samchain/econo-pairs-v1 huggingface dataset:
13  Scale The greater scope of the Fourth Industrial Revolution could mean its scale is larger too. Unlike in previous episodes, the jobs most at risk of automation are likely to lie across the entire spectrum of wages. At one extreme, Frey and Osborne (2017)  15  14  16  estimate that around half of US employment is at ‘high risk’ of  automation, over an unspecified period of time. 10  For example, Brynjolfsson, E and McAfee, A (2014), ‘The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies’. The most extreme view of this is put forward by Daniel Susskind, who highlights the possibility that in the future machines can perform all tasks leading to technological unemployment (Susskind, D (2017), ‘A model of technological unemployment’, University of Oxford, Department of Economics Series Working Papers, No. 819). 11 The question at the heart of this debate is whether we can overcome ‘Polanyi’s Paradox’ - that “we can know more than we can tell” (Polanyi 1966). Our inability to detail these tasks (such as social interactions) in a formulaic manner currently makes them difficult to encode and automate. 12 McKinsey (2017) also suggest demand for creative and social skills will increase. 13 I am grateful to my colleague Silvana Tenreyro for suggesting this point. 14 Brynjolfsson, E, Mitchell, T and Rock,D (2018), ‘What Can Machines Learn and What Does It Mean for Occupations and the Economy’, AEA Papers and Proceedings, Vol. 108, pp. 43-47.

When technological change is disruptive and widespread, the productivity effect is generally insufficient to counteract completely the destruction effect, partly because of the time it takes for the full potential of new technologies to be realised, and partly because of the phenomenon of greater job polarisation – to which I will turn to in a moment. As a consequence, over the medium term, technological change tends to reduce labour’s share of income. Historically, however, technological progress has not led to permanent declines in the labour share because 9  of a third effect – the creation of new tasks for labour. When combined with the productivity effect, this ultimately has counterbalanced the displacement effects of technology, boosting productivity and wages while leaving employment unaffected. 7  Partly there is a lag in reorganising enough of the economy to the advantage of the new general purpose technology for aggregate productivity growth to increase. 8 The following is based on Acemoglu, D and Restrepo, P (2018), ‘Artificial Intelligence, Automation and Work’, NBER Working Paper No. 24196. 9 This creation effect need not be fully exogenous to the technological change, for example because the new technologies allow new jobs to emerge that wouldn’t otherwise be possible – though of course factors like education and skills are important in determining how quickly and smoothly these gains come about. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Could this time be different?
As initially stated, we are in the final stage of the savings bank restructuring process, implementing the strategy envisaged in Royal Decree-Law 2/2011 approved by Parliament in February. Underpinning this legislation are three pillars. First, a very significant increase in solvency. All institutions shall comply with a core capital ratio, in which only top-quality instruments are eligible, of 8%, rising to 10% in the case of institutions that rely on wholesale markets for at least 20% of their funding and none of whose share capital or voting rights are placed with third parties. Second, FROB backing for those institutions that do not reach these new minimum capital levels by their own means. 2  BIS central bankers’ speeches  Third, new arrangements for the instrumentation of FROB aid, which now ceases to be provided as preference shares, taking rather the form of subscription to shares in the bank resulting from the conversion of the savings banks concerned. *  *  *  On 10 March 2011 the mechanisms envisaged in the new regulations were set in train with the publication by the Banco de España of the situation regarding institutions’ capital. Twelve banks (four commercial banks and eight savings banks) did not reach the figures required to comply with the ratio, needing an aggregate additional amount of € billion. Finally, the number of institutions with a shortfall rose to 13 following the collapse of the Banco Base Institutional Protection Scheme (IPS).

The focus groups suggested that people see the ability to “pay anywhere” as the most important feature of a new digital payment instrument. This emerged in all countries and age groups. Instant, easy, contactless payments, especially for person-to-person payments, were the second-most valued feature. Lastly, participants in the focus groups would like to see a solution that would allow instant person-to-person payments regardless of the platform used by the payers and payees. See Kantar Public (2022), Study on New Digital Payment Methods, March. 2. A digital economy is driven by network effects and digital money is a network good. This means that the more people hold and use the digital euro, the more attractive and valuable it would become to other users. This would, in turn, increase the potential number of people who may wish to adopt it as a regular means of payment. See Katz, M.L. and Shapiro, C. (1994), “Systems Competition and Network Effects”, Journal of Economic Perspectives, Vol. 8, No 2, pp. 93-115; and Claessens, S., Dobos, G., Klingebiel, D. and Laeven, L. (2003), “The growing importance of networks in finance and its effects on competition”, in Nagurney, A. (ed. ), Innovations in financial and economic networks, Elgar, pp. 110135. 3. Legislative changes to the current regulatory framework for anti-money laundering and countering the financing of terrorism would be needed to enable high levels of privacy beyond the baseline scenario for lower-risk digital euro payments – namely simplified due diligence for low-value online transactions and exemption of low-value proximity payments from monitoring.
As a result, the latter face an acute dilemma: how to articulate regulations in a way that allows innovations to emerge and develop without compromising stability and trust? According to the Governor of the Bank of England, Mark Carney, FinTech innovations should not be in the “Far West,” nor be choked at birth. In the same vein, Fed Governor Lael Brainard argues that regulators and supervisors should not overburden financial innovations, as this could push them outside the regulatory perimeter, thus creating more risks and less transparency. But the dilemmas for economic authorities do not stop at this philosophical level. There are a number of concrete dilemmas between valid policy goals. ▪  Inclusiveness vs risk of uninformed decisions. One of the main potential benefits of FinTech innovations, particularly for emerging economies, is financial inclusion, as many more people can have access to financial services. However, while this may be unambiguously positive for the most basic financial products, such as payment systems, it may be not so if people make uniformed credit or investment decisions. In order to address this issue, the policy response should comprise financial education (which is a long-term solution) and a proper financial consumer protection framework. ▪  Decentralization, choice and competition vs. operational efficiency, economies of scale and client knowledge. Should FinTech innovations result in an unbundling of the core functions of financial institutions, a large number of relatively small firms may have a large share of the financial industry (decentralization).

Another channel through which an exceedingly large financial sector may have a negative impact on the real economy is the brain drain of human capital from other sectors, owing to the high compensation schemes in the financial profession. The overexpansion of the financial sector has induced banks to increase their demand for highly skilled employees, driving up the average wage of the industry. The depletion of human capital from other – potentially more productive – sectors may have a long term effect on economic growth. Although theoretical and empirical research on this channel has just started, I believe it is important for policy makers to have a better understanding of how financial excesses may produce significant macroeconomic distortions. And I have not mentioned the impact on fiscal balances yet. 3. Improving the resilience of the financial system  Market economies are based on the simple principle that economic agents reap the benefits and bear the risks from their actions. It is this trade-off which leads to optimal decisionmaking, given the available opportunities and the tolerance of risks. If, however, the costs of bad decisions are not entirely borne by the economic agent, significant distortions are introduced, leading to misallocation of resources. Therefore, as a fundamental principle, one has to ensure that incentives of all agents are correctly aligned with the cost and benefits of their financial decisions.
Indeed, in the absence of the extra £ billion of gilt purchases announced two weeks ago, we judged that inflation would be rather more likely than not to undershoot our 2% target in the medium term. That was why we decided that it was necessary to do more. Moreover, the longer capacity lies idle, the more likely it is to be scrapped completely. And the longer people are out of work, the more likely they are to become disconnected from the labour market altogether. So there is an added incentive to getting the recovery back on track quickly. The euro area represents the biggest single downside risk to this picture. Greece is the country in the headlines right now, but several countries of the euro-area periphery face, in varying degrees, a challenging mixture of unsustainably high public and/or private indebtedness and weak competitiveness. Correcting those problems requires: fiscal consolidation; bank recapitalisation; and a rebalancing of demand towards net exports. The first two are under way, but the third is harder to achieve in a monetary union where no exchange rate movement is possible to bring about the necessary improvement in international competitiveness. At best, these countries face an extended period of very low growth while the necessary adjustments take place. And while this morning’s agreement between the Greek government and the euro-area authorities is certainly welcome, there still remains a possibility that events could unfold in a disorderly and damaging fashion at some stage in the future.

The reaction of financial markets is a wakeup call to all countries that sooner or later government finances must be put on a sustainable path. The main measures implemented so far at the EU level are mainly short-term oriented to fight of the liquidity crisis and associated contagion risks. A large assistance package has been established jointly by the EU and the IMF for Greece. To ward off the risk of contagion, the EU has put in place the European Financial Stabilization Facility (EFSF) while the IMF has committed to provide significant bilateral funding. Overall, the funding secured amounts to 750 bn Euros. This significant amount is justified by the high risk of international spillover effects. Additional support to ward off this contagion risk was given by the European Central Bank which decided to intervene in the euro area public and private debt market in order to restore an appropriate monetary policy transmission mechanism. 4 These measures provide essential backstops. By adopting them, the governments of the EU member states and the European authorities have unequivocally stated their intention to safeguard the Euro. While this was a crucial first step, initial market reactions suggested persistent scepticism. The uncertainty regarding the health of the balance sheet of European banks is high and is keeping tensions on financial markets elevated. It is not only the exposure of European banks towards mainly peripheral EU countries that is a concern to market participants.
The policy actions the Fed takes will depend on how economic conditions develop. If circumstances change, our policies will adapt. No matter the circumstances, I assure you that we at the Fed are doing everything we can to achieve the goals of maximum employment and stable prices. Thank you very much. References Board of Governors of the Federal Reserve System. 2011. “Minutes of the Federal Open Market Committee”, June 21–22. Board of Governors of the Federal Reserve System. 2012. “Press Release”, January 25. Federal Reserve Bank of New York. 2010. “Quarterly Report on Household Debt and Credit”, August. Feroli, Michael E., Ethan S. Harris, Amir Sufi, and Kenneth D. West. 2012. “Housing, Monetary Policy, and the Recovery”. Presentation to the 2012 U.S. Monetary Policy Forum, New York, February 24. Jordà, Òscar , Moritz Schularick, and Alan M. Taylor. 2011. “When Credit Bites Back: Leverage, Business Cycles, and Crises”. NBER Working Paper 17621. Mian, Atif, Kamalesh Rao, and Amir Sufi. 2011. “Household Balance Sheets, Consumption, and the Economic Slump”. Presentation at American Economics Association meetings, Atlanta, GA, January 8, 2012. Reinhart, Carmen M., and Kenneth S. Rogoff. 2009. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press. 7  For more information, see Board of Governors (2012). BIS central bankers’ speeches  5  Williams, John C. 2012. “The Federal Reserve’s Mandate and Best Practice Monetary Policy”. Presentation to the Marian Miner Cook Athenaeum, Claremont McKenna College, February 13. 6  BIS central bankers’ speeches

The latest three-month average of M3 growth, covering the period from May to July 1999, rose to 5.4%, compared with 5.3% in the previous three-month period from April to June 1999. Overall, the annual rate of growth of M3 has been moving away from the reference value of 4.5% since the start of the year. This upward movement may be explained to a large extent by the very low opportunity costs of holding monetary assets, especially the most liquid components, but perhaps also by the gradually improving economic conditions in the euro area. At the same time, the annual growth rate of credit to the private sector remained high, even though it declined by 0.5 percentage point in July, to 10.4%. The monetary policy strategy of the Eurosystem assigns a prominent role to the behaviour of M3. Accordingly, recent monetary developments merit close attention. At the same time, taking into account the fact that we are still in a very early phase of Monetary Union and that figures for broad money growth have been subject to some revisions in recent months, shorter-term monetary developments need to be interpreted with caution. Concerning financial market indicators, the upturn in long-term interest rates in the euro area, seen since early May, continued in August and early September. Domestic factors seem to have played a dominant role, as indicated by the fact that differentials between US and euro area bond yields have narrowed further.
Consequently, Switzerland – unlike other countries – was able to avoid introducing state-guaranteed bonds. With the drastic reduction in key rates and the subsequent decline in mortgage rates, the burden on households and companies was eased. In this way, the severity of the recession was somewhat alleviated and the risks of deflation reduced. However, the interest rate is now at a historic low and this means medium-term risks for the Swiss real estate market and financial stability. Experience shows that periods of low interest rates provide scope for excesses on the mortgage and real estate market. Consequently, in the current environment in particular, attention should be given to ensuring that past mistakes are not repeated. Caution must remain the watchword when granting loans. BIS Review 140/2009  1

However, a large part of these outflows have been official and they have not been in RMB. This in fact touches at the heart of what is known as the Triffin Dilemma. China has been sending USDs abroad because that is what it has been receiving through its current account surpluses and FDI inflows. Sometime in the future, China may develop a structural current account deficit, but I do not see that happening in the foreseeable future. Opening up the capital account and domestic financial system to non-resident investors could lead to even more foreign currency capital inflows. On both accounts, China will not only continue to export USD capital but could find itself confronted by persistent appreciating pressure on its exchange rate due to the high demand for RMB. Promoting RMB for trade settlement will only go so far in resolving this. If more of China’s trade is settled in RMB, less USD will flow in, and China would need to intervene less and would have less USD to send abroad. But the question remains, with more RMB flowing in through the current and capital account, how do you get more RMB out of China in the first place? There are in fact numerous possibilities for China to create a significant pool of RMB liquidity abroad without necessarily running a current account deficit.
But the relevant perspective is that of co-operation and not of “autonomous” infighting between the representatives of free enterprise and those of Hobbess Leviathan-type of government. Against this background let me take a bird’s eye view of some challenges that regulatory and oversight authorities should tackle to facilitate initiatives to resolve the identified issues. A first challenge is the need for a common approach of the regulatory and oversight authorities. This need arises from several factors. For instance, clearing and settlement of securities transactions occur in different institutions located in different jurisdictions. The whole infrastructure underlying these transactions has reached a global dimension. Over the past decades cross-border infrastructures have deployed their activities essentially as a complement to domestic systems, but I expect them start playing a more powerful role at a domestic level as well. The common approach to regulate and oversee cross-border securities clearing and settlement systems, which I have referred to previously, is being worked on. The various standards and recommendations that have been issued recently is proof this. Some may set the accent on the divergences, misinterpretations or on the incompleteness of these standards and recommendations. I do not refute them but I also see the value added of sharing the same language to tackle complex issues. Regulatory and overseers tend to adopt a pragmatic approach where one authority takes on a leadership role and consults with other relevant authorities.

Niklaus Blattner: The financial system and the regulatory challenges in securities clearing and settlement systems Speech by Prof Dr Niklaus Blattner, Member of the Governing Board of the Swiss National Bank. at the Seventh Conference of Central Securities Depositories, Lucerne, 12 June 2003. The references for the speech can be found on the Swiss National Bank's website. *  *  *  Ladies and Gentlemen I would like to talk to you about some basic issues and some regulatory and oversight challenges in securities clearing and settlement systems. Judging by the growing number of reports, the way your industry performs has been closely scrutinised over the last few years. Considering, for example, the G-30 Report on Global Clearing and Settlement or the second Giovannini Report, it strikes me that the emphasis has not only been put on the identification of potential difficulties and issues. In addition, responsibilities to resolve these difficulties are assigned and timetables are established. The debate has thus gained a new dimension. I shall start from a rather academic perspective, but nevertheless please count on my devotion to a number of very practical issues. I shall first discuss one of the basic functions of a financial system, which is the provision of clearing and settlement services, and its contribution to welfare. However, as we live in a less than perfect world, I shall focus on a number of important imperfections that tend to affect the smooth functioning of a financial system.
At this stage, risks of an abrupt turn in the cycle with consequences similar to those observed in 2007-08 appear limited in France for several reasons.v To give just a few in addition to macroprudential measures: over 97% of the stock of housing loans are fixed-rate; borrowers’ solvency is assessed in a very cautious way; real-estate is not used as collateral for credit (as they are in many Anglo-Saxon countries), meaning that real-estate price adjustments do not result in an increased repayment burden. We nevertheless have to remain very vigilant, including in other segments of the market. In particular, commercial real estate (CRE) comes to mind, which has been slowing around the world because of the greater recourse to remote work and online business, and because of rising interest rates. The commercial property sector entails both direct and indirect risks for credit institutions: direct through CRE credits, and indirect through CRE assets pledged to them as a collateral for other kinds of credit. Ireland has once more been a pioneer on this  Page 11 sur 11 front by implementing macroprudential leverage limits for investment funds,vi which could pave the way for a more comprehensive macroprudential framework. In France, at this stage, indicators do not show any particular risk accumulation: both non-performing loans- and loan-to-value ratios are tending to decline. But we will definitely keep monitoring risk indicators closely, given the amounts at stake (around EUR 150 billion of direct exposure, and EUR 85 billion of indirect exposure for French banks).

So you would be right to take all forecasts – including our own – with a large pinch of salt. But the MPC has to take a view, when it sets interest rates. My aim tonight will be to share some of that thinking with you. Financial market developments Let me start with the problems in global financial markets. Over the course of the summer, growing arrears in the US sub prime mortgage market triggered a global loss of confidence in the valuation of securities backed by bundles of mortgages and other loans. How could a relatively limited problem – confined to the bottom end of the US housing market – spark a global financial crisis? It’s a good question. The short answer goes as follows. Investors had come to rely too heavily on the ability of rating agencies to value what had become exceedingly complex financial instruments. The realisation that their faith had been misplaced cast doubt on the value of a wider class of asset backed securities. Many of these were embedded in ever more complex, highly leveraged, investment vehicles. This set the stage for a period of turmoil in international money and credit markets which has now been through several phases, and may go through several more. At its heart, the problem is one of uncertainty. First, there is great uncertainty about the eventual size of losses from defaults on US sub prime mortgages that the global financial system will have to absorb.