samchain/econo-pairs-v1 huggingface dataset:
In particular, governments need to foster innovation by providing the right framework to encourage experimentation and risk-taking in new and growing sectors, and to support the transition to new jobs for people working in “sunset” sectors. In parallel, they need to ensure that the conditions are in place to direct investment towards the technologies and sectors of the future. 2/4  BIS central bankers' speeches  This requires sufficient financing. The European Commission estimates that the investment needs for delivering the digital transformation as well as the green transition will be at least € trillion over the next two years.2 But in a number of countries – Italy among them – mobilising investment requires above all a business-friendly economic environment, with efficient and agile public and private services, adequate physical and digital infrastructures, a well-functioning judicial system and a strong financial sector. If such actions are taken, this crisis can engender a period of positive transformation. It offers an opportunity to policymakers to take a decisive step forward towards more inclusive, greener and more digital growth.

If we are collectively successful, uncertainty will start to turn into confidence, and then a real recovery can begin. 1 See Anderton, R., Jarvis, V., Labhard, V., Morgan, J., Petroulakis, F. and Vivian, L. (2020), “Virtually everywhere? Digitalisation and the euro area and EU economies: Degree, effects, and key issues”, Occasional Paper Series, ECB, forthcoming. 2 European Commission (2020), “Identifying Europe’s recovery needs”, Staff Working Document, (2020) 98. 3 Anderton et al. (2020), op. cit. 4 Perez, C. and Murray Leach, T. (2018), “A Smart Green ‘European Way of Life’: the Path for Growth, Jobs and  Wellbeing”, Beyond the Technological Revolution Working Paper, 2018–01. 5 In terms of revenues. See: ec.europa.eu/environment/ecoap/indicators/socio-economic-outcomes_en 6 ECB (2020), The international role of the euro, June. 7 Sondermann, D. (2016), “Towards more resilient economies: the role of well-functioning economic  structures”, Working Paper Series, No 1984, ECB, November. 4/4  BIS central bankers' speeches
The climate issue is therefore in large part about how poor countries can achieve solid economic growth without a continued rise in greenhouse gas emissions. With the rise in emissions we have seen, the world will have to prepare for and adapt to a warmer climate. At the same time, climate change impacts are becoming increasingly evident. This may lead to abrupt policy shifts. 4 Von der Leyen, U. (2019): Political Guidelines for the next European Commission 2019–2024. 11  The outlook for future oil demand reflects considerable climate and energy uncertainty. Businesses, banks and investors are paying more attention to this risk. The outlook for offshore activities on the Norwegian shelf has also become more uncertain. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  The oil price decline in 2014 brought to light once again the important role of the petroleum sector for the economy. Rather than being in a unique position, the Norwegian economy had to restructure and adjust to lower demand in the oil industry. The oil price collapse marked the beginning of the restructuring that we had long known would come, but it started more abruptly than assumed earlier, for example by the Holden III Commission5 (Chart 12). Chart 12 Business sector less dependent on oil. Oil sector demand. 1) Share of mainland GDP.

In Sweden, economic policy has charged the economy with a good deal of stimuli that can help to generate a broader increase in demand now that the stocks cycle is beginning to have a favourable effect and the prospects for the international economy are brightening. As a result of lower taxes and increased transfers, for example, most things suggest that household purchasing power is rising comparatively strongly this year. Seen over a complete economic cycle, the Riksbank’s instrumental rate is comparatively low. Considering the rate of inflation and the signs that activity is picking up, the real repo rate (the repo rate less the rate of inflation) can be said to be low. Then there is the weak exchange rate, which has subdued effects of the international slowdown and is now helping to stimulate the export-oriented sector. All this amounts to not inconsiderable stimuli to general demand in the Swedish economy, stimuli that look like materialising successively. How heavily should we tread on the accelerator? If inflation, even disregarding the temporary effects, is above the target initially, activity is entering an upward phase and economic policy’s impact on the economy is expansionary, then monetary policy ought to contribute to a somewhat lighter foot on the accelerator. But if most of the unduly high inflation stems from transient increases in the price level and if an economic upturn is not yet assured, it may then indeed be advisable to somewhat defer an upward adjustment of the instrumental rate.
We have launched a tough and comprehensive AQR and subsequent stress tests that should be completed by the end of this year. For the first time, these exercises will be conducted in a fully integrated way – under the aegis of the SSM –with full accountability of the results. Completion should mark a turning point where there will  BIS central bankers’ speeches  1  be no more doubts about the sustainability of our banks and credit should resume at a normal pace. 3. In the longer run, a major policy challenge for the euro area is to “reinvent” a new and robust financial integration model. We need sound cross-border capital flows, because we do not want the Eurosystem to intermediate permanently between borrowers and lenders from different countries. Developing a safe securitisation process should be a priority, despite the major technical difficulties. II. Is Europe facing the prospect of a lost decade? Questions about long-term growth are not limited to Europe. What we hear about our continent reflects a more general concern: the possibility of “secular stagnation” in advanced economies. Secular stagnation rests on the assumption that the natural interest rate is negative. This may happen for two reasons:   In the short run, we may have a downward shock on demand and an increase in savings resulting from the deleveraging process.

I have just explained how we are currently addressing this issue ;    In the longer run, ageing and slower innovation may push up saving rates and bring down the return on capital. Therefore, the ultimate response to the risk of secular stagnation is to improve the return on investment, thus pushing the natural interest rate back into positive territory. Again, this is not only a European problem. But we do have difficulties in this regard. Structural reforms are not easy. Many, however, are currently being implemented. France, although at too slow a pace, is reducing taxes on labour and has somewhat improved labour market flexibility. Adjustments efforts conducted by several countries, especially in Southern Europe, are starting to pay off. Competitiveness gaps between Northern and Southern Member States have been reduced, notably through real wages decreases in countries like Spain or Portugal, which are exporting more and more. This builds the way for a healthy growth in peripheral countries, which are experiencing a trade surplus of 2% of their GDP on average, and a moderate public deficit, taken down to 3%. III. Short-term policy challenges and responses  The main challenge, of course, is low and declining inflation, with inflation expectations in the euro area drifting downward at short to medium-term horizons. This prevents adjustments in relative prices, – an important mechanism to eliminate gaps in competitiveness – and increases the risk of outright deflation, should a negative shock occur in the future.
As we have said before, this Strategic Plan does not intend to reinvent the Bank or ignore its great achievements, but to recognize that the prestige gained is always exposed to new challenges and demands and that must be conquered day after day. Likewise, this is neither an exhaustive plan nor a list of the only relevant topics for the Institution, but a select set of actions that are necessary for achieving the expected results in the five focal points listed above. This plan represents a commitment that includes all of us making up the Central Bank of Chile, to enrich our main asset as a public institution: TRUST. Trust is a mirror against which we can be appraised with the eyes of the rest of the country. That trust, more than norms and laws, is precisely what sustains the legitimacy and autonomy of our Institution. Therefore, the new Congress and Administration that will assume their respective functions in March, will be met by a Central Bank that, using the competences and mechanisms granted by its Organic Law, will have updated its corporate agenda and will continue to be a crucial institutional player to generate the conditions of macroeconomic stability on which the country's progress is based. Thank you.

François Villeroy de Galhau: Insurance in a world of disruption Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the 9th International Insurance Conference, Paris, 27 October 2017. * * * Ladies and Gentlemen, I am very happy to be here today as supervisor in my capacity as President of the ACPR, and also as guarantor of the smooth financing of our economy in my capacity as Governor. In these two respects, the insurance sector is both close to me and important to me. Thank you for inviting me to speak on this theme of disruption. To put it more clearly, and as you have pointed out, Mr. President [Bernard Spitz], the world is in turmoil in many ways. This undeniably represents a challenge for insurers, but also a motivation: the raison d'être of insurance has always been to be a vector of protection and stability in the midst of uncertainty. This morning, I would like to stress the essential role that insurance must play in our economy, by emphasising two areas: its financing and its digitalisation. But before that, I would like to mention the very recent developments in monetary policy. I. Our monetary policy is in itself a source of stability Yesterday, at the Governing Council presided by Mario Draghi, we took the important decision to reduce our net monthly asset purchases by half – to EUR 30 billion – until September 2018.
For example, the Governing Council has recommended that owner-occupied housing will in due course be included in the Harmonised Index for Consumer Prices. The ECB also understands the importance of factoring in the impact of climate change. There is 1/2  BIS central bankers' speeches  now an action plan on how the ECB will more systematically reflect climate change considerations in its monetary policy operations. This is not only about the moral imperative. Bear in mind that the physical and transition risks related to climate change affect not only price stability but also financial stability, having an impact on the value as well as the risk profile of assets held on the Eurosystem’s balance sheet. This is why the ECB will enhance its analytical and macroeconomic modelling capacities, while developing appropriate statistical indicators. Another aspect to emerge from the review was the importance of communication. Monetary policy communication has become a tool in its own right – and the communication needs to be understood not only by experts but also by the public if the ECB wants it to be effective. A number of changes will be made to the statements issued following monetary policy decisions, which should achieve this aim. And last but not least, the extensive feedback received from the review process has highlighted the importance of the exercise given the rapid changes in the global economy. The new review should not wait another 18 years.

This equilibrium rate has gone down – while in tandem the global economy has had to weather several major shocks, from the Global Financial crisis to the pandemic. Now, low inflation rates are being seen as just as much of a cause for concern and as a result, the target has now been set to 2% – over the medium-term – and the red flags are not only rates above that, but also rates below it. This decision was aimed at the possibility that the persistent low-inflation environment was being exacerbated by ambiguity about the level of the inflation aim and a perception of the aim being asymmetric. This decision was taken after an extensive assessment of the ECB’s unconventional monetary instruments, which looked at which ones were effective in raising output, employment and inflation – as well as how they affected each other. The new symmetric target is straightfoward, clear and unambiguous. This means that it will provide a more solid anchor for longer-term inflation expectations. In practice, it will require especially forceful or persistent monetary policy action in a way to avoid negative deviations from becoming entrenched. There was also discussion during the review with regards to the primary mandate and its context within the Treaty’s requirement to support the general economic and social policies of the European Union. The changes made to the monetary policy strategy will look at both aspects of this spectrum. Of course, the strategy review made other important changes.
05.07.2019  Ten years of the FROB and banking system transformations Opening address to the conference: “Tenth Anniversary of the creation of the FROB” Pablo Hernández de Cos Governor  Chairman of the FROB, Chair of the Single Resolution Board, Chair of the European Banking Authority, Vice-President of the European Central Bank, Chairman of the Financial Stability Institute, dignitaries, ladies and gentlemen, good morning. It is an honour and a pleasure for me to participate in the opening of this conference to commemorate the tenth anniversary of the creation of the FROB. I should like to take this opportunity to congratulate the chairman of the FROB, Jaime Ponce, and also his predecessors, Fernando Restoy and Javier Aríztegui, and their teams, for the work they have performed over the last ten years. The FROB embodies one of the main institutional changes made during the restructuring of the Spanish financial sector in the last decade, a process that has been fundamental in paving the way for the recovery of the Spanish economy in the aftermath of the crisis. Transformation of the Spanish banking industry in the last decade This period has witnessed one of the most far-reaching transformations in the Spanish financial system in recent decades and the FROB has played an important role in bringing about this transformation. The Spanish economy was engulfed by the international financial crisis at a time when significant imbalances had built up, which were particularly significant in our financial system.

In Europe, the Single Resolution Board (SRB) is responsible for preparing the resolution of significant European institutions. This preparation has already included drawing up resolution plans for all significant institutions, analysing their resolvability on an individual basis and establishing a minimum requirement for own funds and eligible liabilities (MREL) that make it possible to comply with the paradigm shift I have just referred to. The SRB has also put in place effective mechanisms for cooperation with the national resolution authorities that (like the FROB and the Banco de España) participate in the drawing up of resolution plans and in determining the MREL, and in implementing decisions taken by the SRB, as well as developing their own responsibilities for less significant institutions. I should like to underline the importance in these European resolution arrangements of the requirement that European credit institutions (including Spanish ones, naturally) have sufficient levels of MREL. The paradigm shift from a bail-out to a bail-in system, and the other tools permitted by European legislation, require that banks have a sufficient level of MREL so that, if the case arises and there is a public interest involved, the institution can be resolved, while minimising the burden on the taxpayer and ensuring the continuity of critical functions and a minimum impact on the rest of the financial system. For some institutions, this requirement represents a considerable challenge for the coming years.
Regardless of what significance one attributes to the financial crisis, it is clear that the downward trend in interest rates began much earlier. Back in the period prior to the financial crisis, the Federal Reserve Governor of the time, Alan Greenspan, described the low longterm US interest rates as a mystery. Growth, savings and technology determine the real interest rate Regardless of which explanation one concurs with, most people consider the long-run global real interest rate to be primarily governed by expectations of potential growth, the propensity to save and technological advances. I will therefore first describe how the various factors can influence the real interest rate. I will then discuss possible explanations as to how growth, propensity to save and technology may change. Lower potential global growth gives lower global real interest rate According to economic theory, expected growth should play an important role for the development of the real interest rate; the lower the growth, the lower the real interest rate. International organisations such as the IMF and the OECD have made downward adjustments to their assessments of the global growth trend in recent years. This could lead to a lower real interest rate. At the same time, one can note that global growth was both stable and relatively high during the 15–20 years prior to the financial crisis. It is thus not possible to explain the long-term fall in interest rates prior to the financial crisis as due to lower global growth.

There are no guaranties that levels of income in the CESEE countries are going to converge towards those of the developed Western economies. No guarantees that these countries are not going to form one, or more, of the so-called convergence clubs at a lower level of per capita income compared to their developed peers. However, it is our job to dare to introduce reforms even if we are not a 100 percent sure about the timing and the scale of the effects, as these are often not under our direct control. But if history teaches us anything, and if we follow the best practices from around the world, not only the EU, then the path we have to follow becomes much clearer. And the closest thing to a recipe for reducing the probability of being caught in the middle income trap (of low growth and slow or no convergence) would be to dare to reform. Be it the education system with an aim to increase the quality of human capital, be it liberalising product and labour markets controls, be it the reform of justice or public administrations systems, or anything else that is proven to enhance the business environment in the country. It is as simple or as difficult as that. But, and this is my final thought – we have to keep in mind the political economy dimension of the process, and there things do not look encouraging.
The recent redesign of monetary instruments and the yesterday’s cut of reference CB bills interest rate from 4% to 3.75% are aimed towards conducting of policy at optimal level of reference interest rate. Allow me to elaborate. We were preparing the monetary instruments redesign for a longer time period, and made the actual redesign when we considered that the time was right. The economic activity decelerates because the euro area demand is lower and the credit growth rate is below expectations. Moreover, data on the foreign exchange market and foreign reserves and on the trade deficit in the first quarter indicate balance of payments deficit lower than projected. The inflation rate reduced to around 2%, as expected for this year’s average. The banks, instead of investing the household savings, that increase faster than expected, in lending, purchased CB bills, the amount of which increased by Denar 10 billion, i.e. one third in only three months, even though the capital adequacy and liquidity are at exceptionally high levels. The net external borrowing of the country decreased by Euro 220 million only in the last quarter of the last year, and by Euro 280 million, or by one fourth, over the entire last year. Finally, immediately prior to our decision to redesign the monetary instruments, the Ministry of Finance announced cut of budget expenses by 5%.

To summarize, we face low level of risk in the external and the banking sector, low to moderate level of risk in the public sector, the Denar exchange rate is stable, the inflation is lower than in the euro area, and the economic activity decelerates. What would be more suitable in a situation like this than to send signal that there are conditions for enhanced banking activity without jeopardizing the stability? This is exactly the goal of our measures. It is not our intention just to conclude that the credit growth does not develop as expected, and to revise the rate downward all over again. We consider that the credit growth could range around 7–8% without jeopardizing price and financial stability, and we clearly signalize this. BIS central bankers’ speeches  1  The question is whether the banks will follow our signal? The promptness and intensity of banks’ response depend on the power of monetary policy transmission. The recent researches conducted by my coworkers show that the power of monetary policy transmission in our banking system is limited. This was yet another reason to redesign the monetary policy instruments. We hope that the new monetary framework will improve the monetary transmission. Otherwise, we will keep on advancing the monetary instruments setup. CB bills are the National Bank basic instrument used to absorb excess liquidity by banks. CB bills are not investment vehicles. In many countries there are no CB bills.