samchain/econo-pairs-v1 huggingface dataset:
For the survey’s main index – which is called the General Business Conditions Index – respondents report the change from the previous month in of overall conditions in their firm. To explain their answers, we also ask them to assess components of activity such as orders, shipments, inventories and employment. Respondents are also asked for their views on the likely direction of these indicators over the next six months. In addition, each month we ask supplementary questions on a topic of current interest. To share the information as quickly and broadly as possible, we post results on our public website on the 15th of each month or the next business day. In doing this survey, we join the four other Federal Reserve Banks that use a survey to monitor conditions in their manufacturing sectors. This morning I want to highlight the results of our July survey, which we released last Thursday. Our main index began to signal an upturn in the manufacturing sector in New York State last summer and, despite a brief dip last December, has given a consistently positive signal for a year now. Our July survey showed that conditions continue to improve, but at a slower pace than in previous months. In this month’s supplementary questions, we asked respondents about the importance of trade with various parts of the world to manufacturing activity in New York State. In general, respondents indicated that exports account for a growing share of their revenues.

Regional manufacturing sector  Background The manufacturing sector is important to our region because it provides a substantial number of high-wage jobs and, in some parts of the region, is a key driver of business cycles and longer-term trends. To understand manufacturing in our region, it is important to note that different parts of the region specialize in different products. For example, New York City’s largest manufacturing industry is apparel; motor-vehicle parts is a large industry in western New York, as are computers and electronics in Syracuse, Binghamton and the Hudson Valley. The pharmaceuticals industry is dominant in Northern New Jersey and Puerto Rico. Over the past several decades, manufacturing wages have risen, while the number of workers it employs has fallen, These long-term trends stem from fundamental structural changes in trade, technology and consumption patterns. Some manufacturing has moved to other parts of the United States or overseas. The advent of information technology and computerization has also profoundly altered many manufacturing processes. And, the mix of products demanded by consumers has evolved over time. All of these factors have combined to reduce the number of factory jobs across the nation, with the New York/New Jersey region hit particularly hard. What is less well known is that despite this employment decline, manufacturing output has actually continued to grow moderately in much of the New York/New Jersey region. This means that the sector has experienced substantial gains in productivity.
Suppose the pension fund owns a large amount of a particular corporate bond and wants to reduce this holding, but the liquidity for outright sales is limited. The fund may take a view that it will have less price impact by gradually selling the bond in the cash market over a period of a few months but, at the same time, it would prefer to take off the market risk immediately. If that is the case, the fund may take out a standardised CDS (Credit Default Swap) contract with a bank, probably written on a basket of corporate bonds issued by the same corporate. There would be basis risk from any mismatch in the bonds, so the CDS is not an exact hedge, but in most scenarios, holding the bond and the CDS contract together will ensure a substantial reduction in the net value of the market position, compared with holding the bond alone. The fund could then unwind the CDS contract simultaneously with slowly selling the cash bond. In short, the superior liquidity of the more homogenous CDS market (which benefits from relatively elastic gross supply) enables the pension fund to reduce the execution costs of its portfolio management whilst not sacrificing its nimbleness in terms of market risk management. In this example, the strategy seems reasonable. The probability that the corporate defaults in the few months the strategy takes to execute is probably pretty low, and the joint probability of the corporate and bank defaulting is even less.

See also Northern Rock’s 2008 Annual Report and accounts P25/6. BIS central bankers’ speeches  7  large. Introducing a break clause allowing either counterparty to terminate the contract effectively shortens the maturity of the swap, since the bank (or the company, in case it is owed money and the bank’s credit appears more shaky) can demand payment at that time. In reality, most corporates do not expect such a break clause ever to be exercised. The concern would be that, if the corporate expects the bank to ignore the break clause regardless of the circumstances, exercising the clause would be a surprise for which the firm may not have put appropriate contingencies in place – perhaps even making default more likely. Or that the market may start to interpret the enforcement of “break clauses” as a sign of weakness on the bank’s part. In other words, such behaviour could be seen as so antagonizing to customers that a bank would only do it if it is absolutely desperate. Yet if the bank cannot in fact enforce the break clause, its credit pricing and risk management has been faulty. Another example, comprising elements of the break clause and the SIV problem, is the behaviour of managers of money market funds when faced with the prospect of “breaking the buck”. A money market fund calculates its net asset value (NAV) on a daily basis. The NAV is its price per share, which reflects the total value of the fund’s investment holdings.
This is that the cost of a 1% rise in banks’ capital relative to their risk weighted assets would reduce annual GDP by about 0.1%. At a discount rate of 2.5% this implies that the present value of this loss in output over all future periods is 4.25% of current annual GDP 9. I illustrate that less conservative assumptions imply a much smaller estimated cost of higher bank capital requirements. Specifically, I sequentially take account of:  5  See Modigliani, F.; Miller, M. (1958). “The Cost of Capital, Corporation Finance and the Theory of Investment”. American Economic Review 48 (3): 261–297. 6  See Kashyap, K., Stein, J. and Hanson, S. “An Analysis of the Impact of “Substantially Heightened” Capital Requirements on Large Financial Institutions”, Working Paper. 7  See in particular box 7 in chapter 5 of Bank of England, Financial Stability Report, June 2010. 8  In particular, it notes that the costs may be over-estimated because the calculations assume that the Modigliani-Miller theorem does not hold and because they use a Cobb-Douglas production function to compute the reaction of output to changes in firms’ cost of capital. 9  Underlying these calculations are assumptions that the cost of equity and debt are 10% and 5% respectively and remain fixed. Our baseline calculations are similar, but slightly higher than those in the June 2010 Financial Stability Report.

Now I do wonder if some of you expected me to give a speech about what we can’t do. You might have expected a lecture about how sustainable growth is impossible without financial stability. You might have expected warnings that undermining our primary objectives will increase the probability and severity of crises, whilst decreasing the ability of finance to support economic recoveries. These things are indeed true, and colleagues of mine have argued these points in public. [3] So I will not repeat my colleagues’ arguments today. Not because I don’t agree with them (I do). Page 4  But because I want to talk about the other side of things. About what we can, and about what we will, do differently because of the new objective. And this is because industry thrives better when trusted public institutions provide foundations upon which the private sector can build, innovate, and succeed. The PRA must do what it can to strengthen these foundations. [4] In particular, PRA rule making can deliver three things: harness the UK’s strengths as a global financial centre, maintain trust in the UK as a place to do business, and tailor regulations to UK circumstances. The PRA will make rules that harness the UK’s strengths as a global financial centre I believe that the PRA can help harness the UK’s strengths as a global financial centre by providing a high level of responsible openness. Responsible openness is essential to the UK’s success because it is one of the world’s most connected financial centres.
But while adequate for the purchase of provisions at the local general store, such forms of money were clearly an imperfect medium of exchange and created otherwise unintended credit exposures between agents. 18 The recent market turbulence offers a further reminder of the importance of resilient infrastructure for conditions in financial markets. When markets are fragile, any interruption to normal service could have particularly serious implications: further clouding judgements as to individual participants’ solvency; undermining agents’ risk management; or affecting asset prices in dependent markets. With volumes and values in several markets having hit record levels during the market turmoil and remaining high for a sustained period, infrastructure providers have experienced a severe stress test and, by and large, have passed with flying colours. CLS, for instance, processed nearly 860,000 transactions (more than $ in value) on 19th September, 2½ times the daily average in June. 4. Current trends in the wholesale market infrastructure: new markets and new demands. 19 Today, central banks around the world still typically provide the ultimate settlement asset and sometimes operate, and also own, key components of the payment and settlement infrastructure. For key elements of the infrastructure central banks have assumed an oversight role. Depending on the particular regulatory architecture in place, this is sometimes shared with the financial regulator, as in the UK. 20 But this is a dynamic environment: the landscape is broadening and deepening, with niche market-specific facilities, cross-border systems, new entrants and commercial bank providers becoming more important.

25 The declining cost of technology has also been a key driver of the rise of electronic trading in recent years. Almost 60% of trade in foreign exchange is now executed electronically and close to 50% in repo. BIS Review 130/2007  3  26 Automated and algorithmic trading strategies are becoming more widespread across asset classes. The London Stock Exchange (LSE) reports that the proportion of the order flow on the exchange that is automated has risen from negligible amounts just four or five years ago to approaching half today. This not only has implications for the scale of trading activity – volumes have tripled on the LSE’s SETS system over the past five years – but also the design and location of the trading infrastructure. For many algorithmic trading strategies, processing speed is critical. The faster systems can process trades in just one or two milliseconds: a tiny fraction of the blink of an eye. But ultimately speed and thus the ability to gain a competitive advantage depends on proximity to the platform; hence, the old geographical pull of markets has begun to re7 emerge with exchanges selling space near their trading platforms to those who want to be first in the queue. 27 Many new entrants to the trading arena are therefore competing with incumbent exchanges on the basis of processing speed. These new platforms are also looking for lower cost post-trade solutions.
On the other hand, Norway, like many other countries, is facing substantial fiscal challenges. Financing the large pension payments that will have to be disbursed in the coming years will be very demanding. Final remarks To sum up, Norway has a market economy and a large government sector. The way in which economic policy is oriented today reflects the knowledge gained and the lessons learned. We know from experience that fiscal policy alone cannot ensure a high level of employment. The structure of the labour market and wage formation are probably of greater importance. The direct regulation of credit, interest rates and capital movements collapsed and was phased out in the 1980s. Price regulation no longer plays a role as a macroeconomic instrument. The scope of business policy has become more general. 4  BIS Review 22/2006  The most important contribution monetary policy can make to sound economic developments in the long term is low and stable inflation. Low and stable inflation has contributed to solid growth in the global economy in recent years. Thank you for your attention. BIS Review 22/2006  5

Do we use the potential lying in the Polish universities (e.g. Poles that study in China or India and their counterparts studying in Poland)? -  What is the role of trade unions? Should they add to their mandates, so far involving the defence of employee rights, informing employees of the anticipated changes and preparing them for the changes, e.g. through providing appropriate means for re-qualifying and training? -  Do we have a policy to tackle the imminent mass migration, mostly from Asia and Africa, over the forthcoming decades? How should we provide social integration of immigrants so as to help them become Polish global patriots? How can we mitigate the possible pressure on social expenditure due to the immigration of poorly qualified workforce, and how can we attract highly qualified staff to move to Poland? -  Do we sufficiently consider global factors, especially the involvement of countries with low manufacturing costs to the global manufacturing, services, knowledge and labour markets, in our strategic planning, both at the country and corporate level? -  Are we able to anticipate Poland’s specialisation on the global market, with the view to the demographic trends, and do we invest sufficient funds to develop such areas, at the expense of the discontinuing areas?
17  Table 2 World growth (annual change, percent) 2018 (f) Jun.18 Report  2017  2019 (f) Jun.18 Report  Sep.18 Report  2020 (f) Jun.18 Report  Sep.18 Report  Sep.18 Report  World at PPP World at market exchange rates Trading partners  3.7 3.2 3.7  3.9 3.3 3.8  3.8 3.1 3.6  3.8 3.1 3.6  3.6 2.9 3.5  3.6 2.9 3.4  3.4 2.8 3.4  United States Eurozone Japan China India Rest of Asia Latin America (excl. Chile) Commodity exporters  2.2 2.4 1.7 6.9 6.7 4.4 1.1 2.7  2.7 2.2 1.0 6.6 7.3 4.3 2.1 2.3  2.9 2.1 1.0 6.6 7.3 4.2 1.3 2.3  2.3 1.9 0.8 6.3 7.6 4.3 2.5 2.2  2.3 1.9 0.8 6.2 7.6 4.1 2.1 2.2  1.9 1.7 0.5 6.2 7.6 4.2 2.6 2.2  1.9 1.7 0.5 6.1 7.6 4.2 2.6 2.2  (f) Forecast. Source: Central Bank of Chile. Figure 8 Interest rates by type of loan (1)  Real loans (3) (4)  (index, 2002-2018=100)  (annual change, percent)  200  200 25  180  180  Commercial  160  25 Consumer  20  20  160 Consumer  140  140  120 10  100  100  80  80 Housing (2)  40  60 40  02  05  08  11  14  17  (1) Weighted average rates of all operations performed in each month. (2) Loans indexed to the UF.

Here on an LFS basis the rate of unemployment fell from the recent peak of over 10½% in November 1993 to below 6% in July this year for the first time since these data were collected; and, on the Claimant Count basis, unemployment, which touched 10% in the winter of 1992--93, had fallen to 3.8% in August, the lowest rate since June 1975. But I freely acknowledge that it doesn't necessarily feel like that today - certainly not to everyone. I am only too well aware that there are a lot of people in every part of the UK - both business people who've been under real pressure and employees who have lost their jobs - who will react to these statistics by saying "Well you could have fooled me!" That may well be true of some of you here this evening. The Bank receives detailed reports every month from each of our 12 agencies throughout the UK, including reports from Sue Camper based in Cardiff. Many of you will know Sue already - and I encourage those who don't to make yourselves known to her. The reports which she and her fellow agents make each month, based on their direct, first hand, knowledge of what's happening in their area, are fed directly into our Monetary Policy Committee process. They play a vital part in informing our understanding of the macro-economic statistics which in themselves can only capture the overall, aggregate, picture.
And, second, the Bank activated its Contingent Term Repo Facility (CTRF) on 24 March, committing to lend unlimited amounts of sterling at close to Bank Rate, against a broad range of collateral. These operations, together with the passing of the March quarter end, brought repo rates back to more normal levels (Chart 8). By contrast, term LIBOR measures took much longer to subside, in both dollar and sterling markets (Charts 3 and 8). In part that reflected the persistent illiquidity in the market for CP, CD and other unsecured bank paper. But that same illiquidity, coupled with the sharp reduction in the size of the market since the GFC, also meant that, throughout the crisis, LIBOR was based on few if any direct underlying transactions (Chart 9).4 That is a wholly unsatisfactory basis for a benchmark that still underpins a substantial share of global  Libor submissions are classified in three levels. Level 1 is ‘transaction-based’ submissions — an average of transactions in unsecured deposits and primary issuances of commercial paper and certificates of deposit. Level 2 is ‘transaction-derived’ data, including information from historical transactions. Level 3 is ‘expert judgement’ — where a panel bank has insufficient Level 1 or 2 transactions, it estimates the rate at which it could fund itself in the unsecured wholesale funding market, based on an approved procedure.

Available here  0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec  Source: DMO and Bank Calculations. Past values adjusted for inflation (April 2020 equivalents). Moment 7: central banking on the home front Table 1 and Chart 15 summarise the scale of the Bank’s recent balance sheet operations: a balance sheet that has expanded by almost a third in three months, and will reach nearly 40% of annual UK GDP by mid-year. To deliver that, we are doing more than ten times the number of weekly operations than in the pre-Covid19 period (Chart 16). This is eye-popping by itself. But, more extraordinary still, virtually all of it has been done remotely – hundreds of billions of pounds worth of operations delivered from peoples’ bedrooms, attics and kitchens, whilst isolated on their own, or caring for children and other relatives. The Bank has long embraced home working as part of its flexible working arrangements – but the sheer scale of what has been done – what we have had to do – would frankly never have been contemplated by choice. Preparation began early – and the 12  All speeches are available online at www.bankofengland.co.uk/news/speeches  12  technology that enables all of our critical operational functions, and the operational and risk controls that go with them, were quickly re-configured to support working from home. By the time of the MPC’s first policy package on 11 March, we were already operating on a fully-live split-site basis.
It has now been growing around its average historic rate for 11 quarters. Our forecast is for it to continue to expand at around these levels for the next few years, driven by private domestic demand. Credit conditions clearly played an important part in the recovery and expansion of the economy so far. Indeed, the lift off of the economy around the middle of 2013 was, I think, due in part to the easing of credit conditions as a result of the Funding for Lending Scheme. I would also note that this easing happened at the time that the interim FPC actually raised the amount of capital in the banking system – to the accompaniment of some dire warnings about what would happen to credit and growth. Looking forward, credit conditions also play an important role in the prospects for the UK economy. In the Monetary Policy Committee’s forecast, accommodative credit conditions alongside rising pay support the private domestic demand that drives economic growth at a rate around historic rates of 2.6%. In my own view, it looks as if we have entered into a more normal phase of the credit cycle. For the macroprudential authority the question is how we should establish where we are in the credit cycle and assess what risks it might engender? As I said at the outset, the credit cycle is a useful concept but you cannot measure it directly nor calibrate it easily. The credit to GDP ratio is obviously a good starting place.

11 The Bank of England survey found that respondents preferred interest-earning assets to back stablecoins intended as a store of value, but other models could be appropriate when stablecoins were used largely for transactional purposes. Responses to the Bank of England’s Discussion Paper on new forms of digital money (March 2022) 12 Hauser, Andrew (2019) Waiting for the exit: QT and the Bank of England’s long-term balance sheet, remarks at the European Bank for Reconstruction and Development,  London; Åberg et al. (2021) “Demand for central bank reserves and monetary policy implementation frameworks: the case of the Eurosystem ”, ECB Occasional Paper No. 282. 13 Bank for International Settlements, Central bank digital currencies: financial stability implications (September 2021). 14 Bank of England, New Forms of Digital Money (June 2021). 15 Norway and Sweden have seen large declines the demand for currency in recent years. In the U.S., the extent to which faster, or new forms of payments would affect the  demand for currency may be smaller even as the use of cash in U.S. consumer payments declines, given the important international demand for U.S. dollars. 16 Some have argued that stablecoins might not be the best assets to exchange on a distributed ledger and that tokenized deposits might be a better option. See Rod Garratt,  Michael Lee, Antoine Martin, and Joseph Torregrossa, The Future of Payments Is Not Stablecoins, Federal Reserve Bank of New York Liberty Street Economics, February 7, 2022.