samchain/econo-pairs-v1 huggingface dataset:
An additional important step that it´s still missing is related to the need to conclude the process of financial integration that was key to resolving the sovereign debt crisis. This is, namely, the Banking Union, through the agreement on a fully mutualised European Deposit Insurance Scheme. It would contribute decisively to guaranteeing financial stability in the euro area and avoiding problems of financial fragmentation, both in the short and medium-term. In parallel, capital markets in Europe remain relatively under-developed and under-integrated. Hence the need to move resolutely 3/4  BIS central bankers' speeches  towards implementing all the measures that are necessary to create a true capital markets union. It was Jean Monnet who said that “Europe will be forged in crises, and will be the sum of the solutions adopted for those crises". Let´s do not waste the opportunity that this new crisis has offered to us. Forging requires sufficient temperature to mould, but not so much as to melt. There has been much work on how to avoid reaching melting temperature in the last few years. Now is the time to mould both the European project and the multilateral institutions. Our aim is that, when the temperature drops, we find ourselves with a new, stronger global economic architecture. I´m convinced that, among the students graduating today at Barcelona GSE, there is a good number of molders who will contribute crucially to this endeavor in the following decades. Thanks you in advance for this contribution, congratulations to all and good luck.

Let me end these remarks by underlying some of these remaining challenges on the economic front. The monetary union is one of the milestones of the European project: a single currency, the euro; and a single monetary policy, with its own institution, the European Central Bank. This is the epitome of cooperation among countries: a supranational agency that takes into account the well-being of the whole area instead of nations exercising their powers in a disorderly fashion. As a reward, the contribution of monetary policy to the economic stability of the union has been decisive, particularly during the sovereign debt crisis and, crucially, in the current health crisis. In addition to monetary policy, during this crisis, there has also been a genuine, common fiscal European response to the pandemic, notably including the creation of the Next Generation EU (NGEU) recovery fund. This fund adds key elements to ensure the burden of the economic recovery effort is shared. Some are unprecedented, such as the large-scale issue of supranational European public debt to finance reforms and investment in those Member States most affected by the pandemic. However, NGEU cannot and should not be seen as the cyclical stabilisation mechanism the euro area needs to complement our single monetary policy. A true macroeconomic stabilisation mechanism should be a multilateral institution in itself, of a permanent nature and with sufficient size, taxation power and borrowing ability.
But experience showed that this was not an available option. An attempt to increase output beyond the level that is consistent with stable inflation will over time lead to steadily rising inflation. Economic agents will eventually incorporate higher inflation into their inflation expectations. In the long run, the result will only be higher inflation, not higher employment. Output and employment will return to their potential level. Another important lesson from the 1970s and 1980s was that economic agents look to the future when they make decisions about consumption and investments, wages and prices. They will take into account not only current economy policy, but their expectations of future economic policy. If economic agents expect that tomorrow’s policy will result in high inflation, the cost of reducing inflation may be high in terms of increased unemployment. Therefore, it is important to establish confidence in monetary policy and the objective of price stability. There must be consistency between the stated objectives of economic policy and what is actually done to achieve these objectives. This is the most important reason why the implementation of monetary policy has been delegated to the central bank in Norway, as has been the case in other comparable countries. In Norway, responsibility for interest rate decisions was delegated to Norges Bank through the 1985 Norges Bank Act and through adaptations in practice in 1986. However, confidence in the inflation target also requires that government finances are in order.

Norway has had room for manoeuvre because solid state finances secure credibility and because inflation expectations are firmly anchored. Even though oil prices fell from close to USD 150 per barrel in summer 2008 to almost USD 30 at the end of the year, Norway’s state finances were not called into question. In addition, oil prices increased markedly as early as spring last year. The oil fund mechanism curbs the effects of oil price fluctuations on demand and output – as well as on inflation and the krone exchange rate. The Government Pension Fund Global is also an important source of funding for public spending in the next decades. Reductions in government welfare spending, which will probably be a matter of necessity with an increasingly ageing population, will be smaller than would have been the case without the fund. 10  BIS Review 69/2010  5. Challenges to the Norwegian economy  In the period 1992–2008 the Norwegian economy experienced a long upturn. In the 2000s, the cost level started to rise, partly reflecting a sharp improvement in our terms of trade. Prices for Norwegian goods, such as oil, gas, metals, minerals and fish increased sharply while import prices fell. Looking ahead, the impact of these driving forces cannot be expected to be as favourable. It is hardly likely that export prices will show a renewed surge. Moreover, our economy has become vulnerable. Norwegian labour has never been as costly as today.
As there are so many ways of measuring resource utilisation one might think that it would be appropriate to take a broad approach and make an “overall assessment” based on a large number of indicators when making decisions about monetary policy. It is, however, generally accepted that an inflation targeting policy in which target attainment is measured using a large number of different measures of inflation does not work very well. It is often possible to find a measure of inflation that is reasonably close to the target and almost any monetary policy can be justified with the help of a clever choice of index. Therefore, if the target and target attainment are to mean anything, one measure of inflation must primarily be used. 2  BIS central bankers’ speeches  Similarly, I also believe that it does not work well to use a large number of different measures of resource utilisation. It is also often possible to find at least one measure that comes fairly close to normal resource utilisation and almost any monetary policy can be justified with the help of a clever choice of the measure of resource utilisation. This problem is in fact worse for resource utilisation than for inflation. This is because measures of resource utilisation also require us to make an assessment of the normal level for the measure concerned. For the output gap and the hours gap it is a case of determining the level and forecast for potential GDP and potential hours worked.

The repo-rate path chosen by the majority does not meet the well-known necessary but not sufficient condition for a well-balanced monetary policy formulated by the Deputy Governor of the Norwegian central bank Jan Qvigstad (2005). Applied to inflation and unemployment, this condition means that the inflation gap (the difference between inflation and the inflation target) and the unemployment gap should have the same sign. As the inflation gap is negative and the unemployment gap is positive for the majority’s repo-rate path for most of the forecast interval, this condition is not met. With a lower repo-rate path, on the other hand, the gap for both would be reduced and target attainment for both inflation and unemployment would thus increase. The fact that monetary policy is not well-balanced for the majority’s repo-rate path is clearly demonstrated if one uses mean square gaps to measure target attainment as in Figures 7 and 8. Figure 7 shows the forecasts for the CPIF and unemployment that are compatible with the main scenario’s repo-rate path and the higher and lower repo-rate paths published in Chapter 2 of the Monetary Policy Report in February. Panel b shows that the repo-rate path of the main scenario does not meet the Qvigstad condition. Neither is it effective, as a lower repo-rate path stabilises both inflation and unemployment better. Figure 8 shows the main scenario’s repo-rate path and the lower path that Karolina Ekholm and I advocated at the meeting.
That could be due to the fact that the degree of rigidity of the economy would augment in practice under the economic “stress” of the much more rapid changes of their environment. The fact that total factor productivity, which is one of the proxies for the pace of structural transformation over years has dropped from 0.7% before 1995 down to 0.3% 4 after 1995 seems to give some credit to this conjecture. - Finally, let us not forget the demographic change occurring on both sides of the Atlantic. Indeed, Europe’s long term growth performance has also been constrained by the low rate of population growth and the ageing of its society. Since the mid 1990’s, population in the euro area has been growing at a yearly rate of just 0.4% compared to 1.1% in the US. However, what is worrisome is that at the same time, the gap in population growth has been even larger with regard to growth in the working age population the working age population grew on average by 0.3% per year in the euro area over the period 1996-2006 compared to 1.4% in the US , which manifests that Europe has a more acute problem of population ageing. The need for further structural reforms in Europe This brief assessment of the underlying causes of Europe’s relatively disappointing longerterm growth performance provides a mixed picture of the European economy.

Together, MAS and the financial industry will navigate the winds of economic change and strengthen our position as a premier international financial centre.
I would not venture to suggest how these – and all the other developments we look at – will influence our next forecast in February; and it would be pointless to anticipate possible future policy decisions. I would be surprised if they radically altered the broad prospect of relatively steady progress over the next two years. But I can assure you of one thing: if the prospect – or the balance of risks around it were to change significantly – either in the context of our February forecast or subsequently – we will promptly react to that change. Despite the fact that we left interest rates on hold again last week, we have certainly not gone to sleep! We cannot guarantee that we will always remain as close to the symmetrical inflation target as we have been in recent years – the uncertainties as I have explained are too great for that degree of confidence. But that remains our aim. And I will be happy to report back to you again at your next dinner. Let me, Mr President, just conclude by congratulating you and the Chartered Institute on your achievements – not just over the past two years though I do congratulate you on that, especially, if I may, on your introduction of your new Chartered Banker qualification. But I congratulate you more broadly on your achievements over the whole 125 years since your foundation.

But they necessarily remain our best judgements and that, of course, leaves us vulnerable to assertions that we do not give sufficient weight to this or that factor. For what it is worth, at the time of our last forecast in November, our central projection – on the assumption of 6% interest rates – was for output growth of around 2½% over the next couple of years, with RPIX inflation remaining modestly below target this year but rising to 2½% in 2002. There was, of course, a good deal of uncertainty around that central projection, as there always is, for the reasons that I’ve tried to explain. But on the basis of that forecast the short answer to the question: can our steady economic progress be maintained over the next couple of years is a cautious “yes”. Since that forecast was completed things have gone in different directions. The prospect for external demand has somewhat weakened and so too has the oil price. There are mixed messages relating to  2  BIS Review 1/2001  tightness in the labour market, but earnings growth has so far remained reasonably well contained - as it must continue to do. On the domestic demand side, private consumption growth has remained stronger than we had supposed, while the growth in private investment has been weaker; meanwhile it is not clear that underlying public sector demand has – at least yet – picked up as rapidly as planned. The exchange rate has fallen, and so, too, have market interest rates.
While assuring the progress of the financial system and well-established infrastructure in Thailand, we also recognize the importance of consumer empowerment in our financial sector. As a consequence, we established the Financial Consumer Protection Center or FCC in 2012 to promote consumer protection. One of the FCC’s key tasks is to improve financial literacy of consumers. Over the past few years, the FCC has continually been delivering financial education within its capacity through creative tools and communication channels. The FCC has been sending messages that would help shape consumers’ behavior towards responsible finance practices, which would consequently lead to financial discipline of the entire nation. Nevertheless, the attempt to improve people’s behavior to save and spend wisely has not yet been fully accomplished. Household debt is still high at 70 to 80 percent of GDP for the past two years. Crucial financial information and knowledge provided at Point-of-sale were often ignored by customers. Moreover, people still seek loans from alternative sources such as from the informal sector where interest rates are incredibly high and debt collection practices are sometimes abusive and unethical. We also have to admit that the demand side evidence is partially influenced by supply side factors. Intense market competition and countless innovative products and services nowadays could also encourage careless spending behavior. Therefore, effective measure to prevent such situation is truly in need. The potential root causes or threats that influence people to make an adverse decision on their saving and spending manner might consist of these three following factors.

Lastly, I must add ignorance as another essential cause of improper financial behavior. Even with a well-designed financial education program with meaningful messages and effective delivery channels, financial literacy cannot be achieved if consumers neglect the necessity and benefits of appropriate personal financial management. All in all, desirable financial behavior is sometimes well known, but less likely to be implemented by consumers themselves. It is similar to living a healthy lifestyle. We know that healthy food and exercise are good for us, but we don’t do it. Hence, a solution to the improvement in financial behavior remains a challenging puzzle for many of the policy makers and practitioners to find the right solutions for various groups of people. Ladies and Gentlemen, I truly believe that this seminar would allow an invaluable opportunity for us to learn how to solve these puzzles from honorable speakers who have come a long way to share with us their enriching experiences and lessons-learnt. The achievement of effective financial education and behavioral change would eventually drive the global community towards a more financial- literate and disciplined population who would help ensure sustainable growth and equality in our society. Lastly, I wish the seminar a great success. I also wish to express my sincere appreciation for all of your endless efforts in promoting financial inclusion and financial literacy. Thank you. 2  BIS central bankers’ speeches
MONETARY POLICY REPORT PRESENTATION BEFORE THE FINANCE COMMITTEE OF THE HONORABLE SENATE OF THE REPUBLIC  Mario Marcel Governor Central Bank of Chile 1 April 2020    The Monetary Policy Report of March 2020 can be visited at http://www.bcentral.cl. 1. Introduction Mr President of the Senate’s Finance Committee, Senator Jorge Pizarro; Senators members of the Committee, ladies, gentlemen, Thank you for your invitation to the Board of the Central Bank of Chile (CBC) to present our view on recent macroeconomic developments, its outlook and implications for monetary policy. This Monetary Policy Report is seeing the light in unprecedented circumstances, both because of the worldwide sanitary emergency and because of the economic consequences of the policy responses to stop the spread of COVID-19 in many countries. Unprecedented also because the need to restrict social contact has prevented us from presenting this Report normally instead of by this remote connection. The Monetary Policy Report we released this morning shows the dramatic change in the economic scenario that our country and the entire world are confronting. The global spread of COVID-19, the measures that have been adopted to contain it and the uncertainty about its reach have been reflected in plummeting stock markets and asset prices around the world, triggering a global economic recession in 2020. Chile will also feel this contractionary impact: in the baseline scenario that I will share with you in a few moments, we project that the Chilean economy will contract between 1.5% and 2.5% this year.

This is less than the estimates of the Organisation for Economic Co-operation and Development and the International Monetary Fund for world activity, which can be explained by the differences in the structure of the economy and the strictness of the measures considered. 2 “Indicador Mensual de la Actividad Económica” (IMACEC)—monthly indicator of economic activity. 4  The baseline scenario assumes that in the third quarter of this year the sanitary restrictions will begin to be eased and the economy will start its recovery process. Although this will not avoid a contraction in annual terms in that period, it will be the turning point for a significant rebound of year-on-year growth rates in the fourth quarter of 2020 and all of 2021. This vision is consistent with expectations for the rest of the world next year, when the United States will regain growth a little above 3% and China will approach 7%, thus driving world and trading partners growth of more than 3.5%. Towards 2022, both Chile and the rest of the world will again see expansion in line with their medium-term growth rates. In addition to overcoming the sanitary emergency, the expected recovery relies on the premise that most companies and individuals will be able to resume their activities as the spread of the virus is controlled, which depends on whether the financing needs of these agents can be met.
So a price-level targeting regime which specifies that prices should grow at x per cent a year ought to lead to fewer instances in which the ZLB on interest rates bites than does an inflation targeting regime with a target rate of x per cent. This proposition is demonstrated formally by Eggertsson and Woodford (2003). It is, though, worth pointing out that there may be times when having a price-level target is likely to be unhelpful. For instance, consider the present case of the United Kingdom, where upward shocks to oil prices and indirect taxes and a substantial depreciation of sterling have led to inflation running consistently above the 2 per cent target, but at a time when the economy has also been subject to an adverse demand shock which has opened up a substantial margin of spare capacity. Price-level targeting would dictate that this excess inflation must subsequently be unwound. Consequently, inflation expectations would be lower and real interest rates higher. That in turn would exacerbate the downward pressure on demand, worsening the constraint of the ZLB. The theoretical superiority of price-level targets over inflation targets hinges on the forwardlooking nature of expectations. If expectations are not forward-looking, then their automatic stabilising feature is lost. And the presence of inertia in the inflation process also reduces the relative superiority of price-level targets. In particular, if a significant fraction of firms set their prices on the basis of past inflation, then it becomes optimal to permit some drift in the pricelevel path in response to shocks.

The achievements of the December agreement must resolutely be built upon: regarding the Banking Union, a common backstop that would be available rapidly and remain in place for a sufficiently long period is an essential element, even more than the deposit insurance scheme, to ensure that the single resolution mechanism is solid and effective. The Capital Markets Union, on which everyone agrees in principle, must finally forge ahead to better channel our EUR 350 billion private savings surplus towards the concrete needs of our economy: digital innovation, the energy transition and SMEs’ capital. Finally, the progress achieved on the public solidarity mechanisms – preventive intervention of the European Stability Mechanism, fiscal capacity – is a promising prospect but it needs to be translated into action. 2 – My second wish is for financial stability 1/3  BIS central bankers' speeches  I would first like to acknowledge the soundness of our financial institutions. In June 2018, the Tier 1 capital ratio of the main French banks stood at 13.5%, i.e. 7.7% higher than in 2008. The liquidity situation has improved, with an average LCR of 127%. The share of non-performing loans has continued to decline to stand at 3.1% in June 2018, i.e. close to the pre-crisis level, compared with a European average of 3.6%. The same holds true for insurers. Their capitalisation is good, and their solvency has improved, with the average coverage ratio of the major insurers rising by 9 percentage points to reach 241%.