samchain/econo-pairs-v1 huggingface dataset:
This is probably due to the modernisation of the functioning of the economy through the 1980s and 1990s, which resulted in more efficient markets. In addition, growth in labour productivity reflected a marked fall in sickness absence in 2004. The outlook for the Norwegian economy Monetary policy influences the economy with a lag. Norges Bank therefore has to be forward-looking in its interest rate setting. Developments in prices and capacity utilisation in Norway are influenced by both domestic conditions and economic developments in other countries. Since the end of June, global money and credit markets have been characterised by sharp fluctuations, liquidity shortages and reduced risk willingness. The turbulence stems from problems in the US mortgage market. Defaults on subprime mortgages in the US began in the second half of 2006. Securities portfolios had been developed around these mortgages. Uncertainty arose among banks and investors that were directly or indirectly exposed to losses on subprime mortgages. Expected losses on mortgage-backed securities rose. Investors became gradually less willing to take risk. The premium on corporate securities increased markedly. The credit premium has been highest on the lowest rated securities, i.e. securities backed by subprime loans. Another effect of the turbulence is credit migration, i.e. that the rating of securities has changed as the consequences of the unrest have become apparent. For example, a security that had an AAA rating, may now be rated AA or lower. The turmoil spread rapidly to other parts of the financial markets.

After a long period of high housing investment and rising prices, activity in the housing market now appears to be slowing. Seasonally adjusted, house prices have fallen for four consecutive months. In recent years, house price inflation has been accompanied by strong growth in household debt. Credit growth remains high. Higher interest rates and falling house prices may lead to slower consumption growth and a higher saving ratio ahead. There are large regional differences in house price developments, but the trend has been the same since year-end 2006. House price inflation is decelerating in all regions, with a 12month decline in house prices in Hedmark and Oppland and a rate close to zero in Trøndelag. The strong rise in house prices has been accompanied by an increase in turnover up to the summer of this year. The stock of homes for sale has varied somewhat in recent years, but since summer 2006 there has been a sharp increase. This may explain some of the decline in house prices in recent months. The present economic expansion differs from previous upturns in that inflation has remained low so far despite strong growth and increasing capacity utilisation. There are several reasons for this. First, low import prices and high prices for our commodity exports have improved Norway’s terms of trade appreciably. Prices for oil and gas, freight, fish, industrial commodities and engineering products have increased considerably.
Lucas Papademos: ECB Financial Stability Review June 2007 Opening remarks by Mr Lucas Papademos, Vice President of the European Central Bank, at the press briefing on the occasion of the publication of the June 2007 ECB Financial Stability Review, Frankfurt am Main, 15 June 2007. * I. *  *  Introduction  My colleagues and I welcome you to today’s press conference on the occasion of the publication of the June 2007 edition of the ECB’s Financial Stability Review. The financial stability assessment contained in the Review has been prepared with the close involvement of the ESCB Banking Supervision Committee. It is based on information that was available up until 11 May 2007, the “cutoff” date for this Review. The primary objective of the semi-annual ECB Financial Stability Review is to review the main sources of risk and vulnerability for euro area financial system stability and to provide a comprehensive assessment of the capacity of the euro area financial system to absorb adverse disturbances. In addition to the financial stability assessment, the June 2007 edition of the Review addresses several topical issues in 17 boxes and it also includes five Special Feature articles. In my introduction, I will first focus on risks and vulnerabilities we have identified in: (i) the external environment; (ii) global financial markets; (iii) the euro area corporate and household sectors; and (iv) the euro area financial institutions. I will then discuss some potential risk triggering factors and will conclude with an overall assessment of the outlook for financial stability. 2.

Since then the degree of uncertainty, as measured by the width of our fan charts, has decreased significantly, while the balance of risks has shifted as I have set out to being two-sided. While the range of potential outcomes is, as I have described, a complex and multidimensional one, and is still beset with considerable uncertainty, I find it helpful to map out three broad scenarios which for me summarise how the risk factors may play out, and map across to what course the economy might take in future. 12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  The first potential scenario I foresee is broadly in line with the MPC’s “central expectation” set out in the June minutes: that the economy will experience a temporary period of strong GDP growth and above-target CPI inflation, after which growth eases and inflation fall back towards the 2% target. Of course as I stressed earlier, “temporary” doesn’t necessarily mean ‘here today, gone tomorrow’, particularly for inflation. The supply side pressures and their interaction with demand might take some time to disperse. In the mean time we could see very high inflation in certain sectors and products, such that at a whole economy level I wouldn’t be surprised to see the whole economy CPI inflation rate potentially rising as high as 4% for a period later this year, before falling back towards the 2% target. That would not be an unprecedented event: we saw similarly high outturns in 2008 and 2011.
We would like this debt restructuring to have the following five characteristics: to be longer in nature; to be broader and applied to a wider range of people; but at the same time, to be more targeted and flexible, respond more appropriately to different circumstances faced by different kinds of borrowers. This is because the nature of the recovery is somewhat uneven and the crisis has hit different sectors in a very uneven fashion. We would like to make sure that these debt restructuring measures would benefit as Page 5 of 9  many people as possible in order to survive and get through the crisis together. The more debtors that survive, the better off the creditors will be. Lastly and most importantly, we would like to make sure that debt restructuring measures that are undertaken do not exacerbate problems of moral hazard, in which we undertake measures in trying to alleviate the crisis that end up contributing to the moral hazard problem as the saying goes the cure being worse than the disease. That is something we would be very cognizant of in implementing these new measures. What about the longer term? In addition to making sure that we get through this crisis, we, at the Bank of Thailand, are trying to make sure that we put in place the foundations for a longer and lasting recovery beyond COVID and making sure that we are in a good position to take advantage of the opportunities that will arise in the post-COVID world.

We are a country that is, in terms of population and employment, quite significantly dependent on agriculture, about 30 percent of our labor forces is tied to agriculture. So obviously, higher temperatures and higher risk of droughts and floods will severely hit the agricultural sector. Thailand is also highly dependent on tourism, the beach tourism, and so substantial rises in sea levels will hit our country very hard. Therefore, as a country that is very vulnerable to climate change, I think it is beholden upon us to take much stronger initiatives on the climate change and the green front. Page 6 of 9  On Thailand’s development on the green front, I welcome a lot of initiatives that happened in Thailand, especially in the capital markets. We have seen the Stock Exchange of Thailand launching the Thailand Sustainability Index, which is an index composing of green and sustainable listed firms. We have seen our colleagues at the Security Exchange Commission undertaking welcomed initiatives with the Environmental, Social and Governance (ESG) bonds, which are seeing a significant growth in Thailand. I would also like to see that progress on the banking side catching up that of the capital market as the banking side, both in Thailand and globally, still lags in terms of green and climate initiatives that have already been undertaken by capital market participants. Thus, we, at the Bank of Thailand, will do our best to make sure that the banking sector catches up and does play its role as needed.
Moreover, in its latest review of the Lisbon strategy, the European Commission underlined research and development as a shortcoming, but also pointed to insufficient confidence in social security systems and a lack of efficient markets in primarily transport, energy and financial services. Here I would like to focus on three areas that I believe are important for both increasing potential growth and improving the competitiveness and dynamism of the European economies. The first is to consolidate public pension systems so that they can withstand the demands of an ageing population. The second is to overhaul the structure of tax and benefit systems in order to minimise their distortional effects on the labour supply. Last, but not least, we need to reform the functioning of the financial markets so as to increase efficiency and thereby also the willingness to invest. The economic crisis gave Sweden a better starting position With regard to Sweden, much has already happened to improve the functioning of the Swedish economy and increase potential growth. This has helped Sweden to come further than many other euro area countries in terms of living up to the Lisbon strategy. However, some of this has been due to economic developments as opposed to a political will to change. For example, the economic crisis at the beginning of the 1990s resulted in the winding up of low-productivity operations, thus increasing labour productivity. During the same period, Swedish economic policy was changed with a view to laying the foundations for longer-term, sustainable economic growth.

That said, the pickup in business start-ups is moving slowly, as it is in other European economies such as Germany and France.2 This environment of diminished business dynamism in net terms might be associated with an increase in the market power of certain big firms in some sectors. 2  See Chapter 4, “Business dynamics in Spain: characteristics, determinants and implications”, Annual Report 2015, Banco de España. 11/18  Additionally, business dynamics in Spain show two anomalies compared with other countries: 1) the productivity of business start-ups is lower; and 2) companies that increase their size are not necessarily the most productive. As occurs in other countries, new Spanish firms are small in size and show lower productivity levels than the average for their sector. This suggests the existence of a learning curve that new firms must follow if they are to converge towards average efficiency. In Spain’s case, however, the evidence available suggests that the productivity gap between new firms and existing ones is greater than that in other European countries. The relatively low level of new firms’ productivity adversely affects both their survival Spanish firms’ probability of survival after three years is low when compared with other countries – and their ability to grow. There is also evidence that, in Spain, the correlation between growth and productivity is not particularly high. In other words, the most productive firms do not always increase their market share.
If there is confidence in nominal stability, the deterioration in competitiveness may result in an appreciation of the krone in the short term. A lack of confidence in nominal stability may result in a depreciation of the krone. Both cases may entail fluctuations in the exchange rate. A shift in public expenditure growth - or one-sided tax cuts - will have an impact on domestic demand, thus prompting movements in the exchange rate. When fiscal policy is used to smooth fluctuations in domestic demand, it will contribute to a stable exchange rate. International business cycles and financial market unrest may have an impact on the krone exchange rate. Exchange rate variations among major currencies may influence the krone exchange rate measured against individual currencies. Over the last year the euro has depreciated against the US dollar, the yen and pound sterling. The krone has appreciated against the euro. The effective exchange rate has been more stable. A situation may arise with a significant shift in economic fundamentals in Norway. A shock of this nature may be due to a permanent change in growth prospects. This may also imply a permanent change in the krone exchange rate. Our experience suggests that this seldom occurs. A sharp and sustained shift in oil prices, as witnessed in 1973 and 1986, may imply that the use of oil revenues will have to change. This may in itself have an impact on the exchange rate.

This means that we cannot expect growth rates on a par with that of the 1950s and 1960s, i.e. annual growth rates of up to 5%. A new economy New technology may be a driving force behind structural changes in the economy and lead to high growth rates. Chart 14  The trend in the postwar period, with stronger growth in productivity in Norway than in the US, may have been reversed. Productivity growth has tended to move on a weaker trend in Norway, while rising in the US. Both Norway and the US have enjoyed a long period of sustained expansion in the 1990s. At this stage, productivity growth tends to be low. Signs of higher growth in the US may thus suggest a new trend. It is probably too early to draw any definite conclusions. We also know that there may be considerable statistical sources of error. However, the new growth trend is supported by evidence of a more anecdotal nature. Major changes are taking place in the US business sector through processes such as mergers and acquisitions. There is an exceptionally rich supply of capital in the stock market. The new technology companies dominate stock exchange developments. In Europe, Sweden and Finland are leaders in developing new technology environments. Norwegian companies may also be at the forefront of developments in some areas. BIS Review 14/2000  12  Securities markets have been a vital force behind these changes.
This is almost 11 million homeowners.1 One of the factors behind the development of the US housing market was irresponsible lending to households with weak debt-servicing ability. We have also seen examples of this in Europe. Problems in the housing sector could have severe consequences for households We don’t want to have to go through a similar development in Sweden. Our experiences of the crisis of the 1990s are more than enough. And we didn’t emerge unscathed from the crisis of 2008 either. Nobody wants a new financial crisis. At the moment, the greatest risks to financial stability in Sweden are the financial unease in the euro area and the resulting unease on the financial markets. However, our assessment is that the Swedish banks are also well-prepared for weaker development than in our main scenario. I would also like to touch on a domestic risk that is frequently mentioned – Swedish households’ high levels of indebtedness and the risk of a fall in housing prices. Firstly, I would like to say that we don’t see any acute threat in this regard. We are not facing any dramatic falling housing prices. In addition, our assessment is that the Swedish banks can also cope with fairly large falls in the market value of housing. Nonetheless, we at the Riksbank have long warned that the high level of indebtedness may make the Swedish economy vulnerable. If the economy should develop adversely, households may be forced to cut back on their consumption.

Financial crises ultimately threaten fundamentally important social functions An even more serious financial crisis could even threaten fundamentally more important social functions. Households are dependent on the banks’ ability to manage payments so that they can receive wages, purchase food and so on. In turn, our banks are dependent on the financial market as a whole. If a serious crisis should break out – if the payment systems should stop working, if the banks should stop trusting each other or if the banks should cancel payments – there would be problems for a great many of us. As a conjectural experiment, we could ask ourselves how many Swedish households would be able to cope with a week or two in which neither charge cards nor ATMs functioned. Thankfully, we haven’t had to worry about such problems in Sweden. The financial crisis of 2007–2009 impacted borrowers in other countries hard A meltdown in the global financial economy was averted in 2008 and 2009 at a price we are still unable to calculate. Even if the total cost has yet to be calculated, we can still note that 2  BIS central bankers’ speeches  the consequences of the financial crisis are clear if we take one of its fundamental causes, the US housing crisis, as an example. In the autumn of 2011, 22 per cent of all US mortgage holders still owed more than the value of their property.
Since the authorities had decided on how much each bank could increase its credit book every single month, there was really no need to appraise credit applications in a particularly serious manner. Mortgage credits took most of the available credit volume and the remainder was allocated to safe projects. Credit losses in the banking system were only a fraction of a percentage point of the credit stock each year. As a consequence, the ability to appraise credit risk had slowly dwindled out of the banks. So, unfortunately, was the case for the supervisors. When credit controls were finally removed the volume of credit virtually exploded. All banks wanted to increase their market shares and there was plenty of pent-up demand. Many loans were given to customers who, as it appeared later, were far from creditworthy and should not have passed a proper credit appraisal. The regulations had been abolished at the wrong time and without realising what an extended period of regulation had done to the ability of banks and supervisors to handle credit risk. What can be learnt from this? Quite obviously, deregulating does not mean the abolishing of all rules according to which banks should behave. There are good and well documented reasons for regulating banks. Deregulation means the adoption of a new legal structure that is consistent with a competitive market economy. The dilemma of regulation is to balance between having too little and too much. Too much will stifle the banks, too little will lead to unsound risk taking.

In this respect, the IFRS initiative should  not be self-sufficient, as it could neglect the S and G dimensions, and as such key standards are public goods, which require “co-construction” with political authorities. Corporations, financial or non-financial, which proclaim themselves “net zero by 2050” should also be able to disclose and provide a clear pathway, a strategy to achieve this goal, to make sure their commitment is credible. On stress tests, forward looking assessments with scenario-based climate risk analysis will play a key role. Last month, the French ACPR published the first climate pilot exercise worldwide covering both the banking and insurance sectors. The exercise was of an unprecedented nature due to the time horizon – 30 years –, the active participation of financial institutions themselves, and the inclusion of both physical and transition risks. Two lessons can already be drawn: these stress tests are possible; and the risks are better controlled if the transition is orderly and begins early. But we are still in the middle of the journey towards completing our methodology. The ACPR urges all supervisors to  initiate their own exercise. Learning by doing is better than waiting for the perfect solution before taking any action! I now turn to the last part of the quadrant. Greening monetary policy is still the hottest issue. This is no fashion, it is an imperativeiv.
It has been severely tested by: taxpayer bail-outs of systemic institutions; rewards perceived as undeserved; a perception that clients have become counterparties; and egregious examples of misconduct and rigging of markets. Without that licence, the door will be opened to a level of regulation that constrains the ability of finance to innovate and support growth and trade efficiently. The licence will require consistent exemplary behaviour, and finance to have a clear sense of its purpose not as an end in itself, but as a means to promote investment, innovation, growth and prosperity. It is not merely that we should want to follow Churchill’s wish to see “finance less proud and industry more content”. We want to see industry content and finance taking justifiable pride in its contribution to society. That is far from straightforward when, even six years on from the crisis and public bailouts, triggers for public opprobrium are plentiful. Last week, the UK’s Financial Conduct Authority, US CFTC and Swiss FINMA fined six banks $ for misconduct in FX markets: misconduct that went on long after banks had already been fined for abusing interbank interest rate benchmarks. The repeated nature of these fines demonstrates that financial penalties alone are not sufficient to address the issues raised. Fundamental change is needed to institutional culture, to compensation arrangements and to markets.19 As Bill Dudley and my colleague Minouche Shafik have argued, the succession of scandals mean it is simply untenable now to argue that the problem is one of a few bad apples.

How can we expect emerging economies to participate fully in an open global system without the confidence that they won’t again be side-swiped by the failure of a large foreign bank? That confidence is growing as we make the system safer. Consistent, full and timely implementation of global standards is necessary to continue to build the cross-border trust on which an integrated system can be founded. Once the safety of the system is secured, the costs of openness will be contained. The road will be clear to secure the substantial benefits of openness in supporting trade and investment. Conclusion The Brisbane Summit marked the point at which the post-crisis system of prudential regulation was settled. That system, built on safer, simpler and fairer foundations than the one that led to disaster is able to serve households and businesses right across the globe. That we have reached this point is a triumph of the optimists over the world-weary arguments of the pessimists. The mutual trust and co-operation that has allowed authorities to get to this point is a vivid reminder of what can be achieved when countries work together. But as I said at the outset, just avoiding a repeat of past failures can’t be the height of our ambitions. Having built that level of co-operation it would be a travesty to stop at the foundations.