samchain/econo-pairs-v1 huggingface dataset:
Growth is anticipated to be low also next year and approach trend growth in 2001. Demand growth could be higher than expected, which would contribute to maintaining the pressure in the labour market. Employment is still high and near capacity level, while we see a tendency towards higher unemployment in sectors such as the construction and engineering industries. Chart 13 Unemployment rate. Per cent 6  6  5  5  4  4  3  3  2  2  1  1  0  0 80  82  84  86  88  90  92  94  96  98  Source: SSB Legg inn filadresse her  Inflation is expected to remain at around 2% for the next two years, with inflation rates of 2¼% this year, 2% next year and 1¾% in 2001. Chart 14 shows the key technical assumptions underlying Norges Bank’s projections. Short-term interest rates are assumed to move in line with market expectations, as reflected in forward rates in September (Chart 15). According to market expectations, the differential against European rates will narrow from the current level of a little more than 3 percentage points to around 1 percentage point at the end of 2001. The krone exchange rate is assumed to be NOK 8.30 against the euro throughout the projection period. Developments, as indicated by Norges Bank’s analyses, imply that there is little room for further decreases in interest rates.

Everyone is affected, and events in one country affect all other countries too. I hope that this is clear to the decision-makers. In terms of monetary policy, we will do our part to prevent fragmentation in the euro area. The border closures and all the different national arrangements we’ve seen suggest that it is more like “everyone for himself” at the moment. 2/4  BIS central bankers' speeches  The primary goal has to be to contain the spread of the virus. It may be that closing borders is an appropriate step from that point of view. That’s something that virologists are best placed to judge. But it’s clear that all protective measures come at an economic cost. And that is precisely why we need coordinated action, so that we can avoid deepening the crisis. But not every country can afford that. That’s true, and that’s precisely why we need European cooperation. What we need now is European solidarity, also in financial terms. That is in the interest of all European countries. Is it even possible now to prevent a recession as a result of the virus crisis? We are experiencing a very severe economic shock. Supply chains are being disrupted and, at the same time, demand is contracting as governments introduce protective measures: people are travelling less than before and cannot go out to restaurants and bars. Falling confidence may also dampen consumption and investment. And if people are not able to go to work, that has an impact on production, depending on the sector.
The crisis probability equation is estimated directly on a cross-country historical dataset, similar to the one described in appendix 1, giving estimates of ℎ0 = −1.7, ℎ𝐵 = 5.2, ℎ𝑘 = −27.8. The intercept is then adjusted to ℎ0 = −1.7 + 0.11ℎ𝑘 , to incorporate a steady state capital to risk-weighted asset ratio of 11%. The leakage 𝜙𝑀 (1−𝑏)  1  𝜙𝑠 𝑏  3  of credit into the market-based finance sector, given by ( 𝑠 𝐵  ) is equal to − in the red line in Chart 8, to  make it the same size as the leakage to foreign banks in the alternative model discussed below. Therefore 𝑏 = 0.75 implies that 𝜙𝑠𝑀 = 1. Finally, the policymaker’s preference parameter is set to 𝜆 = 0.05, broadly consistent with the literature where loss is derived from the welfare of agents in the economy, 𝛽=0.99 and 𝜁 is varied to derive each curve in Chart 8, where each point represents optimal policy for a different 𝜁. The policymaker’s period 2 loss if there is a crisis, relative to when there is not, is set to just over 4% of GDP lost for 3 years. This is broadly consistent with Chart 6 in Brooke et al (2015), which assumes that the cost of crises will be lower under a credible resolution regime. 3.

Chart 7: Mutual fund flows to emerging economies seem particularly prone to abrupt stops Gross mutual fund flows (per cent of GDP) during surges and stops in capital flows Advanced Economies  Emerging Economies  Sources: Hoggarth et al (forthcoming), EPFR, IMF World Economic Outlook and Bank of England calculations. Notes: EPFR Global defines institutional investor funds as funds targeting institutional investors only or those with the minimum amount of $ per account. All other funds are labelled ‘retail’. Chart 8 Market-based finance can worsen the trade-off between higher output growth and lower probability of a crisis  Source: Aikman et al (forthcoming). Chart shows the menu of choices available to the policymaker in the market-based finance model described in the appendix in response to a 15pp increase in 3-year real credit growth. The y-axis shows the period 1 welfare cost in the model from higher inflation and lower GDP, converted into the equivalent average loss in 3-year GDP that would leave the policymaker indifferent, were inflation to remain unchanged. Thing Global, Act Local  Speech given by Minouche Shafik, Deputy Governor for Markets and Banking On the 24th October 2016 At the joint Bank of England, IMF & Hong Kong Monetary Authority conference on  Monetary, Financial and Prudential Policy Interactions in the Post-Crisis World, Hong Kong
Consequently, this policy can only be effective if the authority responsible for defining and implementing is credible. The conjunction of a clear, overriding objective of price stability (which has been explicitly laid down in the statute of the ECB), with well-established institutional independence ensures the continuity of the monetary policy decisions made by the authorities. •  Secondly, the emergence of a globalised market has quite naturally led to new developments in monetary policy instruments. Interest-rate instruments have gained in importance to the detriment of quantitative and regulatory instruments. Third consequence: renewed set of risks to the stability of financial systems First of all, it is worth noting that financial liberalisation did not eliminate the occurrence of financial crisis. The development of new financial instruments, increasingly mobile and rapid capital flows, and faster reactions on the part of the players have rendered markets more volatile. Moreover, stock market prices and interest rates in the various financial centres have become closely correlated due to increased arbitraging between currencies and financial products and the spread of disintermediated financing.

However, for financial systems to be stable, monetary policy must be consistent with the other aspects of economic policy, that is, fiscal policy and structural programmes. The policy mix must be well-balanced at the international as well as the domestic level. Placing too heavy a burden on monetary policy in terms of achieving the main economic and financial balances is detrimental to its effectiveness. In particular, it diminishes its ability to maintain and consolidate financial market stability. This concern underlies the implementation of the Growth and Stability Pact in Economic and Monetary Union. By obliging fiscal policies to commit to stability, the pact allows the fiscal buffers to fulfil their role as stabilisers. 5  BIS Review 85/2000  Lastly, one must also take into account the fact that, by their information and expectations, investors can penalise imbalances affecting the main world economies or diverging developments in different countries. To reduce this constraint, economic and monetary policies must be harmonised at the international level in order to achieve more balanced international financial relations. Second, prudential policies should try to reconcile efficiency and stability in financial markets I would like to insist on three objectives I feel are fundamental to promoting efficient and balanced financial systems. Supervisors’ first objective should be to monitor the soundness of financial institutions To do so, they must work at two levels. At the micro-prudential level, they must ensure that the restructuring of financial systems is well-balanced and that the merged institutions are healthy.
And by the time the CCFF and the MPC’s second round of asset purchases got under way in earnest, the UK-wide lockdown was underway – and nearly all of us were working from home. Table 1: The Bank’s operations since 1.3.20  Funding Schemes  Asset Purchases  Liquidity Facilities  GBP bn (as at 27 May)  Change Stock since 1 outstanding March  Chart 15: The Bank’s balance sheet (%GDP)  Peak stock level since 1 March  ILTR  28  +21  28  1 & 3 Month CTRF  6  +6  11  USD swaplines  23  +23  37  APF Gilts  556  +121  556  APF CBPS  14  +5  14  CCFF  19  +19  20  TFSME  12  +12  12  TFS (closed)  107 -  107  FLS (closed)  2-  2  Total  769  Per cent 40 Banknote Covid-19 convertibility to gold crisis 35 reinstated Amalgamation of Treasury and Bank note issues Failure of Lehman Brothers  Banknote convertibility South to gold Sea suspended bubble  WW1  30 25 20  WW2  15 10 5  +207 0  Source: Bank of England  1700  1750  1800  1850  1900  1950  2000  Source: Bank of England, available here. Dotted line extends series to mid-2020, assuming completion of current asset purchase programme.

The interest rate differential with abroad is still too wide, although it has narrowed considerably since the SRR was imposed in June 2016. Given how high the real exchange rate is, this is not a good time to take the risk of pushing it higher than economic fundamentals warrant. If forecasts materialise, the conditions for lowering the SRR will improve in the coming term, as Iceland’s positive output gap is projected to keep narrowing and global interest rates are expected to rise. When the SRR was introduced, there were still broad-based restrictions on capital outflows. The SRR was justified in part with reference to the liberalisation process, and there were concerns that the offshore krónur that exited via the Bank’s June 2016 auction would re-enter immediately in search of a new carry trade opportunity. It is surely counterproductive to open the gates for large-scale carry trade before the carry trade positions from the last spree have been closed out. On the other hand, there will be grounds to revisit the level of the SRR and the asset classes affected by it when the final capital account liberalisation measures are taken. The Bank’s large international reserves, which have been financed domestically for the most part, are the result of the strategy of building up large enough reserves to reduce the risks associated with capital account liberalisation, and of the positive shocks that made it possible to build up the reserves without foreign borrowing.
In our view, the responsibility of the banker should prevail over an automatic reporting of transactions exceeding a certain amount. Tracking down criminal money is even more difficult than identifying money laundering operations. The financing of criminal activities does not require large amounts and the ex ante identity of a criminal is not a source of pertinent information. Furthermore, funds used in the financing of terrorism, unlike cases of money laundering, very often are legally acquired. It is therefore crucial that financial intermediaries in both the banking and the non-banking sectors thoroughly verify their client relationships in order to identify suspicious circumstances. In this connection, strict observation of the “know-your-customer” principle is again of key importance. Switzerland does not hesitate to offer international co-operation in judicial matters and to block incriminated assets. Following the decision of the United Nations to apply sanctions against the Taliban regime in 1999 and 2000, we blocked a certain number of Afghan bank accounts and froze the assets belonging to persons listed by the Sanction Committee of the United Nations. To date, 76 accounts are frozen with a total of 42 million Swiss francs. In the United Kingdom and in Switzerland, the authorities and the banks themselves are fully aware of the utmost importance of successfully warding off criminal funds. We all realise that money laundering is not only morally unacceptable, but that it also clearly undermines the public’s confidence in our financial centre.

You are notorious for your ability to pick apart shallow arguments and for your intolerance of superficiality. Your brilliant mind has often put you at the forefront of European debates. In the 1990s you were already writing about how to build a more deeply integrated European framework around the countries that would go on to share the single currency.3 You understood very early on that a monetary union comprising different sovereign states can only be sustainable if there is mutual trust. And you realised that trust does not emerge through declarations or treaties: it is built through actions that demonstrate the commitment of states to abide by the promises they have signed up to. You saw, in other words, that rules are not an end in themselves. I have so often heard you mention the words “implementation, implementation”, because you knew that it is through faithful implementation and respect for the rules that trust builds up between countries. And it is once trust has developed that more sharing of sovereignty can follow, which reinforces the strength of the Union and each of its members. In the face of changing reality, the challenge, of course, is how to ensure that governance is both credible and flexible. As you have said yourself, “sticking to rules […] does not mean a lack of creativity or originality.” 4 And it is this spirit that we will need to channel in our efforts to deepen our Economic and Monetary Union.
Second, that 2017 not be a lost year in Europe for Economic Union, which must complete and balance out the success of Monetary Union. The short-term priority is to build a “Financing and Investment Union", to better mobilise the 350 billion of European excess savings. But it would also be desirable to start preparing the options for a better collective economic strategy, which will be submitted to future governments: the White Paper to be published by the European Commission by spring is a good opportunity. 1. For our country 2017 is obviously the year of a great democratic debate in France. In the economic field, I make the wish that this debate clarifies the assessments, presents the possible solutions, sheds light on the avenues for action. The Banque de France is independent: this essential value is valid for all times, but even more so this year. Our role, therefore, is certainly not to hand out good and bad political points, and we will have, like any major public institution, a duty to exercise restraint. As a trusted institution, we may just contribute to a serious debate, thanks to the data and studies we publish, and by recalling the facts. In view of the successes of many of our neighbors, which are compatible with the European social model, I have already had the opportunity to say that fiscal credibility and economic reforms are the best way to improve growth and employment in France, and for France to be listened to in Europe.

François Villeroy de Galhau: Prospects, challenges and promises New Year wishes to the Paris financial centre New Year wishes to the Paris financial centre by Mr François Villeroy de Galhau, Governor of the Bank of France, 12 January 2017. * * * I would like to welcome you all, our partners throughout the year – public officials, financial and economic players, journalists – to this magnificent Golden Gallery for this happy tradition of extending New Year wishes to the Paris financial centre. I would like to start by extending to you, on behalf of the whole of the Banque de France and the ACPR, our warmest wishes for 2017, for you and your loved ones, as well as for all of your staff. To these personal wishes, I would like to add several collective wishes this evening: first for Europe and its economy, then for our country, and finally for the smooth financing of our economy and for financial institutions. 1. For Europe and its economy A year ago, I had noted with you that 2016 had begun as the year of volatility, with the turbulences in the financial markets. In fact, 2016 was rather the year of uncertainty, with the Brexit victory in June, the American election in November and the Italian referendum in December.
This is well above the average of nearly $ a barrel experienced over 2010, but at the same time still well below the peak of $ a barrel that occurred in mid July, 2008. The recent volatility in oil prices, as the chart shows, is quite striking. Sharp increases have been followed by sharp decreases. This is one reason we may not want to overreact to price changes – they could be transitory. Figure 2 shows the movements in oil prices – their percent change from a year earlier, in the top line – relative to the change in compensation (the lower line), since 2000. Oil prices have risen recently, but based on the history captured in this chart, one would not expect much of a response in wages and salaries. This, of course, is one reason why consumers feel worse off after an oil supply shock. Prices at gas stations in Massachusetts are now around $ a gallon, yet most people’s need to drive cars has not changed much if at all. So income available for buying other goods and services has been squeezed by the increase in oil prices.3 Some softness in measures of consumer confidence suggests that consumers tend to be less confident about the future when oil prices rise. If consumers pull back spending as a result of a supply shock, it has the potential to be a drag on the economy.

As a consequence, the need to reform the existing Accord is widely recognised and supervisors are working very hard to shape the new Accord in close consultation with the private sector. The Basel II Accord is aimed at bringing the capital requirements closer to the true economic risks in banks’ portfolios and at offering a wide range of options and approaches to respond to the increased complexity of financial instruments. Basel II is achieving all of this basically by relying more on banks’ internal models in the supervisory process. An important by-product is, therefore, that there is a lot of pressure on banks to improve their risk management systems. Improvements are already visible. It seems clear to me that more supervisory efforts, similar to those in the banking sector, may also be needed in the other sectors of financial institutions, for example in insurance. The ECB has drawn attention since the early stages of the Basel II process and the implementation of the framework in the EU to macro-prudential implications and to the possibility of increased procyclicality of certain provisions. When bank capital is largely based on risk and risk increases in a recession, macroeconomic consequences might arise through a procyclical reduced ability of banks to lend. These concerns have been appropriately addressed in the revised proposals submitted for consultation by the Basel Committee and the European Commission. Pro-cyclicality concerns are substantially mitigated and a good balance can be found between risk-sensitivity and macroeconomic stability.
On the Bank of England’s Monetary Policy Committee the nine members debate among themselves our current state of knowledge of the  7  The data in Chart 5 are for occupational pension holders of Actuarial Profession member institutions. These individuals are typically wealthier than the rest of the population, and for that reason tend to live longer. 8  Peterman et. al. (1988) found that the probability of infecting a partner was unrelated to the number of sexual acts with that partner. 9  The large models made the further simplifying assumption that the rate took one of only two values. In fact, it varies widely among the population. Robert May, and his colleague Roy Anderson, showed that a key driver of the proportion of the population eventually infected was the “variance of the rate of acquisition of new sexual partners”. Simulations of the proportion of the population ultimately infected with AIDS are sensitive to that variance, and plausible differences in the number of their partners among different people changed the estimate of the proportion likely to be infected from 25% to 90%. 10  Many non-economists believe that economists use a single “model” to explain all economic phenomena. Hence the interest of many commentators in “the model” that is alleged to generate the forecasts of inflation and economic growth published by the Bank of England. But, as we never cease pointing out, the Bank uses not one but many models to help us understand particular aspects of economic behaviour.

Another method of raising potential growth would be to invest so heavily that the productivity of the labour force increased sufficiently to allow one worker to support one pensioner in the future. Capacity for renewal To summarise, much has changed recently in the Swedish economy. The external framework is currently characterised by a substantial fiscal policy and monetary policy stability, which facilitates planning and decision-making for both households and companies. These fundamental conditions, together with a marked increase in openness to the world around us, give reason to believe in a continued favourable development in productivity. At the same time, one should remember that many markets in Sweden still show clear signs of poor competition. This involves considerable costs. I believe that the Swedish economy has considerable unutilised potential for stronger development if we concentrate on this, i.e. how we shall increase the "speed limit" in the economy. It is not enough to have good macroeconomic conditions; a policy for growth is concerned more with microeconomics than macroeconomics. It is a question of creating good incentives for individuals and people to behave in a rational social manner in their roles as economic agents. What is profitable and attractive behaviour for the individual should also be profitable for the whole. This takes me into the field of politics, which is not part of the Riksbank's responsibilities. However, this is a field where I have been very involved in my previous career roles.