samchain/econo-pairs-v1 huggingface dataset:
Obstfeld, M. and K. Rogoff (2004), “The Unsustainable US Current Account Position Revisited”, NBER Working Papers 10869, National Bureau of Economic Research, Inc. Obstfeld M., Rogoff K. (2009), “Global imbalances and the Financial Crisis: Products of Common Causes”. Obstfeld, M., J. C. Shambaugh and A. M. Taylor (2009), “Financial Stability, the Trilemma and International Reserves”, NBER Working Paper 14826. Ostry, J. D., A. R. Ghosh, K. Habermeier, M. Chamon, M. S. Qureshi and D. B. S. Reinhardt (2010) “Capital Flows : The Role Of Controls”, IMF Staff Position Note SPN/10/04. Rodrik D. and A. Subramanian (2008): “Why Did Financial Globalization Disappoint?”, http://www.iie.com/publications/papers/subramanian0308.pdf. 14  BIS Review 76/2010

Such changes impact both sides of the insurers’ balance sheet, via the increase in physical risks and transition risks to a low carbon economy, and more work is obviously needed to address them properly. For instance, no common methodology has been developed yet to properly assess the impact of the foreseen increase in the frequency of natural catastrophes. Regarding the exposure to transition risks to a lower carbon economy, the exposures of the French insurers to such a risk have been assessed. At the end of 2017, EUR 250 billion, or around 10% of the total portfolio of the French insurers, was invested in sectors defined as sensitive to transition risk, which can be seen as a significant exposure. This figure is only a ballpark figure, though, as definitions of and methodologies to measure the carbon footprint of assets portfolios are still under construction. These examples show that there is still not sufficient recognition of the need to act rapidly in order to reach the objectives of the Paris agreement in terms of climate change. Regulators’ actions have to give the right incentives for players to act more quickly. In this respect, the Banque de France and the ACPR have set up and are actively coordinating the network of central banks and supervisors for Greening the Financial system (NGFS). Let me conclude by saying that mutual insurers are of course exposed to all the challenges I have mentioned. I trust that they are willing and well equipped to live up to them.
In this context, and as part of our main responsibility to guarantee the stability of the financial system, we - regulatory and supervisory authorities - must ensure that the materialisation of climate risks does not endanger financial stability. Therefore, we must make sure that financial firms address these risks. In particular, we should contribute to identifying climate-risk drivers and their transmission channels, to the adequate measurement of the economic and financial impact of the different risks, and to the definition and development of the potential mitigation and riskreduction measures. If we succeed in incorporating these risks into the decisions of the financial sector, this will translate into a change in the relative prices of financial instruments. And, in turn, that will help to internalise those consequences originating from both transition and physical risks that affect directly providers and users of funds. This will be a powerful and much-needed complement to the use of the fiscal and environmental instruments that are needed to fight against climate change. In practical terms, climate risk can probably be captured in the traditional financial risk categories (credit, market, liquidity or reputational risks). However, several crucial limitations and challenges are coming to light when trying to measure these risks. In particular, there are few sufficiently deep and harmonised databases to analyse and understand the potential effects of physical and transition risks. Data granularity is particularly important given the high heterogeneity of the potential impacts.

Introducing a CBDC will involve such a substantial change in the monetary system that it will require a political decision. It could also involve the question of whether the Central Bank Act would have to be amended. What is the current situation? Norges Bank’s research is now in a third phase, to be completed in the new year. We are working on specifying the features a CBDC should have and considering a range of technical solutions. We are also drawing on other central banks’ experience and plans. Possible strategies for testing and experimenting with technological solutions are also being assessed. The core of a prospective CBDC system will be controlled by Norges Bank. Banks and other third parties could provide end-user services. This is a natural division of roles. Norges Bank would facilitate innovation through the design of the system’s technical core and regulatory framework. The consequences a CBDC could have for the financial system depend entirely on its design. The design could influence which claims the public decide to replace with CBDC and on what scale. If CBDC replaces cash, banks’ balance sheets will not be affected – the public will simply replace one claim on the central bank with another. If the public replaces bank deposits with CBDC, the consequences for the financial system could be more severe. Banks’ access to deposit funding could be reduced and banks’ funding costs could rise. During a financial crisis or other situations of high uncertainty, the public can suddenly withdraw bank deposits.
The debate regarding the extent to which monetary policy should attempt to counteract the unsustainable development of credit growth and asset prices – a policy often called “leaning against the wind” – has been spurred by the current crisis. Those who have doubts about such a policy maintain that it may entail an unnecessarily tight monetary policy, with costs in the form of a low utilisation of resources and low inflation, at the same time as monetary policy is deemed to be a blunt instrument to use against financial imbalances. According to this assessment, it would require excessively large and costly interest rate increases to prevent these imbalances from arising. Such imbalances, of course, frequently build up in  3  Lars E.O. Svensson discusses this in more depth in his speech ”Flexible inflation targeting: Lessons from the Financial Crisis”, held on 21 September 2009 at De Nederlansche Bank, Amsterdam. times of great optimism and excessive future confidence, and, in such a situation, increased interest rates may have a limited effect on lending and asset prices. It is entirely possible – and, in my opinion, perhaps even likely – that this assessment is correct, but I would like to emphasise that there exists a significant degree of uncertainty at this point in time. So far, research has not had much to say about the ability of monetary policy to counteract financial imbalances. Naturally, this observation also implies an argument against any policy that strongly advocates a monetary policy actively aimed at preventing financial imbalances.

But when the crisis came, capital was insufficient, forcing a number of governments to contribute tax revenues to prevent a collapse of the financial system. At present, intensive work is underway in various international forums, above all in the Basel Committee, to develop new regulations covering the amount of capital a bank must hold in relation to its commitments. Capital adequacy requirements will be placed on liquidity risks, which previously lay outside such regulations, but this is only one of many areas in which capital requirements will be strengthened. New forms for equity are also being discussed, for example bond loans that, in the event of a crisis – but without requiring the bank to cancel payments – can automatically be converted into contingent capital. Another problem has been that the supervisory structure, which has generally been concentrated around the individual banks, missed the risks building up in the financial system as a whole. One example of this has been the tremendous growth of credit derivatives over the last decade, which, together with the emergence of complicated and hard-to-value structured products, have been given much of the blame for causing the crisis to develop in such a serious direction. An immediate example for us is the lending in euro in the Baltic countries, whose exchange rates are tied to the euro, but where the fiscal policy framework, at least in a couple of countries, has turned out to be weak. This problem is also being discussed intensively in many places around the world.
In addition to the low level of housing construction, demand for housing has risen mainly in metropolitan areas due to the greater numbers moving to these regions during the latter part of the 1990s. It is not surprising that a relatively constant, low supply, as well as high demand, should have contributed to the substantial price rises. Thus, low interest rates, an increase in disposable income and a low supply of new housing, together with high demand, are the fundamental factors that I believe have driven the rate of price increases from the mid 1990s. They also suffice to show that current price rises should not be described as an expectations-driven “bubble”. The same analysis can be performed for several other countries experiencing similar developments in their housing market, in particular the US. So did we have a housing market bubble during the crisis years at the beginning of the 1990s? I don't really believe that we did, at least not in the sense that homes were being bought for the purpose of speculation with a view to being sold once prices had risen further. Yes, prices rose sharply, especially in metropolitan regions, but these were due to reasons of a fundamental nature. Households' willingness to pay increased in line with their income during the economic upswing, the deregulation of the credit market led to the removal of some financing obstacles, and the supply of housing was, in the short term, highly inflexible. This is enough to fuel a steep rise in prices.

In particular, their application should not entail a shift of the riskiest activities to the shadow banking system. In sum, before introducing new structural measures, their costs and benefits should be evaluated from a global perspective, bearing in mind progress in other areas of regulatory reform, especially those concerning new resolution frameworks and the treatment of systemic banks. In any event, it seems reasonable to observe the principle that regulation should impose stricter requirements on the riskiest activities. A clear distinction should be drawn between banks whose trading volume is relatively small and geared chiefly to providing services to their customers, and those other banks with a more marked risk profile. Strengthening of and convergence in accounting standards The last issue I wished to address concerns accounting rules. In April 2009, the G20 called on the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) to adopt measures to strengthen and more closely align their respective standards. As a result, the treatment of business combinations and the consolidation of financial statements have been reviewed, with particular emphasis on the specific features of special-purpose vehicles. Work has also been done on defining fair value and on the criteria to be taken into account in its determination. However, accounting standards-setters have not yet reached agreement on the treatment of impaired financial assets (through credit risk provisions, as they are traditionally called).
High inflation, prevailing uncertainties and tighter financing conditions dented private consumption and investment, which fell by 0.9 per cent and 3.6 per cent respectively. Survey indicators for economic activity have steadily improved over recent months, coinciding with reduced concerns about energy shortages and price increases. These factors coupled with the ongoing support provided by fiscal policy and the continued resilience of the labour market, are expected to support a recovery over the coming quarters. Accordingly, projected growth for 2023 has been revised up to 1.0% in our latest staff projections, which also foresee growth of 1.6% in both 2024 and 2025. It has to be stressed, though, that the ECB staff projections were finalised before the recent emergence of financial market tensions. As such, these tensions imply additional uncertainty around the baseline assessments of inflation and growth. I will now turn to inflation, which has decreased from its peak in October owing to a sharp drop in energy prices and stood at 8.5% in February. Input cost pressures, which are partly related to the past surge in energy costs and the impact of supply bottlenecks and re-opening effects, are all weakening. However, accumulated price-pressures are still spreading through the economy with a delay. As a result, inflation excluding energy and food, has continued to increase, reaching 5.6% in February. Wage pressures have strengthened on the back of robust labour markets and employees aiming to recoup some of the purchasing power they have lost to high inflation.

Jean-Pierre Roth: The economic situation – la vie en rose? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at a meeting with representatives of Ticino industry, Centro di studi bancari, Vezia, 28 November 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is true that our exports continue to benefit from a buoyant global economy, that areas of concern such as the volatility of oil prices or the possibility of a significant and lasting downturn in the US economy have partially receded, and that the current economic recovery has led to an improvement in the labour market without endangering price stability. Is this la vie en rose (living life through rosetinted spectacles)? A brief outline of the situation in the national and international economies is given, indicating that the overall perspective remains favourable. It concludes with a concise evaluation of the risks, showing that the current euphoria may conceal significant risks that we must not lose sight of. BIS Review 116/2006  1
In addition, the Hong Kong Monetary Authority itself has the power to pass on information to foreign regulators to assist them in the exercise of their functions. At present, however, this power to disclose does not extend to information about individual customers, though this is an area which we are intending to review in the light of the recommendations of the Basle Committee. In the meantime, we do not impose constraints on access to customer information in the course of on-site examinations in Hong Kong by overseas regulators. What reservations I have about consolidated supervision therefore relate mainly to how the system operates in practice: first, it may of course be difficult in practice to assess the adequacy of consolidated supervision by a home supervisor and how much reliance should be placed on it by the host supervisor. As mentioned above, the Core Principles for Effective Banking Supervision will provide a useful checklist in this respect, but there will still be the problem of whether the Principles are being effectively implemented. A more active monitoring role by the International Monetary Fund may help in this respect.

Within this framework, a more detailed examination of the struggle against inflation process in Turkey reveals that decline in inflation also helped mitigate the fluctuations in inflation and this means less uncertainty and less volatility in economy. While decreased uncertainty brings along decline first in risk premium and then in nominal as well as real interest rates, it decreases borrowing costs from the consumers’ point of view, and opportunity cost of investments from the producers’ view point. At this point, I would like to draw your attention to a risk factor in which the decline in borrowing costs has a significant role. Under chronic inflation conditions, consumers tend to renew durable goods such as automobiles, white goods and alike less frequently. However, when a certain point is attained in the process of reducing inflation, the consumers start purchasing their postponed needs. Demand for durable goods that the consumers defer to purchase tends to increase rapidly in the face of decline in inflation and fall in the borrowing costs. The recovery in demand is not yet at a level that could create an inflationary effect since it is coupled with a rise in productivity. Provided this demand does not assume a permanent nature and lasting economic stability is attained, it is expected that such fluctuations will become less frequent and less intense, but still, it should be monitored very closely. 2  BIS Review 63/2004  Meanwhile, there is another point that I would like to emphasize.
Decisions about ERM2 participation and the exchange rate on entry are made jointly by the finance ministers of the euro countries, the ECB and the central bank governors and finance ministers of other ERM2 participants (at present Denmark). The first step is taken in practice in the framework of the EU's  BIS Review 65/2002  1  Economic and Financial Committee. It is only if this Committee fails to reach a consensus that the central bank governors and finance ministers concerned engage in direct negotiations. When the time comes - in the event of full participation in the monetary union - for the conversion rate with the euro to be locked irrevocably, this is decided unanimously by the euro-country members of the Ecofin Council together with Sweden. On every previous occasion, these decisions have been based on the central rates in ERM/ERM2. The choice of a central rate and a conversion rate A premise when setting the Swedish krona's central rate in ERM2 is that this will also be the conversion rate for joining the monetary union. Having said that, I want to emphasise that there are no absolute criteria for which central rate or final conversion rate that is most appropriate. What we can do is use various models, expert knowledge and common-sense to try to narrow down a reasonable interval and analyse the consequences of different choices. The real exchange rate is a natural starting point A central concept in this context is the real exchange rate.

BIS Review 27/2005  1  measurement issues currently explain between 0.5 and at most 1 percentage point of the growth differential between the EU and the United States.2 We should consider the upper limit of this range as a litmus test to the question of whether there is a structural growth differential between the EU and the United States. In addition to various measurement differences, about one percentage point of the difference in real GDP growth rates between the EU and the U.S. can be attributed to the higher growth rate of labour input in the U.S. for the period between 1980 and 1995. This is attributable to a stronger increase in the working population in the U.S. and a marked relative decline of effective working hours in the EU. Factors causing this decline in individual labour input can be divided into two categories: First, numerous rigidities in European labour markets were introduced over the past decades: working hour restrictions, minimum wage agreements, and other restrictions on the conditions of hiring and firing employees. These restrictions are often valid over a broad range of sectors and geographic areas irrespective of economic fundamentals. Second, changes in taxing labour evolved over time with significant tax cuts realized in the United States.3 In total, overall labour input for the period 1990 to 1995 increased in the U.S. by an average of 1.2% per annum against a decrease of 0.8% per annum in the EU-13. This is pictured in Graph 2.
Unit labour cost growth declined to an annual average of 0.6% during 2005-2007, compared to 3.9% during 2001-2004. This improvement was driven by a pick-up in productivity and moderate wage awards. Wages and productivity drifted significantly apart in 2008, however, a divergence which will have harmful consequences if allowed to persist. Progress has been registered in other areas too, though at times not to the same extent as in other EU countries. In the labour market, the employment rate increased from 54% in 2004 to 55.2% in 2008, driven by a steady rise in the female employment rate, while the unemployment rate fell to a record low of 5.9% in 2008. In education, early school leavers declined from 42% in 2004 to 37.3% in 2007, although this is still well above the 15% average EU ratio. 4 Education attainment levels increased from 51% to 55% during the same period. 5 Since the start of this decade, the student population pursuing further and higher education has increased by an annual average of over 5%. 6 An improvement in human capital goes hand in hand with greater employability. In 2008, the employment rate of those with a tertiary level of education stood at 86%, compared to 46% for those with only a secondary level of education.

As I stated in my introduction, such an assessment is very useful for us, and we will take the committee's recommendations on board in our work going forward. Thank you for your attention. 3/3  BIS - Central bankers' speeches
A bail-in ensures that losses are borne by the owners and creditors of a bank, by those who took the risk and earned the return. So the first question is: what if they were not aware – or were not made aware – of the risks they were taking? For it is sometimes the case that retail investors are among those who are bailed in. These are not professional investors but ordinary people who were trying to build up funds for retirement, for instance. For such people, a bail-in is not just a financial loss; it is a personal tragedy. We must avoid such tragedies. But we must do so in a way which is in line with the basic idea of bail-in. And this is as much a question of consumer protection as of financial education. In terms of consumer protection, we need disclosure requirements which are clear and easy to understand so that all investors are aware of the risks they are taking. In terms of financial education, we must ensure that all investors have a basic understanding of finance, and in particular of the relationship between risk and return.In both areas, I see a lot of room for improvement in Europe. And there’s more we can do. We could set a minimum threshold of € for investing in subordinated debt instruments. This too would help to steer retail investors away from risky financial endeavours. Here, we would need a European approach, of course.

Long taken for granted, this has become the holy grail of banking regulation and supervision. And it has become the ultimate goal of all the relevant reforms that have been undertaken since the crisis. And much has been done. We have revamped the global standards for capital and liquidity – Basel III. Rules for banks are now much stronger than they were before. And the same is true for supervision. Just think of European banking supervision, which was set up in 2014. All this will help to make banks more resilient, so that they can reliably serve the economy. But there is one thing which neither rules nor supervisors can do. They cannot prevent each and every bank from failing. And in my view, we should not even try to. The possibility of failure is inherent to any kind of business, and it is a core element of well-functioning market economies. 1/9  BIS central bankers' speeches  No, it is not the job of supervisors to keep individual banks alive. We, in particular, must not lower our standards to cater for the weakest bank. It would also be wrong to assume that each bank, even the weakest, just needs time to sort itself out. It would be wrong to assume that the local economy just needs to grow for a few more years for the bank to recover. The result would be weak banks that stagger on, zombie-like, barely able to survive in good times.