samchain/econo-pairs-v1 huggingface dataset:
As I have just mentioned, we encouraged banks to use their existing capital buffers, to avoid the severe tightening of credit standards that has characterised the response to shocks in the past. Recommendation on dividends Naturally, as supervisors, we cannot ignore the need to preserve capital in this situation of profound uncertainty. For this reason, we recommend that banks refrain from distributing dividends or repurchasing shares. 6  I am sure I do not need to convince you that this measure has been more controversial, and less popular in the sector, than others. The restriction on dividends has generated much debate; analysts and banks argue that this limitation may generate additional downward pressure on already depressed share prices, putting European banks at a disadvantage in comparison with their peers in the United States. I understand the controversy and the arguments made by banks, but I must again emphasise that, at times of uncertainty, it is clearly preferable to err on the side of caution than on the side of risk. In any case, the evolution of the pandemic, and its effect on the macroeconomic outlook, will be taken into account when the recommendation is reviewed, before the end of the year. Lending developments Following this initial phase, the SSM switched its focus to the assessment of risks and vulnerabilities, analysing the potential impact of the pandemic on bank balance sheets, for which purpose, the vulnerability analysis I have referred to was performed. Certainly, the economic situation caused by the pandemic is entering a second phase.

865–934, New York: Elsevier North-Holland. Micco, Alejandro and Ugo Panizza (2006), “Bank Ownership and Lending Behavior,” Economic Letters, Vol. 93, Issue 2, pp. 248–254. Micco, Alejandro, Ugo Panizza and Monica Yanez (2007) “Bank Ownership and Performance. Does Politics Matter?,” Journal of Banking and Finance, Vol. 31, No. 1, pp. 219–241. Rajan, Raghuram (2010), Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton, NJ: Princeton University Press. Reddy, Y.V. (2012), “Society, Economic Policies and the Financial Sector,” Per-Jacobsson Lecture, BIS. www.bis.org/events/agm2012/sp120624.htm. 4
However, it would, in my view, be unwise to bet on further upward structural shifts in the level of sustainability. The high level of debt to income made the UK vulnerable to shocks as we saw in the post crisis recession. There was a major correction following the crisis that has improved sustainability. We are now back to early 2000s levels of debt to income and income gearing. Household balance sheets, however, remain large by historic standards. The position is sensitive to the unwinding, were it to occur, of some of the forces that pushed rates down over the past 40 years. And of course we remain vulnerable to the resumption of the rates of credit growth,  12  The pre-crisis Okun’s Law relationship between output growth and unemployment would have suggested that the unemployment rate would rise to around 12% given the change in output, rather than peaking at around 8½%. 13  Jorda et al (2015) find that credit expansions associated with housing bubbles are more likely to end in a severe recession than expansions not associated with build ups in credit. Mian et al (2015) find that a rise in the household debt to GDP ratio predicts lower output growth and higher unemployment over the medium-run. Crowe et al (2011) find that more than two thirds of the 46 systemic banking crises (for which house price data are available) were preceded by housing boom-bust cycles. These effects are typically not present in equity bubbles (Aikman et al 2015).

It has steadily established a reputation as the leader in executing the € capacity-building initiatives through the development of skills, and expertise. MII has continued to broaden and enhance its training directory to meet the increasingly complex and diversified needs of the insurance industry. T he Registered Financial Planner (RFP) programme which was launched in 2002 has now produced its first batch of 964 graduates in January 2005. In keeping pace with the evolving changes in education, in July 2006, MII launched its MII e-Academy, an on-line learning avenue to make learning more accessible to the insurance professionals, unconstrained by location, distance or time. I am pleased that MII has taken the necessary steps in upholding the responsibility to deliver quality training, not only for the local insurance industry, but also across the region. The increasing number of participants from abroad signifies the growing recognition of the programmes organized by MII. At the regional front, MII's out-reach has been further enhanced with the conclusion of the Memorandum of Understanding between MII and FORTE Insurance ( Cambodia ) Plc. in June 2005, whereby MII will conduct professional insurance examinations in Cambodia . At the same time, MII continues to assume its role as the secretariat of the ASEAN Insurance Training and Research Institute, or AITRI, in Malaysia , serving as a regional network centre for insurance education and research. For this purpose, AITRI conducts an annual series of insurance programmes and courses for the ASEAN regulators and practitioners.
The Riksbank’s forecast indicated that the repo rate would remain at this low level until the second half of 2010. The forward rates prior to the publication of the repo rate path indicated that the repo rate would not be cut to 0.25 per cent and that increases in the repo rate would begin as early as the end of 2009. Surveys carried out by Prospera indicated that expectations were in line with the forward rates. Although the forward rates were adjusted down after the publication of the repo rate path, the pricing still showed that expectations were set at a first repo rate increase at the end of 2009. Where the Riksbank’s forecast indicated a first repo rate increase, the forward rate was already up at around 1.5 per cent. This large deviation caused considerable discussion, partly concerning the current situation and monetary policy, and partly more general as to whether it is a problem if market expectations deviate from the Riksbank’s forecast. As shown in Figure 2, however, market expectations were lower than the Riksbank’s repo rate forecast at the end of the forecast period. Seen across the entire forecast period, therefore, the average deviation is not so great. With hindsight, we can also note that in summer 2009 market expectations deviated considerably from the repo rate outcome we can see so far. Figure 2 The repo rate path and market expectations in July 2009 Per cent  Note. Market expectations are based on forward rates.

The yield curve of federal government bonds, which is used by banks as a benchmark for the interest rates they set for their clients, has significantly increased for maturities of up to three years, while staying almost unchanged in the long end. The rise in short-term yields reflects both our recent decisions and market expectations regarding the future key rate path. Shifts in long-term yields are minor. Among other things, this is an evidence of market participants’ confidence that monetary policy will finally bring inflation back to the target. I would like to reiterate that these are long-term interest rates, rather than our key rate as such (as is often stated), that determine the affordability of credit for companies’ investment purposes and of mortgage loans. As compared to yields on federal government bonds, interest rates on loans and deposits have responded more slowly and rose less significantly. Our today’s decision is aimed at accelerating this process. An increase in interest rates will help restore households’ propensity to save. Growth in retail and corporate lending is close to its highest rates recorded in recent years. Many borrowers seek to take out loans as soon as possible at lower interest rates. We have raised our lending growth forecast for this year. Mortgage lending will continue to expand fast, while slightly decelerating after the amendments to the subsidised mortgage lending programme become effective. Speaking of unsecured consumer lending, we can already observe the first signs of overheating. This lending segment has been growing faster than we forecast in April.
This may involve a risk that capacity utilisation will remain high and that inflation will eventually overshoot the target. Household debt has increased at a faster pace than income over the past ten years. Norges Bank’s calculations indicate that debt growth may largely be due to the sharp rise in house prices in recent years. Higher house prices have a fairly prolonged effect on household debt growth. Even though the rise in house prices is expected to slow, credit growth will therefore remain high for a fairly long period. Given the assumptions underlying our projections, it is likely that debt will continue to grow at a faster pace than disposable income through the entire projection period. The household debt burden has increased over the past year and is now record high. The interest rate burden is, however, relatively low. A normalisation of interest rates will increase households’ net interest expenses, but according to the projections the interest burden will not be higher than it was at the end of the 1990s. Households will be vulnerable if unexpected disturbances result in higher-than-expected interest rates. Challenges ahead Petroleum activities give us an economic base that is not available to many other countries. But it also presents us with many challenges. 5/7  First, our petroleum resources are part of our national wealth. When oil is extracted and sold, petroleum wealth is transformed into financial assets. This wealth belongs not only to our generation, but also to future generations.

Therefore, there is cause for some optimism concerning the possibility of shielding the mainland economy from the effects of swings in oil prices. In the long run, however, petroleum revenues and their use will affect the level of costs in Norway. An increase in oil prices may generate expectations of higher use of petroleum revenues in the future, particularly if high oil prices are expected to persist. Such expectations may exert appreciation pressures on the krone. It may also generate expectations of higher returns in the Norwegian stock market than in foreign markets, which also can and has contributed to an appreciation of the krone. Our assessment is that developments in oil prices and an increased cash flow have been responsible for the appreciation of the krone since the spring of 2004. We are approaching a peak in petroleum production in Norway and must expect a substantial reduction in the next decades. In addition, there is considerable uncertainty associated with future petroleum production. In recent years, there has been a tendency to overestimate projections for production a couple of years ahead. It is especially demanding to estimate production for the many large fields that have reached maximum capacity. The fiscal rule provides a long-term anchor for fiscal policy. It provides a stable framework that contributes to curbing some of the fluctuations in the Norwegian economy. Nonetheless, the use of petroleum revenues in the Norwegian economy has been increasing over the past few years. Petroleum investment has increased significantly.
I would briefly like to develop these two points. The past two decades have been characterised, on the one hand, by an increasing integration at the global level of goods, services and capital markets and, on the other, by a reduction in inflation that has stabilised at low levels. Given the coexistence of these two phenomena, a number of observers have concluded that there appears to be a causal link. Where exactly do we stand today? BIS Review 28/2008  1  For over ten years, with the growing integration of our economies in the past few decades, powerful forces, throughout the world, have been acting to enhance price stability. Each year, the arrival of tens of millions of people on the world market increases global production capacity, in particular for tradable goods. For monetary policy in developed countries, this process is equivalent to a sequence of positive supply shocks that take the form of a spontaneous decline in the import prices of manufactured goods. All other things being equal, this terms-of-trade gain allows for a lower inflation rate for a given capacity utilisation rate. More fundamentally, and although things seem to be less straightforward in this area, it is possible that the increasing openness of our economies may have structurally changed the wage and cost formation process in a manner that favours price stability. Heightened competition triggered by imports reduces the market power of firms at the national level. However, other more indirect effects are also detectable.

This is the very best we can offer you, whether you are from ancient Ithaca or Delphi or modern Hong Kong. Those who think we can be more specific in stating our intentions and broadcasting our every next move with complete certainty are, in my opinion, clinging to the myth that economics is a hard science and monetary policy a precise scientific procedure rather than the applied best judgment of cool-headed, unemotional decision-makers. We will cross the river that separates us from a normalized economy and a normalized monetary policy by feeling the stones. We may slip on occasion, but you should not underestimate our intention to apply whatever talents we possess as policymakers to do what is right to advance economic prosperity while strictly adhering to our commitment of containing inflation and maintaining market stability. Thank you (謝 謝). 7  6  Richard Fisher joined Mario Draghi, Mark Carney, Joachim Fels and others at a symposium on “Financial Stability and the Role of Central Banks,” organized by Jens Weidmann and Deutsche Bundesbank in Frankfurt am Main on Feb. 27–28, 2014. BIS central bankers’ speeches
Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the more short-term objective of stability in the real economy. Low inflation in recent years is both the result of monetary policy assessments and unforeseen disturbances to the economy. Towards the end of 2002, Norges Bank shifted its monetary stance in an accommodative direction as new information indicated that developments in output and unemployment might be weaker than projected and inflation might be lower than target. The key rate was reduced markedly in 2003 and 2004. The low interest rate level has contributed to a considerable increase in demand for goods and services. Increased petroleum investment and favourable prices in markets for our export products have also made a contribution. So far in this cyclical upturn the mainland economy has expanded by an average of close to 4 per cent. Wage developments reflect and influence the business cycle. Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years has been accompanied by a strong cyclical upturn. It appears that wage growth will be somewhat higher in 2006 than in 2005, but not higher than expected. Employment growth was lower over a long period compared with the cyclical upturns in the 1980s and 1990s.

In part, this is due to the differences in character between domestic and foreign savings. Those managing foreign savings are, understandably, much less concerned about the long-term public interest than those managing domestic savings. Foreign savings are also much more sensitive to changes in market sentiment and shifts in domestic policies, and are more prone to reversals. While this imposes greater discipline on local authorities in pursuing prudent macro-economic policies, it also brings much higher volatility in the financial markets, to the extent of possibly creating systemic problems that Asian monetary authorities are ill-equipped to handle. Furthermore, the foreign financial intermediaries are usually large international financial institutions with considerable market power and influence, in terms of the amount they are in a position to mobilise, relative to the size of the domestic financial markets of the emerging economies. This enables them to operate in the market not simply as price takers, but as a “price maker” with the power of pushing prices in a particular direction. The implications for the emerging markets are greater market volatility, greater tendency for overshooting, and consequently, greater challenges in maintaining monetary and financial stability. The problems are more intense for emerging economies with medium-sized financial markets that are large enough to attract foreign capital but not large enough to be immune from the manipulative or speculative plays that are, more often than not, associated with these fund flows.
21 One can see that international interest rates are very important to Sweden if one studies longer time series of international real rates. Figure 2 shows long real interest rates for a number of developed countries. It is clear that large movements in real interest rates are common to most developed countries, even if the smaller cyclical fluctuations can vary in different countries. One also sees that the degree of covariation has increased over time, as the financial markets have become increasingly integrated and globalised. This is also something confirmed by more formal analysis. 22.It is also striking that real interest rates have shown a declining trend in recent decades and are currently around zero. 23 At the end of the  18  This is also confirmed by more formal studies, see for instance Lindé, J., “Swedish Postwar Business Cycles: Generated Abroad or at Home?” Scandinavian Journal of Economics no. 4, 2004. 19  Robert Mundell was awarded the economics prize in 1999 for this analysis and theory on optimal currency areas. Marcus Fleming, who also contributed to developing a similar intellectual framework for stabilisation policy in open economies, died in 1976 and was therefore not available to receive a prize. 20  This also leads to a strengthening of the real exchange rate, as price levels are assumed to be constant. 21  See, for instance, “Account of monetary policy in 2014”, page 37, the section “Policy rate differences, the exchange rate and inflation”, Sveriges Riksbank.

In order to evaluate in retrospect the monetary policy that has been conducted, we can also examine developments in actual inflation and the krone exchange rate. It should be mentioned, however, that we cannot solely consider whether developments in inflation and the exchange rate have been satisfactory in relation to the objective. We must also, on a discretionary basis, evaluate whether the exchange rate and inflation could have been stabilised at lower real economic costs. When assessing monetary policy in retrospect, the decision-making basis that existed at the time must be taken into account. The decision-making basis may change as a result of revisions to data or new information about economic developments, or our interpretation of the information available may simply change. Even though it is difficult to find a simple and precise performance measure, some general evaluation criteria may be identified. If the krone exchange rate is stable at approximately the initial range, as defined in the Exchange Rate Regulation, and inflation is approximately on a par with the level aimed at by the ECB, it may be said that monetary policy, on the basis of the objective established, has been successful. With a weak exchange rate and high inflation, it is natural to raise critical questions about monetary policy. It may then have been too expansionary. Similarly, with a strong exchange rate and with inflation close to zero or deflation, monetary policy has probably been too tight.
It has become a gold standard for institutional and retail investors – so much so that it has been adopted by jurisdictions outside the EU. But for all the progress, market as opposed to bank-based financing is still very undeveloped in the EU compared to the US. We should of course be a little careful about the comparison; the EU is not a federal country but a single market of member states with different histories, cultures and languages. It may not be possible to attain the level of cross-border investment across EU members as exists across US states. But the relative size of market-based financing in the US compared to the EU illustrates graphically the scope in the EU to go much further. Looked at from the savers perspective, as a percentage of GDP, savings held in EU mutual funds are around 50% of the US level. For pension funds, it’s 35%. Looked at from the borrower end, in the EU equity markets are only 60% of their US counterparts, corporate  4  BIS central bankers’ speeches  bond markets 35% and securitisation 20%. As a result, bank loans account for just over 10% of non-financial company borrowing in the US against 30% in the EU. Banking system assets are over 300% of GDP in the EU, against around 70% in the US. Europe is not short of savings. Far from it. Europe saves € trillion a year – 20% of EU GDP.

If EU regulation and internationally agreed standards diverge materially, it will both create barriers to that activity and opportunities for regulatory arbitrage making it more difficult to ensure UK financial stability. My third example is the European Supervisory Authorities – the European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA). These were established to provide more detailed common rule making so that the EU Single Market in financial services could be supported by a common rule-book underneath the framework of high-level legislation. This search for more detailed alignment of regulation and standards has I think been a general feature of the post crisis reforms in the EU and more widely. The ESAs are governed by their boards, comprising national supervisory authorities, which are also responsible for the majority of their financing. They set and advise the Commission on the rules and standards – they do not engage directly in the prudential supervision of firms. The European Supervisory Authorities perform another important function. I have talked about common rules, commonly applied. There are of course enforcement mechanisms in the Treaties to ensure member States properly observe the EU legislation. But the need for this in financial services has been especially recognised with the ESAs having the capability to conduct peer reviews and for binding arbitration when one national authority believes another has not properly implemented or applied the rules. This is a powerful mechanism to prevent regulatory arbitrage and the risk of adverse spillovers between member states.