samchain/econo-pairs-v1 huggingface dataset:
Norges Bank now devotes considerable resources to improving and developing our model apparatus for such “nowcasting”. We engage in extensive cooperation with researchers in Norway and abroad and with other central banks. Results and documentation of this work will be published in coming monetary policy reports and articles by researchers at Norges Bank. BIS Review 102/2007  5  In order to forecast somewhat further ahead, we must gain more insight into the forces at work and how they are affecting the economy. Statistical forecasting models, or models largely based on previous experiences, will be of limited help. For example, previous experience provides limited guidance in explaining the driving forces behind this cyclical upturn because of the many differences in relation to earlier periods. A solid basis in economic theory is required to shed light on causal relationships. Norges Bank's work on models in recent years has aimed at constructing a theoretical macro model that can enhance our understanding of economic developments. By looking at households' and firms' behaviour, we can analyse the effect of changes of a more structural nature on the economy. In the model that has been given the name NEMO (Norwegian Economy Model), developments in the Norwegian economy can be explained among other things by changes in business technology, market structure in the product and labour market, household preferences with regard to work and leisure and monetary policy.

If monetary policy can be made expansionary without this causing economic actors to fear that inflation will rise sharply, their expectations of what inflation will be in the longer term will not be affected either. However, if fears of sharply rising inflation arise as a result of the expansionary policy, long-term inflation expectations may also begin to creep upwards. If the anchor comes loose completely, the long-term consequence may be that inflation continues to rise in a price and wage spiral. And, just as it may take a great deal of effort to restore confidence in public finances that have begun to erode, it may be difficult and costly to bring inflation back under control. As I mentioned at the start, in Sweden we have some experience of price and wage spirals of this type, even though this was some decades ago. Too low inflation is also a problem… However, it is not only an anchor that is drifting ‘upwards’ that is a cause for concern. Monetary policy can also have major problems if it drifts ‘downwards’ and inflation becomes persistently very low. In this case, monetary policy becomes less effective because the main instrument, the policy rate, becomes more difficult to use.
The Fund’s business is to take calculated risks, and in the new environment of integrated markets, there are cases where heavy financing of a country’s balance of payments difficulties is justified. In Korea, for instance, it was  BIS Review 69/2004  3  a success. The 50billion dollar rescue package supported a rapid turnaround in confidence and economic performance. This being said, however, one point should be very clear. The IMF is not, and should not be, in a position to always fully offset the volume of private flows. For one thing, Fund resources are limited. For another, the systematic relief of debtors’ and private creditors’ responsibilities through Fund financing would create problems of moral hazard. An excessive bail-out of negligent investors would also be perceived as unfair by those who are left behind to bear the cost of the crisis. The most important aspect in decisions on exceptional access to Fund resources does not concern amounts. It is rather an issue of whether lending is justified altogether. To help to take this decision - and also to increase the predictability of Fund action - a framework was developed. According to this framework, the Fund should grant exceptional access if three basic conditions are fulfilled. First, there must be a high probability that the debt will remain sustainable; second, the country must have good prospects of regaining access to private capital markets; and third, the policy program of the member country must provide a reasonably strong probability of success.

Under the circumstances, it should come as no surprise that Switzerland fully supports the IMF in attaching the highest priority to stability and crisis prevention. The main tool in this endeavour is clearly surveillance. Surveillance remains the most important activity of the Fund as its first line of defense against turmoil. However, this activity is hardly known to the wider public. Unlike an agreement on a multi-billion rescue package, efforts to prevent a financial crisis never hit the headlines. Surveillance is relatively unknown, probably also because it is a very complex animal, hard to explain, and with dozens of connotations. I have neither the time nor the desire to elaborate on all the elements of present-day Fund surveillance. However I believe that some points are worth emphasizing. In the first part of my presentation I shall begin with some remarks on transparency, both in the context of the Fund and with regard to its role in promoting market discipline. I shall then elaborate a bit on surveillance in financial markets. In the second part of my presentation, I shall take up issues linked to crisis resolution. However, much effort goes into crisis prevention, crises cannot be completely ruled out in an open and dynamic global economy; the IMF, therefore, needs to be and to remain an efficient “fire-fighter”. I shall elaborate on this “fire fighter” role of the Fund, on the limits of its action, and on what is necessary to preserve efficiency and credibility in this context. BIS Review 69/2004  1  2.
First, it provides greater clarity regarding the MPC’s view of the appropriate trade-off between the speed with which inflation is returned to the target and the support given to the recovery. Second, it can reduce uncertainty about the future path of monetary policy as the economy recovers. And third, it delivers a robust framework within which the MPC can explore the scope for economic expansion without putting price stability and financial stability at risk. This latter point is especially important to grasp in order to understand the intent of the policy. Since 2008, aggregate productivity in the UK – measured as output per hour worked – has behaved unlike any previous recession/recovery. The level of productivity in the economy as a whole today is around 15% below where it would have been on an unchanged long-term trend. We don’t know how much of this productivity gap can be reclaimed. But if even only a small part could be recovered then output should be able to grow strongly for some years without generating much inflationary pressure. In particular, firms should collectively be carrying enough spare labour to expand output without putting pressure on the labour market. Unemployment would consequently fall slowly relative to normal experience, for a given rate of output growth. It is important to stress that forward guidance is not a guarantee to hold rates where they are for a set period of time, as has been widely mis-reported.

Over the past two centuries, upswings or downswings in the trend money growth have usually been followed, a few years later, by swings in the same direction in trend inflation.2 This relationship has remained significant over the past two centuries, across a variety of different monetary policy regimes and in spite of financial innovation. This naturally suggests that it is “hardwired” into the deep structure of the economy, i.e. that it is structural in nature. In turn, this suggests that by analyzing monetary developments – and in particular, by identifying swings in trend money growth, as well as its components and counterparts – a central bank can implement a more forward-looking monetary policy. The monetary nature of inflation, and given that money growth at the long-run horizon is ultimately under the control of the central bank, logically leads to a fifth key principle: the central bank has ultimate responsibility for inflation. Of course, in the short-run macroeconomic dynamics, and therefore also inflation, are determined to a significant extent by events outside the central bank’s control. The last four years provided a forceful reminder with the 2008 shocks in food and energy prices, which led to a temporary hump in Euro area inflation, followed by the large contractionary shock associated with the financial crisis and several months of deflation. These exceptional circumstances brought euro area HICP inflation to 4 per cent in the summer of 2008 and then to –0.6 per cent one year later.
In the same way, the crisis revealed the critical deficiencies in the toolkits available to the regulators to deal with nonbank institutions in duress. Emergency lending by the Fed might be enough to forestall the disorderly failure of a systemically important institution and all the wider damage such a failure might cause, but it was a blunt and messy solution, employed as a stopgap measure because better alternatives were not available. What is needed – what our country still lacks – is a large-firm resolution process that would allow for the orderly failure even of a systemically important institution. 2  BIS Review 6/2010  Thus, in the fall of 2008, regulators and policymakers found themselves facing the prospect of the total collapse of a complex and interconnected system. It was these circumstances, and the prospect they created for an even deeper and more protracted downturn in real economic activity and employment, that required truly extraordinary actions on the part of the Federal Reserve, as well as the Treasury and many other agencies. This is a situation in which the United States must never again find itself. For its part, the Federal Reserve is hard at work on developing and implementing new regulations and policy guidance that take on broad lessons of the recent crisis. We are working with other banking regulators in the United States and overseas to strengthen bank capital standards, both by raising the required level of capital where appropriate and improving the risk capture of our standards.

Even though their importance has been reduced in recent years, mortgage companies still provide most residential mortgages. With the predominance of mortgage companies, fixed-rate mortgages have been a tradition in Denmark and Sweden. This has not been the case for Norway. Mortgages from the State Housing Bank were primarily adjustable-rate loans. After credit market liberalisation, adjustable-rate mortgages were also offered by banks. The supply of fixed-rate mortgages was limited. Fixed-rate loans are less common in Norway than in the other Nordic countries. From the 1980s to the 1990s, the Norwegian economy moved from high to low inflation with, until recently, falling nominal long-term interest rates. Borrowers with fixed-rate mortgages fared poorly in this period, and even more poorly than maturity or mortgage insurance premiums alone would imply. But with a clear monetary policy objective to keep inflation low and stable – and with an independent central bank tasked with achieving this objective – the result would be different. The high inflation expectations that were built into long-term interest rates no longer exist and a further marked fall does not seem likely, nor for that matter does any substantial inflation-driven increase in long-term rates. Purchasing a home is a long-term investment. A fixed-rate mortgage reduces borrowers’ uncertainty about expenses over the life of the loan. Longer-term financing in banks Banks play an important role in the economy. Their task is to convert short-term deposits into long-term loans. In times of crisis, fulfilment of this task is put to the test.
Each of the concepts poses a serious threat to the reputation and credibility of the Facility. a. Excessive leverage is now regarded as one of the causes of the financial crisis. b. The proposals for protection and a first loss tranche of 20% of the nominal debt are also laden with problems. The example of Greece demonstrates that the losses may run to 60%. There is great uncertainty about who would pay for the difference between the insured loss and the actual loss if the Greek  BIS central bankers’ speeches  1  scenario was to be repeated in other countries. Likewise, it is not clear how freely tradable protection certificates would be traded, priced, settled and, in the event of default, enforced if they were to be introduced. Such certificates would de facto be quasi CDS instruments underwritten by the official institution of a community of countries that are simultaneously waging a campaign against credit derivatives because they regard them as one of the causes of the crisis. c.  The signs of a gradual shift towards short-term funding of the EFSF are a worrying signal. The risk arising from financing assets that are by definition long-term and illiquid (primarily rescue loans) through a programme of shortterm debt instruments (liability rollover risk) is more than clear. This ALM model proved to be extremely risky during the financial crisis when the commercial paper market dried up. 4. Another uncertainty is related to the project of purchasing bonds in the secondary market.

Second, our decisions are based on the inflation path over the medium run, not on the latest observed inflation. This requires projecting inflation via different approaches. Recent ECB staff forecasts see inflation averaging 2.3% in 2024. Given this, earlier this month we decided to front-load the normalisation path of our key interest rates, and to announce further rate hikes down the road, in order to ensure the return of medium-term inflation to our 2% target. Third, it is very difficult to know how much further our key rates will need to rise eventually in this hiking cycle, given the huge uncertainty that we face in the current context. But for this very reason, economic models are helpful in providing us central bankers with some guidance. I have provided in this speech some estimates based on models developed by Banco de España staff. Crucially, this is a data-dependent forecast which may change as time goes by and new information comes in. Also, it will depend on our future decisions regarding our asset purchase programmes. I hope that my words have reassured you about our determination to rein in inflation without causing unnecessary suffering to our fellow euro area citizens. We live in difficult times, but we expect to rise to the challenge. Thank you for your attention. 8
While he has moved on to new challenges as head of the Public Company Accounting Oversight Board in Washington, the U.S. delegation to the Basel Committee remains in excellent hands. The hard work of leaders such as Roger Ferguson, the Vice Chairman of the Federal Reserve, and Jerry Hawke, the U.S. Comptroller of the Currency, and of other U.S. supervisors in the negotiations, has strengthened the quality of the capital rules. They have helped ensure that the New Accord will be flexible, forward-looking, and fit for the service of twenty-first century banking. Basel II: a blend of reinforcing policy approaches The long-term objective of fostering greater financial stability led to our decision to supplement the revised minimum capital requirements, which constitute the first pillar of the New Accord, with two equally important pillars. Although this may be an oversimplification, one could argue that each of the three pillars can be viewed as representing a different policy approach for a regulatory/supervisory framework. The first pillar emphasises the adoption of uniform rules. The second pillar relies more on the use of discretion in setting requirements for individual banks. And the third pillar can be expressive of a market-based approach. Each of these choices individually considered has its merits, but also certain downsides. The point I want to make is that the risk/reward features of each of the three options - rules, discretion and market discipline - have their own particularities and are not totally correlated.

Mainly: •  Proprietary versus public information  •  Principles versus Rules  •  Consistency of Accounting Standards and the New Basel Accord  Finally, I will review the present status of the Accord, the significant progress made in our last meeting in Madrid and I will outline the next steps in its rapid finalisation, as well as our plans for keeping it fit for the future. Basel II: a new, comprehensive approach to achieve greater financial stability To begin, I would like to re-emphasise the importance of market discipline to banking supervision, especially in a rapidly changing environment. Supervisors seek improvements in the public’s access to information on a bank’s condition precisely to bolster the ability of rating agencies, of business counterparties, and even of investors or depositors to evaluate the profile of a bank’s risks and the quality of its controls. Yet as safety and soundness regulators, we wish to fortify the stability and resilience of the financial system. In our view this goal requires not just greater transparency, but also  BIS Review 47/2003  1  significant advances in the state of the art of risk management and adequate capital when unexpected losses materialise. For the first time, the Capital Accord will include not only explicit economic incentives expressed in the minimum capital requirements but also implicit incentives built into the processes for supervisory review and market disclosure.
Most people who need insurance and takaful products may not have the time or access to information to even know that it’s there for them. Agents create that awareness. For many, their first contact with insurance would have been through an agent-initiated meeting. For this reason, customers tend to rely on agents to a large degree for information to help them make the right decisions, quite often ones involving lifelong commitments. While competition will only intensifies moving forward, agents who will excel are those that are knowledgeable, diligent and trustworthy. However, findings from the Bank’s recent supervisory reviews are rather disappointing – three in four agents were found to have failed to complete a comprehensive fact-finding process for more than 80% of their customers. This may be a symptom of a product-pushing mentality at the expense of customer welfare. The lack of objectivity increases the risk of unsuitable products being sold to customers, and could well permanently taint the industry’s reputation in the long-run. Things can, and must be done better. With the new Balanced Scorecard developed in consultation with the industry – including NAMLIFA, the incentive structure has been improved so that agents work more effectively and objectively in the best interest of their customers. The Scorecard also reinforces our vision for agents to move towards higher value-add activities that involve advice, sales and customer support for more complex products.

I’d like to conclude with another quote on the future, this time from Nelson Mandela, more than 150 years after Kierkegaard: “A bright future beckons. The onus is on us, through hard work, 4/5  BIS central bankers' speeches  honesty and integrity, to reach for the stars.” I have every confidence that today’s agents have what it takes to thrive in the future, but the hard work of laying the necessary foundations must begin today. With that, I thank you for your time, and wish all of you a productive day ahead. 1 Customer  Behavior and Loyalty in Insurance: Global Edition www.bain.com/publications/articles/customer-behavior-loyalty-in-insurance-global-2017.aspx  2017. 2 Insurance Barometer Study survey in 2016 by the Life and Health Insurance Foundation for Education (LIFE) and  LIMRA 3 Customer  Behavior and Loyalty in Insurance: Global Edition www.bain.com/publications/articles/customer-behavior-loyalty-in-insurance-global-2017.aspx  5/5  2017. BIS central bankers' speeches
If existing players and Fintechs did not both know how to innovate, and often innovate together, it’s the Bigtechs that would ultimately reap the rewards. 2. Promote the integration of Fintechs into the regulatory framework In response to these transformations, our role as public authorities is twofold: to continue to safeguard financial stability and therefore trust, but also to act as a catalyst for innovation – two roles that are far more complementary than they are contradictory. Financial stability without innovation would be a form of dying conservatism; innovation without trust would be a fleeting fad. We therefore want, clearly, concretely and firmly, to facilitate the entry of new players into the regulated arena. To this end, at the end of last year, we adopted the Fintech Charter,iv and today we want to update you on how we have lived up to our commitments. -  Between January and August, the ACPR’s Fintech-Innovation Unit  received 107 contact requests from new project initiators. In 90% of cases, a first response was given within two weeks, with an average response time of six days.

As we work to help restore balance to the economy and bring down inflation, our actions will always be driven by the data, and we will remain focused on achieving maximum employment and price stability. 1 Board of Governors of the Federal Reserve System, Statement on Longer-Run Goals and Monetary Policy  Strategy, as adopted effective January 24, 2012. 2 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, November  3, 2021; Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, December 15, 2021; and Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, January 26, 2022. 3 Board of Governors of the Federal Reserve System, Principles for Reducing the Size of the Federal Reserve's  Balance Sheet, January 26, 2022. 4/4  BIS central bankers' speeches