samchain/econo-pairs-v1 huggingface dataset:
Remarks on The Post-pandemic Landscape for Central Bank Statistics 11th IFC Biennial Conference Pablo García Silva, Deputy Governor, Central Bank of Chile August 25th 2022 I want to thank the organizers for the opportunity to participate in this distinguished panel, providing some remarks on the challenges we face as Central Banks and as providers of statistics, particularly in the environment we live today, as the pandemic recedes. Central Banks are keenly aware of the need to provide timely, accurate, and in-depth understandings of the changing economy. This not only to inform correctly policy making, but also to satisfy the shifting demands of society regarding the environment we live in. This inevitably implies trade-offs. Operative and budgetary constraints mean that a careful balance of timeliness, accuracy, and depth needs to be achieved. The ever-expanding complexity of economic relationships, and the speed at which policies have had to adapt to very large shocks, imply in my view that compared to a not so distant past timeliness is today at a premium. The times of change we live in require us to react promptly. This, however, carries the cost that both the accuracy and the depth of data will be inversely related to its timeliness. This brings about the implication that both policy making needs to consider the implicit uncertainty of the environment, and also that statistics providers need to be candid about those uncertainties when communicating with the public.

While there is a consensus about these positive effects, experience has shown that financial openness modifies the balance of risks at the macroeconomic level: •  first, it may reduce some risks, for instance, by decreasing the correlation between investment and savings;  •  second, it may nevertheless increase other risks: for instance, greater competition in the banking system may prompt strong credit growth with a loosening of credit standards, as domestic banks try to maintain their profits and market shares;  •  third, it may even create new risks, for instance through financial contagion, if risk appetite for emerging markets suddenly reverses, given the prominent role played by hedge funds in cross-border investments and the sudden shifts in their asset allocations. In this regard, the Banque de France recently published a special issue of its Financial Stability Review devoted to Hedge Funds, which may be of interest to the RBI (www.banque-france.fr). In contrast with the French experience which took place in the 1980s, the Indian process of financial liberalisation takes place in a context of intense globalisation and accelerated innovation. It is gradual but successful and it is no surprise that India was one of the first countries to participate voluntarily in the IMF Financial Stability Assessment Program (FSAP). In my view, the progressive and transparent character of this process is fundamental to guarantee that a country reaps the full benefits of its integration into the world economy.
Vítor Constâncio: Interview with CNBC Interview with Mr Vítor Constâncio, Vice-President of the European Central Bank, and CNBC, conducted by Ms Annette Weisbach in Sintra on 27 June, published 28 June 2017. * * *  Mr Constâncio, we’re talking about a lot of economic issues here in Sintra: the output gap, productivity, but also innovation. What does that all mean for your monetary policy? Constâncio: Beyond the point that these are important subjects for any economy looking ahead, it’s also important for monetary policy because this concept of output gap dimension – which is the difference between where output is at the moment compared with the potential output as it could be – this is a very important concept for monetary policy decisions, because what we want when we want to, say, bring inflation closer to 2%, is for aggregate demand to put pressure on supply in order for prices to go up. And when the difference between the actual output and the potential is negative, as is the case, then we have to close that difference. That difference depends on the way we see and calculate the potential, which is a very difficult issue in economics, and there are all sorts of different estimates, but what it means is that all central banks have to analyse very carefully and take a view on what is the degree of slack in the economy, because that’s crucial for the stance of monetary policy being more expansionary, less expansionary: it depends on that.

Everything was decided according to the two laws that apply in these cases, with, in the case of the BRRD, the potential exception of precautionary recap, which is in the law, and state aid rules. This was applied. At the same time, as a result of state aid rules, and logic, policy, the overall capacity of the banking sector in Italy went down. So there was downsizing; there was restructuring. Indeed, everything was applied according to European legislation. Is that just the beginning now for the Italian banking sector? As we all know, it has a huge slab of NPLs. Can we be prepared for more of these kind of… Constâncio: I don’t anticipate anything of that sort. There is the situation which was announced also during these days that is about to be concluded regarding Monte dei Paschi di Siena, but that has been discussed with the European authorities, and very likely it will have, as was stated in the past few days, a solution very soon for that case. 3/3  BIS central bankers' speeches
* * * All in all, today there is no reason to revise the overall picture of the economy and inflation that was presented in the March inflation report. The tendencies to date seem to broadly confirm the assessments there. Various forward indicators suggest that the Swedish economy is again entering a period of increased growth. At the same time, most things point to price increases remaining low this year and next, which is the period we can assess at present. The repo rate was lowered most recently last December. Since then we have frequently declared that the monetary stance is well balanced. This still applies. BIS Review 56/1997

Muhammad bin Ibrahim: Reflection on professionalism, Hippocratic oath and the banking industry Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 20th AICB Chartered Banker's Graduation and Awards Ceremony, Kuala Lumpur, 13 May 2017. * * * Thank you for the opportunity to speak at the 20th AICB Chartered Banker’s Graduation and Awards Ceremony. My congratulations to the 1,062 graduates who have been certified across 15 qualifications. Today, you join the ranks of the over 18,600 banking professionals in the nation. Your graduation is not only an important step in your own careers, but also contributes to our shared aspirations of elevating the banking profession towards greater heights. When we reflect about professionalism, the medical profession often comes to mind for its dedication, devotion, care and interest for society. Over 2,000 years ago, the Hippocratic Oath was first introduced to the world. Today, most medical school students profess some form of the oath upon graduation. While written in antiquity, its principles are held sacred by doctors to this day. Its words have evolved with history. But its message remains the same: treat the sick to the best of one’s ability, preserve patient privacy, teach the secrets of medicine to the next generation, and much more. What is interesting is not the oath itself, but the principles it expounds and the deep philosophical values that have firmly grounded the medical profession over the years.
Housing cost overburden rate - Romania percent 60  1st  50  47% 44.9%  40 24%  30 20 10 0 2007  2008  2009 1st Q  2010 2nd Q  2011  2012  3rd Q  2013 4th Q  2014  2015  2016  5th Q  Note: percent of population with costs more than 40 % of disposable income Costs include rental or mortgage interest payments , cost of utilities such as water,  Source: Eurostat  Figure 11. Savings behavior in Romania - 2016 percent 100 90  82.7  80 70 60 50  34  40  25.9  30  19.1  20 6.6  10  14.4  11.6 2.9  2.5  0.3  0 EUR 0-2,200  EUR 2,200-11,000  EUR 11,00022,000 % in total number of depositors  EUR 22,000100,000 % in total deposits  >EUR 100,000  Source: BDGF  9  Figure 12. Access to mortgage loans percent 14  12.3  12 10 8 6 4.0  4 2  2.0  1.5  0.9  0 1st q. 2nd q. 3rd q. 4th q. 5th q. Note: Share of households with mortgage loans in total households, by income quintiles Source: Ministry of Finance, Central Credit Registry, Credit Bureau  Figure 13.

If we get it right – and a lot of effort goes into ensuring that we do – the outcome of our short term deliberations should be a degree of monetary stability that will create the right climate for you to take the long term decisions on which your economic success depends. BIS Review 11/2005  3
3  Lending through these temporary liquidity facilities was fully secured, as with the standing discount window facility, and almost every facility was designed to provide a useful source of funding during stressed financial market conditions but to be an unattractive source of funding once markets returned toward more normal functioning. All of the temporary short-term lending facilities had ceased extending new credit by early 2010 and were closed, although reciprocal swap facilities with foreign central banks were restored later that year, and some longer term loans arranged under the TALF remain outstanding. 4  See the following for further information about the Desk’s Primary Dealer Survey, along with historical questions and aggregated responses: http://www.newyorkfed.org/markets/primarydealer_survey_ questions.html. 5  This staff unit produces an annual report reviewing open market operations and other developments influencing the Federal Reserve’s balance sheet. For a list of such reports, see as follows: http://www.newyorkfed.org/markets/annual_reports.html. BIS central bankers’ speeches  3  Lessons learned on market interactions through prism of an economist From the onset of the financial crisis until earlier this year, I acted in the capacity of a research economist at the New York Fed. I want to turn to some of the lessons learned as an economist trying to make sense of the crisis through economic theory and how it could be easy to misdiagnose the crisis without the multitude of interactions with financial markets that I have described. I will also apply these lessons to the current controversy about how economics should move forward after the crisis.

Thus, while the overall impact on businesses stands at slightly over 2 pp, it is expected to top 5 pp in the three most affected sectors.22 For households, given that energy expenditure accounts for a larger proportion of the consumption of lower-income households, the price rises seen in 2020 and 2021 will hit this group the hardest. More broadly, the Financial Stability Report also sets out the results of banking industry stress tests for two potential stress scenarios (dubbed “adverse” and “severe”) for the period 2022-2023. The use of this type of extreme scenarios, which are plausible but have a relatively low probability of occurring, is consistent with the goals of prudential regulation, which require that banks have sufficient capital to absorb unexpected losses. The adverse scenario simulates an increase in energy prices in addition to that seen in early 2022, and a greater persistence of international trade bottlenecks. The impact on prices would accelerate the monetary policy response, while also entailing a worsening of financial conditions. Meanwhile, under the severe scenario, the price shocks are slightly more significant than under the adverse one, while including a more marked worsening of households’ and firms’ confidence, triggering further falls in the main domestic demand variables (consumption and investment). 21  Specifically, increases of 22% and 25% in average price levels for 2022 and 2023, compared with the price used in the December projections.
Billi, R. M. and A. Vredin (2014) “Monetary policy and financial stability – a simple story,” Economic Review 2014:2, Sveriges Riksbank. Blanchard, O., G. Dell’Ariccia and P. Mauro (2010), “Rethinking macro policy,” IMF Staff Position Note, SPN/10/03, International Monetary Fund. Broadbent, B. (2016), “Central banks and digital currencies”, speech at the London School of Economics, 2 March 2016, Bank of England. Bryant, R. C., D.W. Henderson and T Becker (2012), Maintaining Financial Stability in an Open Economy: Sweden in the Global Crisis and Beyond,” SNS Förlag, Stockholm. Buiter, W. (2008), “Can central banks go broke?,” Policy Insight, No. 24, Centre for Economic Policy Research. Capie, F., C. Goodhart and N. Schnadt (1994), The Future of Central Banking: The Tercentary Symposiunm of the Bank of England, Cambridge University Press. Capie F. (1998), “Can there be an international lender-of-last resort?,” International Finance, 1:2, pp. 311–325. Cechetti, S.G. (2014), “Towards an international lender of last resort,” BIS Papers, No 79, Bank for International Settlements. Dagens Industri (2015), Inflationsmålets fader sågar Riksbankens agerande [The father of the inflation target blasts the Riksbank’s actions], 30 September. ESRB (2011), “Recommendation of the European Systemic Risk Board (ESRB) of 22 December 2011 on the macroprudential mandate of national authorities” ESRB/2011/3. ESRB (2014), “ESRB Recommendation on the macro-prudential mandate of national authorities – Follow-up Report – Overall assessment,” ESRB/2011/3, 25 June.

Financial stability is our common good, and we should also face a more subtle threat to it: debt complacency on a global level, in the context of accommodative monetary policies which will be less warranted in the near future. Global debt was already about 200% of world GDP before the crisis (2007), but is up to 220% today. Sound fiscal policies for public debt, responsible lending by financial actors for private debt and – if needed – macroprudential measures, should react against this debt complacency. 1/3  BIS central bankers' speeches  More broadly on multilateralism, we should continue to work together to preserve the world economic and trade order. We Europeans, shoulder-to-shoulder with Canada, Japan and others, must resolutely defend international economic relations based on commonly respected rules and multilateral institutions: we are all aware that an escalation of protectionist threats from the United States would dampen growth everywhere. The recent uncertainty is probably already having some negative effects on investment: you saw it in the British economy since the Brexit vote in 2016. And real tariffs would hurt more: according to most calculations including ours, a 10% increase in tariffs would diminish world trade by double digit figures, and decrease global GDP by more than 2%, starting in the United States. 2. The finance of tomorrow Let me now turn to my second point: the finance of tomorrow in an interconnected world.
We must recognize and confront the fact that the logical steps towards deeper integration that I just mentioned seem to run against what seems to be the mood of many Europeans, on the eve of European Parliament elections. It is true that crises always open the door to  15  See F.W. Scharpf (http://www.mpifg.de/people/fs/publikation-art_en.html). 16  Robert Gordon (2012) “Is US growth over? Faltering innovation confronts the six headwinds” CEPR Policy Insight n. 63. Robert Gordon (2014) “The demise of US economic growth: restatement , rebuttal and reflections” NBER wp 19895, Feb 2014. 17  David Rodrik (2011) “The globalizationparadox: why global markets, States and Democracy can’t coexist” Oxford University Press. Antonio Fatás blog “The UK makes the Euro Area look good” May 8, 2014. 10  BIS central bankers’ speeches  discontent and this crisis is not over yet. Some policy-makers seem too complacent in showing a sense of relief because the situation in Europe has stabilised and turned a corner, since economic growth is resuming, even if at incipient level. This sentiment is not shared by public opinion in many countries. It should rather be recognised that adjustment costs across nations and segments of the population could have been more balanced. In this context, it is useful to retain that the legitimacy of Europe has been always much more based on outcomes of growth and prosperity than on values or input legitimacy.

But sterling’s exchange rate has fallen – by around 4% since the MPC’s August meeting; and by about 15% since the beginning of 2007, so that, in sterling terms, the fall in oil prices has been less pronounced over the past month or so. On balance, those developments mostly comprise downside news, since the August Inflation Report, to the outlook for demand and for inflation. But the recent depreciation of the exchange rate has to be offset against that. And headline inflation has reached 4.4%. It will probably rise further. The Committee can and will ensure that this is a temporary state of affairs. But, for the moment, inflation expectations do continue to flash an amber light. Meanwhile, credit has remained tight, and underlying money growth has decelerated, implying that monetary conditions may be leaning against those incipient inflationary pressures. At the end of the last year – some months’ after the onset of the market turmoil – I set out some of the thinking that guided my interpretation of the monetary data and how it related to my policy decisions. 3 I stressed that “we must try to avoid a vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other”. A vicious circle between the world financial system and global economy has so far probably been kept at bay; global growth has slowed not collapsed.
Second, the financial tensions led to a disruption of domestic financial intermediation, with severe consequences for both private and public financing. In Greece, the banks – which were reasonably strong in a “stand-alone” sense – were undone by revelations about the weakness of public finances. In Ireland, causation ran in the opposite direction: the bloated and failing domestic banking system imposed an intolerable burden on what, prior to the crisis, had been a superficially strong fiscal position. Regardless of the causation, the consequences were the same: as confidence eroded, the inflow of foreign capital dried up. Subject to a “sudden stop” in external financing, 4 the European sovereign debt crisis – itself inextricably linked with problems in the financial sector – erupted, forcing Greece and Ireland to seek financial assistance from the European Union and IMF. 3. What can we learn from the emerging market crises of the past thirty years? The developments I have just described might give those of you living in emerging economies a sense of déjà vu. And indeed it has become commonplace to draw comparisons between recent events in Europe and the periodic financial crises seen in emerging market economies (EMEs) over the past three decades: Latin America’s debt crisis in the 1980s; the Mexican tequila crisis of 1994; the Asian financial crisis in the second half of the 1990s; and the Argentine crisis of 2001. Extensive economic literature has analysed these events and identified important roles for many of the phenomena I have just described.

Of course, greater economic integration in Europe has been accompanied by greater institutional cooperation. Although now supplemented by the (still untested) Chiang Mai Initiative, the framework for economic policy cooperation in Asia involves less deep and intense collaboration than in the European Union. The single monetary policy in the euro area is the acme of Europe’s economic integration. And the situation in the 1990s in Asia was much less developed than now. Several Asian countries (notably Malaysia at an early stage) introduced capital controls in the face of the financial crisis, something which cannot be done in Europe given the depth of financial integration and the commitments made to the free movement of capital within the Single Market in the EU Treaties. 4. Policy responses to the crises  The much deeper set of economic and institutional linkages within the EU and euro area today compared with those that existed in Asia in the mid-1990s has important implications for the policy responses. In particular, the lack of a regional framework in Asia placed the responsibility for addressing the financial crisis in the 1990s immediately and squarely on the international financial institutions, notably the IMF. By contrast, the close cooperation between EU countries has meant that the IMF has played a less prominent role in the recent crisis, even though it makes a significant contribution to the design and implementation of the adjustment programmes implemented in Greece and Ireland.
My third point is that, for every financial debt there is obviously a corresponding financial asset, owned either by domestic residents or foreigners. There is a lender for every borrower. Net indebtedness, in this sense, is zero by definition. What matters, therefore, is how the debt and assets are matched and how the debt is distributed across the population. If debt is concentrated in households with low liquid financial assets, and high marginal propensities to consume, that is a more vulnerable scenario than if debt is more evenly distributed across the population. I’ll also return to this issue below. Financial cycle And the idea itself of a “financial cycle” is perhaps the best place to start. We are not here talking about the business or economic cycle – that is, the regular “ups and downs” in economic activity we observe in indicators like employment and GDP. By contrast, financial cycles are the persistent and possibly self-reinforcing build up of leverage, increases in asset prices and loosening of credit conditions over time. They don’t always end in tears. But they often do: the peaks of financial cycles tend to be closely associated with financial crises and the possibility of “serious distress and dislocations”.3  2  Although an increase in credit intensity (credit to GDP) is a key part of economic development some studies have found evidence that beyond certain levels of credit to GDP countries experience lower growth. See Cecchetti et al (2011) and Arcand et al (2012). 3  See Borio (2012).

And indeed, recent work in the Bank of England suggests that much of that fall could well be due to persistent structural factors (Chart 5).7 These factors include a slowing in the underlying global economic growth rate, the rise in saving due to demographic forces, lower desired investment given a lower relative price of capital, changes in the income distribution, excess saving in emerging markets and declining public investment. 7  4  Rachel and Smith (2015) attempt to decompose the substantial fall in real rates over the past 30 years. Although acknowledging significant uncertainty, they account for around 400 basis points of that fall, the majority of which they attribute to structural factors. In another piece of Bank of England work, Waldron and Zampolli (2010) calibrate a model of the UK household sector to examine the behaviour of household debt between 1987 and 2006 – their model can explain most of the rise in debt and house prices if households expected lower real interest rates to persist. BIS central bankers’ speeches  However, not all of these factors will support a higher level of debt. In particular a fall in the potential growth rate of the economy will lower the long-term real interest rate. But it will also lower long-term income so the overall impact on house values and debt sustainability is likely to be neutral.