samchain/econo-pairs-v1 huggingface dataset:
In the assessment of the Executive Board, the sight deposit rate should lie in the interval 2-3 per cent in the period to the publication of the next Inflation Report in March 2006, conditional on economic developments that are broadly in line with the projections. In the press release following the Executive Board’s meeting on 2 November, the following factors of uncertainty were highlighted: •  Stronger trade shifts and increased labour market competition may result in lower price and wage inflation and weaker pressures in the economy. In isolation, this would imply less frequent interest rate changes. •  We have little experience of such low interest rates over a long period. There is a risk that an interest rate that is kept low for a longer period may lead to expectations of a persistently low interest rate. This might result in a higher-than-projected rise in output and inflation and would in isolation suggest a faster interest rate increase. •  Developments in the global economy are uncertain. Our projections are based on favourable growth prospects in other countries and continued high oil prices. Different developments in global growth and in oil prices would result in a different path for the Norwegian economy. Interest rate setting must also be assessed in the light of developments in property prices and credit. Wide fluctuations in these variables may constitute a source of instability in demand and output in the somewhat longer run.

Safeguarding financial stability implies that the interest rate should be brought up towards a more normal level. If developments in the economy are in line with the baseline scenario, it is likely that financial developments in banks and enterprises will be favourable. As mentioned above, however, developments ahead are uncertain and the Norwegian economy may be exposed to shocks. Uncertainty with regard to financial stability in the longer term is mainly related to the historically high household debt burden and to changes in asset prices. Long periods of a sharp rise in debt, asset prices and investments may give rise to instability and problems in the financial system at a later stage. We have observed this phenomenon both in Norway and in other countries. The trend we have seen in household borrowing in recent years is not sustainable over time. The current interest rate level is very low compared with the level that over time must be considered more normal. Borrowers and lenders would probably be wise to bear this in mind. Thank you for your attention. 6  BIS Review 79/2005
This study, which we expect to be completed by the end of 2017, will include various original aspects to address the special characteristics of the Spanish case. First, educational skills are decentralised. Given the nature of financial competence, which varies significantly according to the level of education of the individual concerned, the project will use representative samples of the different levels in the various regions. Second, the financial knowledge of each individual may not reflect that of the persons who actually take household decisions. For example, in Spain, important financial decisions regarding house purchase and mortgage borrowing are taken at different ages than they are in other European countries, as a high proportion of young people live with their parents. As a result, information is sometimes needed on the financial competence of those members of the household who take saving and borrowing decisions affecting the whole household. 4/5  Apart from its financial knowledge, we have little evidence regarding the general economic knowledge of the Spanish population. Given this situation, questions have been included in the financial competence survey that aim to measure, inter-alia, knowledge of certain key concepts, such as inflation and money. In 2018 we will have the results of the survey, which will enable us to analyse on a sound basis the financial knowledge of the adult population in Spain and to identify those areas on which the Financial Education Plan needs to focus. Future activities will be based on this information.

This case also highlights the link that must exist between the LOLR function and deposit insurance, which, in the absence of clear prior arrangements for currency swaps or another such mechanism, must be mostly in the same currency in order to work. The EU framework for this was therefore deeply flawed, as is currently being recognised in the plans for a banking union. BIS central bankers’ speeches  3  Why were these huge risks in the Icelandic banking system allowed to build up? I do not think we yet have the research and the consensus to provide a reasonably undisputed list of the main causal factors in this process; however, I think four factors will rank highly on that list. These are Iceland’s membership in the European Economic Area (EEA) in 1994, privatisation of the Icelandic banking system in the early 2000s in a manner that placed the major banks in the hands of risk-loving investment bankers, the global conditions of ample and cheap credit that prevailed in the years prior to the international financial crisis, and the tendency in Iceland both to adopt international and EU regulations without critical analysis of Iceland-specific risks and to base supervision to a significant degree on mechanical checks of adherence to those regulations. Let me expand a bit on the EEA part, as it is highly relevant to my topic.
Philipp Hildebrand: Developments in the international financial markets and managing the Swiss National Bank’s assets Introductory remarks by Dr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2004. * 1. *  *  Developments in the international financial markets  Looking back at the year gone by, it becomes evident that two opposing price movements have dominated the markets: the strong depreciation of the US dollar on the one hand and the sharp rise in oil prices on the other hand. Developments in the bond and equity markets were, by comparison, rather restrained. In the past few weeks, the dollar has continued its downtrend that commenced three years ago, at which time the greenback was still worth over CHF 1.70. Given the structurally inflated US current account deficit, the sustained downward revision comes as no surprise. However, the fact that the revision to date has been relatively one-sided vis-à-vis the European currencies and the Canadian dollar is problematic. Major Asian currencies have either remained completely pegged to the dollar, such as the Chinese renminbi, or joined the dollar in its slide - at least to some extent - like the Japanese yen. This was only possible, however, at a price, namely huge dollar-buying efforts on the part of the central banks and governments in question. As a result of this asymmetric trend, European exporters are currently bearing the brunt of the additional competitive pressures stemming from the weaker dollar.

The monetary reserves and Swiss franc assets combine to make up the monetary assets, which are required for monetary policy. In addition to these assets, the National Bank also manages the proceeds from the sale of the surplus gold reserves. The portfolio of these so-called free assets amounts to slightly more than CHF 20 billion. In the management of the monetary assets, monetary policy objectives and restrictions have priority. In compliance with the primacy of monetary policy, the investments are optimised according to security, liquidity and return. Important in this regard are the concentration on liquid investments, in other words readily marketable investments, and on the greatest possible risk diversification by holding different currencies and investment categories. The National Bank’s leeway for investment has extended considerably since the entry into force of the new National Bank Act in May 2004. Risk diversification options in particular were also increased as a result. The concrete investment structure of the different portfolios and their yields are published quarterly in an updated appendix to the Investment Policy Guidelines of the Swiss National Bank. The current investment structure and the risk/earnings profile of the National Bank’s assets, in particular the foreign currency reserves and free assets, can be summarised as follows: The portfolio adjustments made under the new Act aim to increase diversification in terms of currency and investment category. Within the context of the 2004 strategy, the dollar share was reduced in favour of the pound sterling and the yen.
So we know firms and workers aren’t entirely homogenous. Not every worker is suitable for every job. Nor was every job eligible for the CJRS scheme to begin with. But the fact that vacancies should have picked up so strongly, while there were millions still on furlough, does suggest that the early phase of the recovery might have been quite uneven – that the jobs lost in the downturn may not have not been the first to come back during the upswing. The broad distribution of vacancies across sectors provides some supporting evidence for this. One way to measure labour-market mismatch is to look at the sectors in which there are vacancies and those in which unemployed people last worked.11 If there’s a good correlation between the two – if the people looking for work have experience in the sectors in which firms are looking to hire – mismatch (on this particular measure) is low. When there’s a poor correspondence between available workers and available jobs the measure is high. In Chart 17 the blue line is the standard measure, in which “available workers” are defined as the unemployed. The orange line broadens the concept to include those on furlough as well. This is a relatively crude measure as the sectors we use are pretty broad12. But, for what it’s worth, this measure of  See also Haskel (2021) “Will the pandemic “scar” the economy?” speech given in online webinar at the University of Liverpool Management School.

17  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  17  You’d expect all this to lead to matching reallocations in employment – job shedding in the weaker sectors and regions, strong rates of hiring where demand has picked up the most. And in the DMP survey that is indeed what you do see (Chart 21). But it hasn’t yet happened to the same degree as in firms’ reported sales – nor, if we extend the series backwards with other sources of data14, to the same extent as after the financial crisis, whose impact on firms’ output was also highly uneven. Chart 21: Employment reallocation has picked up but still looks lower than after the financial crisis  Sources: Decision Maker Panel, Bureau Van Dijk (based on Companies House data) and Bank calculations. For similar reasons, and again both on the demand and supply side, I would expect these imbalances to subside somewhat as the economy recovers. The underlying dispersion in demand is more likely to narrow than widen further. We’ve already seen some signs of that across sectors, with “social consumption” recovering faster than areas of spending since the economy re-opened (Chart 14 again). In the meantime, the reallocation of jobs, which should also reduce these strains, is likely to continue and may even pick up for a while. However, I’m more uncertain about this process, and the implication for costs in aggregate, than about the transitory nature of goods-price inflation.
I would certainly agree that we should not blur the distinction between monetary policy and fiscal policy. That does not mean there is not a good understanding. The fact that governments have taken all the actions that they have taken to support the financial system is extremely important for central banks. It is certainly easier to accept a broad range of collateral when you know that the banking system as a whole is backed by the clear declaration by governments that they will not let a systemic institution fail. FT: This position of the ECB appears to assume there is no risk of deflation. But do you think that the risks of deflation have increased, given the sharp contraction in economic growth that we have seen? CN: Of course one should always remain prudent. We know that, given the evolution in prices of energy and non-processed foods, it is likely that we will have a few months toward the middle of the year with slightly negative inflation figures. But that is very different from the persistent decline in prices that characterises deflation. I do not think personally that the risks of deflation are very high in the euro area for several reasons. One is that we have increased liquidity by a considerable amount. In both the US and the euro area, central banks have increased liquidity in the system in one year by roughly the same amount, proportionately, as the Bank of Japan did in the early 1990s’ banking crisis in five years.

Stricter capital requirements could influence monetary policy in a number of ways. First, a tightening of capital requirements would counteract the build-up of financial imbalances. Second, the countercyclical buffer could cushion the adverse effects of a future downturn on bank lending. Third, higher levels of equity capital will increase banks’ resilience and thereby reduce the likelihood of financial crises. The example also sheds light on conditions that have been important to the conduct of monetary policy in recent years. Low interest rates internationally are an important explanation for the low key policy rate in Norway. At the same time, banks have increased their lending margins in anticipation of higher capital requirements. Let me emphasise that capital adequacy requirements are only one of several factors influencing bank lending margins and rates. And bank lending rates are only one of many factors that are given weight when the key policy rate is set. The relationship between capital requirements and the key policy rate is not straightforward. The example above shows that it may be appropriate to lower the key policy rate while at the same time tightening capital requirements for banks. But situations could also arise where it would be appropriate to raise the key policy rate while at the same time tightening capital requirements for banks. This could be the case if the economy was booming, with prospects for high inflation and a concurrent risk of a build-up of financial imbalances.
After the crisis, inflation in Switzerland remained subdued due to low oil prices and strong appreciation of the CHF  1  08.11.2018 Ten years after the crisis: evolving markets and the challenges for the SNB | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  The SNB monitors the microstructure of the market in real time using high-frequency data EURCHF exchange rate and order book on 8 February 2018 High  High  Tick time 2  08.11.2018 Ten years after the crisis: evolving markets and the challenges for the SNB | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Source: SNB. Low  1.160  1.158  1.158  1.156  1.156  1.154  1.154  1.150  1.148  1.152  1.150  1.148  1.146  1.144  1.144  12:00  15:00  18:00  1.142 09:00  12:00  15:00  EURCHF (rhs) 8 February 2018: turnover (left chart); bid-ask spread (right chart) Since February 2017: turnover (left chart); bid-ask spread (right chart)  08.11.2018 Ten years after the crisis: evolving markets and the challenges for the SNB | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  18:00 Source: SNB. Low  Low  1.146  1.142 09:00  3  EURCHF  1.152  Turnover  High  1.160  bid-ask spread  High  Unusually high trading activity for the EURCHF pair between 17:00 and 17:30, but robust liquidity conditions  Sources: Bloomberg, JP Morgan, SNB.

So transposed to Swedish conditions, around SEK 2 000 billion is at stake. This happens to be in the same order of magnitude as the balance sheet total of three of the four major Swedish banking groups. And, of course, this kind of shock to the national economy would not spare the country’s citizens in their role as taxpayers. Financial crises impact severely on the public treasury. A recently-presented British investigation – the so-called Vickers report – shows how the  BIS central bankers’ speeches  1  financial crisis, since 2007, has increased the United Kingdom’s public net debt by about 100 per cent of GDP. Basel III is strengthening the system’s airbags… The crisis of recent years has made us painfully aware of the financial system’s vulnerability and its importance for the real economy. The need for bigger and better airbags is obvious. These lessons lie behind the global Basel III agreement. The most important areas of Basel III deal with the quantitative requirements for capital and liquidity being placed on the banks. …with a substantial amount of equity… The Basel Committee’s analysis has concluded that the banks need substantial resilience. The crisis has shown the risk of considerable losses. So capital requirements are being increased in Basel III, above all for Common Equity Tier 1.1 The minimum requirement for the banks’ equity is being set at 4.5 per cent of riskweighted assets – more than double the requirement under Basel II.
As far as we can see, these requirements have more or less had the effect that could have been expected: credit expansion has slowed down a bit and people who were previously taking very large loans are now taking smaller loans. 24 According to the random sample from 2018 upon which Finansinspektionen’s latest mortgage survey is based, the average debt-to-income ratio among new mortgage borrowers is 398 per cent, which is slightly lower than in the previous year. The proportion of new mortgage borrowers with mortgages exceeding 450 per cent of their annual gross income also fell between 2017 and 2018. The fact that many new mortgage borrowers are choosing to borrow amounts just below the stricter amortisation requirement indicates that this has affected households’ propensity to take out very large loans in relation their incomes and, ultimately, the kinds of objects they are deciding to purchase. 25 If a household has previously wanted to purchase a one bedroom flat in a metropolitan area at a price of just over 2,500,000 kronor, the macroprudential policy measures have made it more difficult for the household to purchase this object. However, it is important to use the terms correctly. Those households that have been affected by the amortisation requirements and that want to purchase a tenant-owned apartment have not been excluded from the housing market, but only from purchasing that one-bedroom flat for 2,500,000 kronor. Such households can, instead, choose to purchase another one-bedroom flat for a lower price.

In the current governance model, it is natural to think of the Ministry of Finance as the principal and Norges Bank as the agent. For the Ministry, the formulation of the management mandate, reporting and supervision will be important tools for ensuring that investments are managed in line with objectives. It is my view that the interests of the Ministry and the Bank largely coincide. All employees of the Bank are highly conscious of the Bank’s social mission. But there is no escaping the fact that the Bank has much more information about the investments and their management at its disposal than the Ministry. The Ministry has given Norges Bank a relatively detailed mandate for the management of the fund. The investment strategy is largely determined by this mandate. The mandate sets the benchmark index and tracking error limits. In addition, the mandate imposes constraints on the fund’s investment universe. The permitted deviations between the actual portfolio and the 2/7  BIS central bankers' speeches  benchmark portfolio are subject to defined limits, also known as index-tracking, which means that the GPFG’s return and investment risk are for the most part determined by the benchmark index. Chart: Return on the GPFG and the benchmark index The role of the Bank and the Executive Board in formulating and elaborating the management mandate is to advise the Ministry of Finance. This is an important job.
Lending to the private sector increased on average by 11.5% during the first five months of the year, about 1.5 p.p. higher than 2010 H2. In contrast to previous years, lending is oriented more towards the national currency: ALL-denominated loans increased by about 14% as at May. Lending continues to be impacted by a moderate demand for loans while the banking system has adopted prudent lending practices, with tightened lending standards for certain market segments. Financial markets were calm reflecting low risk premiums and a good liquidity situation. In the interbank market, interest rates fluctuated around the key interest rate, following its latest increase in March. The increase in the key interest rate is also followed by the yields in the  BIS central bankers’ speeches  3  Government securities primary market and is reflected less in the ALL-denominated deposits and loans, due to factors of liquidity and risk that accompany financial intermediation. The yields curve has retained its trend, indicating low inflation premiums in financial markets. Summing up the expected economic performance, our projections and assessments suggest that economic growth will continue even in 2011 H2. Aggregate demand will be supported less by the public sector and foreign demand, while the private sector is expected to provide a larger contribution to the economy. Nevertheless, economic growth is not expected to fill completely the negative output gap.

Foreign demand continued to provide a positive contribution to the aggregate demand. Nevertheless, as expected, its positive impact was lower than a year earlier. During the first five months of the year, Albanian exports increased by 23.3% y-o-y, which is lower compared with 2010. On the other hand, deterioration of trade terms and internal demand performance triggered the increase of imports in the first half of the year. Value of imports increased 14.1% y-o-y during January–May, thus, leading to higher trade deficit. Following its narrowing in 2010, this deficit expanded by approximately 8.8% y-o-y during this period. Trade deficit expansion, negative foreign currency flows in the services account and lower remittances are reflected in the expansion of the current account deficit in the first quarter, at the end of which, this deficit was at 11.8% of the GDP, illustrating the fragile position of the external sector of the economy. The performance of the four demand components led to positive, but below potential, economic growth during 2011 H1. Unutilised capacities in the economy controlled production costs and generated controlled inflation pressures. Monetary indicator analysis confirms our assessments for contained inflation pressures suggesting that money supply growth rates are moderate and in line with the economy’s demand for real money. In average terms, M3 annual growth was 11.3% in January–May triggered by a steady growth of deposits in the banking system. Demand for money is dominated by public sector demand for funding, while the private sector’s demand was more moderate.