samchain/econo-pairs-v1 huggingface dataset:
Chart 1 illustrates how the growing proportion of nonprime first mortgage loans helped fuel the sharp rise in home prices. As home prices rose and the stock market performed strongly, household net worth rose sharply. Households responded by borrowing more and saving less. After all, why save when the rise in home prices was adding to your wealth and the housing equity created by the rise in home prices could be easily tapped for funds as needed? The use of home equity as a source for funds to support consumption is evident in the fact that the homeowners’ equity as a share of home values was essentially flat over this period (Chart 2). This indicates that homeowners were borrowing against their accumulated gains. The surge in home prices pushed up the ratio of household net worth to disposable income to nearly 640 percent and the personal saving fell below 2 percent (Chart 3). The surge in home prices was fueled by products and practices in the financial sector that led to a rapid and unsustainable buildup of leverage and an underpricing of risk during this period. These dynamics in turn provided the fuel that caused house prices and consumer spending to rise much faster than income. As shown in Chart 4, the share of GDP accounted for by consumption and residential investment climbed to a peak of 76 percent in 2005 from 71 percent in the mid-1990s. The boom, of course, was unsustainable.

For example, if inflation in 2011 were a 0.5 percentage point below the Fed’s inflation objective, the Fed might aim to offset this miss by an additional 0.5 percentage point rise in the price level in future years. In the current environment, such an approach would have some advantages as well as some disadvantages. When there is a large amount of slack in the economy, the Federal Reserve might not easily be able to hit an inflation objective soon. But, the central bank could plausibly promise to make up the difference later on. Indeed, the further the Fed fell behind its inflation objective in the near term, the more inflation would need to increase in order to  BIS Review 127/2010  5  push the actual path of prices up to the path consistent with price stability over the long run. To the extent this policy was more credible, it might do a better job keeping inflation expectations from falling. This might make monetary policy more stimulative and, thus, might help the FOMC achieve its objectives more quickly. However, such an approach would only work well if people understood how it would operate and formed their expectations of future inflation accordingly. And there could also be significant costs. For example, if people mistakenly concluded that the Fed was tinkering with its long-run inflation objective, this could lead to greater uncertainty about future inflation.
Home refurbishment is probably also rising sharply. Overall, the supply of capital to households has increased sharply. Debt accumulation was somewhat more than 11 per cent in 2004 and is now considerably higher than growth in household disposable income. This largely reflects the sharp rise in house prices since the mid-1990s. According to TNS Gallup’s consumer confidence indicator for the first quarter of 2005, households are still highly optimistic with regard to their personal finances and the domestic economy. Our regional network confirms this impression, with reports of strong growth in companies that provide goods and services to households. On the whole, household consumption and housing investment are projected to show fairly strong growth over the next few quarters. Even with a strong upturn in the mainland economy, the increase in the number employed has been relatively modest. Productivity rose fairly sharply in the first few quarters after economic growth picked up. Normally, when productivity growth is strong, enterprises again begin to hire new staff. The current upturn has lasted about two years. The fairly low level of growth in employment, as measured by the number of employed, must be seen in the light of the sharp decline in sickness absence through 2004 after rising for several years. The decrease in sickness absence has increased companies’ supply of labour and reduced the need for new employees. Measured in person-hours worked, employment growth was solid last year. The number of person-hours worked rose by 2.2 per cent from 2003 to 2004.

Budgetary policy in 2017 Before going on to specify the broad outlines of budgetary policy for 2017, allow me to remind you that the State and Social Security budget provides only a partial picture of general government activity. In a country as decentralised as Spain, in which more than 40% of public spending is by local and regional government, it is essential to take a broader perspective. Since my speech to the Parliamentary Budget Committee on 25 April, the Government has published (at the end of April) the Updated Stability Programme for the period 2017-2020. This document offers an overview of the budgets of central government agencies along with those of regional and local governments. Moreover, the Stability Programme, by adopting a 4/8  broader time horizon, provides a medium-term plan, which is important for correcting public finance imbalances. The macroeconomic projections accompanying the Stability Programme, which update those included in the draft budget for 2017, involve an extension of the current economic recovery to 2020, albeit with GDP growth gradually slowing from the 3.2% rate recorded in both 2015 and 2016. Specifically, real GDP is projected to grow by 2.7%, 2.5%, 2.4% and 2.4% in 2017, 2018, 2019 and 2020, respectively, while prices are projected to recover, so that nominal GDP growth would stand, on average, slightly above 4% throughout the period. These projections thus incorporate a path of slowing economic growth, which is also present in the forecasts of the Banco de España.
This confidence is justified. But one of the consequences of the resilience of the system in the face of past shocks is a higher degree of confidence in a benign and stable future. And this confidence itself can increase the risk of future instability. It is critically important, then, that we continue to strengthen our financial system. The most important dimension of this challenge is to ensure that the size and the quality of the cushions maintained by financial institutions against the risk of adverse outcomes are sufficiently strong. This is particularly important in the case of the relatively small number of bank-centered financial institutions that now play a much more central role in our financial system. Their extraordinary size and diversity diminishes their vulnerability to shocks. However, it also exposes them to a broader array of potential shocks, and magnifies the potential damage to the system should one of these institutions stumble or fail. We need to ensure that the level of insurance these core institutions maintain against risk – insurance in the form of their capital and liquidity cushions, their operational resilience, and the quality of their risk management and control systems – are calibrated to reflect their greater systemic significance and the greater complexity of the challenges they face in managing more diverse businesses. This is true not only for the largest banks, but also for GSEs like Fannie Mae and Freddie Mac, and also for those non-bank financial institutions that play a critical role in the wholesale financial markets.

Global growth is reasonably strong and broad-based. Underlying inflation is low. Estimates of structural productivity growth in the United States remain high. The global economy has weathered the oil price shock and other recent shocks quite well. Most of the major emerging market economies look stronger than they have in some time. Overall volatility in output and inflation has moderated significantly in the United States and, to a lesser extent, in other economies as well. These favorable fundamentals are reflected in low risk premia of many forms - low credit spreads, low and quite stable inflation expectations, and low actual and implied volatility. Market participants appear to believe that future macroeconomic shocks will be more moderate, less frequent, and less damaging than past shocks have been. To say this another way, the price of insurance against a less benign world is now quite low. We face a number of significant challenges that threaten this positive outlook. I want to touch on the two that appear to me most important. The first is the growing imbalances at the center of the global economy. Fiscal policy in most of the major economies is on a path towards rising debt-to-GDP ratios; this trajectory gets dramatically worse as demographic changes reduce the ratio of workers to retirees. At the same time, external imbalances have reached unprecedented levels, most dramatically in the case of the U.S. current account deficit, which is on a path to exceed six percent of GDP. These imbalances – fiscal and external – cannot be sustained indefinitely.
They have also managed to achieve a very well controlled process of deleveraging by reducing their exposure to non-core businesses, in general at good prices. So their overall balance sheet situation has been substantially improved and they are now in the process of meeting in full the requirements of Basel III with core tier one ratios of 9% before the end of 2013. This is several years ahead of the schedule that was originally stipulated. By the way, I always felt that the time frame determined by the supervisors in Basel for compliance by the beginning of 2019 was always a little bit theoretical, because markets were likely to ask for more rapid implementation, which is what the French banks have done. So when I compare the French banking system with other major banking systems, be it in North America or in Europe, I have the clear conviction that the French banks are on track and are among the best performers in terms of their capital ratios. EUROWEEK: Has this deleveraging process been at all damaging to the economy, as some people say it has been in the UK and in southern Europe, by reducing their lending to the corporate sector? Or is the universal banking system such that this is much less of a threat in France than elsewhere? BIS central bankers’ speeches  3  Noyer: The deleveraging of the French banks has been partly done through the reduction of their exposure to sovereign debt markets globally.

Additionally, we will also help build more resilient and inclusive financial systems and thus contribute towards achieving more balanced growth and development. Thank you and I wish you productive discussions at the Symposium. 4  BIS central bankers’ speeches
SPEECH DATE:  18 September 2019  SPEAKER:  Governor Stefan Ingves  VENUE:  Business Arena Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Housing market challenges – weighing today against tomorrow Today, I am going to talk about something that affects all of us: the housing market. Everybody needs somewhere to live, regardless of whether this need is temporary or more permanent. When the housing market functions well, people can find a home for every phase of their lives and it is relatively easy to find the kind of home they want and can afford. In addition, the development of prices is such that the differences between a person owning their home and one renting one are minor. However, in Sweden, the housing market does not work well and has not for some time. This has contributed towards rising housing prices for an extended period. And this, in turn, has led to what I consider to be an unsustainable increase in household debt and has made both Swedish households and, ultimately, Swedish banks and Sweden’s economy vulnerable. This is something that the Riksbank 1 and other actors 2 have emphasised for many years. The prolonged, steep rise in housing prices is fundamentally due to the housing market being dysfunctional for several reasons.

The solution for improving the functioning of housing provision cannot be to force young households deep into debt with all the risks this entails. There are numerous historical examples of how such a development has created problems for both individual households and society as a whole. At an aggregated level, households have relatively high savings and substantial assets. However, since 2007, there is no information on how assets and savings are distributed among households, and consequently neither on how much savings the most indebted households have. Nevertheless, there are signs that the most highly indebted households have significantly fewer liquid assets in relation to their income than households who are less indebted. 27 Better information on household wealth is something that the Riksbank has been requesting for a long time. Structural reforms are needed to manage the challenges on the housing market I am well aware that it is not part of the Riksbank's mandate to manage problems on the housing market and that many of these issues are of a political nature. However, it cannot be disregarded that the housing market is part of Sweden’s economy and thereby affects how the economy functions. The economy becomes more sensitive to shocks if households (and companies) are highly indebted and, consequently, the housing market is of interest to the Riksbank. A poorly functioning housing market affects us all in the long term.
Priorities for Emerging Nations in a New Global Environment Remarks by Veerathai Santiprabhob, Governor of the Bank of Thailand  34th Annual G30 International Banking Seminar Enrique V. Iglesias Conference Center, Inter-American Development Bank 20 October 2019  I would like to first thank the Group of 30, especially Chairman Tharman, for inviting me to be a part of this panel on a very important topic: what should be the priorities for emerging nations in a new global environment, which is changing rapidly, full of unknowns, and driven mainly by factors beyond control of emerging nations. As we all know, the world is changing rapidly, especially in technology, demography, climate, international trade pattern, domestic politics, and international geopolitics, which affect the structure of our society and economy and the way we conduct our business and policy. All of these rapid changes are challenges for all of us advanced economies and emerging market economies alike. But let me speak from the perspective of an emerging market central banker: within this new landscape, how do I see the priority economic areas for EMs. In the short time I have today, I would like to highlight three issues that should be among the top items on an emerging nation’s economic policy agenda. Safeguarding SMEs competitiveness from global challenges The first issue is the supply chain disruption which comes as a result of the technological changes and is further complicated by the ongoing trade tension.

To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. 2/3  BIS central bankers' speeches  In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities. The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. This is particularly important in view of the overall limited implementation of the 2018 country-specific recommendations, as recently communicated by the European Commission. Regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. At the same time, countries where government debt is high need to continue rebuilding fiscal buffers. All countries should continue to increase efforts to achieve a more growth-friendly composition of public finances. Likewise, the transparent and consistent implementation of the European Union’s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. Improving the functioning of Economic and Monetary Union remains a priority.
Besides, many people benefit from low interest rates as they are also homebuyers, taxpayers, entrepreneurs and workers whose companies are benefiting. BILD: In Germany the adverse effects are predominant. Making provision for retirement is becoming increasingly difficult… Draghi: Remember, what counts is what you earn on savings in real terms, i.e. interest minus inflation. This is higher today than it was on average in the 1990s. At that time you might have had a higher interest rate on your Sparbuch (savings account), but we often had an inflation rate that was higher still. So the interest looked good at first, but the real return was in fact much lower. Moreover, people can influence how much they get on their savings even in times of low interest rates. They don’t just have to keep the money in savings accounts but can invest in other ways. The Bundesbank has recently shown that the average return on all German household assets is close to 2%. BILD: So, are the German savers themselves to blame? Draghi: No. But there are alternatives when investing savings. In the United States savers had to face seven years of zero interest rates. The financial system – banks and insurers – nevertheless still worked. Money was invested in a variety of ways which in the end enabled a decent return. BILD: Of all people, German Finance Minister Wolfgang Schäuble, who has supported you for years, is now among your strongest critics, saying your policies are damaging savers and thereby strengthening populist parties.

That makes it all the more important to resist every kind of nationalism or isolationism. Both are however on the rise. That worries me a lot. BILD: In the United Kingdom there will even soon be a vote on a complete withdrawal from the EU… Draghi: I cannot and do not wish to believe that the British would vote to leave, because we are stronger together. But if they do, it should be clear to them that they would lose all the benefits of the Single Market. BILD: If you had a spare wish for Chancellor Merkel, what would that be? Draghi: That she continues to fight for Europe. BILD: And one last question. The Bundestag has invited you again: will you go? Draghi: Of course. It will be my pleasure. BIS central bankers’ speeches  3
Significant findings from the survey were that 66.3% of the Zambian adult population did not have access to financial services and that only 33.7% used banks, other formal and informal financial services and products (such as those offered by microfinance and savings clubs). Above all, only 15% of the adult population had access to commercial banking services. This low level of financial access therefore constitutes one of Zambia’s main challenges in facilitating economic empowerment of every citizen. Arising from these findings, the Government has since set targets or performance monitoring indicators. One such target is to increase the level of access to financial services to 48% by 2008 and 50% by the end of 2009. Following the earlier survey, a subsequent study called the “Finscope Supply – Side Survey” was conducted in 2007. Some of the key findings were that: a.  bank charges are unaffordable for 90% of the rural adult population in Zambia;  b.  Zambian banks generally have high operating costs and interest rate spreads; and  c.  the physical coverage of financial outlets may not increase at current cost levels. It is therefore, my hope that this Forum will address these and other challenges that slow the pace of financial inclusion in our countries.

Honourable Minister, over the past two years, we have noted with delight that financial institutions in Zambia are beginning to rise up to the challenge by beginning to broaden the scope of their financial services and extending their services beyond the traditional customers to include previously unbanked communities. In addition, the Zambian financial sector has in recent years experienced growth in numbers of both registered commercial banks and non – bank financial institutions. We in Zambia, therefore, see this Forum as being timely and providing a unique opportunity for African financial institutions to share knowledge and experiences on how best to promote financial inclusiveness, particularly among our rural and peri-urban communities who have since not been fully integrated in the financial systems of most of our countries. This entails that they are not effectively participating in the economic growth that is being experienced in these countries. This Forum also comes at a time that we in Zambia have just lost a statesman who was passionate about rural development and empowerment of all citizens. The conference theme therefore, is appropriate for us as we carry on the vision of our beloved late President, Dr. Levy Patrick Mwanawasa, SC (M.H.S.R.I.P). In this respect, we would also like to acknowledge the many expressions of sympathy extended to us during our time of mourning. 2  BIS Review 118/2008  Distinguished delegates, on behalf of AFRACA, I would like to thank our various presenters and panelists for accepting to facilitate our deliberations over the next two days.