samchain/econo-pairs-v1 huggingface dataset:
The labour market held up well, with the number of people in employment (on the LFS measure) rising by 184,000 in the year to April, to an all-time high; and while the number of unemployed people on the same measure rose somewhat over the year, it fell on the claimant count basis, to 945,000 in May, a 26 year low. And inflation, though rather more volatile from month to month, averaged 2.2% over the past year very close to our 2½% target, although it fell to 1.8% in May. For only the third time in the past nine years the rate of growth in the year to the first quarter fell below the rate of inflation. So we have much to be thankful for, despite the hostile external environment we have had to contend with. We can also be grateful that the difficult international environment has not seriously undermined the stability of the global financial system - though that’s another story. The key question now is where are we going from here. Well, the relatively good news is that the external economic storms seem to be beginning to abate. The US in particular, which experienced negative growth in the middle of last year, saw a surprisingly strong recovery on the back of a reversal of falling stocks, over the winter; and while this may not have continued on the same scale through the spring, consumer spending has remained encouragingly resilient.

That offers the prospect of both stronger and more balanced demand and overall output growth. Indeed we are already seeing - in surveys but also now in actual data for the past month or so - increasing signs of a recovery in overall output growth, including a recovery in the manufacturing sector which was the most hard hit by the global environment last year. But our policy dilemma has not simply gone away. In fact trying to weigh up the prospects for the various different components of demand in order to decide what we need to do with interest rates to keep overall, aggregate, demand growing broadly in line with the underlying, supply-side, capacity of the economy to meet that demand, is a perpetual dilemma. In the present context what that means is that, in order to accommodate the expected improvement in external demand, we are likely to need a moderation in the recent strength of domestic demand growth - particularly the consumer spending growth which has sustained the overall economy through the period of global weakness - if we are to avoid a build-up of inflationary pressure further ahead. The necessary moderation of consumer demand growth could come about of its own accord, if, for example, consumers become more reluctant to take on additional debt.
Sweden's weak point is the number of hours worked. In relation to the total demands on resources, there are already far too few that can or want to work full-time. The demographic situation will therefore place great demands on innovation. It is likely that employers will be forced to make better use of their labour, recruit from abroad and support people to be mobile so that they can find the right tasks in life. Employees will have to realise that if too many choose not to work, the welfare system will collapse. People that no longer feel satisfied with their work must think of alternative ways of supporting themselves. The welfare model must be designed to encourage people to work. Great demands will be placed on society to think in a longer-term strategic manner so that changes can be implemented in time. Competition in Europe for the young, and especially the well-educated, will be fierce. More people will have to want to stay in or move to our countries. Immigrants must be integrated quickly and successfully. Next year ten accession countries will join the EU and become a part of the free market. The enlargement of the EU and the establishment of a common labour market around the Baltic could perhaps increase the potential for an influx of foreign labour to the Nordic countries. But poorer countries further away are likely to offer greater potential - and pose a bigger challenge.

To date, 109 approved projects have received financing worth RM1.5 billion by 22 banks, of which 17 projects are receiving financing worth RM300 million from six Islamic banks . For the first 9 months of 2013, 33 companies received approved financing facilities totaling RM416 million. The  2  BIS central bankers’ speeches  approval rate for the financing has also improved from 54% in December 2012 to 59% in September 2013, reflective of the positive reception of financial institutions towards green technology financing. The recipients of the financing facilities operate in a broad range of green technology sub-sectors that covers energy, buildings, transportation and water and waste management. This financing initiative has also contributed to increasing employment, with the generation of nearly 1,400 jobs. The additional allocation of RM2.0 billion of the GTFS therefore presents an opportunity for financial institutions, including Islamic banks to further expand financing into this new and exciting area of growth. Strong potential for Islamic finance to support green technology This brings me to my next point – the role of Islamic finance in contributing towards a diverse and robust financing ecosystem for green ventures. In the Quran, verses 11 to 14 of Al-Fajr emphasise the need to care for the environment and the forms of life that Allah has created on this earth that includes proper usage of natural resources.
If so, one wouldn’t expect to pick up any levels effects, even when they genuinely exist, in simple cross-country comparisons like that in Chart 3. Those might simply be telling you that, for various structural reasons, a  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  pound of debt is not quite the same thing, or equally risky, from one country to the next.2 Besides, the distinction between levels and growth rates is in any case a bit fuzzy. If one country has a higher debt burden than another it’s probably gone through a period of faster growth as well. That’s got to be the case if one’s comparing levels of debt in the same country but at different points in time. Nevertheless, the comparatively poor predictive power of the level of debt is quite striking and I think there may be a few lessons one can draw from this. First, if there are structural differences in the nature or terms of debt, whether across countries or over time, it is important to try and take account of them. One example in the UK is within unsecured household debt. This is now a pretty broad category. It includes two things – PCP (“personal contract purchase”) contracts for car purchases and student loans – both of which are relatively new and neither of which, arguably, is really unsecured debt in the conventional sense or at least carries the same risks for borrowers. PCP contracts are more like rental agreements.

The big lesson from the 1970s was that weakness in real incomes and price movements, which drive a wedge between consumer prices and output prices, lead to pressure for increases in pay to “catch up” on the lost income: or as it is sometimes called “real wage resistance”. The end result is more inflationary pressure for a given amount of unemployment. Put differently, to keep a lid on inflation, unemployment has to be higher following periods of pressure on real incomes. The current reduction in real incomes has been as big as we’ve seen for nearly a century. Real wages are still almost 9% below their pre-crisis peak. That is a fall of around 20% relative to the pre-crisis trend. Following a year of strong growth and a very rapid fall in unemployment, this would suggest workers would now demand some catch up in pay. However, there appears to be little evidence of real wage resistance – the sharpness of the recession and the years of austerity that have followed it, appear to have caused a shift in the psychology of UK workers. There appears, for the present at least, to be an acceptance that pre-crisis pay levels are no longer achievable. Real wages have proved to be remarkably flexible and, as a consequence, unemployment has been able to drop quickly without inflationary pressure on pay emerging. To complete the picture, the fall in unemployment has included a high number of long-term unemployed, who probably drag less on pay.
These generally did not foresee the periods of strong house price increase in the first half of the 2000s. This suggests that there could have been some offsetting error, and in terms of the underlying assumptions used by the MPC one candidate is a frequent overprediction of  6  Bank of England (2000). 7  Harrison et al (2005). 8  Hills et al (2005) sets this issue out fully. BIS Review 27/2010  3  growth in earnings. It would not be right to suggest that this had automatically led to a systematic overestimate of inflationary pressure, since, as explained above, the published projections are also based on overall MPC judgements. But it is notable that despite frequently-expressed concerns by the MPC about periods of higher inflation leading to higher wage inflation, the relationship between earnings growth and RPI has become weaker over time. Chart 2 does not suggest a consistent relationship. Indeed, since 1995 the correlation between RPI (lagged by one quarter) and average earnings has been just 0.3, compared with 0.8 over the 1977–95 period. These comments on the past, however, clearly do not exhaust the range of potential uncertainties about the size and interpretation of the output gap. These include mismeasurement in the data, incorrect calibration of the relationship between demand and supply, and changes in the implications for inflation of any particular estimate of excess capacity. How might these difficulties affect the outlook at the present time?

Robust growth now would also potentially have the benefit of reducing the likely erosion of the economy’s supply capacity – the more quickly growth is resumed, the less skills will be eroded and the capital stock effectively run down. The longer-term outlook for growth is therefore improved. This is indeed a powerful reason for continuing to focus on the two-year horizon, and one which seems to trump the considerations around the lags in the policy process and worries about inflation expectations. But it is not the only relevant longer-term consideration. I argued earlier that in the period running up to the financial crisis, it might have been beneficial if policy had taken more explicit account of how it was contributing to imbalances in the economy. And there may be risks in the present circumstances in driving growth up quickly in the UK, if the global economy, and particularly our major trading partner, the EU, experiences a somewhat sluggish recovery. Slow growth elsewhere would make it more difficult for the UK to achieve an improvement in the external balance. The UK’s external sector has so far perhaps had a rather disappointing response to the depreciation of sterling. Manufacturing output in the UK has not, so far, performed any better in the early stages of recovery than has the US, Germany or France. Recent surveys do suggest that export orders are improving (for example, the February 2010 CIPS/Markit survey of manufacturing suggested that export orders grew at their fastest pace since the survey began in 1996).
It is generally true to say that never before have things become so much better so quickly for so many people as they have during the past twenty years of globalisation. Take Asia, for instance, where six persons out of ten were living in absolute poverty in 1975, while today the proportion has fallen to two out of ten. This positive picture is reinforced by statistics on other parts of the world. Studies show that in twenty years, countries with a liberal trade policy have become six times more prosperous than countries where policy has been more protective. This illustrates the potential conferred by economic integration. We must, however, bear in mind that all the problems are far from being solved. Still, globalisation has contributed to growing prosperity throughout the world. The economic processes created by globalisation have been accentuated by many of the impressive innovations we have seen, in computer technology and telecommunications, for example. The new technologies in turn are providing additional facilities for further internationalisation. Measures for making economies function more efficiently are being taken in many quarters to benefit from the opportunities that internationalisation offers. The ongoing integration can be described as the second wave of globalisation in economic history. Before the crises in the 1930s and particularly before World War One, there was a period characterised by openness, increased cross-border trade and growing international capital flows. Major technical advances in the 19th century were introduced successively as the production of goods and services gradually become more modern.

Again simplifying, two features are added to the diagram to bridge from firms’ so-called ‘output’ – or wholesale – prices to the retail prices which the Bank targets. First, as well as being an input to producing firms, some imports are directly consumed by households. Second, distributors – including, most obviously, retailers – add another mark up, reflecting their own costs and desired profit margins. Changes in the economy affecting any of the links in this (stylised) chain will have a bearing on inflation dynamics. The challenge is to separate out cyclical, or temporary, factors from the more structural influences that over some periods alter firms’ costs and margins. That is important for policymakers, as to form a view on the medium-term outlook for inflation we need to distinguish between short-lived and persistent influences. Monetary regime change The monetary framework is one such structural influence. One of the most encouraging features of the post-1997 landscape has been that, as well as inflation tracking the target fairly well, expectations of inflation have been well anchored to the target (Chart 4). Uncertainty about future inflation has also fallen3 (Chart 5 ). It was different in the past. A characteristic shared by the various monetary regimes tried out by UK governments during the 1970s and 1980s was that no one could easily judge what rate of inflation the authorities were trying to achieve – or, therefore, have much idea about the outlook for inflation.
5  All speeches are available online at www.bankofengland.co.uk/speeches  5  1980s, to around $ over the past decade (Chart 1). Chart 1: Weather-related losses worldwide (1980-2017)  $ billions (2015 values)  350  Uninsured losses 300  Insured losses Moving average total economic losses (a)  250  Moving average insured losses (b) 200 150 100 50 0 1980 82  84  86  88  90  92  94  96  98 2000 02  04  06  08  10  12  14  16  (a) Total Economic Losses = Insured + Uninsured losses. (b) 10-year moving average Source: Munich Reinsurance Company, Geo Risks Research, NatCatSERVICE  General and reinsurers insurers have long deployed sophisticated modelling of climate and weather-related physical risks, and have adjusted their cover and business models accordingly. Lloyd’s of London underwriters, for example, are required to consider climate change explicitly in their business plans and underwriting models. Their genius has been to recognise that the past is not prologue and that the catastrophic norms of the future are in the tail risks of today. For example, by holding capital at a one-in-200 year risk appetite, under a forward-looking capital regime, UK insurers were able to withstand the events of 2017, the worst year on record for weather-related insurance losses at around $ Given evidence that suggests increasing levels of physical risk, insurers will need to consider the potential impact of more intense and clustered weather-related events.

At the Bank of England, the risks posed by climate change are currently most directly relevant to our micro prudential responsibilities for the safety and soundness of the banking and insurance sectors. Assessing how well general insurers and reinsurers are identifying, measuring and mitigating weather-related risks, has long been part of supervising insurers. We published a stocktake of insurers’ progress in adapting to climate change in late 2015, and are working to update and deepen our assessment with a second stocktake in 2018. More recently, we have extended our focus to the financial risks faced by the UK banking system, and will publish the full results of the survey I referred to a moment ago in coming months. The aim for both pieces of work is to consider whether insurers and banks have adequate governance arrangements to develop strategies for identifying and mitigating climate risk across their entire businesses, both their liabilities and assets, and over sufficiently long time horizons. We aim to highlight examples of good practice and to articulate our supervisory expectations later this year. We are also considering our approach to assessing risks across the system as a whole. The Bank has routinely included weather-related shocks in the scenarios for its biennial general insurance stress test, including three North American hurricanes in 2017. This meant we had a good sense of the likely resilience of the market and individual firms when Harvey, Irma and Maria 8  hit – both in terms of exposures and mitigating actions.
showroomprivé.com, France’s second largest flash sale web retailer, which has accepted bitcoins since 2014]. Second, as intermediaries in exchanges, crypto-assets are far less effective than a currency with legal tender status, insofar as (i) their price volatility makes it hard to use them as a means of payment, (ii) they generate transaction fees that are far too high for simple retail transactions, and (iii) they offer no guarantee of a refund in the event of fraud. Third, the fact that they have no intrinsic value means that they cannot be used to create trustworthy stores of value. In addition, crypto-assets may be conduits for financial risk, security risk and especially risks of cyber-attacks, money laundering and terrorist financing. These would represent major risks for users and hence for the orderly functioning of our payment system if crypto-assets were ever to play a major role in that system. II- In this complicated context, with crypto-assets undergoing technical and economic trials that offer opportunities but also present material risks for our payment system, should we consider establishing a regulatory framework and supervisory approach and, if so, how should we go about this? 1) Various courses of action are available to the public authorities. The first would be to ignore crypto-assets. But even if the volumes in play remain small and do not represent a threat to financial stability, the risks that I mentioned earlier must be addressed. The second course of action would be to ban crypto-assets outright because of these same risks.

Several countries have already gone down this route, including China in 2013 and Russia in 2017. A third option, and the one that has so far been the preferred  response in Europe and France to innovations with the potential to change the payment services market, is to establish appropriate regulations that make it possible to reconcile two key imperatives: 3/5  BIS central bankers' speeches  First, address the risks that I mentioned, notably with a view to ensuring an adequate level of protection for participants, whether they be investors or consumers. Second, preserve the potential for technological innovation offered by crypto-assets. These two imperatives are mutually beneficial. Adopting a framework that protects  participants in the real economy will help to increase their confidence in the mechanisms associated with crypto-assets, thereby promoting growth in the new assets. 1. If we opt for creating a regulatory framework, what should go into it? That is precisely the topic of a number of debates currently being conducted around France’s new PACTE Bill. The proposed legislation includes an approach to crypto-assets based on two pillars. The first specifically addresses the question of ICOs, proposing an optional labelling system. Under this system, a company planning an ICO would be able to ask the AMF to label the offering. This optional label would give the offering greater credibility and reassure potential token buyers about the serious nature of the project and the associated financing arrangements. The second pillar concerns providers of crypto-asset services.
These firms tend to find it more difficult to access credit, especially in periods of high uncertainty and growing credit risk concerns. Overall, these results suggest that the pandemic is generating substantial liquidity risk for Spanish firms. In this setting, national and supranational economic policies in the different (fiscal, monetary and financial) areas responded rapidly and robustly to address these risks. After the initial stress, this resulted in an improvement in financing conditions recorded in both bank lending and debt securities markets. In the fiscal policy area, two public guarantee programmes managed through the Official Credit Institute (ICO) are noteworthy. The first, with a total of € billion, was designed to finance firms’ liquidity needs, while the second, with up to € billion, was mainly focused on investment in fixed assets. The aim of both these programmes was to encourage financial institutions to grant funding to firms and the self-employed, in a setting in which these agents were facing high liquidity needs, against a backdrop of rising uncertainty and growing credit risk concerns among lenders. Since the Royal Decree approved on 17 November came into effect, the maximum term of loans granted under these programmes has been extended to eight years and the maximum grace period, which was initially 12 months, has been extended to 24 months. Similarly, the deadline for granting of guarantees, which was originally 31 December 2020, has been extended to 30 June 2021.

In addition, financial institutions should maintain the limits on  3  working capital facilities up to that same date for all customers that have a guaranteed loan and comply with the eligibility requirements. This Royal Decree has also extended the insolvency moratorium, which was set to expire on 31 December this year, to 14 March 2021, with the aim of preventing firms that continue to experience temporary, pandemic-related financial difficulties from having to file for insolvency. This measure aims to reduce the risk of viable firms being eventually wound up, with the impact this would have both on the productive system and in terms of job losses. The available evidence suggests that the economic policy measures taken have helped to ease firms’ financing conditions, which contrasts with what was seen in the international financial crisis that began in 2008. It is a consequence not only of the swift and forceful economic policy response, but also of the better financial situation of the banking system and, in particular, of the larger capital buffers built up by the banks in recent years that have enabled them to absorb losses in their credit portfolios. The different nature of the current crisis has probably also been a determinant in this respect. In any event, since 2020 Q2 firms have resorted to debt on highly favourable terms to cover part of the increase in their liquidity needs. Specifically, between February and September, the outstanding amount of corporate sector debt rose by almost 5%.