samchain/econo-pairs-v1 huggingface dataset:
For several emerging economies, such conditions are reflective of the growing phenomenon of the urban poor, with significant implications for social stability and balanced growth. To address this, inclusive growth strategies have gained prominence in recent years among the policymakers in the region. This needs to be further reinforced by strategies targeted at preparing individuals at an early stage to be well equipped to adjust to the new economic, financial and social realities that confront them. This is where financial education has a fundamental role. A key concern in this environment is to strengthen the capability of financial consumers, in particular household and small businesses, so as to avoid being marginalised by market forces and by the disproportionate impact of the changing financial and social landscape. Related to this is the need to reinforce socially responsible finance, and to address the new and growing risks of financial exclusion. Sophisticated risk-profiling methods employed by financial institutions can make it more difficult for deserving individuals and businesses to  BIS central bankers’ speeches  1  qualify for financial services. Among those that qualify, aggressive marketing practices and more complex financial products can also lead to poor financial decisions at a time when economic and financial reforms are also shifting greater responsibility to individuals to plan and provide for retirement and unexpected developments. Marketing practices that target select groups of consumers often further deprive the broader segments of society from new products that can better meet their financial needs.

Asia’s urban population has risen from 33% of total population in 1990 to 43% in 2010. The United Nations projects that Asia’s urbanisation rate would rise to 56% in 2030, and further to 64% in 2050. Accompanying this urbanisation has been the growth of mega-cities with populations exceeding 10 million. Twelve of the world’s 21 mega-cities are in Asia, including Tokyo, Delhi, Mumbai and Shanghai to name a few. Urbanisation has become particularly more pronounced in Malaysia during this period. The proportion of the Malaysian population living in urban areas has increased from less than 50 percent in 1990 to more than 70 percent in 2010, and is expected to rise further to 75 percent in 2020. The improved education and higher income levels that has come with urbanisation has enhanced opportunities for greater access to financial products and services. Indeed, financial institutions and markets have responded to the changing profile of financial consumers by offering a broader range of financial instruments and providing convenient access to meet the changing consumer preferences. It is recognised however that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen. Balanced growth is therefore an important imperative if socio-economic progress is to be achieved and if conditions that limit opportunities for employment and which deepen inequalities of income and wealth are to be avoided.
That was the story of the Flash Crash, with order imbalances propagated through the futures market due to pass-the-parcel dynamics before ricocheting back to affect prices in the cash market. 26 A second channel of contagion is between different exchanges and trading platforms. Here, too, HFT has changed the landscape. Because HFT strategies have emerged to arbitrage differences, price transmission across exchanges and platforms is near-instantaneous. It also has the potential to be more disruptive. Liquidity on these exchanges is no longer  25  Hardin (1968). 26  CFTC-SEC (2010). 10  BIS central bankers’ speeches  pooled and centralised. Instead it is distributed and localised, increasing the potential for illiquidity premia to emerge in periods of stress. A third potential contagion channel is across stocks. HFT algorithms tend to amplify crossstock correlation in the face of a rise in volatility due to their greater use of algorithmic trendfollowing and arbitrage strategies. That is consistent with the evidence in Chart 9, with heightened correlation per unit of volatility relative to the past. Taken together, these contagion channels suggest that fat-tailed persistence in individual stocks could quickly be magnified to wider classes of asset, exchange and market. The micro would transmute to the macro. This is very much in the spirit of Mandelbrot’s fractal story. Structures exhibiting self-similarity magnify micro behaviour to the macro level. Micro-level abnormalities manifest as system-wide instabilities. In many respects, this is an unsurprising conclusion.

As of today, the lower limit for trade execution appears to be around 10 micro-seconds. This means it would in principle be possible to execute around 40,000 back-to-back trades in the blink of an eye. If supermarkets ran HFT programmes, the average household could complete its shopping for a lifetime in under a second. Imagine. It is clear from these trends that trading technologists are involved in an arms race. And it is far from over. The new trading frontier is nano-seconds – billionths of a second. And the twinkle in technologists’ (unblinking) eye is pico-seconds – trillionths of a second. HFT firms  3  Mackenzie (2011) provides a brilliant recent account of the role of HFT, in particular in the context of the Flash Crash. HFT is a sub-set of a broader class of algorithmic trading strategies. See also Aldridge (2010). BIS central bankers’ speeches  3  talk of a “race to zero”. This is the promised land of zero “latency” where trading converges on its natural (Planck’s) limit, the speed of light. 4 The race to zero seems like a million miles from the European coffee shop conversations of the 17th century and the noisy trading floors of the 18th, 19th and 20th centuries. The dawn of electronic trading coincided with the dusk for floor trading. Physical proximity lost its allure. As soon as computers processed faster than traders talked, the time was up for human interactions on physical exchanges. Trading became virtual, distance a dinosaur. Or so it seemed.
Underlying inflation is now estimated to be between 2 percent and 2½ percent, which is one percentage point higher than one year earlier. Chart 9: Norges Bank’s key policy rate projections Saving, investment and spending decisions are influenced by expectations concerning future interest rates. Communication on the future course of monetary policy, including the publication of key policy forecasts, therefore plays an important role. Even though the key policy rate has been kept unchanged, Norges Bank’s forecasts for the key policy rate ahead were revised down through 2013. The downward revision of the key policy rate forecasts primarily reflects lower growth forecasts for the Norwegian economy. There are also prospects that wage growth will be somewhat lower than envisaged earlier. Growth among our trading partners and interest rates abroad have been somewhat lower than projected one year earlier. At the same time, banks’ lending margins are somewhat higher than expected. Chart 10: Inflation and capacity utilisation The analyses in the latest Monetary Policy Report published in March suggested that the key policy rate should be held at today’s level in the period to summer 2015, followed by a  2  BIS central bankers’ speeches  gradual increase. With such a path for the key policy rate, there are prospects that inflation will be slightly below, but close to 2.5 percent throughout the projection period. Capacity utilisation may edge down over the next year and thereafter move up to close to a normal level.

Should the outlook for inflation or economic activity show a pronounced change, we still have monetary policy leeway – in both directions. BIS central bankers’ speeches  3
  What will the impact of physical risks be on assets and on the economy – taking into account different possible transmission channels and non-linearities?   What will the impact be on the financial sector, and constructively, how can the financial system play a role in climate mitigation and adaptation? Conclusion Let me conclude. Dealing with the climate crisis is an unprecedented challenge. Building the toolkit to help us do that is similarly unprecedented. But climate scenarios can help us plot the best course to net zero and they can highlight the dangers of straying from that path. The private and the public sector need to build on our early progress, both by recognising what we do know and urgently filling in the gaps for things we do not. Through climate scenario analysis, we have seen much closer collaboration between different groups of academics, other specialists, the financial sector and businesses. This has led to some fantastic work and insights that can drive the action we need now. If we are to rise to the climate challenge, we need to continue in this spirit and tackle some of these big outstanding questions together. In the race to net zero everyone needs to participate, and there are no silver medals. Do join the team.

In other words we are trying to maintain overall, macroeconomic, stability in a much broader sense, in the medium- and longer- term and not just the shortterm; and the Government's inflation target is the criterion against which our success, or otherwise, in achieving that broader macro-economic stability is to be measured. Our problem is that we don't know with any great precision or confidence exactly what is happening on the supply-side:- we don't know that's to say precisely what rate of growth we can hope to sustain. We don't know precisely either what is currently happening, or what is likely to happen looking forward over the next couple of years or so, to overall, aggregate, demand. And nor do we know precisely what the full impact of a change in interest rates will be on aggregate demand, or how long it will take before the full impact is felt. Ours is not a precise science. In fact it's more of an art than a science. And, although we bring as much economic and statistical science to bear as we can, we know that our forecasts, and indeed our policy judgements, are subject to a range of error. They can't be accurate to every last digit. So, we can't expect to hit the inflation target all the time, but by consistently aiming to do so we can hope to get reasonably close to the target on average over time.
6  For a more detailed analysis of forward rates and surveys as measures of monetary policy expectations see Alsterlind, J. and Dillen, H, “Monetary policy expectations and forward premia”, Sveriges Riksbank Economic Review 2005:2. 4  BIS central bankers’ speeches  Figure 2 SEK/EUR exchange rate and 5-year interest rate differential in relation to Germany Per cent  Source: Reuters EcoWin. So, what form does the link between the krona exchange rate and the interest rate differential take in the data? Figure 2 shows the value of the krona relative to the euro and the difference between Swedish and German five-year government bond rates since 1995. If we only look at the past few years, the theory seems to apply rather well as the krona has strengthened against the krona at the same time as the difference between Swedish and German long-term rates has grown. On the other hand, the figure shows that there have been several episodes with both increasing and decreasing interest rate differentials in which the krona has not at all reacted in accordance with this simple view. If we now concentrate solely on the most recent period, one may wonder why interest rate differentials appear to capture shifts in relative market expectations, while during the same period of time it was difficult, as previously pointed out, to directly interpret interest rate fluctuations in terms of market expectations?

oil, energy and mortgage interest)  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  Goods  Services  -3  -3  -4  -4  jan-95 Jan 95  jan-96 jan-00 jan-01 jan-02 jan-05 Jan 96 jan-97 Jan 97 jan-98 Jan 98 jan-99 Jan 99 Jan 00 Jan 01 Jan jan-03 02 Janjan-04 03 Jan 04 Jan 05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Source: The Riksbank  3. Consumer goods 6  6  4  4  2  2  0  0  -2  -2 Importerade varor Imported goods  Inhemska varor Domestic goods  -4  -4  jan-95 jan-96 Jan 95 Jan 96  jan-97 Jan 97  jan-98 jan-03 Jan 98 jan-99 Jan 99 jan-00 Jan 00jan-01 Jan 01jan-02 Jan 02 Jan jan-04 03 Janjan-05 04 Jan 05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Source: The Riksbank  8  BIS Review 25/2005  4.
We may not have the entire panoply of banking strengths, but we have a number of very strong niches which will continue to make Paris a strong hub, which can and should continue to play an important role in the European financial services sector. EUROWEEK: At the same time, would you like to see the big French banks continue to be active on the global stage, where their experience has been mixed? They didn’t do very well in southern Europe, did they? Noyer: There was a time when there was a feeling in the market that we were going to move towards a return to more national banking system, which meant that international diversification was basically a weakness. Things have changed quite a lot and I don’t think anyone would argue that the move by BNP Paribas to acquire Fortis during the crisis was not a clever one. The French banks weren’t alone in believing that because we were supposed to have a single market in Europe, it was natural for banks to expand to neighbouring countries – just as it is natural for banks originally set up in Scotland to expand to England. So it was natural for French banks to see the eurozone and future euro area members in central and eastern Europe as their backyard. Yes, we had the Greek problem, which was painful and costly for Crédit Agricole. But this was really an extreme case and hopefully we’ll never see similar accidents again in our banking industry.

This is essential if we are to avoid distortions in the convergence of competitiveness and therefore prevent a reemergence of the problem of growth moving towards certain parts of the eurozone to the detriment of others. In structural terms a decisive move in this direction was the agreement on banking union which will break the negative feedback loop between banks and sovereigns and will ensure the efficiency of the single monetary policy. Last but not least there was the new concept developed by the ECB saying it was determined to do whatever it took to ensure the stability of the euro. The concept of the OMT has the merit of making it difficult for the market to fight the central bank once it has expressed a determination to do whatever it takes to achieve a certain goal. On the other hand, the OMT is also credible because of the conditionality. It’s not a case of simply endlessly signing cheque after cheque. It is framed within the context policies which are geared towards sustainability. Finally, of course there is the permanent backstop of the ESM. So I think that when we look at all these decisions they amount to a very comprehensive package which addresses all the doubts and questions which have been raised since the start of the sovereign debt crisis. Therefore it is quite natural that 2012 is considered by market participants to have been a landmark in the creation of a new era for the eurozone.
This prediction did not materialise in full. During the second half of the year it seemed clear that there would be some lag between the depreciation and its effect on the price level. This prompts questions about the correlation between prices and exchange rate developments. The short-term relationship of these factors appears to have weakened, which is undoubtedly explained in part by market competition. A more flexible exchange rate policy is also unquestionably at work. In earlier times, when devaluations were made amid extensive announcements, the change was in general rapidly reflected in the price level, since it was fairly certain that it would be permanent. After the exchange rate was made more flexible, it can be assumed that uncertainty about the permanence of changes has led buyers and sellers of goods to take more short-term exchange rate risk than before,  2  BIS Review 27/2001  since high costs are involved in making frequent alterations to prices. However, it is imprudent to ignore the eventual impact of a depreciation on prices, since research offers no support for such a view. This is one of the assumptions on which the Bank bases its forecast from this February, where inflation is expected to run at 4.3% between 2000 and 2001 and 4.6% from the beginning to the end of the year. Next year it is forecast to slow down to 2.7% from the beginning to the end of the year.

The Central Bank does not consider that the depreciation can be justified on economic grounds and, now that uncertainties have been dispelled, conditions are at hand for restoring calm in the foreign exchange market, and possibly even for the recent depreciation to be reversed. Ladies and Gentlemen  BIS Review 27/2001  5  Three major decisions involving implementation of monetary policy have been announced at this meeting. The Government has agreed to present a bill to parliament proposing a new Central Bank Act which entails a modernisation of the legislation on the Bank and will strengthen its position for tackling monetary issues. The Bank welcomes the new bill. The Government and the Central Bank have issued a joint declaration on inflation targets and exchange rate policy reforms. Experience from other countries shows that such a framework has established a firm basis for implementing monetary policy and contributed towards price stability. The Central Bank has also announced its decision to reduce its policy rates by 0.5 percentage points. This is a reflection of the Bank's assessment that the economy will begin to cool this year and that the targets now set for inflation do not require interest rates to be as high as they have been recently. Interest rates will nonetheless remain high and a tight monetary stance is still being maintained. All of these are decisions, which hopefully will consolidate the position of Iceland's financial markets, will contribute towards price stability and bolster the foundations for improved living standards.
After the licensing of Popular Bank, with Albanian capital, the number of banks increased from 15 to 16, and a preliminary license is granted to Union Bank (Albanian capital), which is expected to raise the number of banks to 17 over 2005. The system assets have further increased by 14 percent while there was an increase of banking products and an expansion of their network after the successful privatisation of the Savings Bank from Reiffeissen Bank, Austria. During this year there will be sold the public shares of both the Italian Albanian Bank and United Bank of Albania, which will lead to an increase of effectiveness and banking competition, paving the way to the processes of selling, merging and acquisitions towards a new consolidation of the banking system. The lending activity increased by 38 percent where one can distinguish inter alia the significant growth of medium-term and long-term loans compared to short-term loans. The map of coverage of the country with the banking system has further expanded, including new areas ever covered before. At the end of 2004, the total number of branches reached 88, or 11  BIS Review 41/2005  1  branches more that the end of the previous year, while the number of agencies recorded for the first time a full three-digit number, 100 and the number of the employed people increased by 26 percent.

Whereas it is common to assume the mean is being reported – implying that respondents generate forecasts under symmetric square loss – the evidence suggests that some individuals’ forecasts are biased away from the mean, suggesting forecasting using an asymmetric loss function. Heterogeneity in loss aversion would contribute to the cross-sectional heterogeneity of inflation expectations. Moreover, asymmetric loss would generate a mean bias that will vary in size with the uncertainty of individual expectations, and hence is likely nonconstant over time. This evidence points to another potential advantage of density forecasts: their reporting may be less affected by loss aversion than simple point forecasts. BIS central bankers’ speeches  5  While there are several possible explanations for the large dispersion of inflation forecasts among consumers, this heterogeneity is typically higher than that observed in various surveys of professional forecasters. In closing, I would like to speculate on a few potential reasons as to why the dispersion measured among professional forecasters may be too low relative to a “true” dispersion in expectations. First, asymmetric incentives may induce a desire to conform. If professional survey respondents have beliefs that are far from the consensus, they might face an asymmetric payoff: a small positive payoff for being correct, but a decidedly negative payoff for being incorrect. This may cause a tendency to converge on a consensus belief.
Over 26 million people are unemployed in the EU today, almost 10 million more than in 2007. Low growth, high unemployment and high debt levels are not a good combination. Even though there are signs of a moderate revival of activity abroad, growth may remain low for a protracted period. Real wage growth in Norway has diverged substantially from that observed in Germany and the US. This is attributable to the sharp price rise for Norwegian goods in recent years. Norway’s terms of trade have improved and the gains shared between owners and workers. The wage share has remained fairly stable. Chart 5: Real wages and productivity for mainland Norway Strong growth in activity in the petroleum sector has for many years been an engine of growth also for the mainland economy, generating high growth in output and employment. Since a share of the terms of trade gains has benefitted wage-earners in the form of wage increases, real wage growth in Norway has been considerably higher than productivity growth. But the economic picture for Norway may be changing. We cannot assume that Norway’s terms of trade will continue to improve. Investment in the petroleum sector is levelling off. Output growth in the mainland economy has slackened. When activity in the petroleum sector eventually declines, there will also be a need for economic restructuring in Norway. The business sector will have to seek new markets where competition may be intense. Restructuring may prove particularly demanding given Norway’s high cost level.

The men of Eidsvoll needed a bank that could provide credit in Norway. Norges Bank quickly became an important lender. It was not until the latter half of the 1800s that a private banking system truly came into being. Norges Bank acquired its present-day role of the bankers’ bank and lender of last resort. With private banking came banking crises. The 1899 crash in Christiania triggered the first serious banking crisis in Norway. A real estate bubble in the capital burst and house prices  4  BIS central bankers’ speeches  plummeted. It took more than 100 years for real house prices in Oslo to return to their precrash level.4 Banks play a key role in the payments system and channel credit from savers to investors. If the flow of credit seizes up, problems will rapidly spread through the entire economy, as witnessed during the latest financial crisis. A robust banking system is of benefit to us all. Banks are now adapting to new capital requirements. On top of the new capital requirements is a countercyclical capital buffer. The countercyclical capital buffer will vary over time. It will be increased when financial imbalances build up. In the event of economic stress and large bank losses, banks will be able to draw down the buffer. Chart 7: Key policy rate and bank lending rates Even if the key policy rate is low, interest rates on loans to households and enterprises are not particularly low.