samchain/econo-pairs-v1 huggingface dataset:
But the idea that monetary policy may need to be used in support of macroprudential policy and contribute to preventing new imbalances arising on financial markets is nevertheless a question that is climbing higher up the agenda in these countries, too, as the economy and the housing market recover.26 A clear example is the United Kingdom, where the most recent remit for the Bank of England’s Monetary Policy Committee (MPC) states that circumstances may arise in which the MPC  24  One recent example is Lagarde (2014): “But where macroprudential policies fall short, monetary policy will have a larger role than in the past to maintain financial stability.” Other examples include White (2009), OECD (2010), Caruana (2010), Borio (2011b), IMF (2013), BIS (2013), Bayoumi and Habermeier (2014). See also Mishkin (2011) and the Committee on International Economic Policy Reform (2011). 25  It should be noted that the central banks in these countries have not necessarily made the assessment that there was motivation for leaning monetary policy against the wind in practice. The point is that they consider such deliberations as important to include in monetary policy as a question of principle. 26  Examples in the US Federal Reserve are Hoenig (2010), Bernanke (2011), Kocherlakota (2013) and Stein (2014). Within the ECB it has been noted that the strategy of a so-called “second pillar” that focuses on developments in monetary aggregates implicitly contains an element of leaning against the wind. See ECB (2010) and Stark (2010).

• What does China economic slowdown and its current adjustment means for capital markets and for the quest of renminbi internationalization? • Should and can the systematically important countries “internalize” their spillovers effects to mitigate negative external impacts?” I organize my points around the three functions of an IMS – liquidity, confidence and adjustment. On liquidity function, there are two areas that we require significant improvement on the current IMS. The first is related to excessive liquidity during normal times. What are the appropriate policies to curb excessive capital flows? The IMF’s approach advocates that recipient countries should implement the capital flow management measures and use macro-prudential tools. Hence, there is an asymmetric treatment of countries as source countries are not expected to do much if not at all. There is of course room for a symmetric treatment. The Holy Grail may exist in the IMF’s articles of agreement as it states in Section 1 that “each member shall seek to promote stability… by fostering a monetary system that does not tend to produce erratic disruptions”. The second is about the existence of safety nets providing liquidity during financial stress times. Again, the optimal provision of liquidity is the main issue. To what extent it should be divided among global, regional and local sources. It is a classic efficiency versus moral hazard problem. Changes in governance structure of the global safety net providing IOs have a potential to alleviate this problem.
According to an assessment by the IMF Mission that visited Samoa earlier this month, about a quarter of the tourism sector’s capacity was destroyed by the tsunami. Beyond tourism, the IMF Mission noted that the widespread damage to physical infrastructure implies that other sectors such as commerce, transport, and communication have also been directly affected. In the seven months to end January 2010, tourist arrivals increased. On the surface, any increase is good news. However, a significant number of the visitors were volunteers and overseas personnel who came to assist with the tsunami emergency and recovery efforts. Many of these people stayed in makeshift camps in the tsunami affected areas, resulting in a reduction in paid hotel accommodation. This, combined with a general decline in the other categories of tourist expenditures, saw total tourism earnings in the period under review fall 5 percent to $ million. Private remittances, which is one of the major sources of income for our people, was also affected by the recession and tsunami. In the early months of the current financial year, private remittances were well on their way down, due to the global recession. However, the huge inflows following the tsunami outweighed the earlier reductions resulting in an overall increase to $ million, in the first 7 months to end January. 2  BIS Review 49/2010  Exports rose slightly in the period under review, reflecting increases in exports of fish, coconut oil, copra meal, nonu fruit and bottled water.

While explicit coordination looks neither feasible nor desirable, there is more that central banks in general, and the Fed in particular, could do to be better global stewards. As an example, recent events demonstrate the importance of effective Fed communication. It is clear in retrospect that our attempts in the spring of 2013 to provide guidance about the potential timing and pace of tapering confused market participants. In particular, markets seemed to conflate tapering with monetary policy tightening and raised their expected paths for policy rates. Lately, we seem to have done better: markets now seem to understand that policy rates will likely remain exceptionally low for a considerable period of time even now that the asset purchase program has been completed. As you know, we’ve taken a number of steps in recent years to increase transparency and improve our communications. This includes regular press conferences following Federal Open Market Committee (FOMC) meetings by the Fed chair; the publishing of growth and inflation forecasts of FOMC participants; and a concerted attempt to lay out the guideposts that the FOMC will look at to assess progress toward our mandate. We are, though, still learning how to more effectively communicate, especially given our new and expanded set of policy instruments. A second area in which we can and must do better is safeguarding financial stability. Simply put, we failed to act both early enough and decisively enough to stem the credit excesses that spawned the financial crisis and the Great Recession.
Surveys and anecdotal information point to firms operating close to capacity, but profit margins have been squeezed in recent years, essentially by the rise in energy prices. There is some slack in the labour market. That is deliberately broad brush; the point is that it is common to both stories. On the Orthodox Story, in conditions of robust aggregate demand, firms operating close to capacity are likely take opportunities to restore their margins by raising prices, pushing upwards on CPI inflation. So the Orthodox Story commanded a policy response to prospective inflationary pressures from excess demand. Under the Alternative Story, the outlook for inflation may be quite different due to developments in the labour market, notably from inward migration. There might well be more slack in the labour market than allowed for in the Orthodox Story. And, most potently, if more workers were to be attracted in to the country as aggregate demand expands, the economy’s productive capacity would expand as well. In that case, it would probably be harder for firms to raise prices, although they may still be able to restore margins by bearing down on costs, especially labour costs. (That is in aggregate; we would probably see further increases in skill shortages and in the premium for highly skilled labour in the professions.) On the Alternative Story, the outlook for inflation is highly uncertain – and not necessarily weaker, although that may seem the most obvious implication.

Nor do I have any claim to originality – Milton Friedman and Anna Schwartz wrote in their monetary history of the US that the most notable feature of the revival of the US economy after 1933 was not its rapidity but its incompleteness[1]. I, and other MPC members, have also used the analogy of a bridge to describe the role of economic policy in the age of Covid, the bridge to the other side of Covid. We are still on that bridge. The rate of recovery has slowed over recent months, and that slowing is continuing. Relative to the fourth quarter of 2019, on the latest data to July, the level of GDP was 3.5% lower. That’s around one percentage point below the level consistent with the August Monetary Policy Report. There is a crucial distinction here between growth rates and levels of activity. It is inevitable in a bounce-back that the growth rate will slow as the recovery nears its end-point. It is not though inevitable – or desirable – that the previous level is not regained. Recovery in some consumer-facing services appears to have been delayed. We had seen a recovery in activities such as eating in restaurants, but activity is levelling off, notwithstanding our contribution this evening. Consistent with the impact of supply bottlenecks and disruption, construction output fell in July, and manufacturing output stalled. Surveys and the reports of the Bank’s Agents, suggest the impact of these supply-chain issues is broadening out.
Since linkages are deep and dense, even the tiniest tensions can be amplified, echoing and reverberating across the world – often in an instant, often with unpredictable twists and turns. Because of this, the global economy can become even more prone to instability”. Therefore, given the complexity and interconnectedness in the current economic activity and the high level of involvement of media in the present day, we must take all steps to avoid the eruption of even a small shock in the financial system as it can create a bigger impact on the economy and on social and political fronts, thereby deteriorating market confidence and increasing overall uncertainty. We believe the consolidation process would avoid, if not, at least minimise such impact. Reason 4: Addressing the fragmentation issue in the financial sector Currently our banking and non-banking sectors are highly fragmented and operate in a skewed manner reflecting the dominance of a few large banks and NBFIs. Continuation of this situation is risky because the small financial institutions are generally more exposed to internal and external shocks and tend to threaten the stability of the entire financial system of the country. Our banking sector constitutes 34 banks, of which 22 are domestic banks and 12 are foreign banks. The assets of the banking sector amount to approximately Rs. 6.3 trillion with only 5 banks, each maintaining an asset base of over Rs. 500 billion, accounting for a share of 66 per cent. Meanwhile 6 medium size banks, including 2 foreign banks, hold assets between Rs.

However, the data, or the explanations may not count if they do not reach the public and do not influence their decisions. According to some estimates, by 2025, 463 exabytes of data will be created each day globally. This means huge generation of data that can blur the official statistical information making it difficult for people to read and understand it. Obviously, to bring statistics closer to the public we need to place further focus on aspects such as putting numbers in perspective so that they can be easily understood by the wider public, language simplification, that sometimes is not an easy task for experts that are used to statistical taxonomy, segmentation of the audience (communicate not only to financial analysts and journalist, but to the broader audience, although through different channels), as well as creation of relatable content that considers what matters to the public and at the same time is educational and entertaining4. Along those lines, the National Bank, recognizing the importance of communication, engages in quite an array of activities. At the end, I feel that it is appropriate to conclude my address with the motto of the European Statistics Day 2021 "Statistics, a vaccine to protect democracy and combat the virus of disinformation". 1 "Survey of National Statistical Offices (NSOs) during COVID-19", World Bank and the  United Nations Statistical Division (UNSD), brief, July 6 2020.
The upturn followed a period of slower growth as from 1998 and a mild recession in 2002 and into 2003. Even though there have been cyclical changes, growth has been very high over the past 15 years. Norway is one of the nations that has gained most from trade liberalisation and increased cross-border flows of capital, technology and labour. Norway has experienced the benefits of shifts in the division of labour across countries and regions. First, Norway’s terms of trade have improved markedly. We can buy one and a half to two times the volume of imports for the price paid for our exports than was the case only 5-6 years ago. Prices for oil and gas, shipping, fish, industrial commodities and engineering products have increased considerably. Moreover, Norwegian importers have gained access to new markets in central Europe and Asia which offer considerably cheaper consumer goods. A similar situation has not been seen since World War I, when earnings in the shipping industry and other export industries were exceptionally high for a period.16  16  Tore Jørgen Hanisch, Espen Søilen, Gunhild Ecklund (1999): Norsk økonomisk politikk i det 20. århundre (Norwegian economic policy in the 20th century), HøyskoleForlaget, page 60. 2  BIS Review 15/2007  Second, the supply of foreign labour has increased markedly after EU enlargement in 2004. Over the past two years, these labour inflows have accounted for more than 30 per cent of growth in our labour force.

A survey of more than 31 European countries also shows that there is a high degree of job satisfaction among Norwegians.17 Demographic developments will have a dampening impact on demand for public services and social security disbursements over the coming years. The number of elderly among pensioners, i.e. 80 years and older, will not grow and the post-war generation will only start drawing on social security in the next decade. There will still be pressures for higher public spending. Demand for services we have chosen to let the government provide, for example health services, increases markedly when revenues rise at the pace they are rising today. Growth in government revenues – among others the return on the Government Pension Fund which is rising rapidly – also raises our expectations. At the same time, this is also a period of strong growth in demand for labour in the business sector. With the exception of part-time employees who want to work more, there are now few idle resources in the labour force. We cannot expect a substantial increase in the supply of foreign labour. Workers from other countries, such as Sweden and Poland with families and the largest share of consumption in their home country, have increased production capacity in Norway, but it now appears that the supply of foreign labour is starting to become more limited. Other inward labour migration does not generate higher value added per capita. Immigrants that become permanent residents make the same contribution to increasing demand as to increasing production.
Nonetheless, as my colleague Governor Tarullo noted in a recent speech, 1 more will need to be done to increase the stability of the unregulated sector, and developments in this area will need to be scrutinized carefully in the years ahead. Before closing, let me reiterate the importance to achieve harmonized global standards. As noted earlier, this is important for competitive equity reasons. But more importantly, it is necessary to ensure that banks and other financial firms cannot move their activities to evade regulation. If that were to occur, we would just have a race to the bottom and a less transparent and even more complex financial system. In this respect, it is important that we regulate the U.S. operations of foreign banks in a way that is consistent with how U.S. banks are treated. It is also important that we work for the same type of national treatment abroad, and when there are differences in regulatory regimes, that we find ways of reducing or eliminating the substantive differences over time. Finally, it is important that we clarify the responsibilities of the home and host countries and work to better share information across the regulatory community. This can help ensure that regulatory decisions are made and applied in a consistent and fair manner.

The Supervisory Capital Assessment Program (SCAP) in 2009 required the large banks to have a capital buffer consistent with achieving a Tier I common ratio of 4 percent under a stress environment considerably worse than what was anticipated (or did, in fact, occur). Banks that fell short of this were forced to raise additional capital. On top of this, Troubled Asset Relief Program (TARP) repayment terms provided strong incentives for banks to issue common equity to repay the TARP preferred stock. In addition, several banks converted preferred stock into common equity. Roughly speaking, the 19 banks subject to the SCAP generated more than $ billion of common equity via share issuance and $ billion via conversion of preferred stock into common equity in 2009. Second, as noted above, the standards are being phased in slowly. For example, in 2013, the tangible common equity standard will be only 3.5 percent. In 2013, there will be no conservation buffer requirement and banks will still get credit for items that will ultimately be deducted from common equity, such as deferred tax assets. The Federal Reserve, as the consolidated supervisor of the largest and most complex banking companies, does not expect these banks to meet the fully phased in standards today. Instead, the Federal Reserve will require firms to develop an adequate capital plan to meet the Basel III requirements as they become effective and will track progress toward meeting those plans over time.
Some say the film is being screened again now; that households are simply addicted to debt and lenders are enabling that addiction. Let’s put things in context. Since the financial crisis, helped by low interest rates, Britain’s households have reduced their debt. Nevertheless, we do still have a high level of household debt by historical and international standards. As a share of incomes, consumer loans are actually smaller than they’ve tended to be in the past twenty years. It is mortgage debt that explains why debt levels are so high (chart 6). Mortgage debt is high, in large part, because housing costs are high. Across the nation, the average house costs 4.5 times income (Chart 7). 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  An imbalance of demand for, and supply of, homes means it’s not just expensive to buy a home, it’s expensive to rent one too. 6  Those who rent in the private sector typically spend a third of their income on rent. How much would a first time buyer be willing to pay for a house financed with a mortgage if the alternative is to spend a third of their income on rent? The payments on a mortgage of 4 times income, paid off over 30 years, at an interest rate of 7% (rather higher than the prevailing Standard Variable Rate of about 4%) would cost the buyer a third of their income.

All borrowers want to consider carefully their ability to make the payments they’re signing up to, but no individual can be expected to take into account the spillover effect of their debt on the wider economy. After all, no individual will really make a difference. These spillover effects are – in the language of economists – an ‘externality’. So lenders are the first line of defence against the wider economic risks of high debt levels. An enlightened lender should factor in the risks of losses on the rest of their business from high levels of mortgage debt. And they should factor in the risks of losses from the consumer credit they’ve extended. The emphasis there was on ‘should’. Because in reality, the opposite can happen; lenders can enter a spiral of complacency. It begins with a period of good economic performance and low loan losses. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Lenders extrapolate that into the future, attributing success to skill rather than chance. 4  Nowhere is this clearer than page 8 of the 2006 Annual Report of Northern Rock: “The credit quality of our assets remains strong…The reason for this improvement is … because we have further improved our credit scoring …Our scorecards are highly predictive…which gives an early warning of potential default - so we are confident that the current historically low level of default will continue.”  Within three years, the arrears rate on its mortgage book had increased ten-fold.
Figure 8 Contribution to annual GDP growth (1) (real annual change; percentage points) 16  16  12  12  8  8  4  4  0  0  -4  -4  -8  -8  -12  97  98  99  00  01  02  03  04  05  06  07  08  Net exports (2)  Private consumption  Gov't consumption  Change in inventories  GFCF  GDP  09  -12  (1) GDP of first quarter of 2009 corresponds to averaged published Imacecs. (2) Exports of goods and services minus imports of goods and services. Source: Central Bank of Chile.

Figure 12 Interest rates on CBC instruments and VIX (monthly averages, percent) 8  70  7  60  6  50  5  40  4  30  3  20  2  10  1  0  04 BCP-10 BCU-10  05  06  07  08  09 VIX  Sources: Central Bank of Chile and Bloomberg. 14  BIS Review 65/2009  Figure 13 Monetary policy rate and forward curve (percent) 9  10 9  7  7  10  8  8  5  6 5  3  3  6  4  4  2 1  2 1 0  07  Jul. 08  Jul. 09  Jul. MPR January 2009 Report  10  Jul. 11  0  September 2008 Report May 2009 Report (*)  (*) Estimated using financial asset prices at 8 May 2009. Source: Central Bank of Chile. BIS Review 65/2009  15