samchain/econo-pairs-v1 huggingface dataset:
The extent of these deficiencies was such that in its first opinion on Malta, the European Commission called for ‘a root-and-branch overhaul of the entire regulatory and operational framework of the Maltese economy’ 1 . Although the situation had improved somewhat by the time Malta’s EU application was reactivated in1998, the economy was still not fully equipped to withstand the competitive pressures unleashed by globalization. While reforms were underway, they were not sufficiently ambitious. For example, while the re-introduction of VAT in 1999 was meant to broaden the tax base and reduce the extent of unrecorded activity, the list of exempt or zerorated items was far longer than that of the other Member States. The role of different authorities having competence in the field of competition remained ambiguously defined, and in many sectors an insufficient distinction was made between the regulator and the service provider. The public sector was not only overmanned, but outdated practices and manual procedures were still pervasive. These weaknesses became fully exposed around the turn of the century when the removal of trade restrictions and other protective measures gained momentum in anticipation of EU membership. This process, moreover, coincided with two external shocks that adversely affected two vitally important industries, electronic components and tourism. The former was hit by the sharp decline in demand as result of the global downturn in the high-tech sector, the latter by the increased travel aversion in response to the 9/11 terrorist attacks.

This decision was also dictated by the need to counter harmful speculation at the time about the appropriate level of the exchange rate. Lessons learned One lesson that could indeed be drawn from Malta’s experience is that the discipline imposed by the currency peg was probably the factor that contributed most to the relatively smooth transition to euro area membership, not only in terms of the achievement of the exchange rate criterion, but more so because it helped to focus attention on macroeconomic and structural policies. There was, however, one factor that remained constant as the journey to the euro progressed. That was the small size of the economy and, thus, its vulnerability to shocks. This was compounded by the risk of a speculative attack of the currency, given the combination of still weak economic fundamentals and the dismantling of the capital controls regime which had protected the lira for decades. These realities made the transition from a basket peg to a full euro peg even more challenging. The potential exposure to capital outflows was also a source of preoccupation because the Bank was aware that the typical  6  4  Malta Enterprise. BIS Review 14/2008  interest-sensitive Maltese investor was likely to be attracted by the availability of a wide choice of financial products overseas offering attractive yields. Long before EU accession the Bank had anticipated this challenge by adopting a sequenced programme of capital account liberalisation to test investor reactions.
This crosscountry financial fragmentation hindered common monetary policy transmission to the whole of the euro area, and even posed a threat of a repeat of the 2012 sovereign debt crisis. In this setting, in March the ECB announced the launch of a new financial asset purchase programme (PEPP) which grants it the necessary flexibility to be able to concentrate its purchases at certain moments in time or on government bonds issued in certain jurisdictions, with a view to preventing fragmentation in monetary policy transmission. The volume of purchases initially announced under the PEPP was € billion for the whole of 2020. In June the term was extended up to at least June 2021, and the volume by a further € billion, making for a total of € trillion. Today we can safely say that the PEPP has been clearly successful in curbing financial market deterioration in all euro area countries. This is particularly visible in sovereign yields, which are now close to their pre-crisis levels, but it may also be perceived in other market segments such as corporate issuance. This decline in the cost of sovereign debt has amplified the room for manoeuvre of the fiscal authorities in all euro area countries, enabling them to take unprecedented measures to sustain the income of households and firms.

Whether this consensus is a result of the role played by Spanish economists, as Enrique Fuentes set out to demonstrate in his major work published by the Real Academia de Ciencias Morales y Políticas, will be something for historians to decide. I would, however, venture to say that in the economic debate in Spain heterodox positions, or those furthest removed from the central strand of current economic thought, are relatively marginal. Concerning qualitative aspects, I have no doubt that another of the factors behind Spain's dynamism is the improved management of Spanish firms. And behind this lies a process in whose beginnings Barcelona was a driving force. I refer here to the expansion and quality of our business schools, which enjoy great prestige internationally. In the business school rankings of recent years, three Spanish institutions have systematically been in the top 30 worldwide. I would not wish to conclude this review of the factors contributing to the momentum of the Spanish economy in the past 20 years without referring to the important role decentralisation has played. Decentralisation is not free from risks - and I shall in fact deal with some that are most relevant to us but it has acted in Spain as a powerful economic, social and cultural dynamo, in a similar way to what happened in post-war Germany with the creation of the Länders. ***** Let us look now to the future.
Nordic countries refers to the Nordic countries excluding Sweden and the EU/EFTA refers to the EU/EFTA excluding the Nordic countries. Source: United Nations  Economic effects of migration The increasing migration has become a hot issue in recent years, partly due to the difficulties in integrating those born abroad into the labour market. The economic consequences of migration have also been debated at length. The perspective has then often been how increased immigration affects public finances. This is an important question, but it is not so easy to analyse, as migration can take many different forms. It can be permanent or temporary. It can involve refugees, labour immigration or family member immigration. In addition, the reasons for migration vary, although they are most often political or financial (in labour market terms). All of this is important when evaluating the consequences of migration. Labour immigration normally benefits common welfare, on condition that there is a redistribution to the groups that might lose out. If the right competence is not available within the country, it is important for companies to be able to recruit from abroad to maintain competitiveness. It is then not just a question of highly qualified labour. Labour immigrants can today be anything from IT specialists and graduate engineers to construction workers, assistant nurses and cleaners. The consequences of the refugee immigration are more difficult to analyse. In the short term, one can expect costs before the migrants become established on the labour market. However, there are also more long-term consequences to be considered.

The employment rate and labour force participation are both high in a European perspective, see Figure 7a, which shows the employment rate in Sweden compared with the euro area. A large part of the difference is due to the labour supply among women and older people being relatively high in Sweden. In other words, a lot of things work well in the Swedish labour market from a European perspective, but there are some challenges. Although unemployment is lower than the average for the EU countries, it is not among the lowest, see Figure 7b. Moreover, we have a marked division in the labour market between those born abroad and those born in Sweden. For those born abroad, unemployment is 16 per cent, but for those born in Sweden it is only 4 per cent, see Figure 8a. Unemployment among those born abroad is also high in relation to other European countries, see Figure 8b. An important challenge for the labour market going forward is thus the integration of those born abroad. 17 See, for instance, Lindé and Trabandt (2019) who show that when the economy is hit by major negative changes, companies and unions delay changing prices and wages, which leads to a flatter Phillips curve. Another possible explanation for the flatter Phillips curve could be that the central banks’ monetary policy has become more effective, see McLeay and Tenreyro (2018). 12 [24]  Figure 7.
At the first stage, when businesses were especially stressed due to restrictions and uncertainty and because not all support programmes had gained momentum by then and banks had not yet adjusted their business processes since the number of restructuring applications was really enormous and nobody could have expected that, the Bank of Russia together with OPORA RUSSIA and other business associations created a ‘green line’ mechanism for businesses to apply to regarding any problems in their relations with banks. As a result, these were business associations who communicated with banks directly, and if they failed to solve a problem, the Bank of Russia intervened. This mechanism has proven to be efficient and highly requested. Therefore, we have decided to make it a permanent one. We are well aware that small companies may really face difficulties trying to gain banks’ consideration and loyalty towards them. Therefore, it is very good that they have their lobbyists, in the good sense of the word. 2/5  BIS central bankers' speeches  As I have already said at the beginning, it is critical for us to make the communication between the financial sector in general and small businesses as easy as possible. This is not only related to the accessibility of loans. Today, I would like to dwell on three issues. Of course, there are also other aspects, but since time is limited I will focus on three issues. Firstly, this is certainly anti-money laundering and counter-terrorism financing (AML/CTF).

Therefore, we discussed this topic already last year, but we have now progressed to the active phase of the efforts aimed at establishing the centralised information service Know Your Customer, or KYC, as we have got used to saying. This platform will make it possible to reduce the number of banks’ refusals and companies’ expenses for the communication with banks. Clients’ risks will be assessed not by banks, but by the platform developed by the Bank of Russia that will classify companies into three risk groups according to the traffic light principle. Banks will be able to focus only on the group having these risk signs and on the analysis of the operations of clients involving potentially higher risks. We are going to launch this platform into regular operation at the end of 2021 and then scale it up so as to embrace all credit institutions by the end of 2022 Q1. Of course, we believe that it will make life easier for SMEs. We have also discussed how to improve this platform together with you. The second issue is the Faster Payments System (FPS). Initially, we launched it to enable P2P transfers. We can see that it is highly requested. However, right from the beginning, we have built this system considering the needs of retailers and small businesses and comprehending that this system may help SMEs cut costs significantly. The FPS addresses the issue of high acquiring fees and considerably reduces costs for trade and service companies.
After all, the danger of inflation is hardly a pressing concern nowadays (but rather the lack of it) and the pursuit of financial stability is ultimately a shared responsibility, since it implies close cooperation with the government and other authorities and may ultimately involve recourse to public funding. I share Stanley Fisher’s view that it would be a costly mistake to give up central bank independence. That would mean “the benefits of having a central bank that can take a longer term and apolitical view of what is good for the economy and take actions in support of that view will be lost”. If a long-term perspective and a shield against political pressure are required for achieving price stability, these may be even more important if explicit concern for financial stability is added. And frankly, I do not see the need for close cooperation with the government as something that implies abandoning central bank independence, but rather as a pre-requisite – which has always been there – for promoting effective policies. Irrespective of how well-designed the policies of the central bank may be, they cannot substitute for a consistent macroeconomic policy mix, and in the absence of this consistency they are likely to achieve at best sub-optimal outcomes. Having said that, I think there are a few questions worth asking – I must confess I do not have the answers, but I believe that the future of central banking hinges upon them.

Still, I do not believe the crisis has shattered the consensus on what central banks should be pursuing – central banking has always been about the preservation of, to quote Charles Goodhart, “the three aspects of stability”, namely price stability, (external) currency stability and financial stability. Nor has the crisis brought about the sudden realisation that these aspects of stability do in fact condition each other – central bankers, maybe even more so emerging-market central bankers, have long been keenly aware that failure to ensure one kind of stability is bound to jeopardise the achievement of the others. What the crisis has indeed challenged is the widespread conviction that meeting one particular stability criterion,  BIS central bankers’ speeches  1  while necessary in order to achieve the others, is also a sufficient condition to do so – after all, maintaining price stability, while valuable in itself, has proved insufficient to ward off major financial or macroeconomic instability. As a matter of fact, Andrew Crockett claimed ever since 2003 that the “peace dividend” yielded by the successful war against inflation had not lived up to expectations and therefore the battlefront against financial instability should not be overlooked. Nevertheless, it is widely accepted that price stability should remain the overriding objective of a central bank and I do not see this approach changing in the future, at least in Europe.
To some extent there have been a number of signs of more subdued growth in the rest of the world, above all in the United States. Moreover, new statistics suggest that Swedish households are not quite as optimistic as before. Somewhat weaker car sales may be an indication of more subdued demand for durables. Asset prices also seem to be in a calmer phase. All of this may point to some slowdown in the development of demand. But is it enough? It is still a matter of forward indicators and we have not yet seen any clear outcome in the statistics. Neither does there seem to be any notable fall-off in labour demand. The number of new job vacancies continues to be comparatively high, at least to date. In the absence of a sufficient slowdown in demand, an adjustment to the long-term growth path will need to be achieved with interest rate increases by the Riksbank. It seems to me that it is deliberations of this type that the Riksbank will face at the coming monetary policy meetings. Consideration will also have to be paid, of course, to the inflation risks associated with the high price of oil and the high dollar rate. These were some of the risks we highlighted in the October Inflation Report. This type of discussion about the direction of stabilisation policy basically deals with how, after some favourable years in the late 1990s, we should act so that growth and employment in the Swedish economy can be sustainably high and stable.

I shall not enter that discussion but simply note that a number of important decisions have been made in the past ten to fifteen years. They include the deregulation of credit and foreign exchange markets, the reform of the tax system, changes to components of the transfers system and the enhancement of competition. All this has helped the Swedish economy to function better. Moreover, price stability is now monetary policy’s statutory objective and the Riksbank, now also formally independent, has been made accountable for this. Other steps, in the form of a far-reaching consolidation of the government budget, provide a stable and credible framework for this objective. As a further move in the new direction of economic BIS Review 99/2000  2  policy, Sweden joined the European Union in 1995. This opened up sectors that previously had been protected from international competition. Competition grew in many fields and prices for some goods and services began to be adjusted downwards towards European levels. The economic policy realignment, which began some time in the 1980s, has coincided with larger changes in the global economic environment. The Swedish economy has therefore been in a position to benefit from the developments elsewhere and so far this has led to a favourable economic path. The realignment of economic policy and the ongoing globalisation were accompanied in the 1990s by a rapid development of the new information technology, globally as well as in Sweden. The innovations have been adopted successively in various segments of our economy.
This attractiveness may no longer be objectively related to low unit labour cost or disproportionate tax facilities which would not comply with EU norms. Therefore, an investor-friendly environment should be the result of a different set of characteristics such as increased flexibility in the fiscal regime and in the labour market. Thus, the NBR’s primary objective to ensure and maintain price stability is closely linked to the policy mix pursued by the Romanian authorities. Another nominal objective which is essential for joining the euro area is exchange rate stability. In recent years, the improved performance of the Romanian economy enabled the significant alleviation of exchange rate fluctuation as compared with the situation in the last decade. In fact, the foreign exchange regime adopted by the Romanian authorities, namely a flexible exchange rate requiring far lesser interventions in the forex market by the central bank, bolstered the national economy. Even the over-appreciation episode in early 2007, generated by massive capital inflows following Romania’s accession to the EU, was corrected via autonomous forex market movements. We may state that, at present, there are no significant pressure-inducing factors in relation to the exchange rate in terms of  2  BIS Review 162/2008  appreciation or depreciation, despite the temporary two way movements caused by global financial market turmoil.

The results are visible, even though – for statistical reasons – the NBR calculations appear to give a different picture. In order to avoid possible confusions, allow me to present several technical details. The data released indicate a faster dynamics of demand deposits compared to time deposits, apparently hinting at the emergence of additional inflationary pressures. We are dealing in fact with two developments related to statistical evidence rather than real economic substance. One such development is the transfer, since 2007, of forex-denominated demand deposits from “quasi-money”, which is part of M2, into M1 (narrow money). This is merely a matter of compliance with EU definitions. The economic substance has not changed: the Romanians do not resort to foreign currency accounts for current transactions, but rather as a means of saving. Another development weighs heavier and it is also manifest in the case of forex-denominated current accounts, while being extremely significant from a quantitative perspective for RON-  BIS Review 162/2008  3  denominated ones. Since deposit accounts are subject to income tax, while current accounts are not, banks have developed a way to attract customers: current accounts whose yields are higher than deposit rates. This led to massive portfolio shifts to the detriment of traditional deposits, as households placed their savings in the so-called current accounts, or even card accounts, which are highly remunerated conditional upon maintaining a balance higher than a certain floor.
Mervyn King: The New Inflation Target Speech by Mr Mervyn King, Governor of the Bank of England, at the annual Birmingham Forward/CBI business luncheon, Birmingham, 20 January 2004. *  *  *  I have always wanted to perform at Villa Park. Now is my chance. Economists at Villa Park are not as unusual a sight as you might think. It is not well known that John Maynard Keynes also came to Villa Park. In September 1913 Keynes was visiting Birmingham and decided to see the match of the day between the two top teams in the country - Aston Villa and Blackburn Rovers. On the following day, Keynes wrote to Duncan Grant1: “There has been some amusement here, but mixed up with a good deal of boredom. Birmingham has a very definite character. I went yesterday with 40,000 other people to one of the peak football matches. The scene was very much as I imagine the Coliseum. The ground is built on the same model - an immense oval rising all round tier above tier in about 50 rows so far as I could count. The crowd maintained a dull roar nearly all the time, rising into a frenzy of excitement and rage when the slightest thing happened. The match was between the two principal “league” teams of England. The local people were beaten by a team from Lancashire, who had, so I was told, ‘the best right wing in England, and the most expensive’”.

In Switzerland, this means that as long as the economic recovery remains on track, we should not postpone for too long the process of normalising monetary conditions. Otherwise, we would put medium term price stability at risk. 1/1