samchain/econo-pairs-v1 huggingface dataset:
Although there have been many overstatements in the discussion of the importance of IT developments, I believe that IT has the potential to increase the level of productivity in the economy. Computers and the Internet make gathering information simple, cheap and quick, as well as enabling contacts between buyers and sellers on almost all levels. Information technology should, for instance, reduce the cost of financing, handling inventories and procurement. It can have contributed to the fairly rapid return in households’ and companies’ confidence in the economy. Another reason why the slowdown in the economy appears to be short-lived is the stimulation contributed by both monetary policy and fiscal policy. Low inflation and stable inflation expectations when the downward turn came meant that there was scope to lower interest rates in most countries. In addition, the central government debt had been reduced in most countries, which meant that fiscal policy could also be used to stimulate the economy. It is possible that a further reason why the turbulence on the financial markets did not have such a large effect on the real economy was the development of risk management instruments and systems in the financial markets. Most of the earlier financial crises have been preceded by a large rise in property prices, at the same time as the banks have been strongly exposed to this sector. This time, it BIS Review 43/2002  5  was the IT and telecommunications sector behind the stock market rise. The banks' exposure to this sector appears to be lower.

Large shocks to the functioning of the financial system would also reduce the effectiveness of monetary policy, as the transmission mechanism is affected by the efficiency of the capital supply and the mediation of payments. The fact that there are close links between the central banks' two tasks becomes particularly evident when the effects of financial bubbles are discussed. An important part of the process leading up to large imbalances is credit granting by the banks. The fact that households and companies demand loans for increased consumption and investment when asset prices are rising is one thing, but it also requires that the banks increase their supply of loans. If the banks have well-developed risk systems, and rules and supervision are designed to motivate the banks to utilise them, the risk of exaggerated lending will be reduced. The way that capital adequacy rules are designed and applied is of great significance. The new capital adequacy rules, Basel 2, are aimed at reflecting to a greater extent than now the risks the banks actually take. However, valuating credit risks over a whole economic cycle is very difficult. The indications are that both internal credit risk models and credit rating agencies tend to underestimate credit risks during an upturn in economic activity and to overestimate them during a downturn. There is thus a risk that the banks will tend to strengthen the fluctuations in economic activity, even with the new capital adequacy rules.
We were fortunate that the need turned out to not be that great: $ billion of capital needed prior to capital actions already implemented and revenue generated during the first quarter of 2010; $ billion of capital needed after these first quarter actions.   We decided to apply the stress scenario on a consistent basis across all 19 banks. This entailed economists and bank supervisors working together to do analysis on both a top-down and bottom-up basis. This allowed us to generate aggregate estimates that made sense on an economywide basis. If we had just used the initial estimates supplied by the banks – we would have had a Lake Wobegon outcome – the banks would all have said that they were above average.   We specified the capital need in terms of dollars rather than in terms of a capital ratio. In other words, we did not allow banks the option of shrinking their risk-weighted assets in order to push up their capital ratios. We didn’t want banks to shrink to minimize the amount of capital needed because such behavior might have damaged the macroeconomy. I think this was an important macroprudential element of the SCAP.   Disclosure. This was hotly debated. There was no precedent for the disclosure of supervisory information. However, senior policymakers – including myself – thought disclosure was essential for the SCAP to be credible and we resolved to disclose extensive information. Disclosure allowed private-sector analysts to kick the tires and this was important.

The day after the results were published, I remember that Bridgewater Associates – which had said the banks needed considerably more resources – published a paper evaluating the SCAP results. The banner headline was: “We Agree.” So this was important. However, I would note that it is important not to draw too strong a conclusion from just one episode. In the SCAP process, I also think it is important that we had some good luck. First, the banks’ needs were not that great. What people didn’t appreciate going in was that U.S. banks have strong revenue-generation capabilities: the banks had already set aside a large amount of reserves and taken large mark-to-market losses, and the banks had already bolstered their capital resources via capital raises and the sale of ancillary businesses. Second, the economy started to look a bit better in May at the time the SCAP results were released. This made the stress scenario more credible. Third, the capital markets were open to the banks. This was important because, as we saw, private capital was viewed as very much superior to Treasury mandatory convertible preferred shares. Fourth, although we made the correct decision to disclose, this was a difficult and close call. The fact that the loss experiences for the different asset classes varied across the banks helped to bolster the credibility of the results. Going into the spring of 2009, there was a prevailing view that several of the largest banks would have to be nationalized.
2. Macroeconomic stability and convergence Price stability has not come at the expense of higher unemployment. Moreover, there are no visible signs of costs in terms of higher real macroeconomic volatility. Quite on the contrary, the volatility of real variables has declined relative to the averages observed during the 1980s and 1990s. Does one size fit all? It is often argued that a single monetary policy combined with inflation differentials leads to different real interest rates across countries, which in turn may destabilisize the currency union by creating divergence in output growth that exacerbate inflation differentials. This is by no way what we have observed:  BIS Review 4/2006  5  First, inflation dispersion among the euro area countries (measured as the unweighted standard deviation of annual HICP inflation rates) amounted to slightly less than 1 percentage point in 2005 compared to around 6 percentage points in the 1990’s. Since the inception of the euro, the average inflation dispersion across the euro area countries has been around 1 percentage point. This figure is very close to the dispersion observed across the 14 US metropolitan statistical areas. Concerning growth differentials, euro area averages naturally mask a variety of growth performances of individual countries within the single currency area, especially in a context where structural convergence has not been completed yet. Growth dispersion is a natural phenomenon in any large economic area.

It shows that the policy stance is also underpinned by the information stemming from our monetary pillar: - From 2001 to 2003, the annual growth of M3 was well above its reference value. However, an indepth analysis of M3’s components and of its main counterparts showed that the dynamics of M3 was mainly due to extraordinary portfolio shifts into M3, in a context of heightened economic, financial and geopolitical uncertainty. This implied low medium-term risks for price stability, as captured by the monetary indicators presented in figures 4 and 5, and allowed the Eurosystem to enter an easing cycle. 6  BIS Review 4/2006  - The situation has changed since the second half of 2004 as reflected by the monetary indicators: first, broad money aggregates accelerated in parallel with increasing demand for loans to the private sector; second, this acceleration was mainly driven by the most liquid components of M3, pointing to a significant impact of low interest rates on monetary dynamics. Furthermore, the growth of borrowing, especially mortgage loans, remained very robust, fuelling a sharp increase of housing prices across the euro area. In such a situation, the risks revealed by the monetary analysis to price stability over the medium-term were strongly revised upward. 4. Predictability and frequency of policy actions Contrary to some preconceptions, most monetary policy decisions have been perfectly anticipated by the markets.
Svein Gjedrem: Monetary policy, forecasts and market communication Speech by Mr Svein Gjedrem, Governor of the Norges Bank, at the Norwegian School of Management’s Centre for Monetary Economics, Norsk Hydro, Lysaker, 7 June 2001. *  *  *  The long-term objective of monetary policy is to contribute to low and stable inflation. Price stability is the best contribution monetary policy can make to economic growth and prosperity. A nominal anchor is also a necessary precondition for stable financial markets and property markets. We cannot achieve higher employment in the long run by accepting higher inflation. On the contrary, the experience of our country and that of others in the 1970s, 1980s and 1990s is that periods of high inflation are followed by downturns with high unemployment. High and variable inflation also leads to an arbitrary redistribution of wealth and income. This spring, the Government assigned a new operational mandate for monetary policy to Norges Bank. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. The inflation target is set at 2½ per cent. I will use this occasion to elaborate on our interpretation of the mandate and to discuss how it will affect the conduct of monetary policy. The inflation outlook is presented three times a year in Norges Bank’s Inflation Reports, and forms a basis for the Bank’s interest rate decisions. Further assessments are presented every six weeks in connection with the Executive Board's monetary policy meetings.

I take this opportunity to extend my special thanks to the media and congratulate this community for its work. The media has transmitted the decision-making and activity of the Bank of Albania in a timely and reliable fashion to the public. Year 2011 was a complex year for the entire global economy, especially the European one, to which the Albanian economy is more sensitive. From this perspective, the role of the media takes special significance. I am happy to affirm that in Albania, the media has expanded its broadcast time dedicated to economy and finance-related issues and especially to transmission of information from the Bank of Albania, whose decisions were covered professionally. The media has been active also in promoting reflection by stakeholders. Media has supported Bank of Albania policies, forestalling dissemination of uncertainties amongst the public. The self-adjusting attitude has been another important element in media’s activity. The alarming effect has been cancelled successfully by thorough analysis of news items, providing nuances of the truth beyond excesses and speculations. A fresh example of this responsible behaviour is the EUR/ALL exchange rate fluctuation at the beginning of December this year. Some “panic” was caused amongst the public by earlier media reports and analysis, which were later considered by the media itself as an unreal exchange rate volatility.
How we’ve been doing So much, then, for what we are trying to do. How, then, are we doing? Well – whatever you read in the newspapers – the answer is that since we adopted an inflation target as the immediate policy objective, we’ve actually been doing pretty well. Inflation over the past six years or so has in fact averaged about 2¾% a year on the target measure and it has recently been almost spot on its 2½% target. But equally important, total output in this country has grown consistently for almost seven years – 27 consecutive quarters – up to the final quarter of last year, at an average annual rate of around 3%, and that is well above our long-term rate of growth of underlying capacity of some 2-2½%. We were, in fact, over this period steadily reabsorbing the economic slack created by the earlier recession. Employment has risen on the most recent figures published yesterday, by some 1.8 mn since 1992, to an all-time high of 27.3 mn. And the unemployment rate is at a near 20-year low, not just for the UK as a whole, but in nearly every region in the Kingdom. Encouragingly these developments in the labour market produced only a rather gradual pickup in earnings growth compared with past periods of labour market tightening, which was an important factor helping to contain inflation. And our balance of payments remained in surplus on the latest available data – for Q3 last year.

I would like to urge that, in searching for labor market solution, attention must also be paid to the problems of the wage structure, since at the going wage, price mechanism and its signaling function do not work efficiently enough to clear the labor market to eliminate this skill mismatch. Related issue is that of a long stall in labor productivity as well as overall productivity growth. Policy distortions and a lack of clear policy directions can discourage firms from accumulating physical capital and investing in innovation, and prevent workers from moving to higher value-added sector. For example, agricultural price subsidy measures, while serving their redistributive purposes, may inadvertently channel workers away from highly productive manufacturing to agricultural sector, thus contributing to lower overall productivity of the economy. At the same time, low public spending on R&D and insufficient protection of intellectual property rights may deter innovative entrepreneurship and hinder a transformation towards a knowledge-based economy. Good news is, the risk of a sustained growth slowdown could be reduced or even avoided, as success of some mature economies in Asia have shown in the past. This will depend crucially on the quality and the timeliness of public policies across a wide spectrum in tackling these long-term issues. To be sure the task is not going to be easy. Reorienting the country’s growth strategy to focus more on skills development, innovation, and productivity involves deliberate planning over relatively long stretch of time. Three principles are of the essence: visionary leadership, consistency, and continuity.
2 2 See Alternative Reference Rates Committee, Second Report, March 2018 3 3 See remarks by William C. Dudley, Restoring Confidence in Reference Rates, October 2, 2014 4 4 See remarks by William C. Dudley, The Importance of Incentives in Ensuring a Resilient and Robust Financial  System, March 26, 2018 5 5 See, for example: 6 William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, October  20, 2014 7 William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry:  Expanding the Dialogue, October 20, 2016 8 William C. Dudley, Remarks at the Culture Imperative – An Interbank Symposium, January 11, 2017 9 William C. Dudley, Reforming Culture for the Long Term, March 21, 2017 10 Michael Held, Reforming Culture and Conduct in the Financial Services Industry: How Can Lawyers Help?,  March 8, 2017 11 Kevin J. Stiroh, Misconduct Risk, Culture and Supervision, December 7, 2017 12 6 See remarks by William C. Dudley, Lessons from the Financial Crisis, November 6, 2017 13 7 See Alternative Reference Rates Committee, Second Report, March 2018 14 8 The U.K. Wheatley Review led to changes in many areas of LIBOR, including statutory regulation of LIBOR,  selection of a new administrator, new governance and oversight regimes, and a code of conduct for submitters.

By going through the issuance process ourselves, along with the help of external parties, we have hopefully showcased to potential green bond issuers, both locally and overseas, that Hong Kong is a convenient platform for issuing green bonds, for three reasons:  3/4  BIS central bankers' speeches  (i) Hong Kong has a strong presence of finance and legal professionals, who can advise on all aspects of the bond offering and assist in arranging, managing, co-ordinating and marketing the green bond certification and issuance; (ii) Hong Kong combines the best market practice from internationally renowned green reviewers and local agencies. For example, we obtained a Second Party Opinion from Vigeo Eiris for the Green Bond Framework and the inaugural transaction under the Framework has also received the “Green Finance Certificate” (Pre-issuance) from the HKQAA; and (iii) Hong Kong is home to leading international institutional investors, including many of the investors who have made strong commitments to green investments. 20. During the roadshow for the green bond, we were joined by our Environment Bureau colleagues to reach out to overseas investors in major cities such as London, New York, Paris, and Frankfurt, in order to demonstrate to the international community the HKSAR Government’s coordinated commitment to green finance and our broader objective to address climate change risks. We believe the exercise has gone a long way in asserting Hong Kong’s branding as the premier regional green finance hub to the leading institutional investors around the world.
In my speech today I would like to touch upon main elements of the forecast which are of key importance from the point of view of the decision we took today and for understanding the logic behind our future actions. I will start from the assumptions. We assume the Urals crude price this year at around 50-55 US dollars per barrel. We have reasons to expect oil prices to rise to 70–75 US dollars per barrel by 2017, but nonetheless remain significantly below the levels observed during several past years. We also assume that access of the Russian companies to the global capital markets will be restricted throughout whole forecast period. A long period of relatively low oil prices will force Russian economy to adapt to the new conditions. As a result, GDP is expected to decrease by 3.5%-4% in 2015 and 1%-1.6% in 2016. Moreover, as I have already mentioned, the structural constraints of the economy will be supplemented by factors of cyclical nature. Despite the drop in oil and other commodity prices, the net export will make a positive contribution to GDP dynamics due to the effects of the ruble depreciation on imports and Russian exporters’ competitiveness. However, net export dynamics will not be able to fully offset the reduction in consumer and investment activity during two coming years. As in 2009, contraction in the domestic demand will primarily influence durable goods, including imports, and also some services sectors.

In and of itself, this shift seems likely to have made money markets more segmented, and more prone to the “turbulence” in response to shocks I mentioned earlier. Longer term, this regulatory shift has catalyzed a deep and complex impact on the structure of money markets, which is still unfolding nearly two years later. These effects have included an ongoing increase in the role of FHLB advances as means of intermediation between government money funds and financial firms, as well as ongoing efforts by a wide variety of borrowers and lenders to broaden their counterparty lists and consider new operating frameworks so as to best accomplish their business objectives in the new money market environment. For example, although the FHLBs for years focused their liquidity management on the federal funds market because it provides a high degree of intraday liquidity, they are now beginning to explore greater use of bilateral repo, as that market has similar characteristics and can at times provide them with a higher return. It is likely that these ongoing shifts in money market structure have contributed to fluctuations in rates and spreads, and that they will continue to do so. 11  I view fluctuations in term money market rates of the magnitudes seen recently as normal parts of market functioning during a period of structural change. Wholesale dollar funding, though more expensive, has remained readily available both in the United States and abroad.
The IAFR, adhering to the principles of independence, transparency and accountability, will contribute to improving control over fiscal policy and to introducing greater budgetary discipline in all tiers of general government, in line with the Law on Budgetary Stability and Financial Sustainability approved in 2012. More specifically, and focusing on the budget for this year, the IAFR has recently published a report on macroeconomic forecasts (Informe sobre las Previsiones Macroeconómicas), endorsing the Government’s macroeconomic projections that underpin the draft State Budget and analysing the consistency of the projections made in previous years. Furthermore, by 15 October, the IAFR is to publish its report on the draft Budget (Informe sobre el propio Proyecto de Presupuestos), in which it will assess its suitability with a view to meeting the objectives of stability, debt and the rule that ties spending to economic growth. As regards the sustainability of public finances in the long term, the latest key development has been the approval and entry into force of the new revaluation index and the pension sustainability factor. The reform entails a structural change, since benefits are to be linked to the system’s ability to generate revenue. The information available on the budget outturn to date this year shows headway in the process of fiscal consolidation. The overall general government deficit in National Accounts terms was 3.43% of GDP to June, 0.5 pp down on the figure of 3.94% in the same period a year earlier.

We commend the extensive IMF exercise, using data from millions of European companies and agree with its main conclusions. Job retention schemes, moratoriums on payment obligations, grants and credit guarantees can be effective in improving companies’ liquidity needs, even more so in advanced than in emerging economies. However, moving forward, the increase in indebtedness does raise concerns for solvency risks and investment prospects. It is true that, from the central banks’ perspective, all chapters of the report are extremely relevant. Personally, I always look towards the IMF’s research findings for confirmations of our own scenarios, different perspectives on certain topics, or even red flags. More broadly, the 2020 Regional Economic Outlook (REO) for Europe provides a much-needed analysis, from the IMF’s point of view of the opportunities and challenges that our region can expect following a very difficult year of restrictions, as well as social and economic difficulties. For 2020, the IMF forecasted a contraction of real GDP in Europe of 7 percent, the biggest contraction after World War II. Thanks to the extraordinary policy response, even more dramatic consequences have been avoided. I understand that the full extent of the pandemic’s impact on companies in 2020 is yet to be revealed as time passes and more data becomes available. I agree that long-lasting changes in the structure of the economy will occur, even though they are hard to predict at this moment.