samchain/econo-pairs-v1 huggingface dataset:
Villy Bergström: Is the Riksbank to blame for unemployment? Speech by Mr Villy Bergström, Deputy Governor of Sveriges Riksbank, at Brunnsvik adult education college for trade union officials, Brunnsvik, 4 November 2004. *  *  *  Thank you for the invitation to come to Brunnsvik to speak about the Riksbank and how we work. Over the past ten years, Sweden’s macroeconomic performance has been relatively robust, both in comparison with other OECD countries and with the economic performance of the 1970s and 1980s. But there are problem areas, and I intend today to discuss perhaps the most serious of these - the employment situation. It’s natural in the employment debate that questions are put to the Riksbank, since our conduct of monetary policy affects short-term economic developments. This makes it tempting to criticise the Riksbank and to expect us to be able to solve the employment problems through a looser, more inflation-tolerant monetary policy. However, the experiences of many decades of research and of actual economic developments are unambiguous: inflation is no solution to unemployment problems. To elucidate this it’s important to differentiate between two issues: on the one hand the long-term relationship between a stable, low inflation rate - which is the Riksbank’s statutory objective - and employment. On the other hand the impact of monetary policy on economic activity and employment in the short term.

If the incentives are low for workers to quickly change jobs and move to a new sector, at the same time as the incentives for firms to employ labour from a different sector are reduced by high initial wages, costs of sick leave and job security, there is a risk that more people will get stuck in the transition. This would entail a rise in frictional unemployment. In addition, the risk of long-term unemployment rises if more people become discouraged and stop looking actively for work. The Swedish labour market has previously functioned efficiently in these respects. Think of the closing down of almost the entire textile industry and of the shutdown of the Swedish shipyards at the same time as the paper and pulp industry and the iron and steel industry were rationalised considerably during the 1970s. Not least the trade union movement, more specifically the Swedish Trade Union Confederation, helped facilitate structural change. Read the official reports from 1941, 1951 and 1961 for the Confederation’s conferences in those years. The findings of these reports are something we need to take in today. The trade union movement realised that structural change was the prerequisite for increasing real wages and for generally higher prosperity. Conclusions I believe that it’s fully possible with the right methods to achieve both an employment rate that is sharply higher and an unemployment rate that is considerably lower than today’s level.
The 2009 survey also revealed disparities in terms of financial access by gender, with male access at 41% while that of females was at only 34%. This was with regard to access to any financial product, formal or informal. With regard to the formal banking sector, only 14 per cent of Zambian adults were banked. Further broken down, 17 present of Zambian males were banked compared to 12 per cent of females. Distinguished Guests, there are a variety of reasons that have been identified for financial exclusion in our country. In remote and sparsely populated areas with poor infrastructure, physical access itself acts as a deterrent. From the demand side, lack of awareness, low incomes, social exclusion, illiteracy, and lack of collateral among others act as barriers. From the supply side, distance from branches, high transaction costs and cost of borrowing, cumbersome documentation and procedures, as well as unsuitable products, are common reasons for exclusion.

From a regulatory perspective, it is important to note that responsibility for ensuring that payment and settlement systems work smoothly and meet the requirements of the financial industry lies with the system operators and market participants. The role of regulatory authorities is to establish certain guidelines, especially for infrastructures that are of critical importance for the stability of the financial system, and to intervene rapidly in cases where market forces do not provide an adequate infrastructure. BIS Review 103/2009  1
The domestic credit ratings industry has also gradually opened up to foreign players to create a level playing field. 6. Secondly, Mainland authorities have continued to enhance foreign investment channels, such as combining the QFII and RQFII schemes and simplifying the application process. The inclusion of ETFs in the Stock Connect and linkage between the interbank and exchange traded bond markets will expand the product range for international investors participating in the onshore equity and bond markets. 7. Thirdly, China’s financial markets have moved towards closer integration with global standards. A milestone development is the recent adoption of a legal framework to bring the onshore futures and derivatives markets under better regulation and in line with international best practices, such as recognising the enforceability of close-out netting. Foreign institutions may also choose to sign ISDA agreements with onshore counterparties in respect of OTC derivatives transactions in the interbank market. 8. The liberalisation of the onshore capital markets has resulted in rapid growth in crossboundary capital flows in recent years. In particular, Hong Kong’s mutual market access schemes with the Mainland, namely the Stock Connect and the Bond Connect, have  played a crucial role in encouraging greater portfolio investment into China and the inclusion of RMB assets into major global indices. Within three years, foreign holdings of onshore equities had more than tripled and foreign holdings of onshore bonds had more than doubled at the end of last year. 9.

The today initiative is a significant event, to sustain the growth of financing for this vital part of the economy and it will help to soften the negative impacts of the world economy slowdown. I encourage the banking system and the other players of the market to undertake similar initiatives in order to not impede the financing of small projects, which owns the possibility to be transformed into profitable enterprises. At the same time to maintain a stable and long-term progress of the country, in line with its European aspirations, the banking system should go on the way toward the perfection of service versus the clients, the intensification of communication and public education. Bank of Albania believes that the sources of the stable growth for the mid-term and long-term period consist not only on the encouragement of the work productivity increase or of the investments in industry and construction, but also in other strategic sectors. For the Albanian economy as a developing economy, domestic investments and foreign direct investments in strategic sectors as tourism and infrastructure shall be a real foundation to the economic growth. The positive chain effects are expected to be reflected on the preservation of the steady growth rhythms. Hence, the overall macroeconomic stability will be seen as a precondition in promoting the further intensification of the domestic and foreign investments.
John C Williams: Fulfilling our economic potential Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Association for Neighborhood & Housing Development 2019 Annual Conference, New York City, 11 April 2019. * * * As prepared for delivery  Introduction Thank you for that warm welcome. As you may be aware, last year I moved from San Francisco to take on the role of President of the New York Fed. In many ways California and New York are like different countries—the weather is a big adjustment, for starters! But through my meetings with community leaders and visits to the Bronx and Brooklyn, I’ve come to appreciate that we’re facing a lot of the same issues in my new home that I saw in the San Francisco Bay Area. The main topics of discussion—displacement as a result of gentrification, inequitable growth, and a critical shortage of affordable housing—are all ones we were grappling with on the West Coast as well. These issues are complex and challenging, and there are no easy answers, so I want to start by saying thank you for all the important work you do. There are a couple of topics I want to talk about today. The first is why the work you do is so important, and the second is the role I see the Federal Reserve Bank of New York can play in supporting you today, and going forward.

I just came back from a trip to Puerto Rico and the U.S. Virgin Islands, which are part of the New York Fed’s district. The overwhelming feedback I received from community leaders there was how useful they found our research reports for thinking about how to strengthen their local economy. An example closer to home is the work we do looking at the credit behavior of households at the zip code level. Analysis from the New York Fed is used by Financial Empowerment Centers across New York City to support people on low and middle incomes get out of financial trouble and build a credit profile. It also acts as a barometer for the success of programs, which helps practitioners learn which interventions are most effective. 2/4  BIS central bankers' speeches  Convene As well as connecting people with research and data, we play an important role creating spaces where different stakeholders convene, discuss the challenges and opportunities facing their communities, and share best practices. This is where our workforce development program comes in, and it’s an area where Federal Reserve Banks from across the country have been collaborating to share knowledge among key stakeholders. The work we’re doing bringing together schools and local employers is also in this vein. We owe it to young people to ensure that their investments in education pay off and that there’s a job at the end of all their hard work and study.
I would like to offer some observations, from my perspective at the Federal Reserve Bank of New York, on some of the broad considerations that should guide this process. Changes to the structure of the U.S. financial system It is useful to start with a brief review of the changes in the structure of the financial system that should motivate reform. Our system was once organized around banks—defined narrowly as institutions that take deposits and make loans. Over time there has been a gradual but pronounced decline in the  BIS Review 95/2008  1  share of financial assets originated and held by banks, and a corresponding increase in the share of financial assets held across a variety of non-bank financial institutions, funds and complex financial structures. The lines between banks, investment banks and other institutions have eroded over time, as have the lines between institutions and markets. Loans made by both banks and non-banks were increasingly sold by the originating institution and packaged into securities. And these securities were repackaged into even more complex instruments and products, many of which resided off the balance sheets of the major financial institutions. Innovations in credit derivatives over this period made it easier to trade and hedge credit risk. Access to credit was extended on a dramatic scale to less creditworthy borrowers, without a commensurate increase in the risk premiums on the securities that embedded this more risky credit.

•  Can direct regulation over a limited set of institutions effectively protect the system from distress among the unregulated? •  How should responsibility for different dimensions of financial regulation be allocated, and how centralized or decentralized? •  What institutions should have access to central bank liquidity under what conditions? The role of the Federal Reserve The Congress gave the Federal Reserve broad authority to address risks to financial stability. Because the financial landscape has changed so substantially, many observers have pointed out the need to revisit the scope and nature of Federal Reserve’s authority. Secretary Paulson has outlined a number of important proposals for reform, many of which would broaden the responsibility and the authority of the Federal Reserve. I want to identify some issues that are critical to our current responsibilities and will be important in defining an appropriate role in the future, with the most effective mix of responsibility and authority. There is more continuity than change in these suggestions, and they assume, as is the case today, that we will have to work closely with other functional supervisors to make the system work. First, the Fed has a very important role today, working in cooperation with bank supervisors and the SEC, in establishing the capital and other prudential safeguards that are applied on a consolidated basis to the institutions that are critical to the proper functioning of financial markets.
[15] In this context, the MPC needs to ensure that domestic price setting does not achieve a selfsustaining, expectationally-driven momentum, which would maintain inflation at elevated levels even as the direct external impulse coming from commodity prices recedes and unemployment starts to rise. Avoiding any drift towards the embedding of such ‘inflationary psychology’ into the price setting process is crucial. With that in mind, and after a very prolonged period of supportive monetary policy in the United Kingdom since the onset of the global financial crisis, the time has now come to withdraw that accommodation in the interest of returning inflation to target in a sustainable way. It is the need for a continuation of this transition in monetary policy that led me to support the 25bp hike in Bank Rate at the May MPC meeting. And, even after this hike, I still view that necessary transition as incomplete. Further work needs to be done. Chart 9: Inflation forecast conditional on alternative assumptions about the path of Bank Rate(a)  (a)This chart shows central projections drawn from fan charts shown in the May 2022 MPR. These depict the modal outcome for CPI inflation in the future, conditioned on an assumption of constant interest rates at 1% and on an assumption that interest rates would follow the market implied curve. Please see the May 2022 MPR report for information on the conditioning assumptions underlying the forecast.

One of the strengths of the UK monetary policy framework is that MPC members are individually accountable for their decisions and votes. The resulting expression of different views, and implied necessity for debate among them, guards against the emergence of ‘group think’ and thereby helps improve the robustness of final policy decisions. Given different appraisals of the economic situation and outlook, these different views reflect different assessments of how the MPC should act to achieve its common goal. Because, even if MPC members are individually accountable for their decisions, they don’t get to choose the MPC’s objectives. They are individually responsible for the means, but not the ends, of monetary policy. The ends of monetary policy are handed to the MPC in the form of its remit, which achieves democratic legitimacy through its roots in legislation approved by Parliament. [4] That remit has three main elements. First, it establishes the primacy of price stability in the mandate for UK monetary policy. Second, that primacy takes concrete form in the 2% inflation target, which holds at all times. And third, the remit requires the pursuit of the inflation target to be achieved sustainably in the medium term, while avoiding excessive and undesirable volatility in output and employment. Given the current situation, pursuit of this remit faces risks on both sides.
Competitiveness and market reform To put the favourable external sector performance on a firm footing, we must build on and further the improvements in competitiveness. In this connection, the markets for factors and goods and services must function in a way conducive to containing costs, margins and prices. Clearly, in the labour market, we need a stable employment-promoting regulatory framework which, at the same time, affords sufficient flexibility to attune working conditions to the circumstances of the business cycle. Indeed, greater moderation and flexibility can be seen in wage-setting in recent quarters, as can – and this is also important – a lesser degree of indexation. A more intensive use of the wage and non-wage flexibility mechanisms envisaged in the new regulatory framework would lend continuity to this ongoing improvement in competitiveness. But our problems of lack of flexibility and competition were not and are not only in the labour market. In the market for goods and services, the recently approved National Reform Plan includes a set of measures aimed at removing obstacles to competition, attaining productivity gains in various sectors and improving the functioning of various institutions. Private-sector deleveraging and lending The overindebtedness of households and firms is another of the major problems that arose in the last upturn in the Spanish economy. Private debt/GDP ratios have fallen from their peaks in 2010, but at a relatively slow pace. The main explanation for this sluggishness lies in the downturn in private-sector nominal income since the onset of the crisis.

Finally, the low real exchange rate stimulated exports and other traded goods sector activity. Moreover, the composition of Iceland’s exports is such that they are somewhat less cyclically sensitive than, for example, exports of motor vehicles and consumer durables. The net result was that Iceland’s exports held up well in comparison to world trade overall, as can be seen in Graph 3. Some of these factors were temporary, however, and the price was paid this year. Contrary to earlier (probably unrealistic) expectations, Iceland did not recover from recession in the first of half 2010. That means that Iceland will emerge from recession later than most other countries, many of which began to recover in the second half of 2009. But given the huge imbalances in the Icelandic economy during the boom and the size of the shocks it sustained, this is not surprising when measured against the broader historical record of countries experiencing major financial crises. In both international and historical comparison, Iceland has gone through a deep and a somewhat drawn-out recession, as can be seen from the following graph. BIS Review 139/2010  5  Perhaps recovery has only just started, but the signs of stabilisation are all over the place. The huge current account deficit of the boom period has turned into a surplus if we exclude the accrued interest on the debt of the failed banks, interest that will probably never be paid.
This could risk contributing to an increase in the turmoil on the financial markets, especially in a situation where economic activity is slowing down. However, I consider the risk of this happening in the market for government bonds to be small, but should it be necessary, we will adapt our sales of government bonds to the situation. Conclusion and summary Inflation is currently far too high and our focus is to bring it down to the 2 per cent target as soon as possible. According to our latest assessment, this should be achieved in 2024. The bank collapses in the United States and Switzerland have shown that despite the tighter regulations for banks following the global financial crisis, there are still problems with high risks in the financial system. The global standards for financial regulation therefore need to be amended on several points. Monetary policy, financial stability and fiscal policy are interdependent. I have discussed some policy implications of this:  24 [30]         There may be a conflict between price stability and financial stability, which may look different and vary over time, and this can affect the monetary policy stance. Monetary policy can in certain situations prevent the build-up of financial imbalances; that monetary policy takes into account the build-up of risk resulting from low interest rates under a longer period of time may therefore be wise.

The shift from the previous low inflation rate was rapid and took us and other forecasters by surprise. High inflation has multiple and global causes. Pent-up demand and a rapid shift from services to goods made it difficult to adjust supply in the short term. This, combined with fiscal and monetary stimulus, pushed up prices. The rapid economic recovery after the pandemic pushed up the prices of raw materials, inputs and transport at a time when production had not yet recovered. Russia's invasion of Ukraine drove up the prices of energy, cereals and other agricultural products. Energy prices then spread to the prices of transport and other inputs. One question to ask is whether we will return to the environment of low inflation and low interest rates that characterised the economy before the pandemic. Our assessment is that inflation will fall back rapidly in 2023 and that it will be around 2 per cent next year, see Figure 1. Long-term inflation expectations as measured in surveys are just above 2 per cent, which supports our assessment, see Figure 2. However, there is considerable uncertainty and unforeseen events always occur. Nor do we know whether several years of high inflation has affected companies' pricing behaviour. Moreover, there is the risk that the deteriorating geopolitical  3 [30]  situation may have a fundamental impact on economic conditions for a long time to come.
In particular, the flow of new mortgages slowed considerably in the second half of 2022, falling 5.4% year-on-year in Q4, in line with the moderation in house purchases and prices. - The stock of lending to non-financial corporations and sole proprietors fell by 1.5%, with a more marked drop in the sectors hardest hit by the pandemic (6.9%). This despite new loans growing 15.2%, while the principal drawn on available credit lines rose by 23.3%. 4  - The average interest rate on loan portfolios increased during 2022, particularly in the last quarter of the year. However, the pass-through of the changes in reference rates (around 30%-40%) was lower than that implied by the historical sensitivity to the cycle. Credit quality  - In 2022 the non-performing loan (NPL) ratio4 fell by 0.8 pp to 3.5% at December, the lowest level since 2008, with cumulative declines since the start of the pandemic of 1.6 pp for the corporate sector and 1.4 pp for households. In the sectors hardest hit by the pandemic, the NPL ratio fell by a lesser degree (0.3 pp in 2022, to 5.6%). 4  The faster decline in NPLs in 2022 was driven both by smaller inflows and larger outflows. 5  - Stage 2 loans likewise declined, falling by 0.9 pp to 7.1%, as a result of both lower inflows and larger outflows to performing status. However, the stock of Stage 2 loans remains 24.5% higher than pre-pandemic levels.

Conclusion I have outlined in this address the case for an Asian bond market and the role being played by the public sector in promoting the development of such a market. Collectively and individually, central banks and governments are making good progress on a variety of initiatives aimed at reducing barriers, building infrastructure and encouraging interest in the market. In the end, however, there is only so much that the public sector can - or should - do, particularly in a region where there is traditionally not a lot of public debt. Central banks and governments have a responsibility to facilitate and promote development, and to provide an environment that is conducive to both supply (the issuers) and demand (investors). It is, I have argued, in the public interest that a healthy bond market should develop in our region. However, it is for the private sector to provide the great bulk of supply and demand. Happily, it appears that the private sector is playing its part with enthusiasm. 4  BIS Review 40/2004