samchain/econo-pairs-v1 huggingface dataset:
One of the forms taken by this unease is that of rising government bond rates in these countries, which is further increasing the burden of debt (see Slide 8). The high levels of public debt are partially a consequence of the fiscal policy stimulation packages introduced during the crisis. In many cases, the situation has been exacerbated by the excessively weak development of public finances in the years leading up to the crisis. Several countries are now facing a difficult balancing act. On one hand, significant fiscal policy tightening will be necessary for a long time to come in order to reduce public debt to a more reasonable level. On the other hand, this tightening must not be so comprehensive as to threaten the economic recovery. Hopefully the planned European Financial Stability Facility will have a beneficial effect, but the public finance problems will characterise developments for a long time to come, one way or another. The United States also has a large and growing central government debt, and it will require comprehensive fiscal policy tightening to gain control over this development. One advantage is that US government bond rates are still low (see Slide 1). Moreover, asset purchases by the US central bank have contributed towards keeping interest rates down. These expansive financial conditions, together with high profits within the corporate sector, suggest that the recovery will pick up further speed, despite the need for fiscal policy tightening.

CPIF inflation has shown significantly more stable development than CPI, which includes the effects on mortgage interest expenditure of the drastic interest rate cuts implemented during the crisis, as well as the recent interest rate increases. Inflationary pressures are starting to increase in tandem with the economic recovery. This means that the repo rate has also been increased from the very low level of 0.25 per cent that prevailed one year ago to 1.5 per cent today. This allows us to safeguard the balance of Sweden’s economy and simultaneously attain the inflation target of 2 per cent. Where are we going? Having come this far, it may be appropriate to stop and spend a moment reflecting over the financial crisis and long-term economic development. As I mentioned in my introduction, the period from the mid-1990s until the financial crisis was characterised by good growth, low inflation and decreasing variation in output and prices. In addition, the financial crisis was preceded by a period of about 60 years of unbroken growth in the world economy. So we could ask ourselves: are crises of the type we have just experienced “improbable events” that take place perhaps once in fifty years and something we just have to accept? My answer is both yes and no. We have learned that financial crises are extremely costly. Governments and central banks are now busy discussing different measures both to reduce the likelihood of crises arising and to mitigate the consequences of any such crises.
First of all, there are a number of events that could slow down the economy, thereby moderating inflation. A deterioration in the international growth outlook associated with a widening of the impact of the crisis in the US real estate market should be placed in this first category. If the resulting slowdown in the growth of the Swiss economy remains moderate, this would reinforce price stability. However, a substantial slowdown would necessitate a change of direction for us. Next, there are some developments that could simultaneously slow the economy and threaten price stability. An example of this, if it were to prove persistent, is the rise in oil prices. In this respect, monetary policy finds itself in a dilemma and care needs to be taken in order to prevent prices from spiralling out of control. Finally, there are developments that could stimulate economic activity – which is already at a high level – as well as exacerbating inflationary risks. In this category we should mention a possible continued weakening in the Swiss franc. To date, the depreciation of the currency has mainly stimulated the economy without pushing up prices. Negative effects on inflation have been limited due to productivity gains, the opening up of the labour market and the appearance of new international competitors. 2  BIS Review 150/2007  The concurrence of these contradictory risk factors makes a global evaluation difficult and encourages the adoption of a prudent and watchful attitude.

BIS Review 150/2007  3  Observed inflation December 2007 2004 Q1  Inflation  2005 Q2  Q3  Q4  Q1  2006 Q2  Q3  Q4  Q1  2007 Q2  Q3  Q4  Q1  Q2  Q3  Q4  0.06 0.87 0.91 1.38 1.35 1.06 1.18 1.10 1.23 1.33 1.22 0.46 0.09 0.52 0.63  Inflation forecast of September 2007 with Libor at 2.75% and of December 2007 with Libor at 2.75% 2007 Q1  Forecast September 2007, Libor at 2.75% Forecast December 2007, Libor at 2.75%  4  2008 Q2  Q3  Q4  Q1  2009 Q2  Q3  Q4  Q1  2010 Q2  Q3  Q4  Q1  Q2  Q3  Q4  0.66 1.20 1.50 1.38 1.57 1.69 1.75 1.80 1.85 1.91 1.96 2.00  1.62 2.14 1.54 1.56 1.51 1.47 1.46 1.46 1.48 1.51 1.53 1.55  BIS Review 150/2007
Sources: ONS, IHS Markit/CIPS, CBI, Bank of England and Bank calculations. Chart 3c: Government balance also cyclical  Chart 4: When the monetary regime is stable policy rates are more responsive to economic growth and inflation is less volatile  Sources: ONS and Bank calculations. Based on GDP growth and inflation smoothed over 2-year periods, and Bank Rate changes over 2 years. Sources: Thomas and Dimsdale (2017), Feinstein (1991), O'Donoghue et al (2004), ONS and Bank calculations. In the interim, and especially during and between the two world wars, the correlation between interest rates and economic growth was lower and the volatility of inflation higher. This is as you’d expect. To stabilise  7  With the nominal price of the metal fixed, the effective target for the price of goods and services in a gold standard regime is the inverse of its real equilibrium price. A rise in the supply of metal, from new discoveries for example, leads to inflation in the CPI (allowing the real price of gold to fall). If demand for gold rises (for example because of strong economic growth more generally), without any increase in the supply, the CPI tends to fall. Subject to these variations, a gold standard amounts to a target for the level of the CPI. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  inflation the monetary authority needs to lean against the cycle, at least when it’s driven by swings in demand8.

Yves Mersch: Euro clearing - the open race Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Frankfurt Finance Summit, Frankfurt am Main, 29 May 2018. * * * During the 2008 financial crisis, counterparty risks became infamous. Obviously, every finance textbook deals with the risk that, when you enter into a financial contract, the other party may not fulfil their part of the agreement and may even default on their obligation. But the failure of Lehman Brothers and the large losses suffered by AIG in over-the-counter derivatives markets revealed that there were counterparty risks throughout the entire financial system. This was due to the domino effect of counterparty defaults in leveraged products. As a response, G20 leaders agreed at the 2009 summit in Pittsburgh to move all standardised derivatives contracts to clearing through central counterparties (or CCPs). CCPs address the weaknesses exposed during the crisis by insulating counterparties from each other’s default risk. They specialise in managing counterparty credit risk, and by doing so they reduce the risk of defaults spreading across the financial system. But CCPs can only make the financial system safer if they are safe themselves. In the European Union, they are subject to a comprehensive regulatory framework. The European Market Infrastructure Regulation (or EMIR) ensures that they hold robust resources to deal with financial distress.
This issue was present during the first asset purchase program, especially when the pace of weekly purchases reached a peak of about $ billion in the middle of last year. The pace of those purchases at times put pressure on liquidity in the MBS market, leading the Desk to take mitigating actions when possible. 8 In the current circumstances, there would seem to be room for the Federal Reserve to expand its holdings of Treasury securities without creating difficulties for market functioning. The SOMA currently holds about 12 percent of the outstanding stock of Treasury coupon securities – a smaller share than it held before the financial crisis. Moreover, the supply of Treasury securities will remain ample, as the Treasury is expected to issue around $ trillion of securities over the next year. Any purchase program that the FOMC decides upon, whether aimed at Treasury securities or MBS, would be designed to support market functioning as much as possible while still achieving the program’s economic objectives. The deep liquidity of these markets has considerable value to our economy, and we should take whatever steps possible to leave this liquidity intact. The second operational challenge I mentioned comes at the other end of the program – the exit. In particular, it is important to consider whether balance sheet expansion would complicate the eventual exit of the Federal Reserve from its accommodative policy stance. I am confident that our ability to exit will not be compromised by any further expansion of the balance sheet.

The Chairman’s speech in Jackson Hole and the August FOMC minutes both indicated that reinvesting in MBS rather than Treasury securities might become desirable if market conditions were to change. Balance sheet expansion as a policy option As you can see, the decision to simply keep the balance sheet unchanged involved a number of considerations and choices. Let me now turn to the possibility that the FOMC could go a step further and expand the balance sheet beyond its current levels. This policy option has been the subject of intense focus among market participants. Chairman Bernanke has indicated that any decision about expanding the balance sheet would depend on the FOMC’s assessment of the costs and benefits involved. Of course, that assessment is difficult to calibrate. Federal Reserve Bank of New York President William Dudley discussed many of the relevant issues in his speech last Friday. 7 In terms of the benefits, balance sheet expansion appears to push financial conditions in the right direction, in that it puts downward pressure on longer-term real interest rates and makes broader financial conditions more accommodative. One can reach that judgment based on the empirical evidence from the earlier round of asset purchases, as mentioned before. In addition, the market responses to more recent news about the balance sheet also lean in this direction.
The forces that have kept down inflation thus appear to some extent to have been common to other small, open economies in our region. One such common denominator is probably that prices of imported goods have developed weakly. The ongoing globalisation process is one reason for this. Low-cost countries, in particular China, have taken on an increasingly large role in the world economy and we have begun to import more and more goods from these countries. If one looks at price developments for consumer goods - a category that contains many imported goods - prices have actually fallen in recent years, both in Sweden and our Nordic neighbours (Figure 4). Another factor that has held back inflation in Sweden, and has probably been even more important, is that productivity growth has been unexpectedly strong. This has kept down production costs in companies and subdued price increases on domestically-produced goods and services. As imported goods are processed and distributed in the country before being sold to consumers, productivity growth has also held back price increases on imported products (Figure 5). It is not entirely clear why productivity improvements have been so rapid in recent years. One possibility is that the major investments in information technology made at the end of the 1990s have now begun to show results. It is also conceivable that the higher productivity growth is a result of companies in many sectors perceiving increased competition, not least as a consequence of globalisation.

In the current circumstances, economic policies have an important role to play by holding the euro area firmly on course to meet its macroeconomic stability objectives, which are those that make sustained growth possible and shore up the economy against shocks and outbreaks of insecurity and uncertainty. As mentioned above, the main task of monetary policy is to ensure euro area price stability in the medium term, and it is against this background that monetary conditions have gradually been normalised since December 2005. This process has been correcting the benign monetary conditions of the Spanish economy in recent years and promoting a more balanced growth pattern. The most valuable contribution fiscal policy can make is to ensure the commitment to budgetary stability. This commitment has been essential for establishing the conditions propitious to the recent long period of economic growth of the Spanish economy and it is particularly relevant to the macroeconomic setting I have described. 4  BIS Review 130/2007  The latest official forecasts for the general government account are for a surplus of 1.3% of GDP in 2007. This would amply meet the requirements of the Stability and Growth Pact and enable a further reduction of the public debt/GDP ratio. Moreover, it represents an improvement of 30 bp on the target set in the latest update of the Stability Programme. This improvement basically reflects a positive deviation of tax revenue with respect to budget, in a setting of higher-than-expected growth.
It is the combination of accounting and prudential rules which shape the incentives of investors and managers. Partial reform, limited to the prudential field for instance, will not suffice and could even introduce additional distortions. The Basel Committee has come out with a comprehensive approach to capital and accounting reform to reduce procyclicality, embodied, in particular, in the Principles for revision of IAS 39 (“Financial Instruments: Recognition and Measurement”). It should be strongly supported. Second, on leverage. Excessive leverage has been a major cause of the crisis. In many instances, it could not be detected early enough, because attention was focused on riskweighted measures of capital utilisation. There is great merit, therefore, in introducing a leverage ratio as an essential tool of macro-prudential supervision. It is also envisaged as part of the capital requirement regime as a complement and "backstop" to risk-weighted measures. It may be almost impossible, however, to use it as a binding instrument on an international basis. The reason is simple: while it is relatively easy to measure the evolution of the leverage ratio over time for an institution or group of institutions, it is almost unfeasible to  2  BIS Review 133/2009  measure it consistently across countries, due to differences in accounting regimes and banking structures. An enormous amount of work is therefore necessary before integration of a leverage ratio into the Basel framework can be implemented. In particular, full convergence in accounting measurements of both assets and capital is an absolute prerequisite.

In the euro area, the economy depends on the banking system for more than two-thirds of its financing. Any lasting disruption to credit flows would cause considerable harm. Regulators could jointly decide on the following sequence. In the immediate future, priority should be given to capital conservation. As I mentioned, most of the current banking profits are, in fact, by-products of public policies and there is a good case for requesting that they should be kept inside the banking system and used to strengthen balance sheets and finance credit to the economy. This would require some restraint in dividend distribution and, of course, in the overall amount of variable compensation. In parallel, all possibilities to issue new equity should be exploited. This would be a first step. As a second step, a progressive schedule of capital strengthening could be precisely defined and published for the future. It would be crucial that this schedule be made explicitly contingent on the state of the world economy. Again, we want the direction and the path to be clear. But it is important to avoid any negative procyclical effects. The same approach could apply to the new liquidity regime when it is introduced. Let me conclude by mentioning one broader and fundamental issue. We don't know yet what kind of financial system will emerge from the crisis. We need to think about this. We want to reduce or eliminate moral hazard, but the definition of a systemic institution still eludes us.
The Bank of England’s own November Discussion Paper was only one manifestation. Another is the IMF’s recent review of the macroeconomic policy framework. 11 The basic question is whether the authorities could lean against credit-fuelled booms by tightening capital or liquidity requirements for lenders or, as some economists have advocated, by raising the amount of collateral that borrowers have to put up. 12 In principle, this could be aimed at aggregate or sectoral credit conditions, and it could have a goal of making our banks more resilient. It would need to be pursued by executive agencies under clear mandates from legislators, and it would benefit greatly from transparency. A painful lesson for the Bank of England is that our warnings of “underpriced risk” and system-wide fragilities in our Financial Stability Reports were perhaps admired by some but made no difference. And, alongside our domestic and international peers, we are not in this for plaudits! People – the markets, firms, households – take notice of our Inflation Report, MPC minutes and speeches on monetary policy not, essentially, because they might sometimes be interesting or well done, but for the simple reason that the MPC is the body that sets sterling interest rates in the real world. If the authorities were able to deploy credible macroprudential tools, their stability warnings would probably be taken more seriously in future, because they would be able to follow up words with actions. Monetary policymakers would need to be attentive to the use of such instruments, as they would affect credit conditions.

This is unambiguously preferred to point A, with greater stability in both the financial system and, in particular, the wider economy. But could we do better still by having monetary policy assume explicit responsibility for safeguarding financial stability? If we augment this monetary policy rule to take account of financial stability factors, by having interest rates respond to credit spreads, we move to point C. This has the benefit of improving financial stability relative to the conventional monetary policy case. But this comes at the cost of destabilising somewhat the macro-economy. It is unclear whether point C dominates B in a welfare sense. In other words, having monetary policy meet both macroeconomic and macro-prudential objectives involves a trade-off. Once we add an explicit macro-prudential instrument to the equation, however, this trade-off disappears, or at least is lessened. In particular, let’s add a regulatory-set counter-cyclical capital buffer for banks, the like of which is now part of Basel III. Used in tandem with optimal monetary policy, this moves the economy to point D. This involves both greater macroeconomic and financial stability than the alternatives. On the face if it at least, it is welfareimproving. Although the model used is specific, the policy lesson appears to be a general one. Having two instruments (monetary and macro-prudential) leads to an improvement in macro-financial stability. Two policy hands beat one when there are two policy objectives.
After client on-boarding, the ongoing contact between the insurer and the insured is limited to premium payment and processing of claims. Many people do not see a need to meet their insurance agents regularly to review their coverage. Some, I am told, even shun calls from their agents. New insurance apps can transform the insurer-policyholder relationship into a broader partnership. The insured person can benefit from various lifestyle information, healthy living tips and other information, emerging trends, advisories on new products and various service options. These can include transactional services such as the option to buy additional insurance based on new needs – all done digitally. Claims can also be an automated self-service process, with expedited settlement based on digital submissions of proofs. The use of Chatbots can also support a customer by providing on-demand standard reports or for other procedural or contract information. I read that in some countries, new InsurTech players now offer universal all-in-one “plug and use” insurance cover. They use AI-enabled insurance platforms that allow a person to key in his details – like his health statistics, occupation, business and personal travels, his car, family, home and home possessions, pets and so on – and get all the insurance that he needs under one policy that can be flexibly adjusted across the difference risk coverage over his life cycle. What this does is to make the customer experience more pleasant and fuss-free.

William C Dudley: The national and regional economic outlook Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the University at Albany, Albany, New York, 18 November 2011. *  *  *  Good morning. I am pleased to be at the University at Albany. It is always a pleasure to speak with students and faculty because of the intellectual leadership role you play in your communities. I also welcome the addition of business leaders to this gathering because you shape the economic landscape in the region. So, I thank you all for coming today and helping make this such a rich audience. Over the past 20 months, I have been engaged in a series of outreach meetings all across my Federal Reserve District. I consider these visits just as important as my trips to Washington, D.C., to help formulate monetary policy or to Switzerland to shape international bank regulation. The understanding of issues and concerns that I gain today will help ensure that my policy decisions reflect the public interest in the broadest sense. Each visit within the region helps me deepen relationships with the people I represent. As you may know, the New York Fed’s District includes all of New York State; 12 counties in northern New Jersey; Fairfield County, Connecticut; Puerto Rico; and the U.S. Virgin Islands. In August, I met with community leaders, businesses and elected officials in Newark, Patterson and Jersey City.