samchain/econo-pairs-v1 huggingface dataset:
Moreover, within the euro area there would no longer be a host or a home supervisor, and this arrangement should ensure that cross-border allocation of capital and liquidity would be primarily driven by business considerations. Banks’ funding costs should start to indicate again their individual creditworthiness, without the premia that reflect their sovereign’s fiscal position or redenomination risk. A common resolution fund would decrease the too-big-to-fail problem and thus reduce moral hazard; furthermore, it would spread the burden of resolution rather than saddling any single sovereign with it. Finally, depositors would not need to consider shifting their funds across the continent in search of a safe haven, as all banks would offer the same insurance coverage. Of course, as with all structural changes and new institutional constructions, setting up a fully-fledged banking union will take some time. The most urgent component of the banking union is in my view the SSM, which should enter into force as early as possible in 2013 to allow the ECB to prepare for its new tasks, with full accountability and a governance structure that strictly separates monetary policy from supervisory decisions. I won’t go into the details of the current proposal put forward by the European Commission. For this, since we are at a research-oriented conference, I would refer you to the report 2 on the European Commission’s banking union proposals which has just been published by the Advisory Scientific Committee of the European Systemic Risk Board.

In the long term, wouldn’t “Grexit” risk putting on record that a country can, in fact, leave the euro area, and thus that the euro is not irreversible? If Greece had to leave the euro area, that would risk casting doubt on the nature and functioning of the monetary union. That would create fragility. It would be a tragedy for Greece and, moreover, for its economy. It would be a challenge that Europe would have to rise to as quickly as possible, by substantially reinforcing its institutional framework. The stability of the euro area depends on a balance between responsibility and solidarity. In order to be stronger and more convincing, concrete initiatives are required to reinforce these two dimensions. What would you say to the Greeks to convince them not to leave? It is vital to put Greece back on a growth path, to reach a consensus in order to recreate a viable economic model for the country. Total factor productivity in Greece grew at a rate of only 1% per year between 1981 and 2014, against 2% per year in the euro area, and that happened despite the sizeable transfers Greece has benefited from. To achieve this, the Greek economy must remain within the single European market and be able to rely on its institutions. What’s more, were Greece to leave, austerity would be far worse. The country would no longer benefit from the solidarity of the euro area, which has given it the time to make the necessary adjustments.
BIS central bankers’ speeches  9  Table 2 External scenario (annual change, percent) 2012  2013 (f)  Mar.13 Report  Sep.13 Report  Dec.13 Report  4.5-5.5 4.0-4.5  4.2  2014 (f)  Sep.13 Report  Dec.13 Report  GDP  5.6  4.0-5.0 3.75-4.75  Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports  7.1 7.3 12.3 5.8 1.0 4.9  6.1 6.1 7.2 5.7 3.1 5.9  4.9 5.7 5.6 5.6 4.0 5.6  3.9 5.1 3.9 5.4 5.3 4.4  4.9 4.8 4.5 5.0 3.3 4.5  4.8 4.5 4.1 4.7 3.1 4.6  Current account (% of GDP)  -3.5  -4.4  -4.5  -3.2  -4.8  -3.7  December CPI December CPIEFE  1.5 1.5  2.8 2.5  2.6 1.7  2.6 1.9  2.8 2.8  2.5 2.9  (f) Forecast. Source: Central Bank of Chile.

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 challenge for central banks is to determine how movements in asset values and expected asset values affect the evolution of the economy. There is little to suggest that the task has gotten easier with the increasing complexity of financial markets, and it has more likely gotten harder. The incorporation of asset price movements into monetary policy formation is hard to do, in part, because we don’t know that much about the transmission mechanism from movements in asset values to the underlying economic fundamentals we care about. We cannot estimate with a high degree of confidence the effects of realized asset price movements on economic outcomes. The relationship, for example, between changes in housing prices or equity prices and household savings and consumption varies substantially across time and circumstances, a fact that only exacerbates the difficulty of sorting out the effect of changes in wealth from other factors, such as greater confidence in future real growth resulting from the acceleration in productivity growth. And successfully integrating asset prices into monetary policy formulation is also hard to do because of the difficulty of assessing how potential alternative paths for monetary policy will feed through to overall financial conditions and thereby for output and inflation—in other words it is difficult to forecast how changes in current or expected policy will affect asset values. These and other factors magnify the challenge of taking asset prices into account in the formulation of monetary policy.

In other words, central banks have to be prepared to adjust policy when past asset price increases could be a significant factor putting upward pressure on aggregate demand, as well as when past declines threaten to reduce output relative to potential. Although the potential case for adjusting policy applies in both directions, the implications for policy may differ. Because some asset prices may fall more abruptly than they rise, and because the effects of downward moves in asset prices on demand may be larger due to the greater negative impact of deflation on the net worth of borrowers—witness the United States in the 1930s or Japan in the 1990s, the case for adjusting monetary policy in response to negative asset price shocks is commonly considered more compelling than in the alternative context. But this does not mean that monetary policy should generally ignore the effects of increases and only respond to observed declines in asset prices. The test should be the size and circumstances of the asset price moves and their impact on the forecast relative to the central banks’ objectives, not the direction of the asset price move. Different considerations apply in the circumstances where the central bank is considering how a potential future move in asset prices may affect the forecast. These circumstances call for even greater caution and care.
But while spending on retail goods has been virtually flat since last autumn, total consumer spending, including services and utilities, has continued to grow, though quite slowly. And while the prospects for consumption are clearly important, so too are those for other key drivers of the economy, such as business investment and net exports. The question is: if consumers decide to save more, are the conditions in place for other sources of demand to take up the slack? The answer depends in part on what is happening in the rest of the world. Plainly, developments in the rest of the world will influence domestic monetary policy. The UK is a very open economy, exposed to trends and shocks that affect supply as well as demand, and our financial markets are fully integrated with global markets. Sterling is one of the world’s most liquid currencies, and the FTSE 100 is heavily weighted with multinational companies. Let me give one example of what this can mean in practice. Over recent years, the progressive shift toward sourcing from low cost producers has been depressing import prices, and improving the terms on which we trade. This has exposed domestic producers to intense competitive pressures, but it has been unambiguously good news for consumers. And it has probably meant that the MPC has been able to set somewhat lower interest rates to meet its inflation target. The establishment of global markets in key asset classes has created complex linkages between economies as well as facilitating better risk sharing.

This time I would like to delve into some matters of great relevance for our institution: (1) follow-up to the Independent Evaluation Panel’s recommendations that we shared with this House a year ago; (2) the impact on the Bank’s balance sheet of the of the unconventional measures implemented; and (3) the Bank’s progress from the technological point of view. III.1. Follow-up to the Independent Evaluation Panel’s recommendations In September 2018, the Bank’s Board agreed to commission an external, independent evaluation of the Bank’s performance of its main legal mandates over the past ten years. To this end, it convened five international experts in the fields of central banking, monetary policy, and financial stability. This Panel, chaired by former Central Bank of Israel Governor Karnit Flug 3, issued a report in September 2019, which, along with positively evaluating the Bank’s performance, made 40 recommendations for improvement. Of these, 24 referred to monetary policy, 14 to financial policy, and two to corporate matters 4. Of this set of recommendations, the Board dismissed two 5 and pledged to take action on the remaining ones. With a little less than a year to go, 23 of the 38 recommendations validated by the Board have been fully complied with, equivalent to 60% of the total; another 10 are close to completion, and five are still under study, four of which involve matters requiring legal reforms (Table 4).
However, its limited efficiency must be taken into account in situations where citizens are not ready or reluctant to change their habits. Research shows that even in countries on high positions in the rankings of access of individuals to the ICT, certain restraint is observed in the use of eadministration services offered to the citizens. In Denmark, for instance, it has been discovered that the reason for such restraint lies in the lack of common understanding of personal benefits that a user of e-administration services may enjoy. 7 It points to a need for improvement of related education and information campaigns. Denmark is not an exception in this respect. Promotional campaigns encouraging the use of the electronic media of communication with the public administration are being developed in many countries; some countries have already launched such activities. In Singapore, a website has been launched to enable payments for almost every public office and government agency in the country, and its users participate in weekly and monthly prize draws. 8 In Dubai another interesting solution has been employed, whereby a loyalty programme for users of online public services has been launched. Its first step includes a ten-hour training on the use of online services. The authorities anticipate to have trained 10,000 citizens and civil service employees by the end of 2006. Upon accomplishment of the training, the citizens are provided with a certificate and a loyalty card.

Because we’re determined not to repeat the cycles of the past when bursts of post-crisis reforms would eventually drift into complacency and cohabitation. When the caravan moved on, markets were left unattended to slip slowly into excess and ethical drift. Today we want not only to profile progress made, but also to spur a continual process of review and reform. This isn’t just about fixing the fault lines that caused the last crisis, but also about seizing new opportunities from fintech and market-based finance. It's about building truly global markets, in the UK and elsewhere, and the cross-border governance and cooperation they need to function well. It is precisely because we don’t know all the answers that we’re setting questions before us today: - What more needs to be done? Are there gaps that will ultimately allow markets to go wrong again? - Are there other places where the pendulum has swung too far, preventing markets from serving society as they should? - And are there other changes needed to build the necessary supports over time? We want to hear from those who might question the steps already taken. We welcome new ideas that challenge conventions of how markets should operate, and whose eyes are fixed on the future of markets that will become ever more important. I’m only sorry there couldn’t be more of us here today. We were four times oversubscribed for places.
However, we are still far from achieving the employment levels prevailing before the crisis, given the enormous impact that it had on our labour market. Unlike in previous upturns, the growth of activity and employment is proving to be compatible with the ongoing correction of the economy’s imbalances. The more balanced and sustainable nature of the current recovery is closely related to the factors that have made it possible, some of which should be considered temporary while others may have a more persistent impact. I would like to refer to two central issues to explain this more balanced growth: the improvement in competitiveness and the normalisation of financial conditions. Competitiveness improvements One of the most important changes in the functioning of the Spanish economy since the crisis has been the recovery in external competitiveness. Cost and price adjustments have stimulated exports and have also enabled our productive sectors to compete better in their domestic markets with imports. This has led to an increase in the demand for resources, driving business investment decisions and encouraging job creation. The increase in employment, favoured by moderate wage growth, has led to a significant recovery in household consumption. Unlike in previous upswings, the moderate growth of prices and costs is helping to ensure that the increase in economic activity is not achieved at the expense of a deterioration in the external balance.

How can the persistent current account surplus, textbook economic theory and the SNB’s own assessment be reconciled? Is the surplus in Switzerland perhaps even the result of a monetary policy designed to deliberately push down the exchange rate in order to boost exports? 1 International debate about certain countries’ current account surpluses and unfair exchange rate policy has intensified in recent years. In this context, Switzerland has been on the US Treasury’s ‘monitoring list’ since 2016, although it is not designated a ‘currency manipulator’ in the associated report as it does not meet all the relevant criteria. However, Switzerland is being specially monitored. We are maintaining a constructive dialogue on this matter with the responsible government agencies in the US. Foreign authorities and international organisations recognise Switzerland’s special position, and appreciate the rationale for the SNB’s monetary policy measures. According to the latest External Sector Report of the International Monetary Fund (IMF) of July 2017, Switzerland’s current account is in line with macroeconomic conditions, and its monetary and fiscal policy is considered appropriate. Yet, international debate about current account surpluses and deficits has at times been heated and not always objective. Some observers have repeatedly denounced Switzerland for its persistent surplus. As criticism has focused on the SNB’s monetary policy, I am naturally keen to give you my analysis of the situation. Before we get into the details, let me outline the crux of my argument.
In the digital age, of course, biting won’t help, and standard counterfeiting doesn’t rank among the many problems that bitcoin faces. Two years ago we held a seminar on cryptocurrencies (and especially bitcoin) at our central bank. When we were preparing for the event, people from the libertarian, cryptocurrency-loving community in Prague asked me: aren’t you afraid of us? Aren’t you afraid of bitcoin and other independent, central-bank-free currencies and their power to marginalise traditional money? I said – well, not really. Let’s put aside the fact that all of these alternative currencies are still marginal in terms of size and scope (all the electronic transactions using bitcoin worldwide combine to some 16% of the number of electronic transactions conducted in the Czech koruna, a currency used by a mere 10.5 million people). Bitcoin’s global market cap also constitutes only a fraction of even the Czech money supply. The key problem is bitcoin’s constantly changing purchasing power. So far it has been more volatile than natural gas, the most volatile commodity. Such a feature is really worrying for any innovation that wants to be seen as money: a means for paying and settling transactions, a unit of account and a store of value. Let’s try to imagine the following: today’s five pound note being worth ten pounds tomorrow and then one pound the day after tomorrow. It would be very difficult to exist in such a monetary system, to use the currency in everyday life.

How will the governance work in coordinating across these three realms? In the meantime, while we work to sort all this out, we should take considerable solace from the fact that we have made the financial system more resilient to shocks. We may not be able to anticipate the next area of excess. But with higher capital and liquidity requirements and the use of stress tests to assess emerging vulnerabilities, I think we are much better placed than we have been in the past. Thank you for your kind attention. 4  BIS central bankers’ speeches
Rather than constructive ambiguity, we need credible clarity that when a bank gets into trouble, the losses will be made to fall on shareholders and creditors and not the taxpayer. And if the bank provides critical services to the economy, that these can continue while the bank is resolved in an orderly way. The Purple Book  It is in order to achieve such credible clarity, that next week the Bank will publish an update of its approach to resolution. This document – known by the colour of its cover as the Purple Book - was first published in October 2014. Its purpose is to set out very clearly the options that the Bank has to deal with a failure of a bank and the way in which we would use our powers. Explaining how resolution is designed to work in practice and what is needed to remove barriers to resolvability are necessary steps to ensure that resolution regimes are credible. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The Purple Book illustrates the scale of progress that has been made in the UK towards putting in place a credible and effective way of dealing with bank failures. I would pick out three crucial areas of reform:  First, there is now a comprehensive statutory framework to deal with failing banks, for which the Bank of England is formally responsible. We have statutory powers to match this responsibility and there are a wide range of options available to us.

This is key to allowing clearing members to measure and manage their exposures at a time of stress. It is therefore important that if the resolution authority intervenes it avoids disturbing the order of losses in the rule-book. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  This requires a robust ‘No Creditor Worse Off’ (NCWO) safeguard which takes as its counter-factual the loss allocation rules in the CCP’s rule book. The issue of NCWO protection is the subject of current debate in the draft EU regulation on CCP Recovery and Resolution. One school of thought is that it is essential to have a weaker NCWO safeguard so that resolution authorities have flexibility to deviate from the way in which losses would fall under a CCP’s rules. This degree of flexibility puts particular focus on the objectives by which home authorities would exercise this discretion. Resolution aims principally to deliver financial stability. But in the case of a global CCP, whose financial stability will be given prominence? This uncertainty may leave participants located outside of the home jurisdiction fearing that they will be exposed to disproportionately greater losses in order to protect the home jurisdiction’s financial stability. The UK does not support that approach. As with banks, it is entirely possible to establish resolution frameworks for CCPs that ensure that interests are mutually aligned and that do not permit or require the home authorities to protect national financial stability at the expense of participants outside of that jurisdiction.