samchain/econo-pairs-v1 huggingface dataset:
Financial integration, together with technological advances in financial markets and financial market instruments, is benefiting the world at large by allowing capital to be invested where returns are higher. Where are the risks? But these benefits also entail new risks. Indeed, despite better institutions, better policies and better markets, we feel more vulnerable nowadays than we used to in the past. How can we reconcile this image of a more prosperous and safer world with our increased feeling of danger? To some extent, our sense of vulnerability simply reflects advances in telecommunications that have enhanced our awareness of the world. I am not a geologist and therefore I cannot tell you whether we are now experiencing more earthquakes than we did 30 or 40 years ago. However, I do know that nowadays I am informed within hours, if not minutes, of any earthquake, flood or terrorist attack that occurs, even in the remotest corner of the planet. Our sense of security is bound to be affected by this kind of information. But it is not just a matter of perceptions. Globalisation means that we in Switzerland are indeed affected by events occurring in India, Brazil, Australia, Japan, Argentina… To a certain extent, our perception of heightened vulnerability is justified. SARS (severe acute respiratory syndrome) or "bird flu" have the potential to become pandemics of unprecedented reach because we travel more than in the past. A terrorist attack in any city around the globe will be felt immediately by investors worldwide.

In parallel to assessing future economic prospects, the European Central Bank’s governing council looks independently at the dynamics of money and credit aggregates. This has proved very useful in the past to detect long-term risks to price stability, in both directions. The message today is clear: both money and credit are growing very slowly in the euro area as a whole. The M3 money-supply aggregate grew by 2.1% in September. These trends do not signal deflation, but warrant monitoring and vigilance when facing an uncertain future. Obviously, intentions may not always suffice and must be backed, when necessary, by appropriate and timely actions. Recent decisions by the governing council regarding both policy rates and liquidity provision show that we are ready to make the necessary decisions. Many instruments remain available should further risks materialize. There should be no doubt that the Eurosystem will ensure that price stability, as currently defined, will be maintained in the euro area. 2  BIS central bankers’ speeches
  These quantitative results differ sharply from public perceptions of the impact of monetary policy. To illustrate, Charts 23 and 24 compare the welfare impact of lower interest rates among different age cohorts with people’s self-reported survey impact. These differ not just in scale but sign. It suggests the public perception gap around monetary policy is large. This is symptomatic of a deficit of public understanding, and is likely to have contributed to a deficit of public trust, on the public’s part.   These deficits may not be that surprising. It is very difficult for people to identify, much less quantify, the channels through which monetary policy affects their lives, directly and indirectly. For most people, this information is simply not to hand. If it were, in a simple and personal form, this might contribute to closing the gaps in public trust and understanding about monetary policy. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  That takes me naturally to practical ways of closing the twin deficits. Inequality issues are likely to continue to loom large in public debate in the years ahead, not least due to the impact of technology on jobs and skills. 39  It seems perfectly reasonable that policymakers should periodically explain the impact of their actions on both aggregate outcomes and its distribution. Indeed, doing so consistently and transparently could I think deliver important benefits, helping close the public perception gap and those twin deficits of trust and understanding about monetary policy.

  Various previous studies have found that employment and financial security can have an important effect on people’s happiness, over and above their impact on income and wealth. 36  For example, it  is well-established that having a job improves significantly people’s confidence and self-esteem, over and above any effect on pay. Those conclusions are borne out here. We find there is a statistically significant role for unemployment and arrears in explaining household well-being, over and above the effects from income and wealth.   The effects of unemployment and arrears on well-being are quantitatively large. To gauge that, we can translate them into income-equivalent terms using our welfare regression. The effects of having a job are, in well-being terms, equivalent to around 3 months’ extra income on average, across all households. 37  This is consistent with powerful effects of work and financial security on happiness. 38  Using this framework, our earlier quantitative estimates of the impact of looser monetary policy can be translated into welfare terms. Charts 22 and 23 show these welfare benefits, broken down into their component parts (income, wealth, unemployment), looking across the age and income distribution. A few key points stand out. First, the effects of monetary policy in lowering the probability of unemployment have a very material impact on household well-being. These effects often account for more than half of the total welfare gain for households across all cohorts.
To the extent that it is generated by an expansion in the fiscal deficit, growth is potentially reversible as fiscal deficits and growing public debt cannot be sustained indefinitely. The deficit averaged 4.5% of GDP in the first half of the 1990s, but surged to 8.4% of GDP in the second. Substantial progress to consolidate public finances has recently been made and the deficit has dropped to around 6% from a peak of 11% in 1998. While this fiscal restraint may curb demand growth in the short run, it is restoring the long-run viability of the economy that would be threatened by a growing public debt. Suffice it to say that the cost of servicing this debt has reached levels comparable to expenditures on health and education. In this context the planned use of privatization proceeds to reduce the public debt is commendable. By stimulating aggregate demand, budget deficits also encourage consumption at the expense of saving, thereby leaving fewer resources to finance investment, the only lasting source of long-term growth. Expenditure on foreign goods and services would rise, leading to a deficit on the current account of the balance of payments. The current account deficit averaged 2% of GDP in the first half of the 1990s, worsening to 8% of GDP in the second. Protracted deficits on the external current account are clearly not sustainable in view of their impact on the external reserves and the extent of foreign borrowing. In the long run, this could necessitate drastic reductions in consumption levels or curtailed investment.

These developments in the growth rate and in the twin deficits highlight the need to critically evaluate the economy’s overall performance and its prospects. The recent IMF mission has done just that and we at the Central Bank concur with its findings. The IMF team concluded that while there do not yet appear to be clear signs of a loss of competitiveness, there are warning signals. What then are we to do? What viable strategic options are available to seek to overcome the obstacles that threaten the continued enjoyment of current living standards? In difficult times such as these some might be tempted to seek shelter from external shocks by pursuing an inward-looking growth policy. Numerous experiences of countries far larger than ours have shown that this course of action only serves to promote inefficiencies that would defeat the original purpose. Malta’s own experience during the early 1980s amply confirms this fact. The fastest-growing economies have been those who faced international competition head-on and pursued outward-oriented policies designed to achieve integration into a globalizing world economy. Malta itself recently reaped the benefits of a similar approach when the removal of protective levies last year was followed by an increase in output and employment in the hitherto protected sectors. Others advocate fiscally-led growth through an expansion in expenditure or a reduction in taxes. In this context, it must be understood that government expenditure puts money in people’s pockets without necessarily expanding the economy’s supply capabilities.
I turn now to a very important response in Europe to the crisis, which is of particular interest for the ECB: the establishment of the European Systemic Risk Board or ESRB. This new body will be responsible for macro-prudential supervision in the whole EU. In contrast to micro-prudential supervision, which focuses on the financial soundness of individual institutions, macro-prudential supervision looks at the financial system as a whole. Up to the late 1990s, the predominant view of policy makers was that if individual institutions were financially sound, the financial system as a whole would also be fine. Unfortunately, this is not always the case. Through various channels, institutions can be inter-linked so that problems emerging from one or some of them may spill over to the rest of the financial sector, setting in motion an adverse dynamic that affects all of them. A macro-prudential perspective, looking beyond the conditions of each institution in isolation, should help to detect and prevent such system-wide potential problems. Of course, there were already in place mechanisms for the monitoring and assessment of financial stability well before the financial crisis erupted, as evidenced by the financial stability reports published by the various central banks. But the financial crisis also demonstrated fundamental weaknesses in practices:  BIS Review 87/2010  3    First, while various central banks engaged in their own financial stability analysis there was not really a comprehensive analysis covering the whole EU and all elements of the financial system.

This reform agenda is very ambitious and time-wise rather tight, but before describing the measures under discussion, let me first briefly introduce the main actors in this area. The G20 provides the political and strategic impetus for the reforms, with the Financial Stability Board (FSB) playing an important role in the policy coordination. Various committees and working groups, of which the most prominent is the Basel Committee on Banking Supervision, are charged with reviewing specific international standards. As regards the reform agenda, the most important issues are the following:   the adoption of high-quality capital and liquidity standards for banks,    measures to reduce the financial system’s procyclicality,    the introduction of a regulatory framework for systemically important financial institutions,    the regulation of credit rating agencies and hedge funds, improving OTC derivatives markets, and    finally, sound compensation practices that support financial stability. These issues are comprehensively addressed by the Basel Committee’s reform package that aims to strengthening the banking sector’s resilience and represents a cornerstone of the response to the crisis. The package, which was released at the end of last year for consultation, aims at improving the quality and consistency of bank capital. It also considers the introduction of a non-risk-based leverage ratio as a supplementary capital measure. This leverage ratio is expected to curb excessive balance sheet growth and to set a floor for the Basel II capital requirements.
12  (annual change, percent) -0.3 -0.7 -2.3  6.2 5.3 3.9  4.1 3.8 2.7  3.8 3.5 2.7  3.8 3.3 2.5  3.6 3.2  4.2 4.1 3.2  4.2 3.9 3.2  3.9 3.6  -3.5 -4.2  3.0 1.9 4.4 10.4 10.6 7.8 6.4  1.7 1.5 -0.7 9.2 6.7 4.2 4.4  1.8 -0.1 2.0 8.2 7.7 4.4 3.6  2.1 -0.3 2.0 8.1 7.3 4.3 3.6  2.0 -0.6 2.7 7.9 6.5 3.9 3.3  2.2 1.0 1.6 8.5 8.0 4.8 4.0  2.3 1.0 1.6 8.5 7.9 4.8 4.0  2.0 0.3 1.3 8.2 7.2 4.6 3.7  80  111  107  107  102  115  97  -6.9  -3.5  -0.1  -1.5  9.2 0.2 -2.0  (levels) Brent oil prices $  121  (annual change, percent) Terms of trade (*)  3.6  19.4  0.5  -6.7  -5.3  (e) Estimate. (f) Forecast. (*) Forecasts at December, projected with national accounts, base year 2003; 2010 and 2011 figures, plus forecasts at March and June, with national accounts, base year 2008, considering chained indexes. Sources: Central Bank of Chile based on sample of investment banks, Consensus Forecasts, the IMF and statistics bureaus of respective countries. 10  BIS central bankers’ speeches  Table 3 Economic growth and current account (*) (annual change, percent) 2011  2012 (f) Report Dec. 11  Report Mar. 12  Report Jun.

Rodrigo Vergara: Chile’s latest Monetary Policy Report and Financial Stability Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report and the Financial Stability Report, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 18 June 2012. The Monetary Policy Report of June 2012 and the Financial Stability Report of the first half of 2012 can be found at http://www.bcentral.cl/eng/index.asp  *  *  *  Introduction Mr. President of the Finance Commission of the Senate, Senator José García, senators members of this Commission, ladies, gentlemen. I am grateful for your invitation to the Board of the Central Bank of Chile to share our views on recent macroeconomic and financial developments, prospects and implications for monetary and financial policy making. These views are contained in detail in our Monetary Policy Report of June 2012 and our Financial Stability Report of the first half of 2012. For several quarters now the world economy has been suffering constant swings. We have said time and again that the causes and consequences of the financial crisis of 2008 are yet to be resolved. Thanks to a combination of economic policy responses and its healthy economies and financial systems, the emerging world succeeded in mitigating its effects and resuming a growth trajectory. But the developed world, especially the Eurozone, has been unable to regain its strength.
[4]  Chart 1 Euro area services trade balance (EUR billions)  Source: ECB. Notes: Quarterly data. The latest observation is for the fourth quarter of 2020. Chart 2 Euro area national accounts: selected components (quarter-on-quarter growth rates in percentages)  Source: Eurostat. Notes: Seasonally and working day adjusted quarterly data. The latest observation is for the fourth quarter of 2020. This highlights a dichotomy between the residency principle underpinning the macroeconomic statistical framework and the global footprint of MNEs. Data on the numerous entities belonging to MNE groups in different countries are not consolidated in the accounts of the home country of the parent MNE. Instead,  these are recorded in the national statistics of the economies where the entities reside, even if their role in domestic economic activity may be quite minor. This dichotomy also extends to the way statistics are collected and compiled: while companies are global, data are gathered nationally, refer only to the activities of MNEs that are located in the country and are subject to strict data confidentiality rules. While European law enables cross-border data sharing for statistical purposes, this is often prevented or highly circumscribed by national rules. Owing to the decentralised manner of data collection, the information sets for global companies that are available to national statisticians differ across countries, which limits cross-country comparability and overall data quality, including for the euro area.

In tribute to the Governor, as I know that Fernando Pessoa is one of his favourite poets, I'd like to quote his “Odes by Ricardo Reis”, in which he reminds us of the importance of being truly committed to our work. “To be great, be whole: don’t exaggerate Or leave out any part of you. Be complete in each thing. Put all you are Into the least of your acts." Thank you all for being here. 5/5
Greek banks have been present in the market since 1996; the German and Italian investment has been present for quite a long time as well, while the latter has grown substantially and has become one of the market’s key actors. Austrian investments may be considered as the most dominant ones. Their ownership has resulted from the acquisition of the largest domestic state-owned bank. The long presence of foreign banks in the Albanian banking system has influenced the establishment of a stable banking system and its stable growth. Despite the financial collapse of 1997 or the panic crisis in 2002, in none of the cases was the system’s performance a source of crisis or instability. Previously, foreign banks were more conservative in terms of expanding their geographical activity; however, the entry of Raiffeisen Bank into the market pushed them to be more active. This fact may be evidenced by the variety of products provided in the market, the growth of lending and the employment of clear strategies to increase or maintain their market share. However, the economic benefits deriving from the presence of foreign banks have not reached the proper levels yet. The enhancement of the quality of information provided to the public at large and to the central bank, the lowering of the intermediation cost, the further improvement of risk management, and the standardization of the accounting and financial reporting systems are not in the desired levels yet.

Now let us now turn briefly to the possible financial relationship between the Albanian banking system and the production foreign investments flow. Undoubtedly, the positive influence foreign direct investments have on economic growth depends largely on their recipient countries’ circumstances. It requires a substantial level of financial system development as a crucial precondition. A developed financial system improves the efficiency in allocating the resources and it further enhances the country’s capacity to absorb the FDI. The entry of new investors will orient the concentration of market segments to large-size businesses. Their impact, along with the lending capacity of our banking market, are believed to be the crucial proof for their success in Albania. In more concrete terms, the circumstances in Albania are such that there is an asymmetrical distribution of total assets between banks in the market. The reference is only to banks, since in terms of total assets, the banking system shares more than 90 per cent. Other non-bank financial institutions play a more insignificant role than the commercial banks. As far as the latter is concerned, there are many qualitative banks in the market, whose presence is an attractive factor for absorbing the FDI. On the other hand, the concentration of assets and banking loans in a few commercial banks bears the risk of creating an oligopolistic environment where only a few banks establish the terms for new loans. Such a situation would increase the investment cost in the public and private sector and in households, as well.
Market depth measures how thick the central limit order book is at any point in time. If the CLOB is denser and thicker, then a large trade should result in a smaller price concession, everything else equal. Price impact measures how the price of a security changes in response to trades of a given size. To measure liquidity risk, we combine the various measures of liquidity discussed above into a single liquidity index. Large jumps in illiquidity are identified as days in which the liquidity index deteriorates by an unusually large amount. We benchmark this as moves of greater  1  2  Tobias Adrian, Dianne Dobbeck, James Egelhof, Michael Fleming, Joshua Frost, Lorie Logan, Michael McMorrow, Matthew Raskin, Ernst Schaumburg, Katherine Tilghman-Hill, Joseph Tracy and Nathaniel Wuerffel assisted in preparing these remarks. BIS central bankers’ speeches  than two standard deviations. Liquidity risk is calculated as the number of such jumps in illiquidity over a two-year rolling window. Constructed in this manner, we are implicitly assuming that the risk of an illiquidity event in the future is correlated with the frequency of such illiquidity events in the recent past. What does the available evidence show in terms of how liquidity has changed in recent years in the U.S. Treasury and corporate bond markets? With respect to the U.S. Treasury market, we do not find much evidence based on available measures consistent with a significant deterioration in liquidity.

But we also learned early on that fish was valuable as a form of currency. As early as in the medieval era, dried cod from Norway was a sought-after product further south in Europe. With their ships laden with dried cod, the Vikings were able to trade the fish for beautiful cloth, exotic spices and precious metals. Chart: The 200-krone banknote (The Cod) Fishing has been a key source of income and an integral part of the coastal culture in Norway for 1/4  BIS central bankers' speeches  centuries. For many people, fish has been a crucial part of their diet. Some crops do not thrive in Norway’s climate of long winters and cool summers. Cod and herring, trout and salmon, on the other hand, have flourished. Sturdy boats designed to cope with the rough waves and unpredictable winds of the open sea enabled us to bring the catch to shore. And before more modern transportation routes became available, cargo ships were needed to transport the catch to customers at home and abroad. Chart: Distribution of exports 1835 The possibility of storing and transporting fish over long distances generated jobs and foreign exchange income. In 1835, 39 percent of Norway’s export revenues came from the sale of fish. Shipping provided 25 percent of Norway’s export revenues. Consequently, it has always been important for the country’s economy to ensure market access for Norwegian seafood exports, as was the case during Norway’s prohibition period in the 1920s.