samchain/econo-pairs-v1 huggingface dataset:
Starting in the autumn of 2008 and continuing into the early months of 2009, demand – in the UK and globally – weakened very sharply. Consumers and firms held back spending plans in the wake of the massive negative confidence shocks associated with the events surrounding the collapse of Lehman Brothers and the knock-on effects on the rest of the financial system. Along with the rest of the MPC, I strongly supported the decision to reduce interest rates from 5% to 0.5% between October 2008 and March 2009, and to inject extra money into the economy through Quantitative Easing. The bulk of this money injection £ of the total £ was agreed by the time of the August 2009 Inflation Report, which was published just under a year ago. Though that Report looked forward to a recovery in the economy, very little economic data available at that time pointed in that direction. Rather, the economic data last summer were telling us how sharply the economy had contracted in late 2008 and the first half of 2009 both at home and abroad, and how sharply unemployment had risen as a result. A strong theme underpinning the analysis of both the May and August Inflation Reports last year was that UK inflation was expected to be pushed significantly below target by a large margin of spare capacity.

The central projection in February’s Inflation Report was for inflation to return to close to the 2% target over the coming two to three years, conditional on the market’s expectation of further cuts in Bank Rate. But nor does the strategy determine a definite path for Bank Rate over the coming months. Each of us on the MPC must form a judgment month by month on which of the risks to the inflation outlook – from financial conditions or from rising costs – is proving more potent, and so a judgment on the degree to which we can set a course that underpins demand. Since the February Inflation Report, oil prices are around 10% higher, and sterling’s exchange rate around 4% lower, so the immediate cost pressures are worse. The good news is that, in the labour market, nominal earnings growth has so far remained subdued, notwithstanding the rise in near-term inflation expectations revealed by a range of surveys. BIS Review 38/2008  1  This is perhaps suggestive of the adjustment in real take-home pay made necessary by the sharp increase in firms’ costs due to the further rises in commodity prices. In manufacturing, firms’ input costs have risen sharply over the past twelve months; and output price inflation has reached nearly 6%. A big question is to what extent competition amongst retailers will dampen the pass through into retail prices. Anecdotally, retailers still sound as though they are competing fiercely on prices, and driving down other costs in order to maintain their margins.
In our part, last year the Bank of Thailand in collaboration with 15 Thai banks and the Electronic Transactions Development Agency, set up the Thailand Banking Sector Computer Emergency Response Team (TB-CERT) as a platform for banks and regulators to share information on cyber incidents and build standards and capacity for IT-personnel to handle new threats. Furthermore, to ensure that our legal framework fits with the current digital environment and can keep up with new innovations, the Bank of Thailand had proposed the New Payment Systems Act, which became effective in April of 2018. The Act unifies previously fragmented payment laws and regulations and empowers the Bank of Thailand to oversee development of the Thai payment systems and regulate new payment innovations and players. Moreover, our supervisory guidelines on management of information technology risks have also 4/6  been updated to ensure that banks have appropriate governance structure in place and can swiftly respond in the event of cyber attacks. These developments will contribute to safer environment for both service providers and customers. On inclusivity, despite high level of financial access in Thailand relative to other emerging countries, financial inclusion remains one of our top priorities. Various measures to promote financial inclusion have been implemented and many more are in the pipeline. The Bank of Thailand and the Thai Bankers’ Association will soon launch the Basic Banking Account scheme to improve financial access for vulnerable groups, especially those in the lower-income brackets.

However, I believe all of us who have experienced this environment have emerged with a very different lesson learnt. Indeed, we cannot overstate the extraordinary potential this setting offers to an institution such as ours which has always valued, and legitimately so, the soundness of its judgement. With that conviction, we should devote most of our efforts to forging closer insertion, collaboration and coordination-based links with our European partners with an essential aim in mind: to reinforce our weight and ability to influence decision-making. This is a challenge and it is also an opportunity, but it is above all a responsibility to support, from the vantage of the Banco de España, the project for European construction. The second objective has to do with our contribution to financial and macroeconomic stability. After an unprecedented financial crisis, the reputation of economic policymakers, of central banks in particular and, indeed, of the economics profession as a whole was enormously dented. 4/5  Testifying to this were the regulatory and institutional changes set in train to prevent similar situations from recurring. However, the real test, where we place our social prestige and credibility on the line, will involve us truly being able to identify risks and vulnerabilities in due time, being able to issue warnings about them and, within our remit, being able to act to mitigate them or to contribute decisively to other players acting when they must.
Changing risks and the search for yield on Solvency II capital Speech given by David Rule, Executive Director of Insurance Supervision  Association of British Insurers, London 6 July 2017  1  All speeches are available online at www.bankofengland.co.uk/speeches  Regulatory change has dominated our insurance supervision agenda for the past few years. Today I want to talk mainly about risks. Our supervisory work is similarly shifting gear. As Solvency II becomes business as usual, we will spend more of our time understanding the risks that insurers are taking and, where necessary, responding to them. I do though want to make a couple of initial points about Solvency II. First, we are making good progress, working with the ABI, in identifying improvements to our implementation of it. This follows up the commitment made by Sam Woods to the Treasury Select Committee in February. Amongst the areas we are working on are our processes around model changes and the matching adjustment; and regulatory reporting. We are working within the bounds of the EU legislation and I do not anticipate any headlinegrabbing initiatives. But I am confident that we will identify a number of practical changes that will make a difference to insurers and supervisors on the ground. Second, we will continue to update our approach in the light of new information. For example, it does appear 1  that the rate of improvement in life expectancy of older people has slowed in the United Kingdom .

  A thematic review across a number of smaller Lloyd’s managing agents, to assess how distribution channels are changing. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3    Reviews of underwriting and risks around pricing at a number of motor insurers. For example, we will assess how insurers protect themselves against the risk that under-pricing leads them to take on a large number of policies quickly, particularly through price comparison websites. Life insurance risks and supervisory priorities  In the life sector, the search for yield on Solvency II capital is taking insurers in different strategic directions. Some are taking a ‘capital-light’ approach, focused on unit-linked liabilities and asset management. Others are growing their annuity books, particularly by taking on the liabilities of defined-benefit company pension schemes. One of the most direct and notable consequences of Solvency II has been growth in reinsurance of longevity risk. On average, between 2015 and 2016, longevity risk transfer increased by nearly 25% across UK annuity writers. Long-dated insurance risks, such as longevity exposures, attract a high risk margin. We 2  have been clear that we think the Solvency II risk margin is too sensitive to the level of market interest rates . It is therefore too high at current low levels of interest rates, encouraging insurers to transfer longevity risk through reinsurance. The risk margin is our first priority as part of the Solvency II review. We are working in EIOPA to achieve a sensible outcome.
That included starting a Bank-wide Operational Risk Committee (a predecessor to the Risk Subcommittee) led by the First Vice President, establishing the risk event reporting and risk control self-assessment processes, and creating the Centralized Operational Risk Function (then located in the Bank’s Corporate Group). Later developments included instituting new Bank-wide control policies reflecting a deeper understanding of sources of operational risk. For example, the Bank established policies to govern end-user developed automation tools and the management of contingent workers. The past several years have been characterized by a focus on integration of the Bank’s risk management program. As part of a review of the Bank’s governance, the Risk Subcommittee of the Management Committee was established with a broad risk management mandate spanning financial, operational, and compliance risk. The Bank also enhanced the coordination of risk management, resource allocation, and strategic planning through linkages between the Risk Subcommittee and our planning and resources committee. Most indicative of this trend was the establishment in 2015 of the Risk Group’s Enterprise Risk Management Function which is responsible for providing an integrated view across all of the Bank’s risks. In thinking about areas for future improvement, I ask myself: How can we accelerate organizational learning from our mistakes? Does our analysis of risks and risk events sufficiently reveal organizational and structural issues that contribute to the risk? How can I further create a positive risk culture that encourages reporting and escalating of risk issues?

In addition, putting the first line in charge of risk management has efficiency and effectiveness benefits, since the first line can adapt risk solutions to its specific needs and nimbly respond when the risk environment changes. The Bank’s second line of defense – independent risk management areas including my Group, the Risk Group – provides independent assessment and oversight of the risks taken by the first line as well as frameworks that provide a common structure for risk management processes and practices. The second line also provides an integrated view of risk to senior stakeholders through consolidated analysis of the Bank’s risks. A second key insight of the three lines model is that a layered defense increases safety and reliability by providing an independent check that reduces the chance of error. The second line is the second layer, and provides a view of risk that is independent of the business area’s assessment. What is the value-add from having this type of second opinion? To start, while the business has the deepest understanding of its environment, operations, and objectives, the second line offers a perspective based on expertise in risk identification, analysis, and mitigation that is informed by its institution-wide view of operations and risks. This allows the second line to provide unique insights by aggregating risks across business lines, identifying interactions across risk types, and spotting anomalies in risk exposures or risk practices that deserve additional attention.
And the consensus view – usually conveyed with confidence all the way out to three places to the right of the decimal point – is almost always wrong, even within short time periods. I asked my interlocutor to recall the presidential election of 1948. The consensus view called for a landslide victory by Gov. Dewey. Indeed, an early edition of the Chicago Daily Tribune on the very night of the election announced in the boldest of headlines that Dewey had won. Before going to sleep, an overconfident Dewey is reported to have turned to his wife and said, “Just think about it: Tomorrow night, you are going to be sleeping with the president of the United States!” The next morning at breakfast, Mrs. Dewey asked, “Am I going up to Washington this evening or is Harry Truman coming to our house?” Carol Reed would love to have reported that story! Thank you, Rotarians. You are the embodiment of what makes this country great. Carry on with your good works. BIS central bankers’ speeches  5

As recommended in the May 2022 CPMI reportOpens in a new window, we will also be working with the private sector to consider the case for an extension of RTGS operating hours, which could help to reduce delays in cross-border payments as well as settlement risks and liquidity costs. And we have already consulted industry on what more we can do, including discussions on demand for synchronised settlement which could link RTGS ledgers in different countries, in our Roadmap Beyond 2024. Enhancing cross-border payments can deliver enormous benefits to business and consumers. We all have a role to play in making this a reality. I would like to thank Abigail Daniel and the Cross Border Team for their help in preparing these remarks. 1 FT Op-Ed by Jon Cunliffe, (2020). "Cross-border payment systems have been  neglected for too long"Opens in a new window 2 SWIFT gpi (2023) 3 The World Bank Group (2021), 'Remittance Prices Worldwide QuarterlyOpens in a  new window' 4 Financial Stability Board (2023), 'FSB invites senior representatives from firms and  industry associations to join cross-border payment taskforceOpens in a new window' 5 Bank for International Settlements: Committee on Payments and Market Infrastructure  (2023), 'Bank for International Settlements' Committee on Payments and Market Infrastructures invites market stakeholders to join cross-border payments interoperability and extension task force'Opens in a new window 6 These forums are detailed in the FSB's priority actionsOpens in a new window paper  (table 4). 2/2  BIS - Central bankers' speeches
In fact, some positive elements stand out from the evolution of the Spanish economy in recent years, such as, for example, the ability to continue to run external surpluses during the upswing, something that was not normal in previous recoveries, and which would indicate that at least part of the correction of the external imbalance is structural in nature, and is associated with cumulative improvements in competitiveness and the increase in the geographical diversification of exports and in the number of firms that regularly export to the rest of the world. This growing internationalisation of Spanish companies has served, in  7/18  turn, to stimulate business investment and employment. Indeed, more than 2.5 million jobs have been created since the beginning of the recovery. Also notable in recent years has been the deleveraging carried out by the non-financial private sector. This has reached a very advanced stage, both in the case of non-financial firms and households. For example, the debt to GDP ratio of Spanish companies has been reduced by more than 40 pp from its peak and it is now below the average level in the euro area. In the same vein, I would like to highlight the intense process of banking industry rationalisation, recapitalisation and restructuring. This has led to a more efficient allocation of capital across firms and sectors, which, as we will see later, has contributed to productivity growth.

2/3  BIS - Central bankers' speeches  At the same time, the conduct of monetary policy is not mechanistic. Models are useful, but they are simplifications and must be supplemented by other information. For example, loss functions in such models cannot be directly interpreted as the Committee's view of inflation costs. As the deviation from the target increases, we need to assess the risk of high inflation becoming entrenched in the expectations of households, firms and FX market agents. If this were to happen, we may find ourselves in uncharted territory, where the costs are far higher than when inflation expectations are anchored to target. As last year, Norges Bank Watch notes that Norges Bank's FX transactions related to tax payments to the government result in volatility in the money market premium. As long as the short-term money market functions well, Norges Bank will not seek to steer such risk premiums. But we do not want to contribute to needless volatility, which is why we seek to make FX transactions as smoothed and predictable as possible. The Ministry of Finance is now appointing a working group, in which Norges Bank will participate, tasked with examining various aspects of the government's liquidity management. The practical implementation of the petroleum fund mechanism is one of the topics for discussion. Among the matters the working group will consider is whether the number of due dates for petroleum tax should be increased. Let me conclude by again thanking Norges Bank Watch for an excellent report.
Europe’s “monetary constitution” builds on the experiences of a long historical process of trial-anderror, often with painful economic consequences, which led to the insight that in order to “safeguard the currency” (Bundesbank Act of 1957) and “defend the savings” of the people (Banca d’Italia mandate), the management of the currency should be entrusted to an independent central bank, with the primary objective of maintaining price stability, and which should not be allowed to directly finance the public sector. The extensive empirical evidence collected over many years and for a wide range of countries broadly and unambiguously confirms the beneficial effects of central bank autonomy for inflation performance.6 Chart 9 clearly demonstrates that countries with more independent central banks have enjoyed lower average inflation without experiencing lower average economic growth (Blinder, 1998). Recent studies show that central banks in most countries (not only in advanced economies but also in emerging market and developing countries) have been granted higher degrees of autonomy over the past twenty years (Arnone, 2007). In addition, in the low-inflation environment currently prevailing in industrialised countries, those central banks endowed with a larger degree of independence are succeeding in maintaining price stability, as recent work at the ECB has demonstrated (Moutot et al., 2007).

BIS Review 43/2007  3  reductions in working hours per person employed in the euro area can certainly help explain the widening of the gap in the level of output per capita between the euro area and the United States. Table 2 shows how the rate of change in labour utilisation can be decomposed into the rates of change of the four variables I referred to. The decomposition is useful because it helps to better understand the relative contribution of developments and factors affecting labour utilisation. Some of these factors can be influenced by policies and changes in economic institutions in a way that can contribute to improving the economy’s growth performance. Since the mid-1990s, labour utilisation in the euro area has increased, also relative to the United States. This has contributed positively to euro area growth and to narrowing the growth gap with the United States. However, despite this improvement, the level of labour utilisation – as opposed to its rate of change – in the euro area remains much lower than in the United States. This fact reflects a lower labour force participation rate, a higher unemployment rate, and lower average working hours per person employed in the euro area. The figures in Table 2 show how labour utilisation, and thus GDP growth, in the euro area have been supported by an increase in the share of the working age population that is employed (labour force participation has risen significantly and the unemployment rate has declined somewhat).
Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 23 April 2021. * * *  We have made the decision to raise the key rate by 50 basis points to 5.00% per annum. Today, we have discussed two possible options: whether to increase the key rate by 25 or 50 basis points. I would like to explain why we have chosen this very option accelerating the return to neutral monetary policy. The economy continues to recover actively. We estimate that it will bounce back to the prepandemic level in the second half of the year. The majority of industries have already completely recovered today. The rise in all other sectors is only constrained by the remaining restrictions largely associated with the pandemic. Accommodative monetary policy has fully played its countercyclical role, supporting the economy at the acute stage of the crisis. Currently, the fast recovery of demand is forming steady inflationary pressure intensifying supplyside constraints. Households’ and businesses’ inflation expectations have risen notably. They have been elevated for over six months. This is a matter of our great concern. High inflation expectations are being translated into inflation movements already now. Moreover, this effect on the steady component of inflation is becoming increasingly stronger. If they are not limited, this will continue to boost inflation. Amid these inflation processes, we need to return to neutral policy faster than we assumed before.

There is a risk, therefore, that the fall in the US current deficit will not be matched by a fall of surpluses in high surplus countries but a rise in deficits in other deficit countries. The imbalances could be transferred not reduced. So it is important that the current large gap between savings and investment in the Far East and oil exporting countries narrows. In the near term, the ability to increase spending will be constrained by the recent increase in inflationary pressures in these countries. But more exchange rate flexibility should be helpful on both fronts. And over the medium-term, in oil exporting countries, government spending is likely to increase further in response to past increases in incomes since part of the rise in the oil price looks to be permanent. This gives oil exporters the opportunity to spend more on diversifying production in their economies. It is encouraging also that in China the government has plans to increase its own expenditure on the infrastructure, encourage higher spending by households through speeding up financial sector reform and improving the safety net as well as allowing more flexibility than in the past in the exchange rate. Conclusion Given the growth of the foreign currency reserves in many EMEs, the emergence of SWFs making long term investments on financial criteria in a wider range of instruments is a positive development.