensive industries facing rising costs, disruptive technologies, and regulatory uncertainties.

The underlying assumption for direct monetary policy intervention is that the central bank is better equipped than private agents to ensure an efficient allocation of resources. But it is not a given that central banks would have such an informational advantage. Quantitative easing therefore does not aim to promote some types of assets over others but merely to free up capacity to finance the economy. For instance, current monetary policy encourages investment in longer-term projects, with better returns than government bonds, such as infrastructures and energy transition. But with one prerequisite: prudential regulations must be consistent, which may require adaptations to the framework laid down by the Solvency II insurance Directive. I welcome a number of recent  2  BIS central bankers’ speeches  proposals promoting infrastructures made by the European Commission, which are a step in the right direction. 2. The information challenge: the role of disclosure  The potential risks posed by climate change to the financial sector are complex and we have only just started to understand them. The most urgent need is probably better information. Much high-quality work has been carried out in recent years to improve disclosure on climaterelated issues. The French act on energy transition, which was enacted on 17 August 2015, strengthens the requirements regarding the disclosure and management of environmental risks.
Willem F Duisenberg: The international role of the euro  Speech by Dr Willem F Duisenberg, President of the European Central Bank, on the occasion of the 2000 Spruce Meadows Round Table, held in Calgary, on 8 September 2000. *  *  *  Let me first thank the organisers of this conference for having invited me to share some thoughts with you on the international role of the euro. The euro was successfully launched 20 months ago as the single currency of 11 Member States of the European Union (EU) - known as the “euro area”. On 1 January 1999 these Member States transferred their monetary sovereignty to a new supranational institution, the European Central Bank (ECB). Since then, the Eurosystem - composed of the ECB and the national central banks (NCBs) of the 11 countries that have adopted the euro - has been in charge of the euro area single monetary policy and related functions, such as foreign reserve management and operations and payment systems oversight. The euro has brought about fundamental changes to the economic and financial environment in the euro area and beyond. By lowering transaction costs and enhancing price transparency, the single currency represents a major contribution to fostering competition and efficiency in goods and financial markets across the euro area. As such, the introduction of the euro represents a quantum leap towards completing a fully integrated Single Market in the EU and lays a solid basis for the improvement in the living standards of European citizens.

The strengthened Islamic financial institutions, the establishment of key financial infrastructure for Islamic finance including the regulatory and supervisory framework have positioned Malaysia at the frontier of Islamic finance. The recommendations in the Blueprint aim to build on this progress towards resulting in the development of a financial sector that will meet the economic and financial realities of this new decade. The financial system envisaged   will be firmly anchored in the real economy in providing financial services that contribute positively to growth;    that offers a diverse range of products, services and institutions that cater to the financial needs of a broader spectrum of Malaysian households and businesses;    will be reinforced by deep, liquid and efficient foreign exchange and money markets to complement the bond market;    that is more engaged with the region and other parts of the world;    that can contribute meaningfully to Malaysia’s economic transformation; and finally,    a financial system that is inclusive in reaching Malaysians across all social, geographic and economic stratas. It is envisaged that by 2020, the financial system is expected to expand from the current 4.3 times to six times of GDP. Correspondingly, the financial sector contribution to nominal GDP is projected to rise from 8.6% to between 10 to 12% in 2020.
The normally more persistent services inflation will also fall, although considering the basis of comparison effect, the impact of lower inflation on indexed prices and its own inertia. All this in a context where, despite some widening, the output gaps are still bounded and the expected external impulse facing the Chilean economy over the next two years shows no big change from September. Still, beyond these changed projections, what merits the most attention is that the range of risks has increased. In this context, in our latest monetary policy meetings we have held the monetary policy interest rate (MPR) unchanged at 3.5%. At the same time, while acknowledging the effects that the changes in the macroeconomic scenario are having on the medium-term inflation outlook, in our last meeting we noted that, for us to meet our objective of placing inflation at 3% in two years, a higher monetary impulse might be necessary. Let me now present to you the details of our vision of the macroeconomic scenario and the projections contained in our Monetary Policy Report. The Monetary Policy Report As I said, in November the CPI posted an annual variation of 2.9%, almost half of a percentage point less than we had estimated in September. This sharper decline in inflation is mainly related to those goods most closely related with the exchange rate and some foodstuffs.

  For a small number of you, we will need better information and visibility going forward to bring you in line with others. We will start that discussion with you now.   For those going in to TPR, it will be a gradual evolution. These firms have had extensive interaction with the PRA’s supervisors over the past three years – we have seen substantial preparations by  9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  these firms as part of their authorisation submissions and we have worked together with firms on a large number of thematic reviews.   And, for those considering coming to the UK to operate, it provides clarity on our approach so you can consider how best to meet our expectations. For our regulatory colleagues around the world, we look forward to continuing to build our open and supportive relationships. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10
Convergence Programs of the new Member States should include ambitious Medium Term Objectives to ensure that not only the Maastricht criteria are met, but most importantly, the emergence of excessive deficit situations is avoided and the risks of taking recourse to exchange rate adjustments after joining the ERM2 (and, eventually, the euro area) are minimized. The well functioning single market for all goods and services, including infrastructure networks, as well as pursuing the National Reform Programmes in the context of the reinforced Lisbon agenda is the other pillar for the success of the euro area and for the new Member States in particular. Estonia has been a de facto member of the euro area since the inception of its independent currency in 1992. Fixing the local currency to D-mark, and later to the euro meant that the monetary policy decisions were not made in Estonia. Estonia's currency board regime implies prudent fiscal stance that has been largely adhered to since 1992, resulting in our general government having accumulated a relatively large net asset position of around 10 percent of GDP. A solid budgetary position and early deregulation of product and capital markets implies that Estonia has been well placed to absorb both positive and negative shocks during the last 15 years. Deregulation and reform in preparation of the EU membership has allowed us to fully integrate our economic and financial systems with the Single Market. However, that kind of approach requires, in today's conjuncture, forward-looking structural reforms in almost all EU member states, e.g.

Andres Sutt: Macroeconomic co-ordination and fiscal policy in the expanding Eurozone Statement by Mr Andres Sutt, Deputy Governor of Eesti Pank (Bank of Estonia), at the conference “thinking EUconomy - Wirtschaftspolitik europäisch denken”, Berlin, 3 May 2006. *  *  *  The enlargement of the European Union with the clear message that all countries without an opt-out clause will, in the future, be also members of the EMU, is a most welcome and forward-looking approach in view of an ongoing globalisation and integration processes in the world. Eventually, the adoption of the single currency by all Member States provides clear benefits for the Union as a whole. From the macroeconomic point of view it would support further economic integration and higher growth rates by fostering trade and investments. Therefore, euro area enlargement will provide tangible benefits for all European citizens over time. The main policy challenge for both the current and prospective euro area members is to ensure that the best use is made of the monetary stability provided by the framework of the European System of Central Banks (ESCB). From the perspective of the new Member States, the issue at stake is how to maintain the economic structure supportive for sustained growth and rapid real convergence. Strong fiscal stance is instrumental in this regard.
Now, given a completely free hand I would probably make modest design changes to the MA, perhaps with slightly greater flexibility around the definition of “fixity” and a greater allowance for unexpected credit defaults. But I contend that we are implementing the regime we have today intelligently, with appropriate recognition of asset and liability matching leading to a £ reduction in capital requirements for the industry. But the MA design itself is not the only reason that we at the PRA sometimes pause when firms discuss new investment opportunities with us. By their very nature, illiquid bespoke loans require very specific skills in terms of structuring, valuation and ongoing risk management. In particular, experience has taught us that the risk firms face from making such loans is related to how skilfully firms can manage any impairment process. These are not traditional areas of expertise for most UK insurers and, in my view, firms must clear a high bar in order to demonstrate that they have adequate systems and controls in place to manage these types of 5  risks and exposures. We recently consulted on this topic and look forward to further engagement with industry. As a final word on this subject, when we have asked insurers directly about the impediments to investing in infrastructure assets, the number one problem raised is the lack of suitable investment opportunities, and not the regulatory framework.

We have, however, been pursuing our objective assiduously on the insurance side – to pick out some examples of steps we have taken to facilitate competition:   we have created a very proportionate regime for the 40% of firms we regulate who are not covered by Solvency II;    we have given around 85% of Solvency II firms in the UK the opportunity to avoid around 70% of the quarterly reporting burden they would otherwise face;    we are working with HMT, HMRC and the London Market to introduce a new structure for insurance-linked securities; and  12  http://www.bankofengland.co.uk/about/Documents/ieo/evaluation0316.pdf 9  All speeches are available online at www.bankofengland.co.uk/speeches  9    we have authorised 19 new insurance companies and Lloyd’s managing agents in the first three years of the PRA’s existence. Conclusion  Financial regulation and supervision can sometimes be a dry business. And in insurance in particular, some of the more arcane aspects of the regulatory framework can rapidly turn off everyone except us and the industry. I have therefore spent some time looking into individual policyholder cases, to remind myself about what is going on at the frontline. One in particular made a powerful impression on me. A young man got in touch with an insurance company to claim on his critical illness cover. The reason for the claim was that his 4-year old son had brain cancer. The cancer was in a difficult place, and the best-case outcome from a forthcoming operation was grim.
4  BIS Review 121/2008  unease has also more tangibly spread to European banks and government agencies in several countries have felt obliged to intervene. We have tried to take into account the effects of the financial crisis in our forecasts. But it is of course difficult to know to what extent we could have captured all the effects the crisis may have had so far on the real economy. Moreover, we cannot know how the financial crisis will develop in future and how long it will last. Falling house prices have affected not just the United States, but many other countries. We have not been affected by this, although there appears to be a cooling in the housing market here, too. Another shock that has occurred during this downturn is that energy and commodity prices have risen substantially. Last summer the oil price reached new top levels and inflation rose around the world. However, since then prices have fallen. Seen in a longer-term perspective, rising commodity prices are not an uncommon feature prior to a turnaround in the economic cycle. This was the case, for instance, in the 1970s. As a consequence of the rising inflation, central banks around the world have been faced with a difficult situation, where the risk of contagion effects on other prices and wages must be assessed in an uncertain economic situation with receding growth. Another common cyclical pattern that is now repeating itself is that labour productivity is low, which is significant for cost pressures.

At the same time as Keynes’ analysis began to be questioned on the basis of economic theory 3 , the world suffered deep recessions in the wake of the oil price shocks of the 1970s,  1  The NBER has a “Business cycle dating committee” which has a procedure for dating peaks and troughs in economic cycles in the United States. 2  J. M. Keynes., “The General Theory of employment, Interest, and Money”. London: Macmillan. 1936. 3  Lucas' criticism, for instance, R. E. Lucas "Econometric policy evaluation; a critique.” Carnegie-Rochester Conference Series on Public Policy 1976. 1: 19-46. BIS Review 121/2008  1  which led to a more pessimistic view of the ability of economic policy. People realised that fiscal policy measures often came too late and that attempts at an active economic policy often merely resulted in high inflation. An alternative interpretation began to emerge; fluctuations in economic activity were regarded as the result of changes in production conditions. The 1980s saw the advent of RBC-models 4 , which stands for Real Business Cycle. The characteristic of these was that they considered fluctuations in the production of goods and services to be natural consequences of externally caused changes in production conditions. This could be changes in technology; IT is one example. It could also be sharp swings in the oil price, terrorist attacks or war, but also more natural examples such as the weather. They assumed that the markets themselves were best suited to adapt to the changed conditions.