samchain/econo-pairs-v1 huggingface dataset:
In contrast to most European countries, Norway also has room for manoeuvre on the fiscal front, if necessary. But – as in the rest of Europe – the authorities cannot solve the deeper challenge, namely the need to establish new private sector activity. This is a task for the business sector. What the authorities can do is to establish framework conditions that promote innovation and growth. Hayek and Keynes In my introduction, I posed the question: can crises be curbed? quickly followed by: can misjudged attempts to curb a crisis sow the seeds of an even deeper crisis? Keynes and Hayek did not come to agreement on how a crisis should be managed. Their debate is still relevant today. Keynes advocated the use of public spending to curb crises. 6  See Financial Stability Board (FSB) (2011), “Key Attributes of Effective Resolution Regimes for Financial Institutions” and FSB (2015) “Principles on Loss-absorbing and Recapitalisation Capacity of G-SIBs in Resolution”. 7  The first pillar of the European Banking Union, the Single Supervisory Mechanism (SSM), with the ECB as supervisory authority for the 130 largest banks in the euro area, started in November 2014. The second pillar of the European Banking Union, the Single Resolution Mechanism (SRM), became operational in January 2015 and the joint crisis resolution authority, the Single Resolution Board, started its work. 6  BIS central bankers’ speeches  Hayek warned against such a policy: the misjudged application of government measures could easily lead to deeper crises and credit bubbles. Both were right.

Crises can and should be curbed, using measures to strengthen the economy’s immune system as well as measures that reduce the impact once the crisis has erupted. This means that government intervention using public funds may be the right approach in a situation of decline and deflation, low interest rates, high unemployment and pessimism. But crisis-related measures must also be focused on the deeper causes of the crisis in order to strengthen economic sustainability over time. Countercyclical policy must not become counterstructural policy. Crises are not necessarily just an evil. A crisis can lead to reforms and measures that foster progress, as it did in Norway in the 1990s. The regulation of the banking sector in the wake of the global financial crisis is another example. Experiences such as these may give us some comfort in the bleakest of times. The world will go on, even after a deep crisis. Thank you for your attention. BIS central bankers’ speeches  7
What is really important is that national budgets should not lead to structural imbalances that may jeopardise the sustainability of public finances and the proper functioning of Monetary Union. This is the best formula for contributing, at the current juncture, to reinforcing agents’ confidence and boosting the favourable effects of European economic integration. Against the background of the exceptional institutional characteristics of European monetary integration, it cannot be ignored that fiscal indiscipline in specific countries has negative externalities for the area as a whole; consequently, it is vital to maintain rules - such as those ìn the EU Treaty and the Stability and Growth Pact - limiting the fiscal autonomy of the Member States. This requirement is even more pressing now that ten new countries have joined the EU and expressed their wish to adopt the euro once they meet the attendant conditions. Given the current difficulties with the EU’s fiscal discipline arrangements, the priority would appear to be to ensure the proper functioning of the multilateral surveillance and control procedures of the current rules. Such rules should be accepted by all the Member States as the sole means of maintaining the effectiveness and credibility of the regulatory framework. In any event, the upturn in activity that the European economy appears to have embarked upon should prove conducive to pushing through national governments’ reform plans and to strengthening the fiscal commitments currently in place.

Jean-Pierre Roth: As the financial crisis recedes, what are the lessons for central bank efforts in the future? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Centre International d’Etudes Monétaires et Bancaires, Geneva, 24 November 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The financial crisis of the last two years has caused people to re-examine a number of generally accepted ideas. Corrective measures are being undertaken, particularly in the area of banking regulation. For central banks, the most delicate issue will be how to contribute to macrofinancial stability without jeopardising their objective of price stability and, in turn, compromising their own credibility. As regards banking supervision, close cooperation between central banks and banking supervisory authorities is essential. The temptation to concentrate forces is strong. In Switzerland, placing centralised oversight responsibility with the Swiss National Bank would risk weakening the SNB’s independence from the political sphere. With respect to systemically important financial institutions, everything possible must be done to limit the likelihood and the risks of further problems. Major efforts are underway in this regard at the Financial Stability Board. To ensure that central banks have the necessary means to act in a crisis, a liberal legal framework and a safety cushion in the form of equity are needed. The SNB is in a favourable position in this respect. BIS Review 152/2009  1
The latter are primarily aimed at ensuring the maintenance of systemically important functions and the orderly resolution of the residual bank, and are therefore important in a “gone concern” perspective. BIS central bankers’ speeches  1  Increasing the credibility of model-based risk-weighted assets Increasing the credibility of risk-weighted assets (RWA) based on banks’ internal models remains an important goal. As discussed in the 2013 Financial Stability Report, model-based RWA are being called into question by market participants, analysts and authorities worldwide. This is particularly significant as RWA are at the heart of the capital regulations for banks. It is widely accepted that a bank’s risks can, in principle, be more accurately quantified using the model-based approach than using the standardised approach. Yet banks’ internal models are highly complex and can vary widely between institutions, thus making it difficult to accurately assess a bank’s resilience and compare one bank with another. The SNB welcomes the efforts by the Swiss big banks to increase transparency with regard to their risks. For example, both institutions recently started to disclose changes in their RWA, broken down by cause. Of particular interest is the proportion of the reduction in RWA which is attributable to model adjustments. In addition, Credit Suisse has been publishing a statistical measure of total loss potential for some time now, and UBS recently started to publish a statistical measure of loss potential by business division and a scenario-based post-stress capital ratio. The SNB encourages the big banks to further increase transparency with regard to their risks.

Philip R Lane: Interview with RTÉ (Ireland’s National Television and Radio Broadcaster) Interview with Mr Philip R Lane, Member of the Executive Board of the European Central Bank, and RTÉ (Ireland’s National Television and Radio Broadcaster), conducted by Mr Robert Shortt on 13 February 2020 and broadcast (in part) on 13 February 2020. * * *  There has been some criticism of ECB policy when it comes to quantitative easing and negative interest rates. Some people have described it as an experiment in monetary policy. There’s been this assertion that interest rates are no longer an effective tool for stimulating economic activity. People have painted the scenario of the Japanification of the eurozone economy. What’s your response to all of that? We don’t agree with that analysis. If you go back to 2014, which is when this policy started, since then ECB monetary policy has been very effective. We have seen very low interest rates for firms and households. We have seen a big increase in employment in the euro area economy. And we do see inflation moving upwards. Without these policies these disinflationary pressures would be more severe. We would not only have lower inflation: we could even have the risk of deflation. And without these policies the recovery in Europe we have seen in the last five or six years would not be so far advanced. So we think ECB policy is still effective.
This might in part be due to low inflation and nominal interest rates that have helped to keep the cost of debt payments down particularly in interest terms [Chart 4], while greater macroeconomic stability and low unemployment have given households the confidence to borrow and lowered the risk to lenders. There has also been a decline in real interest rates that has reflected many factors, including to some degree the accomodatory actions of monetary policymakers. And the rise in house prices has led to a natural increase in debt as people need to borrow more money to finance the purchase of a house. Chart 4: Aggregate income gearing Per cent 18  Interest and mortgage principal repayments  16 14  Interest only  12 10 8 6 4 2 0 87  89  91  93  95  97  99  01  03  05  Source: ONS and Bank of England As far as debt levels are concerned, for me the key issue for monetary policy is that the more capital gearing or leverage increases the greater the vulnerability to shocks and the consequent adjustment to consumption behaviour. I think this is true for individuals and for the economy at large. Let me explain why it might matter if capital gearing rises. Imagine two states of the world. In the first an individual has assets of £ million, and debt of £ In the second an individual has assets of £ and debt of zero.

Debt There has been much comment on the build up of domestic debt in recent years. In aggregate, the ratio of household debt to disposable income is now over 150%, having risen from around 100% in the late 1990s. This upward trend is not unique to the UK, although the debt-income ratio here is a little higher than in most countries [Chart: 3]. Chart 3: Debt-income ratio across countries France Germany Netherlands Spain US UK Australia  Per Cent  200 180 160 140 120 100 80 60 40 20 0  97  98  99  00  01  02  03  04  05  Source: Data from Eurostat, the Federal Reserve and data sent direct from Reserve Bank of Australia. There are a number of key reasons for the increase, coming from changes both in demand and supply. Supply side factors include: a liberalised financial market place with new categories of lender and greater competition; new technology, in particular the widespread adoption of credit scoring techniques and data sharing that have given confidence to lenders in granting unsecured loans; and greater securitisation, enabling firms to write more business by diversifying and laying off the risk onto third parties without burdening their own balance sheets. On the demand side, there appears to have been a change in social attitudes towards debt that has made people more willing to borrow.
A key issue for discussion was the challenge posed by large current account imbalances and the role of exchange rate adjustment in any unwinding of the imbalances. As we looked around the table it was obvious that some of the key players, such as China and India, were not present. Since then a rather informal and ad hoc arrangement has ensured that the G-7 engages in discussion with a broader group. We need to take a multilateral approach to the key issues but that does not mean that every country needs a seat at the table to discuss every issue. If the Fund is to make this possible, reform is necessary. Realistically, only meetings with a small number of participants can encourage the level of frankness needed to resolve the challenges in the international monetary system. All member countries will need to accept that the big players in the international monetary game must be able to meet at a relatively small table. But the membership of the top table must change with circumstances - the group of big players is no longer an exclusive group of rich countries. Low and middle income countries can now affect the global economy. India and China have to be at the table. Reducing the size of the IMF Board itself to achieve this aim is likely to be problematic. An enlarged Board has been one way of providing a platform for smaller and poorer members.

If the participants were to provide confidence bands around their paths, they probably would be very wide because the economic outlook is uncertain and the linkage between the instrument of monetary policy – the federal funds rate target range – to financial market conditions is loose and variable. In conclusion, I believe that the FOMC is continuing to make progress towards our dual mandate objectives. However, I have become somewhat more uncertain about the growth outlook given the lack of a sharp rebound in economic activity in recent months from the weak first quarter. With respect to inflation, as long as we see further improvement in the labor market and anchored longer-term inflation expectations, I am somewhat less worried that inflation will stay too low. Thus, I continue to expect that monetary policy normalization is likely to begin later this year. 4  Thomas Laubach and John Williams (2003), “Measuring the Natural Rate of Interest,” Review of Economics and Statistics 85(4), 1063–70. The FRBNY DSGE model also estimates that the natural rate of interest is currently close to zero. See Marco Del Negro, Marc Giannoni, Matthew Cocci, Sara Shahanaghi and Micah Smith, Why Are Interest Rates So Low? Liberty Street Economics blog, May 20, 2015. 5  With the benefit of hindsight, one could argue that the Federal Reserve should have raised short-term interest rates more aggressively over this period. 6  BIS central bankers’ speeches  Longer-term, I expect that the trajectory of short-term interest rates after lift-off will likely be relatively shallow.
Our challenge was to free up this industry so that it could continue to develop and grow, without compromising stability and soundness in a changing landscape. Strong and wellmanaged local banks, with a significant share of the home market, were and are critical to the resilience and stability of our financial system. However, we could no longer maintain this by restricting access to the domestic market. We needed to permit more competition, but in phases, to allow the local banks to adjust and compete effectively. 2  BIS Review 39/2004  MAS therefore introduced a five-year programme to liberalise access to Singapore’s domestic banking market. We made the first moves in 1999. As we lightened our regulatory touch, we also worked with banks to set guidelines for best practices and give banks greater room for enterprise and innovation. Stronger banking industry Today, Singapore’s banking sector is more open and dynamic. This has come about without sacrificing strength and stability. Individual banks and the industry as a whole have risen to the challenge. Existing players have upgraded and strengthened themselves. Banks have maintained high prudential standards, become more efficient and improved their service quality and product ranges. The foreign banks have contributed to the vibrancy of the Singapore banking scene. Competition has led to the development of a rich array of innovative products and more discriminating pricing models. Customer service as a whole has improved.

Also, the IMF assumes solid growth of the Macedonian economy of 3.2% in 2014, which is higher than the growth projected for the regional countries and wider, and provides a clear vision that there is potential for achieving the economic growth. As the central bank, for us, it is extremely important that the surveyed companies largely expect increase in the exports. Thus the larger export potential, the higher foreign exchange inflows, i.e. narrowed trade imbalance. After all, in 2013 we witnessed trade deficit narrowing in the trade of goods that equaled about Euro 190 million, annually, given the increase in the exports (of 3.2%/3.9% in services) and a decrease in imports (of 1.5%/0.9% in services). This improvement in the trade is closely linked to the increase in the production capacity of the economy, i.e. the increase in the export potential. The policies that were applied in the previous period, which were aimed at attracting foreign investors in the tradable goods sector, which meant export diversification, proved as a good pillar for reducing the foreign trade imbalance. The export growth capacity of TIDZs plans indicated that the foreign exchange rate is not a barrier to exports, i.e. that it is not overvalued. On the contrary, the stability of the Denar exchange rate, in the past against the Deutsche Mark, and today against the Euro, is an important pillar of all business decisions.
If Switzerland’s current account surplus were the result of the currency being too weak, there would have to be a stable correlation between exchange rate movements and the current account balance. Appreciation of the Swiss franc would result in a smaller current account surplus. Chart 9 shows that is not the case. The chart is based on the last ten years, during which time there were periods of Swiss franc appreciation that saw a falling current account surplus and other periods that were accompanied by a rising current account surplus. A conclusive correlation cannot be found. Page 12/13  This assessment comes as no surprise in light of my earlier arguments. Rather, it illustrates once again the sheer size of the impact of a few industries in the Swiss economy – which are largely immune to exchange rate movements. The current account is therefore of no help in determining the direction of Switzerland’s monetary policy. The persistent surplus is neither a good indicator for the strength or weakness of the franc, nor for price stability and economic developments. The SNB takes a wide range of exchange rate models into consideration when assessing the currency situation. Due to the considerable importance of the exchange rate for inflation and economic development, reliable signals for assessing the value of the Swiss franc can also be directly deduced from both inflationary developments and the utilisation of production capacity. Allow me to conclude with a summary of my core messages.

You can see this clearly in chart 8. Both inflation and the output gap show a strong correlation with the development of the exchange rate. Appreciation of the Swiss franc equates to a tightening of monetary conditions. It leads via lower import prices to lower inflation. At the same time, the appreciation of the Swiss franc has a negative impact on utilisation of overall production capacity and thus also on general price developments. 9  The Swiss Federal Statistical Office and the Swiss Academies of Arts and Sciences (2016), Switzerland and the Commodities Trade, Swiss Academies Factsheets, Vol. 11, No. 1. Page 11/13  It is not only the export-oriented companies trading in goods on the global markets that are affected by exchange rate fluctuations. Geographically, the Swiss economy lies at the centre of the European Economic Area. Even in the domestic market, Swiss companies are in direct competition with foreign companies and cannot set their prices as high as they would like above those of their competitors in neighbouring border regions. An appreciating franc erodes the competitiveness of these companies, too. In an exceptionally open economy like Switzerland that is highly integrated internationally, exchange rate fluctuations have a major impact on price stability and economic activity. Since 2009, we have repeatedly been confronted with situations in which the appreciation of the Swiss franc has led to an undesirable tightening of monetary conditions so that production capacity has not been fully utilised and inflation has temporarily dipped into negative territory.
Chart 8 constructs a fan chart for female life expectancy at birth in the United Kingdom derived from the latest forecast published by the Government Actuary’s Department. The width of the fan chart shows how forecasts of life expectancy are likely to change in the future, as new information and ideas about mortality evolve,  12  To understand the concept of independence consider the example of a church spire that is struck by lightning several times. Is this just coincidence (implied by the assumption that the strikes are independent of each other) or does the spire have certain characteristics that lead it to be struck regularly? Given our knowledge of spires and lightening the latter is more plausible. Similarly, there may be characteristics, genetic or other, and still largely unknown, that make particular families more likely to experience cot deaths than others. 13  Hill (2002) and (2004). See also Dawid (2004) and Eggleston (1978) for a discussion of the difficulties courts find with the concepts of conditional probability and Bayes’ theorem. 14  The forecast for inflation is based on the assumption that interest rates follow the path expected by financial markets over an average of the fifteen days prior to the finalisation of the Inflation report. 6  BIS Review 73/2004  causing forecasts to be revised - assuming that news about life expectancy arrives in the future at about the same rate as in the past.

Both women were convicted by juries which had in all likelihood been influenced by the assertion that the probability of two cot deaths in the same family was extraordinarily low. That assertion was based on the assumption that cot deaths in the same family were independent events, a view for which there was  11  See, for example, Thompson and Schuman (1987). BIS Review 73/2004  5  no scientific evidence and which is a priori implausible.12 The assumption of independence was crucial to the prosecution evidence against Sally Clark that the odds of two cot deaths in a family such as hers were 1 in 73 million and so would be expected only once a century. Given the complex and conflicting medical evidence, it would not be surprising if that striking and simple statistic had played a role in helping the jury come to its conclusion. In fact, as pointed out by Professor Ray Hill, the statistical evidence on cot deaths suggests that in England and Wales we should expect several cases a year.13 Thankfully, both women were eventually released after winning their appeals, albeit largely on other grounds. Why then do probabilities cause us so much difficulty? Our understanding of probabilities evolved through counting the frequencies of various events, whether the number of days in summer on which it rains or the outcomes of tossing a coin. All this was part of our evolutionary experience long before the concept of probability was invented in the seventeenth century.