samchain/econo-pairs-v1 huggingface dataset:
  the Bretton Woods, system was built around an elaborate framework of rules, disciplines and support mechanisms aimed at ensuring convertibility for the current account – but, crucially, not the capital account – together with fixed but adjustable exchange rates. All these conventions were enforced through IMF surveillance and were supported by IMF facilities  BIS Review 76/2010  1  With the generalisation of flexible exchange rate regimes, and the ensuing changes in the IMF articles, the normative approach to the international monetary system was somehow weakened. Capital account liberalisation led to entrust international financial markets with the “disciplining” function. When it became apparent that the discipline would not be gradual and progressive, but, instead, often lead to abrupt capital flows reversal and crisis, the international community attempted to strengthen the IMF surveillance and develop its facilities so as to pre-empt such shocks and make them more manageable. That is, basically, where we are today. Everything must be done to ensure that IMF surveillance works. But, like any “disciplinary” approach, it meets with three essential difficulties:   first, diverging interests between countries. At any single point in time, conflicts may arise as to how much adjustment is needed and by whom. Situations when all national policies naturally point in the same direction – such as in the first quarter of 2009 – are very exceptional.   second, enforcement problems : the IMF has naturally more leverage on countries that need its help than on others.

And the central role these firms occupy in our financial system and the consequences to other firms and to the stability of the financial system should one of them face significant financial or operational difficulties requires that they hold a higher margin of capital above economic capital than would be appropriate for smaller institutions with a similar risk profile. These arguments are compelling on their own, and they are made more compelling by the challenges ahead facing the U.S and the world economy. The increased stability in macroeconomic outcomes that has characterized the last two decades, the relative ease with which the U.S. financial system weathered the stress of the equity market shock and September 11, the increased mobility of the world’s savings and the optimism produced by the acceleration in productivity growth, have all worked to lower expected future volatility and risk premia. BIS Review 28/2005  3  The reduction in credit losses and in realized volatility has created room for institutions to take greater risk without showing deteriorating risk-based capital measures. But the macroeconomic environment may not prove to be as benign in the future as it has in the recent past. And it is important that the major financial institutions in particular sustain a strong capital cushion at levels that will enable them individually and the U.S. financial system as a whole to manage safely in a more uncertain and perhaps more volatile world. Thank you. 4  BIS Review 28/2005
Specifically, our research indicates that when college tuition rises in a state, it leads to higher levels of student debt and a lower homeownership rate. These factors matter for inequality and social mobility, because increasing home equity is the major form of wealth accumulation for the great majority of American families. Thus, rising tuition and changes in the way that college is financed appear to have diminished the ability of higher education to lift people from poverty into the middle class. Of course, students’ reliance on debt and the returns from graduating vary across educational institutions. Of particular interest here is recent work by Raj Chetty and his co-authors showing that some colleges—some of which can be found in the CUNY and California state systems— appear to be much better at fostering economic mobility than others. In other words, they accept relatively large numbers of lower-income students while also producing large numbers of high earners, which means that these institutions facilitate considerable upward mobility. Learning exactly how they do it and how it can be replicated strikes me as a first-order question for further study. Recent research by Caroline Hoxby to assess differences in productivity across educational institutions makes important progress in that direction. In summary, academic research on the financing, costs, and returns of higher education is more important now than it has ever been. We are pleased to have many of those researchers participating in this conference.

Not only did we hire 1.000 new staff members at the ECB, but we also integrated 5.000 staff members from 26 national supervisory authorities, who were formerly responsible for supervision in their home country, into the SSM. Since November 2014, the SSM is responsible for directly supervising 1200 individual banks, which until that point in time had been supervised according to 19 national interpretations of European law and according to specific national regulations, following a national supervisory tradition with varying degrees of quantitative and qualitative elements, with a historically grown reporting universe. It was a busy first year. And it was a successful first year as we made progress on many fronts. We achieved a lot regarding our main objective: we improved the resilience of 122 significant banking groups, of the 19 national banking systems, and of the European banking system as whole. The comprehensive assessment was the most publicly visible success, but many smaller and less visible steps followed and will still follow on our way to a safer and more sound banking system in the Euro Area. As the SSM changed the way supervision addresses problems and communicates what it expects to be done by banks, it also changed the timing and the way banks, their management and their owners acknowledge shortcomings and find solutions.
The effect of the expansionary monetary policy on capital incomes, via rising equity prices, should therefore have led to a more unequal income distribution. However, capital income is only one part of households’ total income; the largest part is comprised of labour income. As with capital income an expansionary monetary policy can affect the labour income of different households in different ways. For some households the hourly wage may be what primarily determines their income development, while for others the number of hours worked is the most important thing – and above all  6 Lundberg and Waldenström (2016). See also Waldenström (2016). 7 Sveriges Riksbank (2011), Swedish Fiscal Policy Council (2013) and SoU 2013:78. 9 [14]  whether or not one actually has a job. As monetary policy affects these quantities in different ways, income distribution will also be affected. In Sweden, it is primarily the differences between the income of those who have a job and those who do not that is important to the income distribution, rather than the wage differences between those who work. 8 This is clearly visible in the dispersion of disposable income, that is, income including work and capital income, as well as various transfers and after taxes are deducted. The higher the disposable income, the less common it is that one’s main source of support is from something other than labour and capital.

If inflation is higher than expected, borrowers benefit from the value of the debts being eroded, while lenders and those with large savings are correspondingly disadvantaged. This type of arbitrary distribution between lenders and borrowers was common during the 1970s and 1980s. The inflation target, together with the reforms of the fiscal policy framework and the changes in wage formation in the 1990s, has contributed to inflation in Sweden both coming down to a lower level and becoming more stable than before. The same has happened to inflation rates around the world. It is therefore not surprising that the question of the distributional effects of inflation and monetary policy disappeared from the economic policy debate.   I would like to thank in particular Björn Andersson, who has helped me produce this speech. Carl Andreas Claussen, Charlotta Edler, Cecilia Roos-Isaksson, Stefan Laséen, Tomas Lundberg, Marianne Sterner, Ulf Söderström and Anders Vredin have contributed with valuable comments. 1 [14]  Distributional effects topical again However, in recent years the question has become topical again. One reason for this is a growing insight that the distribution of income and wealth may have considerable significance for the effects of monetary policy on the economy as a whole. And it is therefore important to understand the relationships better. Another reason why this has become topical again is the rising asset prices and the effect that monetary policy has on the distribution of income and wealth.
(Exhibit 7) Similarly, price impact – the effect on price from a $ million trade – has also been trending down since the early 2000s apart from the jump during the financial crisis. (Exhibit 8) Although liquidity in the Treasury and corporate bond markets does not appear to have changed much recently, liquidity risk may have risen. For the Treasury market, our liquidity risk measure increased sharply with the financial crisis, and declined from 2009 to 2013. However, over the last two years Treasury liquidity risk has moved higher and relative to the pre-crisis period is currently somewhat elevated. For the corporate bond market, liquidity risk also increased sharply during the financial crisis, and then quickly fell as the crisis passed. BIS central bankers’ speeches  3  Corporate bond liquidity risk subsequently increased again in 2012 and early 2013, but is now back down close to its pre-crisis level. (Exhibit 9) In sum, there is limited evidence pointing to a reduction in the average levels of liquidity. However, there are reasons to think liquidity risk may have increased, and there are some data to support this conjecture. Two cautionary notes are warranted in evaluating the available evidence. First, the Treasury market evidence is based on the inter-dealer markets, and we do not have comparable evidence on liquidity conditions in the dealer-to-customer market. Second, it is important to note that the FOMC’s unconventional monetary policy may have affected recent measures of liquidity in ways that could make it more difficult to clearly discern any potential changes.

With monetary policy now transferred to the European Central Bank, the policies left to us are fiscal and structural ones. And if I were to be consistent with the recommendation I made to watch over all fronts, I ought now to give an exhaustive list of each and every economic policy. But as Madame du Chatelet’s friend said, “The secret of being a bore is to tell everything”. Thus, out of respect for you, I shall choose only what I consider to be most significant in the fiscal and structural field. Structurally speaking, while the loss of competitiveness is one of the risks looming over the economy, the boosting of productivity should remain the driving principle of all reforms. The National Reforms Programme, as indicated in the Banco de España Annual Report last June, duly includes the liberalisation and market flexibility policies the Spanish economy needs. It is now a question of adhering to it. The programme provides for very important liberalisations such as those of the railway and energy sectors, which have so often been put back. If they are diligently and ambitiously rolled out, they could contribute effectively to the growth of the Spanish economy. The gearing of public spending towards infrastructure and investment in Research, Development and Innovation should also be maintained.
Over the past few months, the staff of our institutions have been in very close contact, preparing together the terms of the contract and finding appropriate solutions to a rather diverse set of challenges. I would like to ask you, Mr Chairman, to extend our warmest thanks to the staff of the Bank of Russia for their efforts to address all pertinent issues. The new three-year cooperation programme will start on 1 April and will focus on banking supervision and internal audit. In the area of banking supervision, the Eurosystem will support the Bank of Russia in its gradual implementation of the internationally accepted principles of the Basel Committee on Banking Supervision that are commonly known as the Basel II framework. The financial market turmoil that emanated from the US subprime mortgage crisis has highlighted, among other things, the importance of transparency and of sophisticated and effective risk management standards and practices in banks. The Basel II framework provides an advanced approach to capital measurement and capital standards. It represents the regulatory response to the increasingly complex and globally integrated financial markets, where credit risks are often passed from the originators of bank loans to a wide range of investors, instead of remaining on the books of the originating banks. Indeed, the Basel II framework was conceived to support banks in the implementation of advanced risk management standards with the overall aim of improving the stability and soundness of the financial system in all the economies around the world.

There is always a group of people who are relentless in their criminal pursuit of economic profit at the expense of others. It is only through our collective efforts that we can manage this negative externality of technological advancement. Challenges posed by Cryptocurrency for AML As all of you are aware, the next frontier in the financial industry is the advancement in blockchain technology that allows the existence of cryptocurrency. With the global market capitalisation now standing at approximately $ billion1, cryptocurrencies could become a major part of the financial system that offers new and exciting opportunities as well as challenges for the industry and regulators. However, cryptocurrency is vulnerable to criminal abuse due to the anonymity it provides to its users and its ability to facilitate cross-border transactions, potentially allowing illicit funds to be transferred globally without a trace. We have seen a range of actions taken by regulatory bodies across the globe in order to manage this risk, ranging from total prohibition, partial regulation, to full legalisation. Each country will need to make an assessment of risks and rewards in its own unique context. We are also in the midst of making such an assessment and we do so with an objective that has and will always remain steadfast – that is to balance between safeguarding our economy and allowing room for innovation and progress. Increasing Threat of Cyber crimes Let me now touch on the increasing threat of cyber-crime. We have seen a double digit growth in cyber-crime in the past decade.
There have been members of the MPC on both sides of this argument. Second, there has been an acceleration in the pace of globalisation. The entry into the global market economy of China, India and Eastern Europe is effectively doubling the world economy’s supply of workers – from 1.5bn to 3bn. This is having pervasive effects on wages, prices and, potentially, economic relationships in developed countries in ways we need to understand in order to set interest rates. Third, the last few years have seen the largest recorded entry of foreign workers to the UK. This has increased the supply capacity of the economy, as well as boosting demand, but the precise scale and likely duration of these effects are very hard to judge. How is migration changing the ground rules by which we set policy? If labour shortages were to cause more migration, rather than higher wages, we would be in a rather different world from the one we are used to. Finally, there has been a major surge in energy prices in the past three years – first a doubling in global oil prices, and then an even larger rise in natural gas prices which was specific to the UK. Up until now at least, the UK and the global economy appear to have weathered the impact of these major cost shocks remarkably well.

To get an idea how long ago that was, 1984 was the year I finished college. The labor market has also improved dramatically and is now very strong. Over the past 12 months through January, the economy added over 6-1/2 million jobs. The unemployment rate has fallen from the pandemic peak of 14.7 percent to just 4 percent today. In fact, there are many more job openings now than there are people looking for work. Another clear sign of the hot labor market is that wages rose sharply last year, especially for lower-paid jobs. Inflation I mentioned earlier that the Federal Reserve has two goals: maximum employment and price stability. The very strong labor market is great news in terms of achieving maximum employment. However, we have seen inflation rise to a level that’s far too high. Ten years ago, the FOMC set a longer-run goal of 2 percent inflation—that is, prices rising 2 percent per year on average.1 From 2012 through 2020, inflation averaged below this 2 percent goal. But the inflation rate started rising sharply in 2021. The Fed’s preferred price measure, the personal consumption expenditures (PCE) price index, rose 5-3/4 percent last year, its highest reading since the early 1980s. This sudden, sharp rise in prices reflects a unique set of circumstances that has driven supply and demand out of balance. For those of you who have studied economics, you will not be surprised that I ascribe this rise in inflation to demand outpacing supply.
In 1950, the total output value was just over SEK 500 billion, measured at current prices, and in 2003 it was around SEK 2,300 billion. However, one can also see that this has not been an even development. GDP growth has been more rapid during certain periods than others and during some episodes, such as the 1990s crisis, the level of output even fell. But seen over a longer period, the increase in GDP has been relatively stable. On average, output rose by 2.7 per cent during these years. The orange line in the figure shows how a measure of trend, or potential, output has developed over the same period. Potential output in principle reflects the capacity limits put on production of goods and services at a given point in time. One type of limit is the access to resources for production factors of production - in the economy. This normally covers two main factors: labour force and physical capital, i.e. factories, machinery, etc. Another limitation is how productive these factors of production are, that is to say, how much that can be produced in, for example, one hour of work or use of the machinery. It is important to emphasise that potential output is not an estimate of a ceiling for production. It is therefore not a measure of the level of output that would apply if the entire labour force were employed and all physical capital was used to the maximum.

The Riksbank has chosen not to specify any exact figure for potential growth, but instead has decided to state a range of between 2 and 2.5 per cent. We have not considered it possible to be more precise than this, given the difficulties in measuring growth, etc. If we look ahead, it is reasonable to believe that growth will in future be somewhere within this interval, although where depends on how far ahead one looks. Over the coming years, growth will probably be closer to 2.5 per cent than to 2 per cent. In the longer perspective, when the demographic effects on the labour supply are greater, it is reasonable to believe in a figure closer to 2 per cent than 2.5 per cent. How much closer depends to a great extent on how much the labour supply can be stimulated during the period. Thank you! Figure 1.GDP and an example of potential GDP 1950-2003, SEK million 2300000  2300000  GDP  2100000  2100000  Potential GDP (example)  1900000  1900000  700000  500000  500000 2000  700000 1995  900000  1990  900000  1985  1100000  1980  1100000  1975  1300000  1970  1300000  1965  1500000  1960  1500000  1955  1700000  1950  1700000  Sources: Statistics Sweden and the Riksbank  8  BIS Review 64/2004  Figure 2.
Even the best of products would not have a good chance of success without a well-conceived communication strategy. This goes beyond marketing and advertisement. It would include educating customers to adapt to the new ways of doing banking transactions or changes being introduced and to use the innovative products being offered. It is also interesting to note that the survey findings clearly indicated the importance of quality interface between customers and banks. As such, numerous interface points need to be reengineered to ensure the right mix of the virtual and physical environment. New branch models have emerged, incorporating features from both virtual and physical environment, to fulfil the varying needs of different localities and market segments. BIS Review 28/2004  5  Conclusion Ladies and Gentlemen: While the new emerging trends in both the domestic and global economy will have significant implications on the domestic financial landscape, each banking institution will need to be able to formulate differentiated strategies to effectively respond to these forces in a strategic manner. Thus, the ability to precisely assess the institutions individual capabilities and strengths as well as opportunities in this changing environment is key to facilitate effective strategic management at the organisational level. Through this process, I envisage that the domestic financial landscape will evolve into a banking environment characterised by three types of banking institutions that will emerge to meet the future demands of the economy. a.

This component was calibrated similarly to the baseline price volatility that central counterparty style initial margin models intend to absorb, by looking at the tail of the ten-year distribution of 30year index-linked gilt yields,[11] Currently, this is around 80 basis points. Secondly, a systemic resilience component aimed at ensuring that all LDI funds can absorb a severe but plausible historical stress, over the period of time needed to recapitalise the fund, without the need for forced asset sales. This was calibrated by looking further into the tail of a longer distribution of 30-year index-linked gilt yields,[12] and is currently around 170 basis points. You might think of it as funds being able to  Page 4  absorb a shock like that seen in September 2022 without that leading to forced sales with systemwide consequences. These two components make up the 250 basis points of minimum resilience. In calculating this minimum resilience, the FPC expected pension schemes to be able to deliver collateral to their LDI vehicles within five days. LDI funds unable to receive collateral within five days should be resilient to a larger shock, calibrated to their own timelines. Third, an additional resilience component, that captures risks specific to the individual fund. This component should be calibrated by funds according to assessments of their own exposures and operational capabilities, as well as interest rate trends and levels of market volatility. The result of resilience levels being proportionate to individual risks will be some variation between different LDI funds’ resilience levels.