samchain/econo-pairs-v1 huggingface dataset:
It is expected that such support will boost their capital position and as a result ensure these banks to keep up their lending to the economy. Did the French banks really need such a boost to their solvency and capital? Setting aside DEXIA, the answer is not really. DEXIA was very specific: because of its large exposure to US monoline risks, public recapitalisation was absolutely necessary. By contrast, all the other French banks, without exception, have sufficient own funds, be it in terms of prudential requirements or in comparison with their peers from other developed countries. Public recapitalisation is not aimed at making up for faults or weaknesses. Rather, it is to anticipate potential problems. Circumstances are indeed exceptional; even the soundest and most profitable banks cannot take it for granted that they will be able to tap markets to meet their funding and capital needs. As long as such uncertainty pervades and markets continue to fail, it is the public authorities’ duty to protect the credit system and safeguard the financing of the economy. The macroeconomic outlook It is fair to say that the public opinion is worried about the economic consequences of the financial crisis. I understand these concerns. Yet, I do not totally share them. Let me explain. When attempting to understand the situation we are facing, it is tempting to look at the past and draw lessons by mere analogy.

Banks’ balance sheets became overstretched. Off-balance sheet vehicles without any equity proliferated. Monoline insurers  BIS Review 143/2008  1  guaranteed volumes of structured products way beyond what their equity position could bear. As you know, leverage works both ways. It amplifies gains as well as losses. Amplified gains took the form of the US property boom. Amplified losses are with us now. The whole deleveraging process still underway has meant, since its start, that financial institutions unable to raise capital had to suffer very considerable depreciations on some products, which in some instance wiped out their net worth, bringing them to failure. Against this background, what about French banks? Of course, they are not immune to the crisis. Direct or indirect exposures to toxic assets implied that they too had to record writedowns; sometimes substantial ones. The liquidity shortage is also hurting and the prolonged market disruptions have raised their refinancing costs. That said, our banks are sound and robust. Indeed bearing in mind the following. First, French banks exhibit high solvency ratios. Indeed well above minimum prudential requirements and above ratios of many competitors. Second, overall, they remain profitable. It is so not least because they benefit from regular sources of income. They are universal banks; and as such much less susceptible to funding market conditions. Sound and revolving sources of profits are a vital asset at the current juncture. Fourth, French banks can “manoeuvre” and play an active role in the ongoing restructuring of the international financial sector.
If we compare the period 1970-1993 with the past twelve years, we can observe that  BIS Review 21/2006  5  growth was much higher during the latter period of low inflation (almost 3 per cent a year) than during the earlier period of high inflation (almost 2 per cent a year). Real wages have also developed better over the past ten years than during the interim period with higher inflation, despite the fact that nominal wage increases have been lower. During the 1960s and up to the mid-1970s, real wages rose every year, i.e. wage were rising more rapidly than prices. Then followed a period of 20 years when real wages did not rise at all on average. Since the mid-1990s, we have once again enjoyed a period of rising real wages. Higher productivity growth has contributed to this. The current account is showing a very large surplus. Public finances are also showing a surplus, although this does not reach the target of 2 per cent over an economic cycle. On the other hand, unemployment is now higher than before. During a very long period up to the beginning of the 1990s, unemployment was very low in Sweden. Open unemployment varied between 1 and 4 per cent. In recent years, it has varied between 4 and 6 per cent, following a peak of 9 per cent in 1997. When I studied economics at university, we were taught that lower inflation was linked to higher unemployment. This relationship was illustrated by the Phillips curve.

Chart 8: UK market interest rates still responsive to economic data news UK US Euro area  Rolling 1-year sensitivity  Lehman collapse  US presidential election  Draghi "whatever it takes" speech  0.7 0.6 0.5  EU referendum  Eurozone debt crisis  0.4 0.3 0.2 0.1 0.0 -0.1  2004  2006  2008  2010  2012  2014  2016  2018  Sources: Bloomberg Finance L.P. and Bank calculations. Notes: Dotted lines show 2004 – 2017 averages. For details of the methodology, see 'Stirred not shaken: how market interest rates have been reacting to economic data surprises' , Bank Underground blog. Chart 9: Interest rate volatility as percentile of historic distribution since 1997 Percentile 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 Jun. 16  Sep. 16  Dec. 16  Mar. 17  Jun. 17  Sep. 17  Dec. 17  Mar. 18  Sources: Bloomberg Finance L.P., ICE and Bank calculations. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Guidance into Brexit Now, with the excess supply in the economy virtually used up and the Brexit date looming, monetary policy could travel along two broad paths. The first path is consistent with the MPC’s current central projection which assumes a smooth transition to a Brexit that is the average of a range of outcomes. In this case, the Committee’s reaction function will become conventional again, with the path of policy driven primarily by demand.
Depositors will then try to withdraw their funds before the bank runs out of cash and other liquid funds. The bank will in turn be forced to sell its longterm assets – its loans. This is a slow and loss-generating process. Normally, a bank will fail long before it gets that far. 4  At that time, Norges Bank had already injected NOK 10 million in share capital as part of a new share issue totalling NOK 50 million in autumn 1922 (see Rygg, Nicolai (1950) Norges Bank i mellomkrigstiden [Norges Bank in the interwar years], p. 90 (in Norwegian)). 5  Ibid, p. 119. 6  For a description of the relationship between bank lending and deposits, see McLeay et al. (2014), “Money creation in the modern economy”, Quarterly Bulletin Q1 2014, Bank of England. 2  BIS central bankers’ speeches  Until recently, such bank runs were usually associated with the Great Depression of the 1930s. That is, until 2007, when the UK bank Northern Rock failed, with long queues of depositors outside its doors. This was a forceful reminder that banks may also be vulnerable today. The closure of a bank can create fear that also other banks will have to close, and depositors and other investors may begin to withdraw their funding from a large number of banks at the same time. Problem banks can infect other banks, partly because banks have claims on one another.

In the context of investment policy, climate risks are not fundamentally different from other financial risks – they too can trigger or amplify market fluctuations, which influence the attractiveness of certain assets. By opting for broad coverage of entire markets, the SNB takes into account the complexity of the many different risks. We regularly review changes in the risk landscape and factor them into our investment policy where necessary. Furthermore, as an investor the SNB has long had in place a clear set of exclusion criteria for companies that violate Switzerland’s fundamental norms and values. For instance, it does not invest in companies that systematically cause  1  Relevant documents are available on the SNB website: www.snb.ch/en/ifor/finmkt/fnmkt_benchm/id/finmkt_reformrates  Page 3/6  Berne, 12 December 2019 Andréa M. Maechler  News conference  severe environmental damage. Given the monetary policy requirements of our mandate, we are convinced that the approach we have chosen is appropriate. Foundation of the BIS Innovation Hub  In October, the SNB announced that it was collaborating with the Bank for International Settlements (BIS) to establish the BIS Innovation Hub Centre in Switzerland. This Hub Centre, which is scheduled to commence operations at the beginning of 2020 alongside the Hub Centres in Hong Kong and Singapore, will initially focus on two projects. The first will examine the integration of central bank money into a distributed ledger technology infrastructure, with a view to facilitating the settlement of tokenised assets between financial institutions.
In addition to transition risks, climate events are already having increasingly visible effects on activity and food prices. The price of wheat has currently reached a historic high, partly for climate reasons. In Europe itself, the drought in the summer of 2018 had caused the Rhine to drop to a historically low level and slowed growth in Germany by disrupting river transport. Page 3 sur 8 In the longer term, climate change will weigh on the potential growth of our economies. Numerous studies show that higher temperatures reduce labour productivity by about 2% for every degree above 25°C. iv According to simulations by the Banque de France, real GDP in Europe is expected to be 2 to 6% lower in 2050, in the event of a disorderly rather than orderly climate transition. 1.2 For the smooth implementation of monetary policy Climate risk is also a source of financial risk. It is therefore essential, as my colleague and friend Jens Weidmann, President of the Bundesbank, says, that "central banks […] practice what they preach" v for the banks they supervise, i.e. better factor climate risk into their own operations. Moreover, preserving financial stability is a prerequisite for ensuring the smooth transmission of monetary policy, as the NGFS also recently recalled. vi Let's face it: the ECB's balance sheet is "exposed" to climate risk through the securities it purchases and the assets pledged as collateral by banks, to an extent that is insufficiently taken into account.

Our today’s decision on the key rate will support this trend, increasing the attractiveness of deposits and the propensity to save. Lending still continues to expand at a fast pace. In July, the annual growth rate in corporate lending remained close to its six-year high. Growth in mortgage lending has slowed down somewhat after the conditions of the subsidised programme were changed, but is still close to its peaks as well. Unsecured consumer lending remains a matter of our great concern as annual growth rates in this segment continue to rise still, including due to the base effects. If the current trends persist, we admit the possibility of additional macroprudential measures to cool down this segment of the credit market, besides those provided for beginning from 1 October. Monetary conditions continue to adjust to our decisions. At our next meetings, we will consider changes in interest rates and in credit and deposit activity and assess whether these changes are sufficient in order to create such monetary conditions that would help bring inflation back to 4% and stabilise it at this level. As regards the risks to the forecast, their balance is still significantly shifted towards proinflationary ones. 2/3  BIS central bankers' speeches  The key demand-side risk is persistently elevated inflation expectations, fuelled by, among other factors, the still high inflationary pressure in the global economy.
But banks and building societies need to be seen as safe and sound to fund themselves and to secure other business. When banks are under-capitalised, raising capital can improve the market’s perception of their creditworthiness and so make it easier for them to borrow more cheaply. If we are to have a set of banks fit to provide credit and offer payments services to the UK economy, they must be better capitalised and less leveraged than they have been in the past. I want to make one point about this debate which bears repeating: if a bank becomes better capitalised that need not be at the expense of lending to the real economy – capital is actually a source of funding which supports lending. And an improved capital position, for most of the large lenders, need not come about by reducing real economy lending but by a number of actions such as restricting distributions (salaries, bonuses or dividends), by raising new capital or by running down other parts of their balance  BIS central bankers’ speeches  1  sheets. The FPC has always been explicit that banks should not meet the need for more capital by reducing lending to the real economy. The new FPC is one of a small number of macroprudential committees in existence. Few other advanced economies have delegated such macroprudential powers to a technical committee. Will it work to make the UK financial system more robust? I hope so.

Some companies have longstanding pension fund deficits that need to be fed, if not eliminated. Others, particularly some SMEs, ought to be leveraging up as they grow but may be struggling to get sufficient credit (at least in aggregate). And many firms borrow to fund activity in the commercial property sector which remains relatively weak. Collectively the economy as a whole also needs to rebalance. The significant external trade deficit built up pre-crisis needs to close up further to be sustainable in the medium term. If this description of the changing economy is correct, why has it happened and how does that affect the outlook? Until 2008 it did not appear that the UK economy was growing faster than the very long established trend. Maybe that trend had shifted without anyone noticing? Perhaps the growth of the financial sector crowded out other industries and the financial crisis has left a hole that needs to be filled by other sectors? Perhaps globalisation has shifted activity from developed to emerging economies? The rise in global energy prices clearly makes us all worse off and is likely to be an important factor. Or maybe it is just that the crisis in Europe has turned out to be such a big drag on the UK – not just through trade but through financial markets and through general household and business confidence? The source – or sources – of the revision to income expectations will matter in the medium to long term.
There is an argument that such uncertainty is helpful to the insurer because the promise to the policyholder is cautious in terms of accrued income and gains, and the insurer is in control of the investment strategy for the asset pool. The issue with uncertainty around contractual terms is therefore arguably more of a conduct issue to do with fairness in the operation of the contract, but to be clear it will have prudential consequences if the scale of the fairness problem is large enough, as Equitable demonstrated. Compare this with the newer life insurance products in some jurisdictions which contain much more definitive promises, for example that at each valuation point the policyholder has a commitment such that if their asset-pool is valued higher than the previous guaranteed amount, this new amount will feature in the minimum guaranteed return. This reduces uncertainty in one sense relative to With Profits but increases financial risk for the insurer – which is further increased where policyholders can switch instruments at each 6  BIS central bankers’ speeches  valuation point and thus select against the insurer on the basis of a more definitive promise they have made on future returns. The insurer thus risks adverse selection against them. The risks in this type of contract are therefore more clearly prudential. Globally the scale of all of these promises is very large – the full extent is not clear, but it could be well over $ trillion.

The question of whether or not to join the monetary union mainly has to do with long-term aspects of economic development and how we in Sweden view our future political role in Europe. In this perspective, today’s stronger Swedish economy is an argument in favour of adopting the euro now rather than for remaining outside. Some of the Calmfors report’s arguments against participation have been weakened. A decision to join – based on long-term, strategic considerations – is now associated with smaller short-term risks than it would have been some years ago. The report and the Riksbank on economic efficiency The next step of the analysis in the Calmfors report concerned the consequences of membership for resource utilisation, that is, how the long-term output trend might be affected by the impact of membership on, for example, investment, foreign trade and transaction costs. The report focused on the effects that are easiest to measure and assess. The decreased costs for currency exchange and covering foreign-exchange transactions were seen as definitely positive. The report was uncertain both about the magnitude of this effect and about the effects on foreign trade and investment but came to the overall conclusion that they were not particularly large. The Riksbank considered that the report underestimated participation’s effect on efficiency. One reason for this was the report’s assumption that firms could reduce the costs associated with exchange rate movements by covering them in financial markets.
As a counter-example, in 2008 Google launched a predictive model of flu outbreaks based on searches for phrases such as “indications of flu”. 10  This did a terrific job of tracking flu outbreaks in the US in 2009-10. 11  But that model’s predictions broke down spectacularly in the following years. That empirical fragility arose, I  would suggest, from an over-reliance on empirical regularities and an over-adherence to inductive methods. Or, put differently, from too little focus being placed on the deep medical causes of past flu outbreaks. In the first case, empirical fragility arose from too tight a set of axioms and restrictions, from placing too great an emphasis on theory over real-world correlations and historical experience. In the second, empirical 5  Haldane (2016). Popper (1934) and Popper (1959). Bacon (1620). 8 Anderson (2008). 9 For example, Stiglitz (2018). 10 Ginsberg et al (2009). 11 Lazer et al (2014). 6 7  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  fragility arose from too loose a set of axioms and restrictions, from observed empirical correlations being given too great a role relative to theory and causality. In both cases, these mistakes might have been reduced had inductive and deductive approaches been used in a complementary, or iterative, fashion. This iterative approach has a strong pedigree in other disciplines.

Chart: Relative labour costs Improved cost-competitiveness is an important factor in enabling new exports to emerge as the production of oil and gas dwindles. Tourism in Norway has risen markedly in recent years, and exports of traditional manufactured finished products have shown an appreciable increase. However, the increase is not sufficient to compensate for a decrease in exports from other sectors of the mainland economy. Total mainland exports were lower last year than in 2014. The most important reason for this is the marked decrease in oil service industry exports in the wake of the fall in oil prices. But even excluding this part of the export industry, growth in mainland exports since 2014 has been lower than growth in trading partner imports. Chart: Mainland exports Weak export growth partly reflects supply-side constraints in some sectors. Production stoppages at several large companies led to a decrease in industrial commodity exports last year, while salmon lice infestations contributed to a decline in seafood exports. Other service sector segments in addition to the oil service industry also appear to have been adversely affected by the downturn in the global petroleum industry. A weaker krone is also an advantage for Norwegian firms competing in the domestic market. Competitiveness in the oil service industry has improved considerably, particularly after the substantial cost-cutting measures introduced by companies in this industry in recent years. We have recently seen that a larger share of contracts on the Norwegian continental shelf is being awarded to Norwegian companies.
As previously mentioned, various empirical studies suggest that the large purchases carried out in the U.S. and in the U.K. were instrumental in decreasing yields by several tens of basis points, with spillover effects on other asset prices, including mortgage rates and exchange rates. In turn, GDP growth and inflation rates also appear to have been significantly affected. After all, even if they have to use new instruments, central banks cannot avoid their responsibility in ensuring price stability, as long as inflation continues to be determined by monetary policy. Broad-based asset-purchases would allow the ECB to continue pursuing its mandate even under more adverse circumstances. It is however important that other policies also play their part. An extreme adverse scenario that has recently appeared in the public debate is that of a “secular stagnation”.8 This is effectively a situation where the “natural” long run growth rate of the economy falls significantly and permanently, e.g. because of a fall in the growth rate of population or because of a fall in technological progress, or both. This scenario is only still a possibility, but it is illustrative of a broader need for structural policies to again unleash the growth potential of our economies. Public spending should be redirected towards public investment in infrastructures and education. International trade and labour mobility should be fostered. These are the best recipes to ensure that the secular stagnation will remain a purely academic hypothesis.

For example, the International Monetary Fund (IMF) recently revised its estimate of the write-downs on expected losses by financial institutions on bad assets to $ trillion. 1 The scale of these losses remains significant. Further, several weakness in the global economy continue to present risks to the sustainability of the recovery. These include the continued deleveraging by banks and households, rising unemployment, weak fiscal positions in certain economies, and a reduced buffer for further decisive intervention. In addition, with the revival in investor confidence and generally conducive global liquidity conditions, authorities have been keeping a close watch on the asset markets. In Singapore, MAS recently decided to disallow the Interest Absorption Scheme and Interest-Only Housing Loans for private residential property lending. We will closely monitor developments in the property market and the broader economy. Our upcoming Monetary Policy review in October will continue to focus on MAS’ objective of maintaining overall price stability for the mediumterm. In this climate of relief and confidence, it is also easy to lose the sense of urgency to address lessons that can be learnt from the crisis. Much remains to be done, especially in  1  IMF Global Financial Stability Report (GFSR) - Navigating the financial Challenges Ahead dated October 2009. BIS Review 121/2009  1  strengthening risk management. Each of us, as regulators, as industry participants, as research institutes, academics and researchers, has an important part to play. Role of regulators First, there is need for global regulatory reforms.