samchain/econo-pairs-v1 huggingface dataset:
The Government has indicated in the National Budget that monetary policy should be the first to react when the outlook for the economy changes. A situation may nevertheless arise in which an active use of fiscal policy is required, either because capacity utilisation is particularly low, or because pressures in the economy are very strong. Weak developments in the global economy over the last few years are reflected in equity prices. Prices on most stock exchanges have fallen considerably since the beginning of the year. Equity prices in the various countries have a tendency to shadow each other. The impact of the decline has been felt by many countries simultaneously. Developments this summer indicate that the international recovery may be weaker, and come later, than we had expected earlier this year. The global fall in equity prices has also spread to the Norwegian stockmarket. There is a close relationship between equity prices in the US and in Norway. A sharp fall in share prices may also have a dampening impact on activity in the Norwegian economy, even if the effects are considerably milder here. The wealth of households that own shares will diminish, and they will reduce their consumption. It will also be less attractive to invest in new production capacity. Share price movements may also have a negative impact on business and household expectations. Registered unemployment has edged up over the past year, to 3.3 per cent in October (seasonally adjusted 3.5 per cent).

Risk is less concentrated in the banking system, where moral hazard concerns and other classic market failures are more likely to be an issue, and spread more broadly across a greater diversity of institutions. And yet this overall judgment, that both financial efficiency and stability have improved, requires some qualification. Writing a decade ago about the history of the financial shocks of the 1980s and early 1990s, Jerry Corrigan wrote that these same changes in financial markets we see today, though less pronounced then than now, created the possibility that financial shocks would be less frequent, but in some contexts they could be more damaging. This judgment, that systemic financial crises are less probable, but, in the event they occur could be harder to manage, should be the principal preoccupation of market participants and policymakers today. What factors might contribute to this risk, a risk that could be described as the possibility of longer, fatter tails? One reason is a consequence of consolidation. The major banks are larger and stronger today, and it would take a much larger shock to make them vulnerable than was true in the past. But in that event, the consequence of their failure could be greater for markets. Another reason is the consequence of leverage.
See, for instance, Michael Mussa, “Asset Prices and Monetary Policy”, in: W. Hunter, G. Kaufman, and M. Pomerleano (eds. ), 2003, Asset price bubbles: The implications for monetary, regulatory, and international policies. Cambridge and London: MIT Press, 41-50; Stephen. G. Cecchetti, Hans Genberg, John Lipsky, and Sushil Wadhwani, 2000, "Asset Prices and Central Bank Policy", Geneva Reports on the World Economy 2, CEPR and International Center For Monetary And Banking Studies. ; or Otmar Issing, 2002, "Monetary Policy in a Changing Environment", Contribution to the Jackson Hole Symposium on Rethinking Stabilization Policy, Federal Reserve Bank of Kansas City. 13  See Bertrand Rime, 2005, “Too Big to Fail”, The Financial Regulator 10, 47-51. 14  See Alan Blinder, 2002, "Through the Looking Glass: Central Bank Transparency", Center for Economic Policy Studies. Working Paper No. 86; Michael Woodford, 2005, "Central Bank Communication and Policy Effectiveness" NBER Working Paper No.11898; Otmar Issing, 2005, "Communication, transparency, accountability: monetary policy in the twenty-first century," Review, Federal Reserve Bank of St. Louis, March, 65-83; or Alan Blinder, Charles Goodhart, Philipp Hildebrand, David Lipton, and Charles Wyplosz, 2001, “How do central banks talk?”, Geneva Reports on the World Economy 3, ICMB Geneva. 4  BIS Review 141/2007  its accountability in a democratic society. Moreover, we have learned that transparency renders monetary policy more effective and helps achieve low and stable levels of inflation. 15 Many central banks have augmented transparency beyond a clearly stated inflation objective, the publication of inflation reports or published minutes of board meetings.

The risk premium in the interbank market has generally driven up the 3-month LIBOR which serves as the reference rate for the pricing of  15  Georgios Chortareas, David Stasavage, and Gabriel Sterne, 2002, “Does it pay to be transparent? International Evidence from Central Bank Forecasts”, Review of the Federal Reserve Bank of St. Louis, July/August, 99-117. 16  Frederic S. Mishkin, 2004, “Can Central Bank Transparency Go Too Far?”, NBER Working Paper No. 10829, p. 25. 17  In fact, the Bank of England would have preferred to act covertly, but the market abuses directive prevented this (http://www.guardian.co.uk/business/2007/sep/21/14). BIS Review 141/2007  5  credit. At the same time, interest rates on risk-free securities such as Government notes have declined. The result is a significant increase in the TED spread (the difference between an uncollateralized interbank loan and the risk free rate of the same maturity). With the 3-month LIBOR rising, central banks faced an important monetary policy decision. In countries where the official target rate is a central bank rate, for instance, the euro zone, the 3-month LIBOR became increasingly disconnected from the official target rate (typically a repo rate of two weeks or less). As you can see from Graph 1a, the ECB held its official target rate (the two-week repo rate) constant and therefore tolerated an increase in the 3month LIBOR.
Durmuş Yılmaz: The role of competition policy and practices in attaining macroeconomic objectives Speech by Mr Durmus Yılmaz, Governor of the Central Bank of the Republic of Turkey, on the occasion of the 11th Anniversary of the Turkish Competition Authority, Ankara, 26 March 2008. *  *  *  Ladies and Gentlemen, First of all, I would like to greet you all. We have convened here on the occasion of celebrating the 11th Anniversary of a distinguished institution of Turkey. The Turkish Competition Authority has served its critical function in the development process of Turkey with the studies it has conducted. Let me take this opportunity at the very beginning of my speech to say that I believe the contributions of the Competition Authority to Turkey’s development will continue in an increased capacity in the upcoming periods. The main objective of public policies is to increase prosperity. Under the current circumstances, where economies are becoming increasingly interrelated, raising the level of prosperity of our country is contingent on increasing the share it gets from the global value added. In the post-2001 period, the Turkish economy grew by approximately 7 percent on a year-onyear basis and considerably increased its share in the world export market. During this period, the private sector was the engine for growth, with the greatest contribution from the industrial sector. In the 23-quarter periods of uninterrupted growth process, private sector investments increased by 150 percent in real terms.

Naturally, the Turkish Competition Authority and the Central Bank are among these public institutions. Strong relations among public institutions including the last two are critical for the Central Bank to reach price stability and for Turkey to attain a higher level of prosperity. Before ending my speech, I would like to reiterate my belief that the Turkish Competition Authority will further contribute to the level of prosperity in Turkey in the upcoming years. I would like to thank everyone who had a hand in the organization of this conference and for your attention. BIS Review 37/2008  3
Under the scenario of a more moderate fall in GDP, the public debt/GDP ratio would rise to around 115%, a similar figure to that projected by the Spanish Government, the European Commission, the IMF and the AIReF. Under the harshest Banco de España scenario, the debt ratio would in fact stand at over 120% of GDP (some 25 pp higher than at end-2019).4 Under the assumption of economic recovery projected for 2021, the public debt/GDP ratio would stabilise around its 2020 levels or fall slightly. This projected path is not specific to Spain: in its latest World Economic Outlook, the IMF estimated that the increases in the deficit and debt ratios, as a percentage of GDP, might rise in 2020 to a comparable scale across the advanced economies. Likewise, on the European Commission’s latest forecasts, public debt in the euro area as a whole will stand this year at 102.7%, and exceed the 100% threshold in another six countries, as well as Spain. 4  Comparisons between Institutions on the budget deficit and public debt increases forecast for this year are hampered by the timing of the preparation of the projections and, therefore, by the fiscal measures approved that have been taken into account, beyond the differences between institutions stemming from the different macroeconomic scenarios and from the estimated responses of public revenue and spending to the projected downturn in activity.

The forthcoming NGFS work should therefore also focus on shorterterm horizons (2030, and not only 2050) as the transition to a low-carbon economy may be less linear than anticipated, with tipping points accelerating the transition in a disorderly way. [Slide] We generally need to better understand the long-term trade-off, in terms of GDP, between transition and physical risks and the cost of delayed action. The chart breaks down the GDP losses under three scenarios into the costs of transition and physical damages. Under the “Paris Agreement” scenario, GDP would be 5% lower in 2060 and around 7% lower in 2100, and most of this reduction can be attributed to transition policies. Under the two “Too-little too-late” scenarios, the transition costs are limited, but by the end of the century the impact of physical risks becomes much larger, leading to overall losses that could range between at least 10 and 20% of world GDP level. From an economic and rational standpoint, the prescription is clear-cut: an orderly transition would require a governmental forward-looking guidance, sending long-term signals and anchoring credible but ambitious commitments. This “climate forward guidance” should include an appropriate pricing of carbon; and as long as we don’t have such global pricing, a carbon border adjustment mechanism (CBAM), as recently put forth by the EU in order to prevent carbon leakage is appropriate. We all know how politically sensitive these issues are, domestically as well as internationally.
Does it have a sustainable business? Are the people running it competent, open and honest? With that in mind, the types of activity undertaken by supervisors became well-established, particularly as supervisory approaches evolved, and indeed began to conform, in the latter half of the twentieth century. This evolution has laid the groundwork for the supervision that we undertake at the PRA today, with some obvious exceptions such as cyber risk which calls for innovation in our approach. It would be hubristic to condemn and discard all the regimes of the past, or to insist that our approach is, for the first time in supervisory history, perfect. But I am confident that we have distilled the best (often basic) elements of supervisory practice from our mixed heritage – forward-looking, judgment-based, focused on the key risks – and combined these with a healthy dose of common sense to deliver the PRA’s approach. So what conclusions should we draw from the evolution of supervision over the past 100 years? Will a supervisor in 2117 look back and say the PRA had the best way of doing things? I doubt it – supervisors of the future will surely identify ways to improve on various elements of our current supervisory model. Our approach here at the PRA is a good one but we would be wise to have some humility about it.

Large-scale asset purchases, forward guidance on the future path of interest rates, and seven years where the federal funds rate hovered close to zero, were all measures necessary for the full recovery from the Great Recession. 3/4  BIS central bankers' speeches  A decade later and the FOMC has slowly but surely been moving monetary policy “back to normal.” We’ve moved interest rates closer to neutral, scaled back on forward guidance, and are over a year into the process of winding down the balance sheet.5 Our goals throughout the policy normalization process have been twofold. First and foremost, to support a strong, sustainable expansion of the economy. Second, to do this in a predictable and transparent way that creates as little disruption as possible.6 So far, this plan has worked very well, with the economic expansion nearing record duration. But it is important to stress that if circumstances change, I will reassess our choices regarding monetary policy, including the path of balance sheet normalization. Data dependence applies to all that we do. And, as always, if the outlook deteriorates in a material way, we stand prepared to deploy all our policy tools as appropriate in support of the economy. Conclusion I’d like to conclude where I began, with the dual mandate. There’s sometimes a view that Fed policymakers are fixated on two data points: inflation and employment. And the reason is that’s how we’re judged by Congress at doing our job.
For a few years now, UK companies’ domestic operations have been producing surplus cash flows: £ or  2  BIS Review 47/2006  about 1% of GDP, in 2005. The counterpart has, of course, been an accumulation of financial assets. A lot of that has gone in to the money markets – in particular, holdings of call-deposits with banks (Chart 4) and investments in money market funds. In placing that liquidity, you should be in a position where you need to negotiate only the spread paid relative to a stable money market rate, not the underlying rate itself. Our overhaul of the system should deliver that. By taking the noise out of the sterling money markets, we aim to achieve greater stability and greater transparency. That won’t revolutionise your businesses, but I trust that it will bring a welcome reduction in the avoidable uncertainties you confront. Business risk management and pension-scheme uncertainties At an aggregate level, the recent financial management of the company sector has, in fact, posed some puzzles about your assessment of uncertainty and risk. This has been important to our understanding of what is going on in the money markets, and indeed financial markets more generally, as part of the backdrop to our role of promoting monetary and financial stability. The surplus cash flows I described earlier, in the context of your treasury management, are a product of UK cash profits having exceeded, by some margin, business investment (Chart 5). The same is true across the G7 economies as a whole.

These attributes are a prerequisite for a vibrant international financial system and are supportive to global trade. A regime with many reserve currencies would imply a well-governed international economy. This should facilitate global investment, resulting in rising productivity growth and improving standards of living. In other words, I don’t see this as a zero-sum game. If other countries’ currencies emerge to gain stature as reserve currencies, it is not obvious to me that the United States loses. This is assuming, of course, that the emergence of alternatives is being driven by their progress, rather than by the U.S. doing a poorer job in satisfying the attributes that I discussed earlier. Having more countries achieve the stature of having a reserve currency may also be desirable for other reasons. First, with more reserve currencies available, portfolio diversification opportunities are enhanced. This is desirable because, all else equal, it would allow investors to move further out on the risk/return frontier. Second, more currencies are likely to be close substitutes, which could dampen currency volatility. With many viable reserve currencies available, no particular one would necessarily have to bear the bulk of any adjustment. The dollar’s dominant reserve currency status has sometimes been referred to as the United States’ “exorbitant privilege,” implying that the U.S. benefits extraordinarily from this privileged status. I’d argue that the situation is much more nuanced. Yes, this status does allow the U.S. to benefit from seigniorage. More than half of all U.S. currency outstanding is held abroad.
The year I joined this institution, 1983, was when the problem of the ethnic issue started, unfortunately. And it raged on for almost thirty years. So I do not think any of us have really experienced that normalcy and as a result, people are not really prepared to take on the challenges of what a normal market economy looks like. Hence, it is really incumbent to us, to define for the country, for the government, for the people. And to propagate that message  BIS central bankers’ speeches  3  we have to be much more forceful in-terms of using the media, whether it is the newspapers, the television or social media, to bring forward views on what we think the future of Sri Lanka will look like. Obviously in consultation with the government, we have people, as I said, in various institutions of government who can coordinate with us to come up with a comprehensive message, and using our annual report and other publications, we can continue to project that report, that view, that map of the future and engage with the government on how that will be achieved, all the while stressing the need for financial stability, the control of inflation and for seeing that economic development takes place in an optimal manner. That I think is really the challenge for us. We have to imagine what the future is going to look like. And at the moment I think this is the best institution to do so.

The statement notes that the Committee “decided to keep the target range for the federal funds rate at 0 to ¼ percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6–1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longerterm inflation expectations continue to be well anchored.”3  2  Federal Open Market Committee statement, September 18, 2013. 3  Federal Open Market Committee statement, September 18, 2013. BIS central bankers’ speeches  3  One noteworthy question that emerged following the meeting was why the Committee did not begin to reduce the pace of asset purchases. Although I can’t speak for the Committee, I can provide some reasons for my own decision. To begin to taper, I have two tests that must be passed: (1) evidence that the labor market has shown improvement, and (2) information about the economy’s forward momentum that makes me confident that labor market improvement will continue in the future. So far, I think we have made progress with respect to these metrics, but have not yet achieved success. With respect to the first metric, we have seen labor market improvement since the program began last September. Over this time period, the unemployment rate has declined to 7.3 percent from 8.1 percent.
33  See Jon Elster (1995): “Forces and Mechanisms in the Constitution-Making Process”, in Duke Law Journal, 45, no. 2, pp. 364-396. 34  Norsk Retstidende (Norwegian journal of law) 1994-1036, p. 1044. 35  The Storting had adopted a Bill on transparency in the voting process four times since 1818, but assent to the Bill was refused each time. 8  BIS Review 140/2009  records in the Supreme Court. 36 He argued that public disclosure was “the most effective means of ensuring confidence and respect for any government authority is by awakening a noble pride among senior civil servants and hence instilling in them respect for the voice of the people”. 37 The Supreme Court had a different view and argued that it could undermine confidence in the Court if the public discovered doubt or a lack of competence among judges. 38 Today, there seems to be little controversy surrounding the disclosure of voting , records in the Supreme Court. 39 40 Norges Bank is not only responsible for securing price stability, but also has a duty to promote stability in the banking system and financial markets. In principle, the same transparency considerations apply here, but with certain exceptions. 41 Many of us were surprised and experienced associations with the interwar years when we saw television footage of depositors queuing at the doors of the crisis-hit British bank Northern Rock in 2007. In a situation where a bank’s solvency comes into doubt, depositors may rush to withdraw their cash.

Clayton, G. British Insurance, London, Elek, 1971. Debbage, S. and Dickinson, S. ‘The rationale for the prudential regulation and supervision of insurers’, Bank of England Quarterly Bulletin, Q3 2013. Finsinger, J. and Pauly, M. (eds), The economics of insurance regulation, London, Macmillan, 1986. HeinOnline, Citation: 4 Statutes of the Realm 978, 1547–1624. Leonard, A. ‘Contingent commitment: The development of English marine insurance in the context of New Insitutional Economic, 1577-1720’, in Coffman, D’Maris, Leonard, A.B. and Neal, Larry (eds): Questioning ‘credible commitment’: perspectives on the rise of financial capitalism, Cambridge, Cambridge University Press, 2013. Lewin, C.G. Pensions and Insurance Before 1800: A Social History, East Lothian, Tuckwell, 2003. Persaud, A. ‘How Not to Regulate Insurance Markets: The Risks and Dangers of Solvency II’, Peterson Institute for International Economics, PB15-5, April 2015. Pearson, R. and Lonnborg, M. ‘Regulatory Regimes and Multinational Insurers before 1914’, The Business History Review, Vol. 82, No. 1, (Spring 2008), pp. 59–86. Plantin, G. and Rochet, JC. When insurers go bust, Princeton, Princeton University Press, 2007. Raynes, H. A History of British Insurance, London, Pitman, 1968. Rawlings, P. ‘What can history tell us about insurance regulation?’ in Andromachi, G. and Goldby, M. (eds), Systemic Risk and the Future of Insurance Regulation, London, Informa Law, 2015. Thoyts, R. Insurance Theory and Practice, Oxford, Routledge, 2010. BIS central bankers’ speeches  9