samchain/econo-pairs-v1 huggingface dataset:
This is because, inflation raises all the prices together and, for resource allocation, what is needed is the changes in the relative prices, i.e., the price of one commodity rises, but the price of another should fall to compensate the same. •  Inflation discourages exports by functioning as a tax on exports. At the same time, it encourages imports by providing a subsidy. The end result is a continuous shortage of foreign exchange and pressure for exchange rate to fall in value. •  Inflation also taxes savers and subsidizes borrowers. This happens when interest rates are not adjusted to ensure a positive real rate of interest rate in the market. Hence, savers would find that the real value of their savings falling and borrowers the opposite, along with inflation. •  Inflation also causes an undesirable change in assets structure by favoring unproductive assets like real estate, gems and jewelry and discouraging the much needed financial assets. This happens when interest rates are negative in real terms due to the nonadjustment of the rates to reflect inflation. So, people would shift from value-falling financial assets to value-appreciating real assets. •  Inflation disadvantages the vulnerable groups with low bargaining power such as pensioners, housewives, students etc. It generates social disharmony and social tensions. •  Inflation also raises the costs of local enterprises by raising the prices of inputs and wages. This would adversely affect a country’s comparative advantage.

Her sacrifice is a real sacrifice, because she could have enjoyed that time for her own pleasure. In contrast, the government’s real sacrifice is just 5 units of money, the value of real resources it spent on producing the note. So the government enriches itself at the expense of the teacher who now has been given a note with real sacrifice of 5 units for getting eight hours of real services. This type of an unfair transaction is known in economics as an unequal exchange. Why should the teacher agree to this unequal exchange? That is because she is promised that she could acquire a real basket of goods and services worth of 1000 units of money with that paper. For instance, if a kilogram of rice is 1000 units, she is promised one kilo of rice in exchange for eight hours of her time. If this promise is kept, then, there is no problem. But, if such currency is excessively produced, too much money would chase after too little rice and the price of rice would go up in the market. As a result, when the teacher goes to the market, if the price of rice has risen to 2000 units of money, she could now buy only a half of a kilogram of rice. In other words, she has been forced to give up eight hours of her time for half a kilo of rice.
To conclude, the main challenges ahead are twofold. First, a "wise" exit from the macroeconomic policy stimulus in order to strike a right balance between the need to support economies and prevent accumulation of imbalances. Second, shifting the focus back to structural and transformational policies to address deep seated pre–crisis structural bottlenecks, as well as new structural hurdles that will be left as a legacy of the pandemics, which might not be even well known at the current juncture. This is the only way forward towards transformation of the traditional economies into more smarter, inclusive and greener economies. Finally, when written in Chinese, the word 'crisis' is composed of two characters. One represents danger and the other represents opportunity. I hope that, we have left the danger behind us, and now we will use the opportunities to elevate the wellbeing of our economies. 1 IMF WEO, April 2021. 2 Global Competitiveness Report, 2019. 3 https://www.worldbank.org/en/publication/global-economic-prospects  3/3  BIS - Central bankers' speeches

Instead, it is important to analyze the loan growth in broader economic policy context where due consideration should be paid to the credibility of macroeconomic policies and the impact other policies may have on the incentive structure in the financial markets. As I stated earlier, the presence of Nordic banks in the Baltic market is, of course, a hugely important positive factor. Parent banks are sometimes considered to have an implicit responsibility for the stability of the banking systems in the Baltic countries. It is said that the Baltic banks are too small to fail. International experience lends support to this view, although the evidence is not always in one way. Hence, there are also potential risks. If parent banks are active in many countries of the region, a shock affecting exposure in one country may lead to a reduction in their exposure across the region. Build-up of exposures to common risk factors in a region may also increase the potential for contagion - a reduction in lending to countries not affected by a crisis. The potential for contagion is naturally higher in highly integrated economies. Another potential risk factor is the smallness of the banks in the Baltics combined with their high profitability. While the Nordic banks have high profitability in all of their markets, profitability in the Baltic market is especially high. As a result, the share of banking groups' assets in the Baltics is significantly lower than the share of profits banks make in this region.
The impact that changes in Fed policy can have beyond our borders has led to calls for us to do more to internalize those impacts, or even that policymaking be internationally coordinated. As I’ve already noted, Fed policies have significant effects internationally, given the central place of U.S. markets in the global financial system and the dollar’s status as the leading global reserve currency. In pursuing our policy responsibilities, we seek to conduct policy transparently and based on clear principles. We are mindful of the global effects of  2  BIS central bankers’ speeches  Fed policy. Promoting growth and stability in the U.S., I believe, is the most important contribution we can make to growth and stability worldwide. There is, of course, the argument that Fed policy has been too accommodative for too long, creating risks for financial stability worldwide. Here, I think, it’s important to consider carefully the counterfactual. Would countries beyond our borders really have been better off with a weaker U.S. economy? The fundamental issue is whether U.S. monetary policy has helped support our dual objectives of stable prices and maximum sustainable growth and whether this is consistent with a healthy global economy. Moreover, it is far from clear that explicitly coordinated policy would produce better outcomes for the global economy generally, or the EMEs specifically. Central banks have challenges enough in tailoring policies to their domestic circumstances. I believe that it would be taking on too much to attempt to collectively fashion policy in reference to global conditions.

Focusing only on direct channels, the effects that one would expect to ripple back to the United States from problems in one or two EMEs typically look quite small. But, when all of the indirect channels of feedback are aggregated properly – which admittedly is difficult to do – the effects may be considerably larger. My point is that we tend to underestimate these feedback effects. For most of us, the market volatility of this past spring and summer still remains fresh in our minds. EME financial markets were hit hardest, with declines in equity prices, a widening in sovereign debt spreads, and a sharp increase in foreign exchange rate volatility. In the U.S., we saw a spike in Treasury yields, with 10-year rates rising by roughly 100 basis points from early May to early July, and rising by roughly another 30 basis points before peaking in early September. Most commentary has focused on the shift in expectations with respect to U.S. monetary policy – and, in particular, to uncertainty about the timing and implications of Fed tapering – as the catalyst for these moves. This focus seems generally right, although other factors also played a role. Market participants also had to evaluate the possibility that growth in China and other EMEs might be slowing even as growth in the U.S. and other advanced economies  BIS central bankers’ speeches  1  was picking up.
Now the time has come—I would argue it came a while ago, but in any case it’s here now—the time has come for every firm with LIBOR exposure to actively grapple with the risks that are coming your way whether you like it or not. The way forward for the vast majority of LIBOR-based instruments is rapidly becoming clear. It’s easy and tempting to justify inaction by criticizing the available solutions as imperfect or as just too hard to do. But inaction at this point in the LIBOR transition is short-sighted and futile and only extends the uncertainty. We need decisive action by everyone in the market to avoid damage to individual firms and the financial system. 1 Raymond Check and Thomas Noone assisted in preparing these remarks. Mr. Held would like to thank his  other colleagues at the Federal Reserve who provided comments and corrections. 2 2019 Outlook: Trends in the Capital Markets 3 See for example the FSOC’s Annual Reports for 2013 and 2018. 4 See Introductory Remarks by Federal Reserve Board of Governors Vice Chairman for Supervision Randal K.  Quarles at the Alternative Reference Rates Committee Roundtable, July 19, 2018 5 Second Report of the Alternative Reference Rates Committee, March 2018 6 Reforming Major Interest Rate Benchmarks, 22 July 2014 7 Principles for Financial Benchmarks Final Report, July 2013 8 Information on the ARRC, including  its announcements and publications, can be found at  www.newyorkfed.org/arrc.

You may have noticed that I didn’t mention an ARRC consultation on fallbacks for derivatives, even though ARRC’s original purpose was to address benchmark transition in derivative products. That’s because the FSB’s Official Sector Steering Group asked ISDA to do that for derivatives on all of the IBORS. So, alongside the ARRC consultations for cash products, ISDA has been conducting consultations on fallback provisions for IBORS in multiple currencies,20 and has said it will be putting out a U.S. dollar LIBOR consultation in the near future. One of the key questions being discussed is how closely aligned the cash products fallbacks and the derivatives fallbacks will be. The ARRC has also been an essential vehicle for engaging the official sector to address regulatory obstacles to LIBOR transition. For example, replacing fallback language in legacy, uncleared swaps presents a host of issues under the swap margin rules. ARRC’s regulatory working group is actively engaged with the Commodity Futures Trading Commission, the Federal Reserve, and other regulators to address those. On the accounting side, the Financial Accounting Standards Board has ruled that SOFR is eligible for hedge accounting treatment. While all the consulting and coordinating and kvetching has been going on, market participants have gone ahead and begun the transition to actually using SOFR. SOFR swaps are being quoted by dealers and cleared by central counterparties. CME Group and LCH are clearing SOFR-linked swaps and are moving quickly to using SOFR for discounting curves and interest on collateral. CME Group and Intercontinental Exchange have listed SOFR-linked futures.
It is instructive to compare the underlying causes of the sovereign debt crisis in Ireland with that in Greece. In the case of Ireland, it was the financial system and bank lending policies that drove the country into crisis, which then engulfed the government’s finances. Excessive  1  See L. Bini Smaghi, “Eurozone, European crisis and policy responses”, Goldman Sachs Global Macro Conference – Asia 2011, 22 February 2011. BIS central bankers’ speeches  1  risk-taking by the banks led to strong credit growth and the consequent surge in house prices. The bursting of the housing bubble not only had a severe impact on the banking sector’s balance sheet but also led to a rapid deterioration in government finances. Tax revenue flows, particularly from construction activity, dried up, while the banking system was hit by its heavy exposure to the property market. This brought about an extremely rapid deterioration in public finances as the government bailed out the banking system. In the case of Greece, it was the government’s fiscal irresponsibility that was the root cause of the crisis that then had dire consequences for the domestic financial system. Poor governance, the absence of a culture of accountability, and an inadequate internal auditing mechanism,2 led to a mismanagement of public finances. The resulting accumulation of public debt led to serious financing problems for the Greek banks, which were considerably weakened by the loss in value of their asset holdings as Greek government bond yields surged.

On the one hand, it needed to rapidly address the immediate financing needs of distressed countries, but at the same time it also recognised that the origins of the crisis had to be tackled through a comprehensive reform in economic governance in the Euro area. When Greece signalled that it needed financial support from its Euro area partners, the first financial programme for this country took the form of a bilateral loan agreement with its euro area partners, supplemented by aid from the IMF. It was clear at the outset that there was a need to establish a framework that could swiftly and efficiently respond to possible requests from other Member States. Thus, in May 2010 the European Financial Stability Facility (EFSF) was set up with a lending capacity backed by guarantees from the Member States of the euro area. As from July 2013, the EFSF will be replaced by a permanent framework, in the form of the European Stability Mechanism. 2  See I. Sarmas, “The Greek Financial Crisis from an Auditor’s Point of View”, World Class Performance Symposium 2011: Trust and accountability in public financial management, London, 17 March 2011. 3  See J. M. Gonzalez-Paramo, “The reform of the Stability and Growth Pact: an assessment”, Conference on “New Perspectives on Fiscal Sustainability”, Frankfurt, 13 October 2005.
Behind the chair But before coming to any of those things, unbeknownst to you the prudentist has in fact used some of the Covid lockdown to check her own teeth and try out some new tools on herself before starting in on yours. I can assure you that if you employ hundreds of people whose main job is to identify the weak spots in institutions, then when you step back a take a good look at yourself it is not an easy process! Nonetheless, through a thorough check-up of the PRA we have identified some ways in which we think we can improve our work going forward, with an eye to being as effective and efficient as possible. Much of this is about internal improvements of the kind which will be familiar to many of you from your own change programmes, across areas such as flexible resourcing, organisational design, the consistency of operations across silos and how well we use data and 1/5  BIS central bankers' speeches  technology. But two areas may be of broader interest: the significant change we need to make as we take on a fuller rule-making role following Brexit; and an increased emphasis we intend to place on ease of exit. Ease of exit Starting with ease of exit, this is of course a very important thing to consider when you visit the dentist – just in case they turn out to be the kind of dentist who appears in Marathon Man.

Indeed my first meeting on getting back from summer leave was to review, with Andrew Bailey and other colleagues, our security team’s preparations for an Extinction Rebellion action in the City around the Bank. Some of the protesters seem to believe we are doing nothing much at all, which I do not accept . At the other end of the spectrum, some have argued that central banks have no real role in responding to climate change. This also I disagree with. I think it would be completely non-credible for the PRA, charged with the safety and soundness of banks and insurance companies, to say that climate change and the financial risks it brings should be ignored in its work. I do of course agree that everything we do on climate must be directly rooted in our statutory objectives. But it is essential to acknowledge that banks and insurance companies are exposed to financial risks from climate change. As the prudential regulator, we must understand these risks and ensure they are being well-managed. Moreover, banks and the broader financial sector will play a pivotal role in financing the transition to a 4/5  BIS central bankers' speeches  greener world, helping to mitigate the climate-related risks to the UK financial system and economy. Diversity and inclusion The same applies to our work on diversity and inclusion. It is not the job of the PRA or the wider Bank of England to pursue social policy – that is a matter for politicians. But we should do two things.
Indeed over time, I think that the “ECB watchers” have increasingly come to understand and to respect our monetary policy. We have also become better at explaining it. It is an ongoing process. But things are on the right track. Most importantly, we have done our duty. We have maintained price stability. And we have done it in a pragmatic fashion, with a steady hand. There were many who feared that in the early years of EMU, the euro area economy might be a sacrificial lamb on the altar of credibility. According to this view, the ECB would raise interest rates unnecessarily to prove its anti-inflation credentials. The facts do not bear this out. A number of shocks have hit the euro area economy over the past few years. But we did not over-react. We held our nerve. Even in its infancy, the ECB showed itself to be a mature central bank. I am proud to have been its President these past five years. *** I do not retire without some regret. There is a lot that I shall miss. I shall miss my colleagues in the Executive Board. I shall miss my colleagues in the Governing Council. I shall certainly miss the regular meetings and contacts I have with many of you, especially in the Eurogroup. I have to say that I was touched when I received your invitation to this special dinner. And I am touched that so many of you have taken the trouble to travel to Venice to say goodbye.

*** The last few years have already been littered with outstanding achievements. It was not so long ago that most people doubted that the single currency would ever see the light of day. Then, when they saw that it would, they speculated that only a few countries would be able to join. But they underestimated the resolve of European governments to be part of this great step forward in Europe’s history. Since then, we have witnessed the two changeovers; the introduction of the euro in book-entry form and then in the form of banknotes and coins. Both went smoothly, not because they were easy, but because of the hard work of all involved. And of course, for nearly five years now, we have had a single monetary policy conducted by the European Central Bank for the euro area. During this time, the Bank has not been without its critics. I have not been without my critics. The nature of that criticism depended on which newspapers you read. If you read the Anglo-Saxon press, then we paid too much attention to monetary growth. It seems that money shouldn’t matter for monetary policy. If you read the German press, well the story was different. Some said we communicated too little. Others said we communicated too much. When you are flanked on both sides, then you must be somewhere in the middle of the park. I conclude from this that we must have positioned ourselves more or less right.
As a result, conditions in the banking sector are likely to continue to act as a brake on the recovery. As far as the public finances go, the public deficit widened sharply in the wake of the recession, reaching more than 11% of GDP in 2009/10, in large part reflecting the endogenous response of spending and revenues to the downturn in activity. Action would be needed to address such an unsustainable deficit, unless an early resumption of the pre-crisis growth path is expected. As already noted, that is usually not the case after banking crises. And the maintenance of such a large deficit for any length of time runs the risk of the cost of debt finance rising sharply, as we have seen in the countries of the euro-area periphery. But the necessary fiscal consolidation that is now under way is likely to weigh on domestic demand in the coming years. Moreover, a worsening of the sovereign debt problems in the euro-area periphery could also hold back the recovery here, particularly through its impact on the banking systems here and abroad. Finally, household and business spending, both of which fell sharply in the recession, remain depressed. In part, that reflects subdued growth in households’ real incomes since the onset of the crisis. But in addition, it takes time for confidence and spending to recover after such a shock. Some households need to maintain higher savings in order to repay debts taken on before the crisis.

Therefore, we urge the EPC and CAS members to swiftly agree on concrete proposals for a permanent governance structure with regard to security certification for cards and terminals. Last, but not least, I would like to stress that, from a European perspective, it is of strategic importance to adopt a more coordinated approach to global standard-setting bodies, such as the ISO and EMVCo. These requirements should lay the foundation for a competitive European cards market. However, I personally believe that the European cards market would also benefit from the power of choice. Therefore, a duopoly in the European cards market is not the outcome that I would prefer to see for the SEPA project, which brings me to New Year’s resolution number three. New Year’s resolution number three: let’s move forward with an additional European card scheme The Eurosystem has been calling for an additional European card scheme for four years. Therefore, we are closely monitoring the work of the three initiatives that have been launched. It is important to emphasise that we have not selected any “favourite” out of the three projects, but treat all three equally. All three face some of the same challenges: the  2  BIS Review 159/2010  main challenge is certainty as regards the potential business case. Some clarity has been provided with regard to the sensitive issue of multilateral interchange fees (MIF) thanks to the agreements reached by the EU Commission with VISA and MasterCard.