samchain/econo-pairs-v1 huggingface dataset:
As for spending, after contracting by 4.2% this year, total consumption will resume positive growth in 2021 and 2022, consistent with a recovery in employment and household income, and with the positive short-term effect of the withdrawal of pension savings. Plus, the low base that will be left by this year’s contraction. The projection is that the recovery of economic growth will result in an increase in employment, albeit with lags that will vary according to the categories of occupations, sectors and activities involved. Thus, it is likely that, with the lifting of the strictest sanitary measures, employment in sectors such as construction and trade will show a significant upturn, as will self-employment. However, in activities more permanently affected by social distancing, changes in production methods or technology, the lags may be last much longer. In the short term, the expected recovery in consumption would be more biased towards goods—with a higher proportion of imports and a lower relative intensity of employment—than towards services. Thus, after rising by 6.8% in 2021, total consumption will reduce its expansion to 1.7% in 2022, considering that the temporary stimulus to household spending provided by the various income support measures will have dissipated and that 2021 will leave a higher basis for comparison. Gross fixed capital formation (GFCF), in particular its construction component, will recover as quarantines are lifted, especially in those works that were shelved.

15  Figure 7  Labor market indicators (1) (2) (index, January 2020=100)  Employment levels  Total hours worked (3)  110  125 110  125  100  100 100  100  90  75  90  75  80  50  80  50  25  70  25  70  20 01 Chile  Abr. 04 Colombia Spain  Jul. 07 U.S.  France  01 20 Japan  U.K.  04 07 Abr. Jul. Peru (right axis.) (1) Monthly data for all except Spain and France, which use quarterly data. The latter use base 2020.Q1=100. (2) Seasonally-adjusted series, except for Colombia, Spain and Peru. (3) Four Chile and France, total hours worked are calculated by multiplying average hours and total workers in the period. Sources: Bloomberg and respective statistics bureaus. Figure 8 Q: How have your workers' wages changed with respect to before the crisis? (percent of total answers)  Annual wage correction Welfare benefits Sales commissions Overtime pay Incentives and bonuses Non-monthly payments Other basic and permanent wages Basic wage Significantly reduced  0 20 Slightly reduced  Slightly increased  Significantly increased  Source: Special survey to companies, Central Bank of Chile.
In this context, policy rates, liquidity management facilities, and reserve requirement ratios are concurrently used to ensure price stability and financial stability. Therefore, the Monetary Policy Committee is of the opinion that given the economic situation, the combination of a lower policy rate, a wider interest rate corridor and higher reserve requirement ratios is the most appropriate policy mix in terms of jointly upholding financial stability and price stability. In this respect, the policy rate -the one-week repo auction rate – was reduced from percent to 6.25 percent in the last two months. In addition to the policy rate cuts, the CBRT decreased the overnight borrowing rate by 450 basis points to 1.5 percent. The corridor between the overnight lending and borrowing rates was widened to allow fluctuations in short-term interest rates, when needed (Figure 10). All these decisions aim to extend the maturity of short-term capital inflows as well as to prevent the Turkish lira from following trends that are detached from economic fundamentals. BIS central bankers’ speeches  5  Another issue taken into consideration when formulating the new policy mix was to limit rapid credit growth, an important factor contributing to the widening of the current account. In this context, reserve requirement ratios are used as active policy instruments with an aim to decelerate the credit growth and to extend maturities of banks’ liabilities.

These two examples are of course extremely simplistic, and are not realistic parameterisations of the Bank’s actual RSS. In broad terms, the elasticity of the Bank’s RSS is pinned down by three broad considerations. First, the Bank sees merit in allocating some funds regularly against wider collateral, to ensure counterparties remain familiar with the auction structure and continue to participate. Second, the Bank should not undermine the incentives to manage liquidity prudently. And third, the auctions should permit an increased allocation against wider collateral to the system in the face of adverse liquidity shocks and the associated heightened demand for liquidity. While the principles underlying the Bank’s RSS are clear, the precise configuration of the RSS is not revealed to the market, so reducing the scope for firms to game the Bank, and encouraging them to bid according to need. The Bank’s supply curve should be continuous but otherwise need not be linear. In particular the Bank can use the results from each operation to determine the degree of stress in the market and hence adjust the scale of the operations accordingly. Equilibrium The equilibrium point, which pins down the clearing spreads and the share of funds allocated to the two collateral sets, is determined by the intersection of the observed demand curve, and the Bank’s RSS. Chart 7 illustrates that using our hypothetical auction bids from Table 1 above, and three hypothetical linear RSS schedules. In case of intersections such as those given by curves A and B, a unique equilibrium is well defined.
Observations  14 6 8  χ2 statistic  Average magnitude of rate 'surprise' (bp)  Average of 'surprise' variable (bp) Difference IR months Other months  Reuters measure: 1998-2000 2001-present Difference  30 50  11 7.6 -3.3**  Reuters measure Whole period 1998-2000 2001-present  10.6 12.6 9.5  7.9 10.0 6.6  +2.7* +2.6 +2.8  LIBOR measure: 1997-2000 2001-present Difference  43 50  5.4 3.6 -1.8*  LIBOR measure Whole period 1997-2000 2001-present  5.9 5.5 6.3  3.7 5.3 2.2  +2.3** +0.2 +4.0**  E. Market reactions in Inflation Report months  Average magnitude of 'surprise' / market reaction (bp)  LIBOR measure: Whole period 1997-2000 2001-present Difference  Policy decision  Inflation Report publication  MPC minutes publication  5.9 5.5 6.3 0.7  3.0 3.4 2.7 -0.8  2.8 2.4 3.1 0.7  Difference between Difference between reaction to policy reaction to policy decision and IR decision and MPC publication minutes publication  +2.9** +2.1 +3.6**  +3.1** +3.1** +3.2**  Observations  31 14 17  Notes: Tests are for significance based on t-test for difference between two sample means, except for Panel (A) and (B), which is a test for whether rate changes are distributed 1/3 in IR months and 2/3 in other months. The critical values for Panel (A) and (B) are derived from on Monte Carlo simulations. Excludes the special MPC meeting following 11 September 2001.

χ2 statistic  Expected rate changes IR months non-IR months  4.41** 0.13 7.54***  Whole period 1997-2000 2001-present  8 5 3  9.09*** 2.23 7.68***  D. Are interest rate surprises larger in Inflation Report months? C. Are interest rate surprises getting smaller?
Clearly, it was not by chance that some countries found themselves in a more difficult situation than others. It was mainly those countries that had implemented inappropriate economic policies in the past. This is also why the first responsibility in this situation is for countries to make determined reforms and convince markets that they are credible. But many were already doing this, only for interest rates to rise even higher. There was an element of fear in markets’ assessments that governments, acting alone, could not remove. Markets were not prepared to wait for the positive effects of reforms to emerge. In our view, to restore the proper transmission of monetary policy, those unfounded fears about the future of the euro area had to be removed. And the only way to do so was to establish a fully credible backstop against disaster scenarios. 2  BIS central bankers’ speeches  We designed the OMTs exactly to fulfil this role and restore monetary policy transmission in two key ways. First, it provides for ex ante unlimited interventions in government bond markets, focusing on bonds with a remaining maturity of up to three years. A lot of comments have been made about this commitment. But we have to understand how markets work. Interventions are designed to send a clear signal to investors that their fears about the euro area are baseless. Second, as a pre-requisite for OMTs, countries must have negotiated with the other euro area governments a European Stability Mechanism (ESM) programme with strict and effective conditionality.

Again, the biggest strides have been taken in the realm of supervision, but a greatly improved resolution framework is also in the process of being introduced. A common deposit insurance system is not yet on the agenda, however. That might be an impediment to further banking integration and potentially a source of vulnerability. EU members outside the euro area can opt into banking union. This introduces the possibility of deep banking integration without a LOLR, which is a risky combination, as we have seen. That risk could of course be mitigated through uncapped central bank swaps and mutual acceptance of collateral, but as far as I can see, there is as yet no formal framework for this. In this connection, I note with interest the plans in this region to progress with regional banking integration by, for instance, the ASEAN. The benefits will be substantial, but we need to be mindful of the risks and learn from the European experience. As I see it, banking integration without a monetary union or alternative arrangements for FX liquidity provision is potentially very risky. That said, recent events have shown that a monetary union without a banking union is also risky. At the global level, there has been some progress on the framework for supervision, crossborder crisis management, and resolution of cross-border banks through the work of the Financial Stability Board (FSB).
Some may not adequately address recent changes in the global economy—such as the rise of digital trade—and may need to be refreshed. And, important trade barriers still remain that should be addressed. In particular, from a U.S. perspective, the access of U.S. firms to some foreign markets and the protection of intellectual property rights are issues that deserve close attention. But, in addressing these issues, we should take care to preserve the vital benefits of trade to higher standards of living in both advanced and emerging market economies. Our focus should be on further strengthening an open trade regime, and, as appropriate, amending and improving these agreements. 1/8  BIS central bankers' speeches  The Pace of Globalization To begin, let me briefly describe the pace of globalization as a reminder of what is at stake. Global economic integration has increased dramatically in recent decades. Trade in goods and services, for example, has grown from nearly 40 percent of global GDP in 1990 to 54 percent in 2016. Over the same period, the stock of foreign direct investment has increased from roughly 10 percent of global GDP to 36 percent. Put simply, national economies and financial systems have become more integrated and interdependent.2 This rapid growth in trade reflects falling trade barriers, declining transport costs, and improved information and communication technology. These trends have enabled the development of complex global supply chains that allow companies to manage their production more efficiently.

This is best illustrated by the following statistics: •  According to the Bank for International Settlement's triennial survey in 2004, our average daily foreign exchange turnover was close to $ billion, which was the sixth largest in the world;  •  On average, transactions settled through the various RTGS systems in Hong Kong amounted to $ billion each day in 2005;  •  New debt securities issued in 2005 amounted to $ billion; and The total amount of funds raised through IPOs reached $ billion in 2005. 3. Our treasury markets have done well in servicing the financial businesses behind these impressive numbers. Further globalisation of financial markets and financial liberalisation on the Mainland will likely place new and increasing demands on our treasury markets. We need to move with the times, if we are to maintain our status as an international financial centre, and I think the establishment of the TMA provides a good mechanism for us to do so. In my view, there are four key areas which the TMA should focus on: professionalism, market development, codes and standards, and publicity. 4. The professionalism of market practitioners contribute significantly to the competitiveness of a financial centre. An important area of work of the TMA is therefore to enhance the professionalism of the practitioners in the Hong Kong treasury markets.
In other words, banks with a large share of their deposits in a country with high coverage may have different incentives and access to deposit finance compared to banks in lower coverage countries. A related point could be made about the different types of deposits that are covered by the respective schemes. A second important parameter of a deposit insurance scheme is the funding structure. In the EU some schemes are pre-funded, i.e. they collect the means for being able to pay out in case of a bank failure beforehand, others are only funded ex post, i.e. in case of a bank failure the necessary amounts are collected from other banks, and again other schemes use a combination of the two. For the pre-funded schemes the premium structure is of relevance. Some schemes use flat rates in proportion to banks’ deposits and others take some aspects of bank risk in the pricing into account. All this leads to greatly varying “coverage ratios” across the EU, defined as the size of funds divided by the total amount of deposits covered. The differences in funding structures can lead to differences in the costs of deposit insurance for banks headquartered in different countries. As the views of stakeholders tend to be divided, an important issue for further analysis and research is whether differences in coverage and funding structures have a significant impact on the competition among banks originating from different countries.

In addition, cross-border banks with subsidiary structures have to obey to the rules of the deposit insurance scheme in each country where they are represented. This is complicated and costly for them. Once they have become a member of a scheme and paid into it, it is often impossible to recover the funds in case they would like to streamline the group by moving to a branch structure, e.g. by becoming a Societas Europea. This might discourage cross-border groups from streamlining their company structure, which could become a factor limiting financial integration. In this area as well, I a missing a study providing answers that take all benefits and costs of different options into account. All these observations raise the issue as to whether the mechanisms for coordination at the level of the EU should be used to achieve more convergence in the various aspects of deposit insurance schemes in the context of the presently decentralised approach to financial regulation and stability. This convergence could go in the following directions. First, in addition to setting a lower bound, also the maximum amount covered could be limited and the specification which deposits are included and which not better harmonised. Partial insurance, or the so-called co-insurance, for smaller deposits could be removed where it still exists, as recent experience seems to suggest that it may reintroduce incentives for retail depositors to run a bank. Second, it may be advisable to move towards pre-funded schemes, which are financed through risk-sensitive premia. This would bring bank incentives better in line.
Mergers – or, I should rather say, their absence in light of the recent past – are always prominent in press headlines. In this respect, let me reiterate that mergers may be a means for securing gains in efficiency and profitability, but they are very complex operations and the attendant business plans must be appropriately assessed. 10/15  We have seen a 30% reduction in the number of institutions there were in 2009. More recently we have seen how, in the absence of a context of acute crisis, many of the corporate operations announced do not reach fruition. Meantime, in some of the operations that are finalised, integration problems continue to be seen for years. Our task in a setting such as the present one is to ensure that any merger process should lead to the creation of a new, more solvent institution, with a sound business model, enabling structural costs to be cut and, in short, value to be generated. We must of course assess these same aspects with a view to potential cross-border mergers in Europe. The absence of such mergers may be seen as a sign that the Banking Union is not working as it should. True, several elements of the Banking Union are still not in place, including most notably the European Deposit Insurance Scheme (EDIS). It is likewise true that the regulations affecting the sector are still too heterogeneous across the different Member States.

Via the effects on inflation, asset prices are thus taken into account in the formulation of monetary policy, although they do not feature explicitly in the target variable. However, the simple use of financial asset prices as indicators is not a panacea for the central banks’ forecasting problems. Asset prices can move for a variety of reasons. Understanding those reasons is important in determining the appropriate monetary policy response. For example, if a rise in share prices stems from increased productivity and thus from expectations of higher future profits, the implications for monetary policy would be very different from a case with no such fundamental reason for the higher share prices. This raises a number of questions. The first pertains to the relative informativeness of different kinds of asset prices. The second is how to integrate the information obtained from asset prices with other macroeconomic information. Notwithstanding the empirical evidence of the indicator properties of asset prices, the causal relationships between asset prices and real macroeconomic variables have 1  BIS Review 51/2000  proved to be more difficult to understand and model. But, as I have just illustrated, the answers to these questions can be very important for monetary policy. It seems quite clear that central banks cannot afford to adopt a view of asset markets as merely “side-shows”. There can be other, sometimes less straightforward, situations where monetary policy has reason to react to movements in asset prices even though the effect on inflation is negligible.
As deposits are readily available to depositors and many deposits are covered by a deposit guarantee, depositors accept a relatively low interest rate. The insurance premium banks pay for the deposit guarantee bears little relation to the risk the bank takes. In addition, since investors can expect that the authorities will come to the aid of banks in distress, they  BIS central bankers’ speeches  1  may be satisfied with a lower return. The result is an underpricing of risk, potentially leading to excessive risk-taking. Low equity ratios reduce loss-absorbing capacity and, at the same time, strengthen the incentive to take risks. While owners cannot lose more than their equity stake, there is a potential for high returns on the equity they have invested. To avoid a situation where banks hold inadequate equity capital, banks are subject to capital requirements. Each bank should hold capital in proportion to its risk exposure. This is the basis of microprudential bank regulation. But even if banks appear to be solid individually, the banking system as a whole may be vulnerable. Banks are exposed to one another and can inflict losses on one another directly. Banks can also suffer substantial losses indirectly if they have shared exposures outside of the banking system. This was clearly evident during the financial crisis. When a bank is forced to sell off assets, they fall in value. This weakens the balance sheets of other banks holding the same type of assets.

Philipp Hildebrand: The new investment policy of the Swiss National Bank Introductory remarks by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Geneva, 17 June 2004. *  1. *  *  The evolution of the new investment policy  The new National Bank Act has been in force since 1 May 2004. The management of monetary reserves is explicitly mentioned in the NBA as part of the Swiss National Bank’s mandate for the first time. The management of these reserves is subject to the primacy of monetary policy and implemented according to the criteria of liquidity, security and return. In so doing, the National Bank must guarantee professional, modern asset management and risk management. Until the mid-1990s, the National Bank only had limited possibilities for managing its assets. Monetary reserves were mainly held in the form of gold and foreign-currency government bonds with a maturity of less than one year. Accounting for approximately 80%, the US dollar was the main reserve currency. An easing of investment regulations came about in 1997 when the legally prescribed maximum term for bonds was repealed and repo and gold lending business was introduced. At the same time, the National Bank began to diversify currency risks on its investments to a greater degree and gradually reduced the US dollar portion. The new Act takes this a step further and leaves the permissible investment universe completely open. 2.