samchain/econo-pairs-v1 huggingface dataset:
Deposits have grown by 18% y-o-y, out of which more than 2/3 of this figure represents foreign currency-denominated deposit growth. Banking sector treasury and interbank operations declined versus the same period in 2009. Liabilities to non-residents have dropped by 32% y-o-y. Concerning the composition of banking sector assets, we note that lending has grown by 8% on a yearly basis. The annual growth rate of lending has been constantly downward in the last couple of years. Banking sector and interbank operations have grown by about 25% on a yearly basis. Banking sector investments in non-resident assets increased by 53% y-o-y. Net profit was positive and substantially higher than in the same period in 2009. Return on Assets and Equity stood at 0.6% and 6%, respectively. Capitalization and liquidity figures were at adequate levels. Capital adequacy ratio was estimated at 15.7%, while liquid assets accounted for 28.9% of total assets. As part of the regular stress-test analyses conducted by the Bank of Albania, in the context of a more comprehensive risk evaluation, the banking sector results stable. Let me now elaborate on some issues I find critically important for the future. The banking sector weathered the hard liquidity situation in year-end 2008 and early 2009 successfully. Following that period, public deposits in banks have grown at stable rates and liquidity has improved markedly. However, lending has contracted pronouncedly, initially as a result of the higher credit risk and later, due to the fall of business and consumer demand for loans.

This was in connection with a discussion on the general increase in prices that was expected to happen in the United States: Even those who tend to agree with the concept of a rough balance between supply and demand (i.e. no inflationary or deflationary gap), point out that there is still a huge money supply— and that is the hard core of inflation…. In time, this concept began to be used increasingly often, especially when inflation began to rise at a rapid pace in the beginning of the 1970s (see Figure 1). 4 According to Gordon (1975a), the higher rate of inflation was due to a number of factors: That food prices had begun to increase faster as a result of supply factors in the United States and abroad, that the oil price had risen as a result of production restrictions introduced by the OPEC oil cartel, that the Nixon administration had introduced price and wage freezes and the devaluation of the dollar in 1971 and 1973. Now a need arose to distinguish temporary price increases from more lasting ones. 3 See, for instance, Rogers (1998) for a discussion of how central banks use the concept. The next reference in the same text search of Wynne is Sprinkler (1975). He writes: “Recent price increases of 10-12 percent annually were about double the hard-core inflation”. 4  3 [19]  Figure 1. CPI inflation in the USA Annual percentage change.
The recent developments were triggered by a perception of higher credit risk originating from a perceived deterioration of the credit quality of assets held both by banks and by special  BIS Review 130/2007  3  investment vehicles, with which banks were associated either through liquidity commitments or reputation issues. The situation deteriorated when liquidity buffers of banks were put under stress by the need to meet their liquidity commitments and to take on their balance sheet assets which had become illiquid. Then, banks also became unwilling to provide unsecured lending to other banks, in particular at longer maturities, because of uncertainty whether they would themselves obtain liquidity if needed. Once this stage was reached, the deterioration of liquidity conditions became self-reinforcing, and turned out to be painfully durable, as can be seen for instance from the still exceptional three-month EURIBOR spread relative to three-month repo rates. What could central banks do about this? First, they provided extra liquidity through open market operations. This not only contributed to bringing down short-term interbank rates to target levels again, fulfilling monetary policy implementation purposes, but may also have contributed to supporting the willingness of banks to lend. Second, accepting that availability of central bank eligible collateral is the ultimate line of defence against illiquidity for banks, many central banks widened the set of eligible collateral. For instance, the central banks of Canada and Australia took such actions, and also the US Fed clarified that it would accept certain instruments in its discount window.

The immediate future: consolidating the measures taken and putting the reforms on a firm footing In recent weeks international financial market dynamics have continued to be influenced considerably by the high degree of risk aversion and by fragile confidence levels. There has been a resurgence of the doubts – first seen in the case of Greece – about the solvency of euro area Member States. The uncertainty over the euro area’s fiscal sustainability cannot be explained merely by the economic downturn and its impact on public finances. The measures taken by authorities to avoid the collapse of the financial system have involved, in the case of Ireland, guaranteeing the funds lent to the banking system by depositors and wholesale investors. Markets are suspicious about the ability of certain small States, with relatively large banking systems, to meet these commitments. The European Union has come to the aid of Ireland, which has experienced problems precisely because it used substantial amounts of public funds to shore up a banking system bloated with real estate assets, particularly offices and houses in the Dublin area. In Spain the situation is very different as regards both the public sector and the banking sector. Despite the substantial rise in the budget deficit in 2008 and 2009, public debt as a percentage of GDP remains relatively small in comparison with the euro area average, which is 20 percentage points higher.
Assets are managed on behalf of end-investors, whether institutional (such as pension funds and life insurance companies) or retail, the former typically through Separately Managed Accounts, the latter through Collective Investment Schemes. The industry’s Assets Under Management (AUM) are currently estimated at around $ trillion globally (TheCityUK (2013)). 1 This is large. It is equal to around one year’s global GDP or around three quarters of the assets of the global banking industry. It has also grown fairly rapidly, with AUM roughly doubling over the past decade in dollar terms. The longer-term picture is more striking still. In the United States, AUM have risen almost fivefold relative to GDP since 1946, from around 50% of GDP to around 240% of GDP (Chart 1). In the United Kingdom this pattern has been replicated, but over a much shorter time period since around 1980 (Chart 2). Across most OECD countries, the patterns are similar. The asset management industry has, it appears, come of age. The drivers of this growth are reasonably well-understood. The pool of prospective global savers has become larger, older and richer, each of which tends to be a boon for the asset management industry. Since 1950, average life expectancy has risen by nearly 50%, world population has risen by a factor of three and world GDP per capita has risen by a factor of nearly 40. There is a strong cross-country correlation between GDP per capita and AUM relative to GDP (Chart 3).

With attention focused on money markets, the spotlight also fell upon central banks who implement their monetary policy in money markets by influencing the level of interest, via the supply of liquidity. Moreover, the central banks are the only market participants who are in a position to create the liquidity used in the interbank payment systems. The kind of upheaval observed in the international money markets over the past few months has never been witnessed in living history. Rumours and reports of substantial sub-prime positions at banks led to a sudden loss of confidence in international financial institutions. Moreover, these banks are, to some extent, uncertain about their own future liquidity situation. Consequently, banks subsequently began hoarding liquidity and became extremely cautious when granting credit to each another. The market for unsecured interbank loans over longer terms collapsed and at times the market for foreign exchange swaps dried up. Since then, banks have been unable to obtain unsecured funds for terms of more than a few days or weeks – or have been able to do so only by paying substantial interest premiums. There were three factors that exacerbated the money market disruptions. First, bank securities holdings that had supposedly been first class and liquid proved to be illiquid, thereby failing to serve as a source of supplementary liquidity. Second, other participants in the financial markets also faltered in their supply of liquidity to the banks. Their confidence in banks suffered because money market investments that had been considered safe suddenly turned out to be risky.
[7]  According to European Commission estimates, the average annual contribution from TFP to growth in potential output was 0.6 p.p in the euro area and 0.9 p.p in the US between 2001 and 2015. The equivalent figures for capital accumulation are 0.5 and 0.8 p.p., while labour contributed by 0.2 p.p. in both cases. [8]  For a similar argument made in a different context, see: Krugman, P. (1994), “The Myth of Asia’s Miracle”, Foreign Affairs, 73:6. [9]  See Cœuré, B. (2014b), “Credit and Investment in the European Recovery”, speech at the IMF/Banka Slovenije high-level seminar on “Reinvigorating Credit Growth in Central, Eastern and Southern European Economies”, Portoroz, 26 September. [10]  See Hege et al. (2009), “Venture Capital Performance: The Disparity Between Europe and the United States”, The paper provides evidence for the existence of a gap between the value generated by US venture capital investments and European investments that is statistically significant and very large in economic terms. [11]  See ECB (2016): “Financial Integration in Europe”, https://www.ecb.europa.eu/pub/pdf/other/ financialintegrationineurope201604.en.pdf. [12]  See, for instance, Pellegrino and Zingales (2014), “Diagnosing the Italian Disease”, available at http://www.haas.berkeley.edu/groups/finance/Diagnosing.pdf. The paper says that the slowdown in Italy’s labour productivity is also associated with its failure to take full advantage of the ICT revolution. [13]  See Jones, B.F (2005): “Age and Great Invention”, NBER Working Paper No. 11359. [14]  See European Commission (2015), 2015 Ageing Report.

Moreover, many product and service sectors are represented by powerful lobby groups with vested interests that sometimes conflict with the interests of consumers and society as a whole. The Greek programme is one example; the authorities there faced strong resistance from pressure groups[25]. I have absolutely no doubt that one  BIS central bankers’ speeches  3  would meet similar obstacles when reforming, say, the German or French product and service markets. In fact, both these countries have been opposed to wider service sector reform at European level. And Germany is one of the countries that has realised the smallest share of potential benefits from the Services Directive according to the European Commission[26]. Strengthening the single market and governance If we view the euro area as a single economy and not as the sum of its 19 national members, we must have a common growth strategy based on identifying our structural weaknesses. The key words must in my view be “productivity” and “employment”, which are positive-sum games – not “competitiveness”, which could end up as a zero-sum game. The Member States will not lend much support to euro area growth by merely competing for their neighbours’ market shares. We have to act together to raise productivity and employment. Improving the functioning of the service market in the euro area is therefore important not only because of its large share of overall gross value added, 65% on average in the euro area, but also because 75% of the total labour force is employed in this sector.
When operational, such distributions should help guide judgements on how overall financial system vulnerability is changing. But the approach should also provide considerable additional information on pressure points within the system and on the channels of transmission and potential contagion. 14 I believe that this broad approach offers an important step forwards in the development of an analytically and empirically robust framework for financial stability work. Of course it is analytically hugely challenging – modelling non-linear tail events with endogenous strategic interactions is always going to be tough! The results will inevitably be subject to major uncertainty. But the approach does start to provide a consistent and coherent framework which should substantially improve the value of top-down stress tests and of risk assessment work. 15 A particular “operational” aim is to use the results to help improve the focus of risk reduction work and crisis management planning, for example through the identification of  BIS Review 81/2007  7  “weak points” in the financial system and through improved assessment of the impact of policy interventions. An important element of risk reduction work is to influence the behaviour of financial firms. “Bottom-up” or firm-level stress-testing practices have developed rapidly in recent years. But one challenge is that, as for the authorities, it is hard for individual firms to gauge the likely “systemic impact” of particular shocks, which takes into account macro and financial system interactions and feedback effects.

When we look at successful examples of technology adoption, it’s not just about state-of-the-art technology. It’s about how you manage the change – especially changes to mindsets. It takes time and effort to convince people that a new technology is worth the cost, the effort or the potential risk. 16. This is often the case with larger organisations, especially official institutions like the HKMA. We set up the FFO in early 2016 precisely to serve as a dedicated agent to drive changes and take practical steps to turn ideas into reality. 17. The FFO has contributed to a number of Fintech initiatives in the past three years – from cybersecurity to supervisory sandbox, open API, the FPS, and the rest of the seven Smart Banking initiatives. But I must stress that the FFO is not working in isolation. Other parts of the HKMA must work alongside it, and of course it must work with the banking, technology and even legal sectors. 18. The FFO has essentially served as the coordination point of this collective effort. This has enabled a “change” mindset to spread throughout our organisation and among our partners. And the result is the impressive Fintech developments we have seen in the last few years. 19. A change agent does not have to come from within. Sometimes, competition is an effective driver for innovation. One good example is the imminent entry of virtual banks in Hong Kong.
The net real wage was higher by 42.7% in 2017 as compared to 2008, while the number of employees is also higher by 2.4% in 2017 compared to 2008. As social contributions and other taxes were reduced, the increase in real wages was only partially mirrored by the increase in compensation of employees. When compared against EU average, labor productivity raised faster than compensation of employees over the entire period, therefore the unit labor cost, relative to our main trade partners (EU), decreased by 7.7 percentage points (Figure 3). This explains the positive dynamics of exports. Public debt, as a percentage of GDP, is three times higher now than it was in 2008 (35% in 2017 compared to 12% in 2008), but this is a misleading figure for a number of reasons. First, in 2008 and few years before that, Romania did not access international markets, by its own choice, as it financed the deficit from one-off revenues. Second, international reserves were 10 billion euro higher by the end of 2017 compared to the end of 2007 (Figure 4). International reserves include a foreign exchange buffer which has been built since 2011, reached an average of 4 months of financing in 2013 and fluctuated around this level since then. This buffer is the first line of defense against short-term external shocks which may affect emerging markets, and our opinion is that it is a very good instrument which needs to be preserved and consolidated.

The recent economic deceleration from 6.9% in 2017 to 4.2% y-o-y in first half 2018 is a double edged sword. On the one hand, it represents a slowdown compared to last year. On the other hand, it brings growth towards its potential, therefore reducing the output gap and making growth more sustainable. But, as former US President Harry Truman said, “All my economists say on the one hand…on the other hand…Give me a one-handed economist!”. The current account deficit, although much lower than prior to the crisis and below its long time trend of 4% of GDP, remains a concern because our peers are recording current account surpluses in these years (Figure 15). However, it remains fully financed from autonomous flows (FDI and European funds) (Figure 16). Let me make two remarks here. The FDI flows, although lower than prior to the crisis, are much more stable, as they only comprise of equity and reinvested profits (especially after mid-2014), while short-term intra-company loans have practically vanished. As for the European funds, in the last 10 years, more than 40 billion euros entered the country, representing a factor of the increase in the monetary aggregates. This brings me to the issue of inflation. Price stability is our main task and I think we did a good job, given the circumstances. Last year the inflation target was met.
In other words, at this stage of the Peso incorporation process to CLS, it is imperative to define the participation of local banking entities, as a Settlement Members or Nostro services providers. •  The current projection is that the Peso will go live before the end of the second quarter of 2022. Therefore, and given the necessary actions, investments, and transformations to connect to the system, the banks must join during this budget period to carry out the implementation process during next year. V.  Central Bank actions to incorporate the Peso  •  The CBC must also perform significant actions, investments, and modifications of its current operation to integrate the Peso settlement into the CLS System. •  Several actions that will be detailed later in this workshop, include extending the operating hours of our Realtime Gross Settlement (RTGS)—Sistema LBTR—to coincide with CLS between 00:00 AM and 6:00 AM. •  In this sense, the CBC is willing to take all the necessary steps to incorporate the Peso and to do business as usual with the Peso settlement in CLS. Page 2 of 4  Central Bank of Chile July 2020  VI. Central Bank actions to improve the Peso convertibility  •  Let me emphasize that CLS is an important piece among the actions taken by the CBC to improve the convertibility of the Peso in a safe environment, following our mandate to safeguard the local and foreign payments.

BIS central bankers’ speeches  5
In this regard the authorities launched a consultation process with the stakeholders involved, to amend Banking Rule 9 which involves measures addressing credit risks arising from the assessment of the quality of asset portfolios of credit institutions. In a nutshell, the proposal aims to establish a concrete plan with those banks with NPLs higher than 6% to reduce such NPLs below that level over a period of 5 years, where failure to adhere to this plan will require the institution to shore up its resilience through the accumulation of an additional capital reserve. Meanwhile, on a European level, the European authorities are pushing for the establishment of a European Deposit Insurance Scheme (EDIS), which is a necessary ingredient to complete the architecture of the Banking Union project. This is because a common deposit insurance fund inspires the same level of confidence to depositors throughout the entire Banking Union, creating a consistent and common framework for supervision, resolution and depositor protection. Moreover, this joint safety net within the Banking Union is expected to prevent the creation of competitive distortions, thus facilitating cross-border banking and hence strengthen financial integration. However, in this regard, there is still some way to go for agreement among all Member States, as risk reduction measures, particularly through asset quality reviews of the less significant institutions and addressing the banking-sovereign debt loop, need to be also implemented. Malta is committed to taking the EDIS file forward during its presidency.

Following an exceptional increase of 6.2% last year, real GDP expanded at a more than respectable average annual rate of just over 4% during the first half of 2016. The expansion in output is being driven by domestic demand, especially by strong growth in private consumption and investment. Exports of services are also performing well, indeed significantly better than the export of goods. Growth is being driven by private market services, encompassing a mix of traditional and new sectors, including tourism and distribution, aviation and professional services. The  utilities, which were formerly loss-making, have now returned to profit, reflecting the use of cheaper energy sources and efficiency gains. Manufacturing is holding its own, with pockets of success and others that continue to face strong competitive pressures. At the same time, following vigorous growth last year, growth in value-added in construction has eased. Growth in output depends upon and feeds into a dynamic labour market. According to administrative records, which are available up to April 2016, annual employment growth consistently exceeded 4% in recent quarters. The Labour Force Survey paints a similar picture, with employment gains averaging around 3% during the first half of the year. More recently, registered unemployment has continued to fall to record low levels over the summer. Notwithstanding such a dynamic economic performance, price pressures remain contained, with inflation fluctuating in a narrow range around 1% since the beginning of the year.