samchain/econo-pairs-v1 huggingface dataset:
In connection with the expansionary cycle of the world economy, and also with the depreciated dollar, prices of copper, oil and derivatives – especially gasoline – are picking up again. The rise in commodities’ prices has now spread to foods. For the year 2008, projections from Consensus Forecast foresee global growth similar to that of 2007 but with a rebound in the U.S. and a slight deceleration in the euro zone and in emerging economies, influenced by the process of monetary normalization implemented to keep inflation under control. Such a favorable global scenario may continue longer, but it can also deteriorate if a number of latent risks materialize. The most important ones facing the world economy are: (1) a deeper deceleration in the U.S. as a result of a stronger adjustment in the housing sector that ends up shocking the rest of the economy and the world; (2) an acceleration of inflation because of supply-side shocks in a global economy with little output gaps, which generates a  2  BIS Review 87/2007  sudden and large increase in the monetary policy rates of industrial economies, especially the U.S. and the euro zone; (3) an unforeseen sharp increase in risk premiums and a liquidity shortage affecting asset prices and world activity as a result of an unexpected increase in inflation in the developed world or a shock in financial markets, at a time when risk premiums are in unusually low levels.

The evaluation available with partial data for output and domestic expenditure over the second quarter of this year is that domestic activity continues to be strong, exceeding projections in the last Monetary Policy Report of May. In particular, the monthly index of economic activity IMACEC grew at an annual average rate of 5.7% in April/May, spreading to the various components of aggregate demand, namely private consumption, public consumption, fixed capital investment and exports of goods and services, especially noncopper. The baseline scenario in May’s Monetary Policy Report projected for this year a growth rate in the range of 5% to 6%, biased upward. With the evidence accumulated this year so far, the probability that the risks considered in said Report will materialize increases,  BIS Review 87/2007  3  taking this year’s growth to the upper part of the range. Important elements to consider are the strength of consumption and the recovered dynamism of investment. Private-sector expectations have internalized this higher growth expectations in their 2007 GDP projections. The aggravation of natural gas restrictions, combined with low rainfall, has increased the risk of energy shortage and higher costs. For the moment, the impact is believed to be nonsignificant, except obvious effects on electricity, gas and water, and have concentrated mainly in smaller value added from electric generation. However, this is an element of risk in the internal scenario that must be monitored with special care, in particular because of its medium-term implications.
Fixed rate of Estonian kroon and the currency board to support the peg necessitates in strong financial system for several reasons. In the open economy, if the exchange rate is fixed, the interest rates should be let to fluctuate, from time to time within wide margins, to meet the market supply and demand for Estonian assets. That monetary transmission channel from the rest of the world – in our case from the ECB in Frankfurt – to Estonian economy is of vital importance to provide early signals to address emerging imbalances. Financial system is, thus, both the messenger and the first line of defense, as the banks have to withstand volatile interest rates in case of negative expectations and resulting market uncertainty. Lack of lender of last resort even more underlines the essential role the financial stability plays to avoid domestic currency crisis. As Minister Kallas vividly explained, we have gone through lot of experiences over the past decade. At the outset of East-Asian crisis, Estonian currency system survived the speculative attack that we at these times considered a pure "Asian contagion". The 1-month TALIBOR rates were pushed up from 6 to 15 percentage points in less than 2 weeks. Of course, it became clear afterwards that at least part of the reasons for the attack were entirely home grown. Nevertheless, it showed us very convincingly, – in real life, so to say –, the importance of capitalized and liquid financial system that was able to adjust its risk management accordingly.

Uncertainties regarding the lagged effects of the strong monetary stimulus pose upside risks on both domestic and global economic activity. Given that the recovery in domestic demand has been relatively robust, a faster than envisaged recovery in external demand could lead to a rapid narrowing in the idle capacity, which, coupled with cost push pressures, may delay the attainment of the medium-term inflation targets. In this respect, should the recovery in economic activity turn out to be faster than expected, the monetary tightening implied in the baseline scenario may be implemented sooner than envisaged. Prospects regarding the pace of growth in developing economies, especially in China and India, have been posing upside risks regarding oil and other commodity prices. The increasing share of these economies in world demand has been creating additional pressures on commodity prices. I would like to emphasize that if commodity prices rise faster than expected in the forthcoming period and delay the disinflation, then we, as the Central Bank, may implement the monetary tightening described in the baseline scenario sooner than envisaged in order to eliminate the risks of deteriorating price setting behavior. The Central Bank will continue to monitor fiscal policy developments closely while formulating monetary policy strategy. Since the second half of 2009, economic activity has been stronger than envisaged in the Medium Term Program, leading to a better than expected performance in budget revenues.
Figure 14: Selected Sub-items of Consumer Loans (Annual Percentage Change)  570  450  Housing  400  470  Automobiles (right axis)  350  370  300 250  270 200 150  170  100 70 50 01/08  10/07  07/07  04/07  01/07  10/06  07/06  04/06  01/06  10/05  -30 07/05  0  Table 3: Consumer Loans and Claims From Credit Cards (Quarterly Real Percentage Change)  2006-II  2006-III  2006-IV  2007-I  2007-II  2007-III  2007-IV  Consumer Loans  20,0  1,5  3,6  2,6  9,0  10,0  6,6  Housing  22,8  0,9  2,2  2,7  7,5  10,2  5,4  Automobile  5,1  -6,4  -5,0  -8,9  -3,4  -2,0  -1,4  Other  24,3  6,0  8,9  6,6  14,5  12,8  9,9  Credit Cards  6,8  2,1  2,1  -1,6  7,7  2,4  3,2  Source: CBRT. External demand conditions are also expected to contribute to disinflation in 2008. Recent data on global economic activity suggest that world economic growth is likely to moderate in the forthcoming period, increasing the downside risks on external demand. Accordingly, our medium term outlook is constructed under a baseline scenario of gradual slowdown in external demand.

We believe that excluding this item, in line with the international practice, could give a better proxy for recent inflation trends. 8  BIS Review 20/2008  Figure 12: Output Gap 6 4 2 0 -2 -4  Monetary Tightening  -6  07-III  07-I  06-III  06-I  05-III  05-I  04-III  04-I  03-III  03-I  02-III  02-I  01-III  01-I  00-I  -10  00-III  -8  Monetary conditions continue to support the disinflation process. Despite the recent rate cuts, monetary policy can still be considered to be in the restrictive territory. Underlying rate of monetary expansion remains modest, consistent with a relatively restrictive monetary stance. Although medium term interest rates followed a downward trend in the past quarter, 2-year-real rates at this point fluctuate between 9 and 10 percent, implying a nonaccommodative monetary stance. Moreover, the currency remains strong, curbing inflationary pressures and easing the impact of rising commodity prices on domestic production costs. (Figure 13).
However, we also need to take into account the risks associated with household indebtedness in our repo rate decisions. Our balancing act in October resulted in an unchanged repo rate, but a downward adjustment of the forecast for the repo rate (see Figure 18). Such a monetary policy means that we can, on the one hand, attain the inflation target and stabilise employment in the long term and, on the other hand, take the risks associated with financial imbalances into account. However, monetary policy alone cannot eliminate the risks associated with household indebtedness that I have discussed today. It is important to have a wide-ranging discussion among several authorities in Sweden on the need for additional measures. 6  BIS central bankers’ speeches  Figures Figure 1. Repo rate Per cent, daily data 5  5  4  4  3  3  2  2  1  1  0  0 06  07  08  09  10  11  12  Source: The Riksbank  Figure 2. GDP growth in Sweden and the world Annual percentage change, calendar-adjusted data 8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  Sweden The world  -6  -6 80  85  90  95  00  05  10  15  Note. The broken line and bars refer to the Riksbank’s forecast in MPR October 2012.

It had been clear for a relatively long time that if the share of human labour in output was only one-third, Solow’s model would provide a very good picture of reality in international comparison. To overcome this inconsistency, however, it was necessary to come up with the idea of introducing a new variable in the model that would represent human capital. Although this may seem obvious today – as such things always seem to be as soon as someone else thinks of them – it was a novelty in the late 1980s. It was another Nobel Prize Laureate in economics Robert Lucas who divided human labour into a part reflecting people’s general capacity for work, and the contribution of human capital that was a result of previous investment in education. What Lucas did was very simple from today’s point of view. Using the extensive structure of US economic data, he chose the average wage of people with basic education as a basic remuneration of people’s capacity for work. Then he gradually added the average wage of  BIS Review 81/2008  1  other people after each finished year of education. The results showed that every additional year of education up to the level of a bachelor’s degree increases the wage by 8% on average.
So I don’t find the argument convincing that we have to keep up the pressure. It is also not our task. It would not be democratic for a central bank to dictate to elected governments what they have to do. BILD: Mr Draghi, in your first interview with BILD four years ago, we spoke a lot about Greece. The country has still not got back on its feet, even though it has received hundreds of billions in emergency loans. When will the madness end? Draghi: Clearly, last year was an economic setback for Greece. Now everyone is aware that there can be no growth without reforms. And what the country and its people need above all is growth. Greece has implemented many reforms in the past few months and is committed to the path of reform. BILD: Is the euro a part of the solution for Greece, or a part of the problem? Draghi: Greece’s challenges have little to do with the euro. It would have to implement reforms in any case. In the euro area, Greece can do that with the support of its partners. But one thing must be clear: who belongs in the euro area and who does not is not for the ECB to decide. That is a matter for the Member States. BILD: They are now more fractious than ever. Is that the biggest danger for Europe? 2  BIS central bankers’ speeches  Draghi: We are experiencing several crises which are all interconnected and reinforce each other.

Eva Srejber: Greater budgetary discipline in the EU through transparency and national ownership Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at a breakfast seminar organised by Ernst & Young, Stockholm, 26 September 2006. *  *  *  Fiscal and monetary policy are interdependent. A government needs transparent and consistent monetary policy to know how to conduct fiscal policy. Similarly, no monetary policy will be sustainable if there is a rapid accumulation of debt. This is what Sweden witnessed in the 1980s and the early 1990s. An unsustainable mix of fixed exchange rates and lax fiscal policy, which led to high inflation and eventually to a crisis that landed us with an even higher mountain of debt. When the regime collapsed, General Council decided that the Riksbank should work towards a direct inflation target. The Riksbank determined that the target would be two per cent. Today this policy is hailed as a success. However, the real breakthrough for the new regime was in the mid-1990s when a forceful implementation of fiscal consolidation, supported by a broad political majority in parliament, made the macroeconomic set-up as a whole credible. It was only then that inflation expectations among the public finally fell to the target of 2 per cent, and interest rate spreads against Germany were reduced substantially. This fiscal tightening could in turn be based on the predictability of the new monetary regime with a clear inflation target. And the tighter fiscal policy would eventually allow less restrictive monetary policy.
Indeed, the current turmoil has underscored the importance of robust liquidity management by banks, as well as the need for supervisory approaches which keep pace with structural market developments. Many initiatives with a view to addressing issues and risks arising from the recent financial market turbulence that go into the right direction have already been launched, both at the international level, namely by the Financial Stability Forum, and at the EU level, with the ECOFIN agreeing to a roadmap for action by 2008, and also by the private sector. They must be pursued now with even stronger impetus. In this respect, co-ordination at the global level should be ensured. In closely interlinked financial markets, any policy measure should be agreed to and consistently applied at the international level. Fifth, in the same vein, there is a need to reflect carefully on the “originate-anddistribute” business model. The period ahead is likely to provide a first material test of changing banking business models and the increased reliance on secured funding. Although currently profitable and well capitalised, many banks will experience income and credit losses, which may trigger a re assessment by some of them of the suitability of the so-called originate-and-distribute business model. The current episode has also shown that the transfer of credit risk outside the banking sector may ultimately not be effective. This is related with reputational and other concerns, which induce banks to take credit risk back onto their balance sheets.

Luis M Linde: IV Meeting – Financial System Reform Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the inauguration of the meeting on “Financial System Reform” organised by Expansión, Madrid, 9 July 2013. *  *  *  Introduction It is an honour for me to participate in the inauguration of this meeting on “Financial System Reform”, organised by Expansión. Given the agenda and the list of participants, this meeting will be an excellent opportunity for players in the Spanish financial system to review the latest developments and to assess, from the standpoint of their own institutions, the more immediate future. The future of our financial system and of our banks will necessarily be framed within the new international regulatory system, whose design has been under way since the international economic and financial crisis broke six years back, in 2007. This crisis, whose consequences have clearly not yet been overcome, has given rise to numerous initiatives. Various international financial organisations, public and private alike, including the International Monetary Fund and the Bank for International Settlements, have been involved in studying and addressing such initiatives. But we should mention, above all, the establishment of new institutional frameworks. These include most notably the creation of the Financial Stability Board (FSB), which was promoted by the G20 and has assumed a key role in designing and coordinating international financial reform. We have also seen the main economies create institutions entrusted specifically with overseeing the financial system from a macroprudential perspective.
Other key developments that took place during the last five years included: yearly state expenditure rising up to Rls 2.6 trillion; decline in public debt to Rls 167 billion (10.2 percent of GDP); annual current account surplus averaging $ billion and increase of more than Rls 550 billion in bank assets. According to the World Bank Group report, the Kingdom has been ranked eleventh in the world and first in the East region in terms of doing business and provision of competitive environment in 2010. The development witnessed by the Kingdom during previous years has been comprehensive and broad-based. Vast number of development projects to modernize infrastructure, and improve facilities to provide water, electricity, health and educational services have been approved. Therefore, it is expected that strong growth of the Saudi economy will continue unabated and this will expand the financial sector in general and the insurance sector in particular. Dear Audience, Insurance companies play a key role for the development and stability of public and private sectors by providing opportunities to individuals and firms to improve their risk profiles and obtain compensation for losses incurred. It is for this reason that SAMA has been keen in regulating the insurance sector in accordance with the national and international standards and practices. SAMA ensures that all companies operating in the insurance industry comply with such standards and practices and work according to prescribed rules and regulations.

I also emphasize that SAMA will follow up this matter and take legal actions against insurers that are proven to be negligent. I am sure that you all are aware of the significance of handling such claims promptly and efficiently since this will enhance insurance companies’ reputation and attractiveness to those averse to taking risks. Dear Audience, During the past few years, the insurance sector has not only achieved good results in terms of services provided, diversity of products, and establishing trust with beneficiaries, but also in terms of compliance with laws, regulations, and instructions issued. However, there is a lot more that remains to be done to modernize the insurance industry to enhance its soundness, capabilities and performance to make it comparable to regional and global insurance industries. Such a situation calls for considerable attention to professionalism in application of technical aspects of pricing policies, management of claims, provision of technological infrastructure consistent with the size and nature of the work, investment policy, compliance with the financial solvency standards, and allocations of necessary technical provisions to ensure health and soundness of the companies’ financial positions. It is imperative that the insurance industry remains competitive by developing and providing insurance products and services to the satisfaction of customers at all times. Dear Audience, We expect the insurance industry to continue to improve its performance and achieve balanced growth in accordance with corporate objectives and available resources.
As far as Sweden is concerned, the importance of the National Swedish Pension Funds is self-evident. The funded wealth is not as large as the Norwegian oil fund, but Denmark, for example, with funds equal to about 200 per cent of GDP, is not that far behind. Among the euro countries, the Netherlands and, to a lesser degree, Finland stick out as they have substantial funded pension wealth. However, such wealth is negligible in Germany, France, Italy, Spain, Belgium, Austria and Greece. Figure 2. Funded pension wealth in relation to nominal GDP in 2019, per cent. 250 200 150 100 50 0  Pension scheme funds Buffer funds for national pension systems Source: OECD (2019), Table 9.2. 6 An earlier comparison of this kind can be found in Ohlsson et al. (2020), Appendix D.  4 [6]  Mandatory collective pension funds (like the premium pension system) or quasimandatory collective pension funds (like the SAF-LO pension agreement) can be found in just less than half of OECD countries.7 The countries in the figure that have mandatory systems are Denmark, the Netherlands, Australia, Sweden, Finland and Norway. But as far as Norway is concerned, the wealth is negligible compared to the wealth in the oil fund. I do not have access to information showing how funded pension wealth is distributed in those countries that do not have mandatory systems based on labour income.

In addition, the social partners have concluded agreements in different areas on various types of collective pension schemes, many of which are based on funds. It is no coincidence that pensions are in focus when this type of fund is built up. In some way or another, systems must be created so that people have financial resources for their whole life. And this means that the perspective is very long-term. Neither is it so strange that the Norwegian oil fund is actually called Statens pensjonsfond utland (The State’s pension fund abroad). A century of collective pension wealth in Sweden How much funded collective pension wealth has then been built up in Sweden? What share of the wealth in Sweden is in collective pension funds? Figure 1 answers these questions. Figure 1. Funded collective pension wealth as a share of total wealth in Sweden, 1920-2019, per cent. 30 25 20  15 10 5 0 1920  1930  1940  1950  1960  1970  1980  1990  2000  2010  2020  Source: Swedish National Wealth Database, 1810-2019. See also Waldenström (2016) and (2017). Note: Total wealth is the sum of financial and real assets, with a deduction for financial liabilities, and funded collective pension wealth. 1 Ore and forest are natural resources that have been and still are of major importance in Sweden. But extensive  investment has been required to be able to benefit from these natural resources. Norwegian oil is a “windfall gain” in a completely different way.