samchain/econo-pairs-v1 huggingface dataset:
After peaking at 2.2% in October 2018, euro area inflation could fall to around 1% in some months of this year, before rising again gradually to 1.8% in 2021 according to the latest Eurosystem projections. Beyond these temporary fluctuations, the key trend to watch is core inflation. The improvement in the labour market has already led to a substantial acceleration in wage inflation. Growth in average compensation in the euro area has thus risen from 1.2% in 2016 to 1.6% in 2017 and will probably reach 2.2% in 2018. However, this wage inflation has not yet been passed through to core inflation [slide 5]. Until now, the acceleration in the inflationary pressures linked to unit labour costs since the fourth quarter of 2017 has been offset by the improvement in terms of trade and the decline in corporate profit margins. In our forecasts, these downward factors have a temporary lagging effect: core inflation should gradually increase towards a rate of 1.8% in 2021 (after 1.0% in 2018, 1.4% in 2019 and 1.6% in 2020). However, certain observers have stressed that this lagging effect appears to be durable, and has caused inflation to fall repeatedly short of Eurosystem projections. Inflation excluding energy and 4/6  BIS central bankers' speeches  food remained subdued at 0.9% in November, as well as in December according to the Eurostat flash estimate.

The logic there was that at that level failure of the material entity might trigger resolution of the group as a whole; problems for smaller entities, even those that might house functions that are critical to the host jurisdiction, should be more of a recovery matter. -  by including a provision that internal MREL for subgroups should be scaled in single point of entry (SPE) groups to 75-90% of the requirement that would apply to the subgroup on a standalone basis. The logic was that given the interdependence in the business models of SPE firms, prepositioning in this range would be sufficient to secure cooperation and deter hosts from ring-fencing, and home authorities from cutting off, foreign subsidiaries. Prepositioning of resources in this way will provide concrete underpinning for cooperation that goes beyond the paper commitments to cooperate in Memorandum of Understandings (MOUs), honoured in the breach in previous cross-border failures. Even with these restrictions there may still be a sum of the parts problem in which the sum of TLAC requirements at solo level pushes up external requirements. If internal TLAC requirements are high they are also likely to stand in the way of holding a surplus at the top of the group that could provide flexibility in covering losses if they are concentrated in a particular part of a group. Thus in our internal MREL policy our intention is first to consider setting internal MREL generally for the firm at the bottom of the 75-90% range.
Just as a pebble dropped into a lake disturbs the water not just at the point of impact but ripples outward far from the origin, changes in the federal funds rate influence the prices of financial assets more broadly and this, in turn, affects the broader economy. An important insight of modern monetary theory is that this transmission of monetary policy to the broader economy through its many channels works best when the central bank is transparent about its goals, policy strategy and approach to implementing its strategy. In this case, market participants and households both understand and can anticipate actions by the central bank. By doing so, the transmission channels of monetary policy are enhanced. This places considerable importance on effective central bank communication. Recognizing this, the FOMC has undertaken many initiatives over the years to improve its communications with the public. These include providing clarification in terms of the goals of monetary policy, discussions of the FOMC’s broad policy strategy, as well as FOMC participants’ ongoing explanations of their views on monetary policy. As part of this effort, I provide a comprehensive update on my outlook for the economy and monetary policy several times during the year. Once a year we publish our staff’s judgmental economic forecast. We have also provided in the Liberty Street Economics blog discussions of an internal staff modelbased economic forecast. In addition, we now regularly release our real-time forecast of “current quarter” real GDP growth.

Our goal is to provide information that helps households and businesses follow the data along with the Fed. If people know more about how the economy is performing and how that is likely to influence our actions, this should make it easier for us to achieve our twin objectives. I will now turn it over to Rob to discuss the Snapshot in greater detail. 2  BIS central bankers’ speeches
A board member is not a figurehead, as they may seem, but someone responsible for the company’s development. Companies establish functions of risk management and internal controls, and protect dividend rights of their shareholders in the best possible way. And the last point I would like to make on the banking sector is the outcomes of major banks’ resolution under a new mechanism. Last year, we almost completed the resolution of three major banking groups and Asian-Pacific Bank. We created a bank of non-core and toxic assets, and all banks that underwent resolution already operate in the market in compliance with all ratios. It would be fair to say that the most difficult stage of banking sector resolution is behind us. Certainly, it was not painless and came at a cost. Last year, the Bank of Russia registered losses associated with the resolution and establishment of a non-core asset bank. However, the losses on the Bank of Russia’s balance sheet mean that depositors keep their money and entrepreneurs whose funds were placed in accounts with these banks remain solvent. We avoided larger losses in the economy and knock-on effects in the financial market. Our current objective is to return as much funds as possible through the sale of these banks and operations with non-core assets. Insurance market Last year, we launched an OSAGO reform.

The value of dubious transactions in the financial system continued to decline last year, and this is a stable trend of recent years. The slides show data over several years. Cashing-out transactions halved, while illegal overseas withdrawals shrank by 20%. These are last year figures. The development of digital technologies increases potential cyber-risks. We are controlling cyber resilience of financial organisations. The Bank of Russia continuously monitors cyber-attacks and operates a system of information exchange and support for market participants. As regards the protection of households against fraud, our objective is to minimise the period of time between the moments when a Ponzi scheme or an organisation that illegally provides financial services is revealed and liquidated. This requires large-scale monitoring. Last year, we established two special-purpose centres in our Krasnodar and Khabarovsk branches, which helped us detect fraudulent entities more promptly. Last year, we revealed 168 Ponzi schemes, which is 25% more than the year before. We are working together with law enforcement agencies, including regional authorities. It is law enforcement agencies that bear responsibility for putting an end to the activity of such illegal entities. Illegal lenders pose the greatest threat to the public. Under the guise of microfinance organisations (that is why microfinance organisations often face criticism), they offer loans which are sometimes secured against housing, and afterwards demand that borrowers repay enormous amounts of money. Illegal lenders usually operate via the Internet and we must stop their activity.
The key standards here are the 40 recommendations of the Financial Action Task Force (FATF), first issued in 1990 and revised twice in 1996 and also this year. After the events in September 2001, eight further recommendations were added, focusing on combating terrorism financing. These recommendations have been accepted by the international financial organisations as a basis for anti-money-laundering criteria in the financial sector. The Basel Committee published a document entitled “Customer Due Diligence for Banks” in October 2001 specifying details of the “know-your-customer” principle for banks. The IMF has added the recommendations to its surveillance work within the FSAP missions and Offshore Financial Centre assessments, having developed a methodology for assessing the general principles in practice. These AML standards are thus on a par with all the other international codes and best practices and form an integral part of the strengthened global financial architecture. I should also note that an increased awareness of the crucial role played by the AML regulations in today’s world is also apparent among private financial institutions themselves. This has been demonstrated, for example, by their adoption of the “Wolfsberg principles” and the involvement of the banking associations in many countries in AML issues. The AML regulations require financial institutions to identify their customers in certain transactions, either in suspicious ones, or in standard ones such as opening bank accounts, safety boxes, etc. The growing use of modern communications channels, e.g.

Mugur Isărescu: The power of the mind Opening address by Mr Mugur Isărescu, Governor of the National Bank of Romania and President of the Romanian Association for the Club of Rome, at the Annual Conference of the Club of Rome “The Power of the Mind”, organized by the Club of Rome, the Romanian Association for the Club of Rome (ARCoR) and the National Bank of Romania, Bucharest, 2 October 2012. *  *  *  Dear colleagues of the Club of Rome, Honoured guests, Ladies and gentlemen, It is a pleasure and a privilege for the Romanian Association for the Club of Rome and for the National Bank of Romania to be the host of the International Conference of the Club of Rome, here in Bucharest, with such a challenging topic: “The Power of the Mind”. As we all know, 2012 is an anniversary year for the Club of Rome, since we are celebrating the 40th anniversary of the first Report to the Club, which was entitled “The Limits to Growth”. When this Report was published, it created shockwaves all over the world, including the communist countries. I can testify this, because I addressed comments concerning this issue when I was a young research fellow, after graduating the University. Actually, I confessed to my colleagues that my first public appearance in 1973 was related to the Club’s first Report. But the debates were not limited to Romania or to Europe. They were manifest all over the world, and are still continuing today.
In recent decades, however, the real rate of interest – i.e. the nominal interest rate less consumer price inflation – has likewise been falling (cf. chart 3). As central banks have only limited influence on the development of the long-term real rate of interest, other factors must have been at work. First, population ageing in the advanced economies has resulted in an increased propensity to save, which in turn has increased the supply of investable capital. 4 1 2 3  4  The percentage rate applied to retirement savings to calculate the annual old-age pension. The minimum rate for the interest payable on retirement savings. The parameters apply first and foremost to mandatory insurance cover. Under the BVG, it is the portion of a salary between CHF 24,885 and 85,320 (the ‘coordinated salary’) that has to be insured. However, many pension funds pay benefits over and above this statutory minimum (‘non-mandatory’ pension insurance). Pension funds that provide ‘comprehensive’ insurance cover in excess of the minimum benefits prescribed by law can define a conversion rate applicable to all retirement savings, provided the pension actually paid is at least as high as the pension payable under the mandatory insurance. If life expectancy increases while the retirement age stays the same, the number of post-retirement years rises. Thus employees have to save more money than previously if they are to be able to spend the same amount each year in their old age. Page 3/8  Second, productivity growth is declining.

Longer life expectancy – success story and challenge Ladies and gentlemen, the low interest rate environment is a challenging situation for pension funds. And I cannot even give you an idea of when Switzerland will be able to return to positive interest rates. All I can say is that the timing will greatly depend on developments in the global economy and the performance of the international financial markets. Another challenge that is sure to preoccupy you as pension fund managers is that of rising life expectancy – on the face of it a very gratifying development and, indeed, one of humanity’s success stories. Rising life expectancy is not only influencing the propensity to save but is also having a direct impact on the pension funds. Given an unchanged retirement age, it steadily lengthens the average duration of pension payments. This in turn results in higher payments and extra strain on the pension funds. The consequences of these developments are clear. Lower inflation and reduced real rates of interest are resulting in lower nominal interest rates and are thus diminishing the pension funds’ earnings prospects. On the benefits side, increased life expectancy means that pensions are being drawn for longer, thus increasing the volume of savings capital needed to finance these benefits. As a result, the system becomes unbalanced. Price stability – the SNB’s contribution to a healthy pension system What could be done to find a workable solution? Which measures would make sense and which would not?
But both short and long nominal and real interest rates have shown a negative trend since the mid-1990s and have fallen in Sweden and the rest of the world. This makes it misleading to now make direct historical comparisons of the level of the policy rate. The fact that monetary policy has been and still is too tight becomes clearer when one sees that the policy rate and the short real rates in Sweden have been raised since 2010, and then have been kept high in comparison with policy rates and the short real rates in the euro area, the United Kingdom and the United States. This is despite the fact that inflation in Sweden is significantly lower than in these economies while unemployment is about as high as in the United Kingdom and the United States (Figures 1–3). After having been close to the target in early 2010, CPIF inflation in Sweden has also since trended downwards to a rate of one per cent or below.1 Average inflation too low and average unemployment unnecessarily high since 1997 In a longer perspective, one can note that since 1997, when inflation expectations had been anchored to the inflation target, the average rate of inflation in Sweden measured using realtime data for the CPI has been 1.4 per cent, that is, 0.6 per cent below the target for the CPI, which is 2 per cent.

In practice, monetary policy has to some extent neglected the price stability objective and led to unnecessarily high unemployment. Against this background, it is remarkable that monetary policy in Sweden nevertheless seems to have been aimed at influencing household indebtedness. Any problems arising from household indebtedness could be better managed by other means than the policy rate, such as mortgage caps and tax regulations, which, unlike monetary policy, are effective in both the short run and long run (Svensson 2012c). The Riksbank’s mandate – price stability and the highest sustainable employment – demands a lower policy rate and policy-rate path I thus believe that monetary policy should be more expansionary than it is at present, that is, the policy rate and the policy-rate path should be lower. The Riksbank’s mandate should, in line with the Sveriges Riksbank Act and its preliminary works, be interpreted as price stability and the highest sustainable employment (Svensson 2012b).5 The highest sustainable employment is in practice the same as the lowest sustainable rate of unemployment. Every monetary-policy decision thus entails setting the repo rate and selecting the repo-rate path that best stabilises inflation around the inflation target and unemployment around a long-run sustainable rate.6  3  Andersson, Palmqvist and Österholm (2012) discuss the Riksbank’s target attainment during a different period, that is a period beginning in 1995 instead of in 1997, which gives an average of 1,5 per cent for CPIinflation in 1995–2011 instead of 1.4 per cent. During 1995–1996, CPI inflation was 1.8 per cent, which increases the average.
The potential vulnerability of critical nodes in fast markets  Finally, it is unclear whether we yet fully understand how the migration towards fast markets has changed the nature or location of critical nodes within the system, and the risks to which they are exposed. Any intermediation model relies upon a particular infrastructure and has critical nodes. Traditional over-thecounter (OTC) markets, for example, are critically dependent on the willingness of dealers to warehouse risk in return for the informational advantage that seeing the flow provides. Such frictions have started to take new forms in fast markets. In particular at the same time as highfrequency trading activity has increased, a number of banks have stepped back from acting as market makers and have assumed a more infrastructural role. But new market participants still rely on banks to provide market access and extend them credit when engaging in algorithmic trading, through banks’ prime brokerage and clearing businesses. Providing a competitive service to such technologically advanced clients – particularly those trading at very high frequency – requires substantial investment in technology and infrastructure, including that to facilitate the real-time monitoring of exposures and risk management. The costs associated with this are high, and serve as an effective barrier to entry. As few banks provide these services, this leads to a concentration of nodes of market access for short-term liquidity providers. The changing role of banks/dealers in fast markets prompts the question whether the nature of potentially disruptive risks is also changing.

Proportionate changes to our prudential regime and a renewed international focus of will both contribute to strengthening the UK insurance sector and facilitating effective competition. I will go on to discuss the role of the UK in future international policymaking, and the importance of international co-ordination both to enable global insurance activity and address global risks including climate change, one of the themes of today’s event. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  Our role as a host for international insurance business  Preparing for Brexit was a significant task for the insurance industry and regulators. The extensive work undertaken since 2016 meant that for the insurance industry at least, 31st December 2020 passed largely without incident – few, if any, of us spent the first week of January stuck in a (metaphorical or actual) lay-by outside Dover. However there is further work for both regulators and industry to do, not least moving the c.190 EU insurers that have entered the Temporary Permissions Regime (TPR) onto a more permanent footing in the UK, but an important milestone has been passed successfully.1 While describing Brexit as an “opportunity” is at this point an extremely well-worn phrase, it does give the regulator, and the UK as a whole, a chance to consider how our financial services sector should operate in future.
Credit has begun to present month-on-month increases, lending rates remain fairly low and the evaluation of both suppliers and demanders of credit show less restrictive lending standards despite the earthquake (figure 6). As highlighted in the IEF, it is important for the local banking industry to remain proactive in keeping and diversifying the sources of external credit and adequately manage credit risks within a context of economic recovery. Since mid-2008, household borrowing ratios and their financial burden have decreased. Consumer and firm expectations are still near or somewhat above their neutral values. This combines with the labor market recovering in aggregate terms, which overall was not affected by the earthquake and tsunami. Investment growth relies on both favorable macroeconomic conditions and the boost of reconstruction efforts. As for fiscal policy, the baseline scenario considers that the structural balance will be reached towards the end of the current Administration and that there will be tax changes, budget reallocations and new financing sources for the reconstruction, according to the government’s announcements. BIS Review 99/2010  3  The performance of output and demand will result in a current-account deficit of 1.2% of GDP this year. Measured at trend prices, this deficit is large by historical standards, but it responds partly to temporary reconstruction and replacement expenditures associated with the earthquake. Year-on-year CPI inflation has continued to rise in recent months, consolidating in positive figures. Core indicators for annual variations are still in negative territory but they steadily approach above-zero numbers.

But, because it takes some time before changes in Bank Rate affect inflation, it is important that the Monetary Policy Committee look through this short-run volatility and try to understand where inflation might be heading in the medium term. That poses a real challenge. None of us can foresee the future. To assess the likelihood of different possible outcomes for inflation, we examine all the available information – official statistics, business surveys, and reports from around the country, including those from our team in Wales. Then we make a judgement about the outlook for inflation. That judgement cannot be made on the basis that just because certain developments seem to have forecast inflation in the past they will do so again. Such correlations are not stable over time. We have to try to discover the driving forces behind the mosaic comprising all the different pieces of information that we examine each month. To understand what is likely to happen in the economy, we have to behave like the child who cannot stop asking “why?” Why is output growing so steadily? Why did recorded employment fall last quarter? Why are money and credit rising so rapidly? Why have oil prices picked up? And each answer inevitably provokes another question “why?” So setting interest rates is not straightforward. Our job, in fact, is rather like taking part in a “spot the ball” competition.