samchain/econo-pairs-v1 huggingface dataset:
There is no consensus on the effects that this recycling of foreign exchange reserves is having on global financial markets. The market for US Treasuries is exceptionally deep and liquid, but with foreign official investors 3 accounting in aggregate for around 30% of the total US Treasury debt market, some academic studies suggest that they may have kept the nominal yield on the 10-year US Treasury a hundred basis points lower than they would have been otherwise. 4 The perception that official buyers may well have different aims and risk appetites to other commercial investors could give them more influence in the markets. And, as with UK pension funds, they may genuinely alter the risk and term premia in some markets. Within these accumulating reserves, the growth of SWFs will alter, at least at the margin, the asset mix of official balance sheets. Over time that will tend to increase the price of riskier assets, like equities and corporate and emerging market bonds, compared to government bonds. The impact will be greater if there are concentrations of investment in particular asset classes or countries. More widely, the switch of reserve rich countries from lenders to owners of financial or real assets is also likely to lead to political tensions and pressures for protectionism.

I am especially grateful for the support from the faculty over the years – both while I was a student and afterwards. There are two people I would particularly like to highlight: Jan Van der Veen – Jan was the professor who really got me started in economics. Bob Bennedetti – Bob agreed to a contract in which I would get a semester of college credit mainly through working on the 1972 presidential campaign in the California primary election and in Ohio for the general election. Probably learned more from that experience than anything else I have ever done in higher education. I would encourage all of you – Republicans, Democrats and Independents – to get involved in public service at some point in your careers. I have many memories of New College – some about people such as Jan and Bob, and others about events and experiences. For example, one of the most remarkable events I have ever witnessed occurred here one night in December 1972 – the first Apollo spacecraft night launch. I remember staring out from the top of a dormitory roof not far from here across the horizon looking at the star specks – wondering, is that the rocket? When it actually came up over the horizon it truly was amazing. I remember it as no bigger than a half-inch gap between your thumb and index finger at arm’s length.
It also finds that potential deviations from the globally agreed Basel III reforms – for example, with regard to the output floor – would significantly dilute the benefits to the real economy. 2/3  To sum up, there are clear and significant benefits to all from implementing the Basel III standards in a full, timely and consistent manner in Europe: -  For households and businesses, it would reduce the probability and impact of future banking crises, and provide banks with the capacity to maintain lending in both good times and bad. -  For European banks, such an implementation would shore up their resilience by fixing some of the outstanding frailties in the banking system. It would also avoid any stigma and negative signalling to financial markets about their noncompliance with global standards. The pandemic has further reminded us that the benefits of a resilient banking system should not be taken for granted. -  For policymakers, it would help safeguard global financial stability and avoid the risk of a harmful “race to the bottom” in bank prudential standards. And it would serve as an important input towards greater financial integration in Europe. Europe has a strong track record of playing a lead role when it comes to multilateralism and sticking to global agreements. Now, more than ever, it is crucial for Europe to continue to demonstrate these traits, including with regards to globally agreed prudential standards.

Financial markets in the first quarter of 2012 were serene, reflecting relatively low premiums of liquidity and inflation risks. The interest rate in the interbank money market has followed swiftly the recent key interest cuts. The transmission of eased monetary policy signals is also observable in the deposits market, while it is expected to be transmitted in the future also in other market segments, conform to the time lag of the transmission mechanism. In the primary market, government security yields showed upward trend reflecting developments in relevant structural factors of the demand and supply, without signalling added risk or inflation premiums. Verified developments insofar, change the basic projections for economic developments in the future. Year 2012 is expected to be influenced by unfavourable developments in the global economy, which may affect the Albanian economy as well. Foreign demand is expected to provide lower contribution over the course of the year, impacted by economic slowdown in our trade partners. Fiscal policy orientation towards further consolidation of fiscal parameters limits the space for a substantial fiscal stimulus to foster the economic activity. Under these circumstances, private domestic demand remains determinant for aggregate demand increase in the future. Overall, analyses suggest a better performance of private consumption and spending, helped also by the eased monetary policy stimulus. Estimates of the Bank of Albania suggest that, in the course of the year, demand growth below the potential of the economy will continue to exercise low inflationary pressures from the demand side.
Therefore, in order to develop reliable indicators for systemic risk, to analyse the  4  BIS Review 121/2010  interaction and feedback between macroprudential and monetary policy instruments, and to carefully evaluate the effective measures, we need clear mandates, enough time and additional expertise. So what is the role of central banks in establishing such a macroprudential framework? Generally speaking, the traditional tasks of central banks are closely linked to various aspects of systemic stability. A stable financial system is very important for the effective implementation of monetary policy. But also in active crisis management, central banks bear a major responsibility, as the recent financial crisis clearly demonstrated. The contribution of central banks is therefore of great relevance in the analysis and regulation of systemic risk. In particular, central banks will have a key role to play in macroprudential supervision and regulation for the following reasons: Developing and structuring macroprudential measures requires reliable analytical and forecasting skills – for instance, with regard to the overall economy or specific market segments, such as real estate. Central banks have extensive and soundly based knowledge of these fields. Moreover – as I have already pointed out – macroprudential policy interacts closely with monetary policy. This implies that the information advantage of central banks could be important in shaping macroprudential measures. Central banks will therefore almost certainly have to play a major role in implementing such instruments.

Likewise, the iTraxx Sovereign Western Europe Index, consisting of 15 sovereign CDS across Europe, rose by approximately 70% in the same period. 2  This is an approximation of the real effective exchange rate, assuming constant weights and inflation differentials. 3  Annualised volatility computed over one calendar month on the basis of daily movements. BIS central bankers’ speeches  1  rate on 6 September, EUR/CHF volatility has fallen below 10%, though it remains high from a historical perspective. The introduction of the minimum exchange rate also had an impact on some of the dynamic properties of the Swiss franc. As the red bar on the left side of chart 2 suggests, there was previously a positive correlation between the movements of the Swiss franc and those of risk indicators such as the VIX Index, i.e. investors tend to buy Swiss francs when perceived risk increases. In the same vein, the blue bar on the left of the chart shows that the correlation between the movements of the Swiss franc and those of risky assets, such as the equity shares on the MSCI World Index, has historically been negative. In other words, negative market developments have often been accompanied by a rising Swiss franc. Intriguingly, as the right side of chart 2 shows, the introduction of the minimum exchange rate appears to have had a significant impact on these correlations. The SNB’s implementation of monetary policy: liquidity measures On 3 August, the SNB started to implement liquidity measures against the massively overvalued Swiss franc.
In our simple example, imagine people’s satisfaction has a logarithmic relationship with income, consistent with diminishing marginal utility. Then, we find that social welfare is almost 10% lower after than before the changes, even though GDP is 5% higher. When it comes to assessing how societies are doing, the distribution of gains and losses really matters. The role of the Bank of England is to serve the good of the UK people, as it has been since its inception in 1694. Monetary policy is very unlikely to be the most effective tool for changing the distribution of gains and losses across society – other macroeconomic tools are better placed. And, indeed, doing so would be inconsistent with the Bank’s monetary policy mandate. But policymakers, including central banks, do need to dive beneath the statistical surface to understand the economy region by region, city by city, town by town, sector by sector, household by household. Indeed, that is the very purpose of regional visits like this one. The economic jigsaw Before turning to the distribution of outcomes, let me start by looking at measures of economic health for the economy as a whole. When it comes to economy-wide measures of activity, economists typically look at metrics such as output (often measured by GDP), employment (such as the number of people in jobs) and wealth (financial, property etc). These are, essentially, different pieces of the same economic jigsaw. Chart 1 plots these three measures over the past decade.

Changes in the size of the average household could affect this series. 15  Chart 5 – Full time, self-employed, part time Per cent increase in number of employed since Q1 2010  Chart 6 – Job to job moves  Proportion of those in employment moving to another job each quarter  15  Employed PT  3.5  Job-to-job moves as a proportion of employment  10  3.0  Self-employed Employed FT  2.5  5  2.0  0  -5  2010 2011 2012 2013 2014 2015  1.5  2002 2004 2006 2008 2010 2012 2014  1.0  Sources: ONS. Sources: Labour Force Survey, ONS and Bank calculations. Data shown on a seasonally adjusted basis. Chart 7 – People desiring more hours work  Chart 8 – Mean and median wages Median weekly earnings Mean weekly earnings Real median earnings* Real mean earnings*  Number of people, thousands People desiring more hours 4000 3500  Pounds per week 600 500  3000 2500  400  2000 1500  300  1000 500 1996 1999 2002 2005 2008 2011 2014  0  Sources: Labour Force Survey, ONS and Bank calculations. 16  1998  2002  2006  2010  2014  200  Sources: Annual Survey of Hours and Earnings, ONS, Bank calculations.
Ardo Hansson: Working together for the good of the EU and Estonia Opening speech by Mr Ardo Hansson, Governor of the Bank of Estonia (Eesti Pank), to the Ragnar Nurkse Lecture for the 95th Anniversary of Eesti Pank, Tallinn, 4 November 2014. *  *  *  Professor Balcerowicz, President of the Riigikogu, Chair of the Supervisory Board of Eesti Pank, Excellencies, Ladies and Gentlemen, Thank you for being here today to mark the 95th anniversary of Eesti Pank and to honour Ragnar Nurkse, the world's best-known economist from Estonia to date. Eesti Pank was founded when the Republic of Estonia was only a year old and Ragnar Nurkse was a model eleven-year-old pupil at the Tallinn Cathedral School. In the words of Juhan Kukk, the Minister of Finance of the time, founding Eesti Pank as the issuer of the national currency and tying the currency to gold showed the same great “bravery and belief in national and economic independence” as engaging in the War of Independence did. Ragnar Nurkse started his studies in the University of Tartu, but he soon moved to continue them in the School of Economics of the University of Edinburgh and later in Vienna. He was recognised in his home country for his work, as is shown by the worried letter that Jüri Jaakson, Governor of Eesti Pank at the time, sent him in spring 1938. Nurkse was working in Geneva at the time for the League of Nations, the forerunner of the United Nations.

Instead, there are many reasons to believe that more stable economic performance over time also leads to conditions that foster high growth and employment. Moreover, a simple comparison of unemployment data between the periods before and after the shift in regime proves rather misleading. This is because of the attempts in the 1970s and 1980s to meet the target of full employment through a policy that was unsustainable in the long run - it was exactly because of this that the change in regime was implemented. As I mentioned earlier, this policy involved Sweden devaluing the krona as soon as we were hit by a cost crisis that resulted in weaker developments in exports and employment in the private sector. The devaluation of the krona restored competitiveness by lowering real wages for a number of years until excessive increases in prices and wages compared with abroad once again eroded the scope that had been created. The other way in which unemployment could be kept down was through a sharp increase in public sector employment. From having comprised 15 per cent of the labour force in 1960, the proportion of the employed accounted for by the public sector rose to just over 30 per cent by the end of the 1980s. So even though jobs were being lost in the private sector, employment held up through increased employment in the public sector. However, neither the decreases in real wages due to the devaluations or the increased public sector employment could solve the problems in the long run.
According to UN estimates 2 , by 2050 Europe's population will have shrunk by more than 70 million, that is by around 10%. In the same period, Asia's and Africa's population will have grown by 1,300 million and more than one billion respectively. This means that we should expect a gradual shift in the centre of gravity of the economic activity from the US and Europe to Asia and Africa. As a matter of fact, numerous estimates have shown that in 2050 the Chinese economy will be 40% larger than that of the US, while India's economy will be similar to the US in terms of GDP measured at purchasing power parity 3 . These trends are also reflected in studies assessing what companies in developing markets will challenge the current global giants based mainly in the US, Europe and Japan. According to Boston Consulting Group, the 100 ‘global challengers’ include 44 Chinese, 21 Indian and 12 Brazilian companies. There are no Polish companies on this list, even though it includes a few companies from Egypt and Turkey 4 , among other countries. In the future, demographic trends will be of greater significance than they used to be in the past, for several reasons. First of all, the population is aging faster in the developed world, yet China will also be affected by this problem due to its one-child policy.

All else equal, the removal of a considerable amount of this risk by the Fed’s purchases would be expected to lower agency MBS rates by lowering this extra return, thereby reducing primary mortgage rates, stimulating demand for housing, and prompting increased refinancing activity. Indeed,  3  See responses to June 2012 Survey of Primary Dealers. 4  For example, see Brainard and Tobin (1968), Vayanos and Vila (2009), Li and Wei (2012), Gagnon et al (2010), Krishnamurthy and Vissing-Jørgensen (2011), and Hancock and Passmore (2011). 2  BIS central bankers’ speeches  asset purchases do appear to have a meaningful impact on mortgage markets. For example, in the two days following the announcement of additional agency MBS purchases at the September 2012 FOMC meeting, agency MBS yields declined by roughly 30 basis points and option-adjusted spreads to Treasury securities narrowed by about 25 basis points. Over time, the primary mortgage rate also declined to about 3.3 percent, near its lowest levels on record. Even though the Committee is communicating a monthly pace and composition of purchases, in my opinion, the predominant effect on interest rates from changes in the Federal Reserve’s portfolio holdings comes from the expectations of the total stock of different risks that the Federal Reserve will remove from private investors and the length of time that it will hold these risks.
The challenge is to enhance efficiency and reduce costs, respond to market and regulatory demands and, most of all, gain competitive advantage through innovative products and services. The overall Islamic financial system, comprising financial institutions, markets and the financial infrastructure, has demonstrated its viability and robustness as a form of financial intermediation. Its growing role in mobilising and channelling funds to productive investment activities across borders brings significant benefits to global economy. Building stronger financial markets and greater intermediation through knowledge sharing especially, forms an important part of this process to facilitate greater international and investment flows. Much in the same way that national strategies are developed to remain competitive in the new, knowledge-based economy in a globalised environment, institutions in the public, private or non-profit sectors, have come to recognise that "knowledge" can play an important role in enhancing the effectiveness of their operations. In addition to investments in human capital and leveraging on the role information technology, considerable attention has been devoted to harnessing the explicit and tacit knowledge they posses. Ladies and Gentlemen, I have previously made two references to the New Silk Road. The first was made at the 2nd World Islamic Economic Forum (WIEF) on "Unleashing the Potential of Emerging Markets" in Islamabad, Pakistan in November 2006, while the second reference was during a special address at the Global Islamic Finance Forum - Investors and Issuers Forum in March 2007.

Hoerova and Monnet (2011) view market  6  BIS central bankers’ speeches  money market (as demand might not be fully matched by supply) and segmentation in the market between maturities over and below 30 days. At the same time, by reducing liquidity risk, the LCR may lead to lower liquidity risk premia. The overall effect of these two countervailing forces is unclear though. While there could be an overall impact on the difference between short and longer-term rates, to assess the overall impact on the monetary policy transmission, one would need to see whether the transmission from short to longerterm rates would be also affected. However, it remains to be seen whether unsecured lending beyond 30 days will revive after the crisis. As mentioned, this new set of liquidity requirements is expected to have important consequences for limiting solvency risk and encouraging good risk management. In fact, the regulation is expected to bring an overall positive effect on the functioning of the money market by internalising the negative externalities for financial stability and monetary policy, i.e. reducing information asymmetries concerning banks’ liquidity risk exposure and their liquidity risk bearing capacity, creating the conditions for a better functioning of the money market.17 This has to be combined with actions ensuring a proper functioning of the money market (such as oversight of reference rates along the lines recently proposed by the European Commission).
This would have negative consequences for investment, competitiveness, growth and employment in the euro area. So there cannot be any “benign neglect” with respect to the exchange rate. A stable and strong currency contributes to lowering long-term interest rates, which play a crucial role in the financing of the economies in continental Europe. All these reasons point to the need for a strong and stable euro, a currency that will be as credible as the franc, the guilder or the Deutsche Mark. The euro must be, and will be, rock solid. Therefore the exchange rate of the euro, even if not targeted as such, will undoubtedly play an important role as an indicator in the conduct of the single monetary policy. 5 See, for instance, “Money Demand in EU Countries: A Survey”, by F.X. Browne, G. Fagan and J. Henry, EMI Staff Paper n° 7, March 1997. 6 This is different from the current stance in France, where the stability of the exchange rate vis-à-vis the most credible currencies within the ERM is one of the two intermediate targets of monetary policy. BIS Review 112/1997  -4-  1.4. The starting level of key interest rates in the euro area Let me say a few words on another strategic question: what will be the starting level of key interest rates in the euro area thirteen months from now? Futures contracts on short-term interest rates reflect the market’s expectations on this issue.

In the model, the central bank therefore raises its policy rate to curb the rise in inflation and gradually bring it down. The tighter monetary stance, which in this model is represented by an increase in the real interest rate, results in a negative output gap. [10] The extent to which monetary policy should be tightened to achieve a reasonable trade-off depends on the impact of higher prices and costs on consumption and investment. In most New Keynesian models, a cost shock does not affect demand directly. This is because temporary disturbances have little impact on households’ permanent income and because households and firms can borrow and save freely in these models. In practice, however, many households have small financial buffers and limited borrowing capacity. A decline in purchasing power due to a higher interest rate and higher prices will compel these households to reduce consumption. In addition, higher costs can reduce firms’ profits and thereby business investment. Chart: Costs shock – monetary policy trade-offs These effects of a cost shock can be illustrated in a model with different types of households – a so-called TANK model. [11] The model assumes that there are two types of households. One group can spread the effect of a decline in real disposable income on consumption over time, that is to say they can smooth consumption. The other group, called hand-to-mouth households, spends all its disposable income in each period. The cost shock hits the hand-to-mouth households relatively hard, and aggregate demand falls.