samchain/econo-pairs-v1 huggingface dataset:
Or, put differently, curbing the credit cycle appears to be an important ingredient of broadly-based macro-economic stability. In principle, monetary policy could be used to curb the credit cycle. In practice, the differing duration and synchronicity of the credit and business cycles means this is unlikely to work well. Pre-crisis experience illustrates well just that point. At the same time as the wider economy was operating in cruise control, credit markets were in overdrive. Hitting these two birds – one flying high, the other low – with one (monetary policy) stone would have defied even the most astute marksman [King, 2013]. What is needed, in these instances, is a second instrument. In the language of Tinbergen [Tinbergen, 1952], two cycles and two objectives call for two instruments. This is where macro-prudential policy comes in. One of the aims of macro-prudential policy is to act counter-cyclically on the credit cycle, constraining credit booms and cushioning busts  BIS central bankers’ speeches  1  [Aikman et al, 2014]. In this role, macro-prudential policy is complementing monetary policy in its role of stabilising the macro-economy. Macro-economic policy then becomes, in effect, two-handed or ambidextrous. Since the crisis, this two-handed approach to policy has been taken up actively by a number of countries internationally [IMF, 2013]. For example, counter-cyclical prudential policy is now baked into new international regulatory rules. The so-called Basel III reforms introduced for the first time a “Counter-cyclical Capital Buffer” (CCB) to be adjusted to counteract the credit cycle [BCBS, 2010].

This has enabled explicit co-ordination between the monetary and macro-prudential arms when tackling the joint needs of the economy and financial system – for example, in the UK through joint meetings of the Bank’s MPC and FPC. But in a number of other countries, responsibility for macro-prudential policy has been located outside of central banks [IMF, 2013]. We have a mixed model. In this institutional respect, macro-prudential policy today resembles monetary policy perhaps a generation ago. It is, of course, still early days for macroprudential regimes. Monetary policy took a generation, if not two, of trial and error to find its feet. For policymakers finding their feet today, doing so will be far easier using two arms than one.
I would say that this is one of the lessons worth highlighting from developments in Sweden after the financial crisis. An expansionary policy with communicative challenges So how have things gone since? The more expansionary policy gradually started to have an effect. Growth rose and employment increased. Inflation started to rise in 2015 and in 2017 returned to the inflation target of 2 per cent. Since then, it has remained close to target, although most recently it has decreased slightly. Inflation expectations also turned upwards, both short-term and long-term (Figure 3). Furthermore, developments in Sweden have been generally positive in an international perspective, regarding both employment and growth (see Figure 4). Intensive debate despite good target attainment The fact that macroeconomic developments have largely been favourable for some time does not mean that everything is hunky-dory, which one might have expected. As I have already indicated, the expansionary policy has given rise to intensive debate. Perhaps the debate has been livelier and monetary policy more brought into question than in many other countries with similar frameworks. A comparison could be the debate in the United States. But in contrast to in the US, it has not been a question in Sweden of political pressure to conduct a more expansionary policy but rather about pressure from opinion-makers and debaters to conduct a less expansionary policy.

From the regulator’s perspective,  2  BIS central bankers’ speeches  risk culture could be inferred and gauged based on the effective implementation and level of compliance by the risk takers and the frontline staff. To improve risk culture, Board and management must review the incentives and penalties in place and ensure that it is effectively implemented. Among the key questions that Board and management should be asking are; Does the performance management and compensation system reward good behaviour and punish bad behaviour? And how are audit and supervisory issues handled? As you already know, a weak risk culture may lead to staff resorting to “check the box” compliance exercise whilst a strong risk culture will judge the wisdom and decision of looking beyond the profit number and be able to see the medium and long term sustainability. On this note, allow me to share some of the key observations made by Bank Negara Malaysia during the recently completed AML/CFT Thematic Reviews on Banks and Insurance Companies. First, the good news. In general, we observed that there was greater awareness among Board and senior management on ML/TF risks and its potential implication to their reputation. From the AML/CFT policies and framework implemented, there was also shift towards risk-based approach. In most of the institutions reviewed, the management of AML/CFT was no longer viewed solely as a “Compliance” job but more aligned and integrated with the bank’s overall risk management function.
3  Page 10 of 27  expect to return to the labor market, but in more flexible jobs that allow them to reconcile personal duties and paid work. Women’s attitude towards returning to the labor force will depend on both the duration of confinements and school closures, and the recovery of the traditionally more feminized areas of economic activity. However, a higher prevalence of the latter two groups harbors the risk of a slower recovery of participation rates, or that in the future we will see an increase in the underutilization of the female labor force in terms of occupations with shorter working hours or lower productivity, such as self-employment or informality. All of the above should make it clear that while a full normalization of the labor market would require reversing the loss of jobs and the exit of women from the labor force, this will not necessarily occur automatically as activity levels recover. In other words, the abrupt, prolonged and traumatic exit of hundreds of thousands of women from the labor market in 2020 has economic, social and cultural ripple effects that may extend well beyond the normal cycle and become a bottleneck to a robust, sustained and equitable economic recovery. Therefore, analyzing the evolution of the labor situation of women, deepening the diagnosis and enriching the projections in this regard is not a second-order task, but an issue that should be a priority for public policy makers.

In sum, we revised our end-2015 inflation forecast down by 0.6 points to 5.5 percent from 6.1 percent in the October Inflation Report. This revision is driven by falling oil prices. The projected noticeable decline in inflation compared to 2014 is largely due to falling oil prices as well as our projections that cumulative exchange rate effects will continue to taper off and food price inflation will recede to past years’ averages. The course of inflation in 2015 will be determined by base effects. We expect base effects to pull annual inflation down until August and push it up the rest of the year. Thus, we project that annual inflation will remain on a downward track until the third quarter and increase slightly to 5.5 percent due to base effects in the fourth quarter (Chart 18). In addition to these forecasts, we discuss alternative scenarios on the inflation outlook and the global economy in the Risks section of the Inflation Report. You can examine the Report for details. 4  BIS central bankers’ speeches  While concluding my remarks, I would like to thank all my colleagues who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9
Andrew Bailey: The evolution of insurance regulation – a shifting scope and new frontiers Speech by Mr Andrew Bailey, Executive Director and Member of the Financial Policy Committee, Bank of England; Managing Director of the Prudential Business Unit, Financial Services Authority, at the Nicholas Barbon Lecture, London, 6 February 2013. *  *  *  Thank you for inviting me to give this Nicholas Barbon Lecture. And, thank you for giving me the opportunity to remind myself of the career of Nicholas Barbon – I say “remind myself” because a long time ago I was an economic historian. Barbon is certainly one of the founders – if not the founder – of the insurance industry in London in the late seventeenth century. He was first a builder, indeed, he wrote a tract called “an apology for the builder” in which he defended new construction in London on the grounds that cities created employment and wealth. Barbon was probably the leading builder of the time and he offered an integrated service because he pioneered house insurance. Indeed there are observations that Barbon’s business was to build, insure, and re-build your house when it fell down. These days you would be in FSA enforcement if you tried that one. But Barbon was also one of the early economic theorists in a period at the end of the seventeenth century when economic theory flourished, before it went into abeyance until Adam Smith and David Hume came onto the scene.

Inflation in services is also increasing but here it is interesting to point out that whereas supply side factors were the main driver of services inflation until the end of 2021, demand factors have been making an increasing contribution to services inflation throughout 2022, and ended up surpassing supply driven factors in the third quarter. A similar increasing contribution of demand drivers versus supply drivers is observed in Non-Energy Industrial Goods inflation in 2022. So, Headline HICP inflation is projected to rise further from the already very high levels, averaging to 8.1% in 2022, then decreasing to 5.5% next year and to 2.3% in 2024. But these are annual averages of inflation. This is also important because in order to reach the 5.5% average inflation next year, since inflation starts in the coming year at a high level, it means that inflation is expected to be at 3.3% in the fourth quarter of 2023, assuming, of course, there are no new external shocks. The aim of monetary policy, through higher interest rates, is to support disinflationary pressures through downward pressure on demand. So Monetary Policy has a "more" difficult job than when dealing only with "typical" demand driven inflation. 1/2  BIS - Central bankers' speeches  Given the above considerations and the current highly uncertain environment, the inherent flexibility of the meeting by meeting approach we decided at the Governing Council is well suited to calibrating monetary policy, in line with the incoming data and the evolving outlook. Thank you.
Mr. Heikensten looks at the prospects for the Swedish economy against the background of the central bank’s monetary policy Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, given at the Centre Party’s Economic Seminar in Haparanda on 15/6/97. I should like to begin with a word of thanks for the invitation to talk to you here. In these introductory remarks I shall be discussing the economic situation. Sweden’s economy presents many positive aspects: the outlook for growth is good, the general government deficit is estimated to be eliminated next year and the low inflation policy is becoming more and more established. But there are also persistent economic problems to solve, not least in the labour market. Before considering the economic situation, however, I thought I would say something about monetary policy, the role of the Riksbank and the changes in the status of the Riksbank that recently gained the support of five of the political parties in Sweden’s parliament, including the Centre Party. 1. Monetary policy and the role of the Riksbank Why low inflation? In the past decade there has been a growing awareness of low inflation’s importance as a central condition for the proper workings of an economy. This has been the case not just in Sweden but virtually throughout the western world. The significance of price stability is clearly demonstrated by Sweden’s experience in earlier decades.

Re-estimating the scale of the productivity puzzle using more plausible estimates for trend productivity growth in these two sectors reduces the size of the productivity shortfall by up to 2 percentage points – that is from around 9% to 7% – with the majority of that difference reflecting slower underlying productivity growth within the energy extraction sector. Extrapolating from the past may also be misleading if some businesses were operating at above normal levels of capacity utilisation prior to the recession. If that were the case, some of the subsequent slowdown in productivity growth would simply reflect the need for companies to adjust to more sustainable operating levels. And that indeed appears to be the case, with business surveys pointing to above average capacity pressures in both the manufacturing and services sector prior to the recession. The implied required adjustment may account for around a further 1% point of the productivity shortfall.8 Taking account of changes in productivity trends within key sectors of the economy and of the position of the economy prior to the start of the recession may account for around one third of the productivity shortfall. But even if we combine both of these factors with the impact of the likely upward revision to GDP, this still leaves a sizeable productivity puzzle – of around one half of the productivity shortfall – to explain. The third explanation is that underlying productivity growth has been weakened by the impact of the financial crisis.
In some cases, we can achieve better terms by investing in new companies ahead of a planned listing. As the GPFG has grown so has Norges Bank’s experience in investment management. The investment universe has broadened. Every year new emerging economies are added to the list of countries in which we can invest. The aim is always to improve the trade-off between risk and return over time. The GPFG is subject to an extensive governance and control framework. The Ministry of Finance draws up the mandate for investment management. Norges Bank’s Executive Board has laid down, pursuant to the mandate, further detailed guidelines for the CEO of Norges Bank Investment Management. Pursuant to these guidelines, Norges Bank Investment management makes decisions concerning individual investments. Control and supervision of investment management follow the same lines as the delegation of investment decisions. Risk and return are routinely reported to the Executive Board and discussed at its meetings. Norges Bank reports on investment management to the GPFG’s owners on a quarterly basis. Norges Bank works to safeguard financial wealth over time. Responsible investment is a key component of that task. The Bank uses a number of instruments to promote active ownership, such as international principles and standards, expectations documents, voting at shareholder meetings and contact with companies. Corporate governance and environmental and social considerations are integrated into the investment process and risk management. In a number of cases, the Bank has sold off or refrained from buying securities as a result of concerns regarding longterm sustainability.

We have shared common destiny for centuries and now we should be ready for dialogue, cooperation and coordination. Above all, when we want to push through common interest in the future, we should work together in order to get a joint view of the events past and present. Thank you for your attention. 4  BIS Review 101/2010
Page 1  Four Rs: Creating the conditions for long-term sustainable growth in the life annuity sector – speech by Charlotte Gerken Given at the 19th Annual Conference on Bulk Annuities  Page 2  Published on 26 May 2022  Charlotte Gerken talks about the long-term sustainable growth of the UK’s life annuity sector. She says that potential changes to regulations for UK insurers can support this. In her speech, she highlights the importance of: the responsibility of the board risk management resilience regulation  Speech Introduction Thank you for your introduction, and for inviting me back to the Bulk Purchase Annuities Conference. There is never a shortage of material to cover at this event given the challenges and, of course, opportunities that annuity business creates for the management of very long-term assets and liabilities. This year I am going to focus on the conditions for sustainable growth in the Bulk Purchase Annuity (BPA) sector – the Four Rs referred to in the title – Responsibility of the Board, Risk Management, Resilience and Regulation. Like last year, I will share insights we have gained from our supervisory analysis of the asset-related risks that annuity writers face. As you will be aware credit risk and its effective management continues to be one of the Prudential Regulation Authority’s (PRA’s) top priorities for the sector and – through the Matching Adjustment (MA) - it is also a topic of focus of the Solvency II reform[1] work.

Minister Calviño has now stated that Spain should not resort to using it and that, in any case, she only believes it is an option if conditionality is extremely low… Before this crisis, Spain was growing, it was competitive, its debt-to-GDP ratio was below 100%, its government deficit was 2.6% and its unemployment rate stood at 14%. Currently it has been able to obtain the funding it requires on the markets, it is not experiencing any difficulties, and the spread against the German bund is 110 basis points. Let’s hope that Spain can maintain this relatively comfortable position. Italy is not in the same position; could that be why it is adopting a more combative stance? I don’t want to start making those kinds of comparisons. Let’s come back to Spain then. There is talk of making a political pact, like the Moncloa Pacts of 1977. What’s your opinion? Are you in favour of pacts? I think we must always be in favour of political pacts during extraordinary times such as these. Although a comparison with the 1977 Moncloa Pacts is perhaps not possible. At that time, Spain was not a member of the EU and the euro did not exist. The main goal was to reduce inflation and change the income policy. Today, there is a deep recession that will have a very severe impact on the public finances and which will require a huge effort to get the economy back to normal. This is the most serious economic situation since the Civil War.
To achieve the 2% inflation target over the medium term but at the cost of an avoidable depletion of the economy’s supply capacity would not be congruent with the MPC’s Remit, which includes supporting growth and employment in so far as that is consistent with the overriding goal of price stability. I was glad that the “effective supply” way of thinking about this was reflected in our latest Inflation Report. But I would readily concede that we must not lose sight of the potential “speed limit” effects that featured in our November Report. Given the need for some rebalancing in the pattern of demand and activity, and the likely lags in firms bringing even suspended capacity back on-line, bottlenecks are a distinct possibility. We will need to be especially alert to messages from the Bank’s Agents, to survey evidence, and to data on productivity, wages and prices for any sign of inflationary pressures. Volatility of inflation, and inflation expectations The Committee’s strategy has warranted maintaining the very substantial monetary stimulus notwithstanding the marked pick-up in inflation over recent months. As the Governor explained at our press conference a fortnight ago, we think that the recent rise in inflation is accounted for mainly by the increase in petrol prices, the restoration of VAT to 17.5%, and lagged effects of sterling’s substantial depreciation. But we can’t be, and aren’t, comfortable about it. Not least because the country has to trust us that these will be temporary disturbances.

The emergence of substantial markets in forward, futures, options swaps and other derivative instruments has significantly altered the conduct of borrowing, investment and risk management activities. The significant economic benefits of financial derivatives include: (i) permitting the unbundling and trading in risks, (ii) the ability to hedge price risks and to synthesise investments with greater efficiency and lower costs, (iii) and an increasing liquidity of and trading in financial assets. I would expect this process of constant innovation to continue in the decade ahead. First, because innovation is a natural feature of modern financial markets. The expansion of the credit derivatives in the last five years illustrates how fast new instruments cans develop and expand. And, second, because markets are still incomplete, in the sense that some risks cannot be efficiently hedged or transferred in the current environment. B  Incomplete markets and intergenerational risks  One interesting example is demographic risk, and more generally, the efficient transfer of risk between different generations. Currently, markets may not be well equipped to deal with intergenerational risk that simultaneously affects different generations living at the same time. Many developed countries are going through a demographic transition, sometimes called the old age crisis. According to the World Bank’s 1994 report for instance, by 2030 there will be 1.4 billion people in the world aged over sixty, versus 500 million in 1990. So, we are experiencing a transition to an economy with many more aged dependents relative to the active workforce.