samchain/econo-pairs-v1 huggingface dataset:
Figure 8  BCS: causes behind changes in lending standards (1)  (index, moving four-quarter average)  Big enterprises' demand  30  Substitution of funding sources  15 0  Households' supply (2)  30  10  15  0  0  -10  10 Competition other entities  0 -10  Other  -15  Working capital  -15  -20  -30  Mergers/acquisitions  -30  -30  -45  -40  -40  -60  -50  -50  -75  -60  -45 -60  Fixed asset investment  -75 14  15  16  17  -20 Regulatory changes  -30  Risk (npl, default, other) 14  15  16  -60 17  (1) Index measures net relative importance attributed by banks to credit demand and supply determinants, respectively. For more detail, see Banking Banking Credit Survey. (2) Average between housing and consumer Source: Central Bank of Chile.

That a period of relative price stability does not breed complacency? That the collective national memory is maintained? A key part of the answer can be found in the role of regimes and institutions.5 Individual policymakers and officials come and go. Intellectual ideas pop in and out of fashion. The inflation target and the MPC are the result of a long and painful search for a credible money anchor. They provide the memory to ensure that we don’t return to the inefficiency and inequity of the 70s and 80s. They provide the memory that underpins the consensus that low and stable inflation is a perquisite for economic prosperity. And they provide the memory that guards against some of the dangerous talk of late. Let me sum up this section on the twin objectives of monetary policy. The MPC has objectives for growth as well as for inflation. The current inflation targeting regime provides considerable flexibility for the MPC to support output and employment. And in recent years, the MPC has used that flexibility to the full. Indeed, some have argued excessively so. The MPC has been at the forefront in supporting growth and employment and continues to be so. But that flexibility is constrained by the discipline that monetary policy must be set in a manner consistent with inflation coming back to its target. Without that credibility, monetary policy wouldn’t have the flexibility to support the real economy.
It is fair to say that the task of addressing risks to financial stability fell between the cracks. The rapid expansion of debt and accumulation of risks in the financial sector ended, as we all know, in a damaging and painful crash – for the financial sector and for the economy as a whole. There is a substantial body of international evidence that recessions are deeper and more painful when they follow a sharp run-up of debt and a banking bust. The UK recession in 2008–9 was a case in point. The costs of mopping up afterwards are still very clear today. Despite interest rates being effectively at zero for over five years now, the economy is only just now back to its pre-crisis level. There are still over half a million more people unemployed in the UK than before the crisis. The amount of net public sector debt has pretty much doubled relative to GDP. On current plans, the OBR expect it will take a further five years until the public sector deficit is eliminated. I think, knowing what we now know, we would be more prepared to use monetary policy to address financial stability risks. Indeed the MPC’s latest remit letter from the Chancellor notes the MPC might wish to allow inflation to deviate from the target temporarily to avoid the development of imbalances that pose a potential risk to financial stability. But it is not without cost.

A variety of fintech solutions are being offered, which can be broadly clustered in three groups: a) financial services, as business that offer internet based applications for instance for managing personal finance, trading securities, automating financial services (robotization); b) financing, via platforms that directly match investors and lenders, such as crowdfunding, or peer to peer lending; c) payments, via more innovative and customer tailored payment solutions. No doubts we have that fintech offers wide-ranging opportunities. It holds the promise of reducing costs and frictions, narrowing information asymmetry, enhancing efficiency and competition, and increasingly important, broadening access to wider set of financial services – especially in low-income countries and for underserved part of the population – although it may take time for the benefits of technological change to fully materialize. Against this background, ongoing innovations and technological advances can support stronger growth dynamics and higher inclusiveness of the growth, thus speeding up the real convergence process through a number of channels. For small economies, such as ours, fintech innovations can play important role in facilitating trade integration. More convenient and cheaper instruments for digital payments can set basis for easier cross-border trade, including e-commerce that currently plays a marginal role in the region. And there is a wide consensus that small country cannot become rich without accelerating its exports and deepening its integration into the international economy. Yet, national authorities should be mindful of the potential risks posed to the financial system and to its customers.
Notes: The figure shows by how much the term premium component of euro area sovereign yields (weighted average of Germany, France, Italy and Spain) with maturities of one to ten years is estimated to be compressed due to the APP through the duration channel at three dates: the announcement of the APP (Jan 2015), the extension of the programme in June 2018, and the announcement of the restart of net purchases in September 2019. Chart 9 APP impact on ten-year euro area sovereign yield over time (basis points)  Sources: ECB, based on Eser et al. (2019). Notes: Evolution of the APP impact on the ten-year synthetic sovereign yield (weighted average of Germany, France, Italy, Spain). The impact is derived on the basis of an arbitrage-free affine model of the term structure with a quantity factor (see Eser et al. 2019). Latest observation: September 2019. The first point is January 2015 when the ECB had just announced that it would start purchases in the following March at a rate of € billion per month, intended to run until September of the following year. According to ECB staff estimates, the anticipation of the purchases, the associated balance sheet accumulation of the ECB and, as a flip side of the coin, the expected duration extraction were associated with a term premium compression of almost 50 basis points for the ten-year maturity. For shorter-term bonds the effects are lower, such that the expectation of asset purchases is estimated to have led to a flattening of the curve.

[19] See, e.g., Bauer, M. D. and Rudebusch, G. D. (2014), “The Signalling Channel for Federal Reserve Bond Purchases”, International Journal of Central Banking, 10(3), pp. 233–290. See also Broadbent, B. (2018), “The history and future of QE”, Speech given at Society of Professional Economists, London, 23 July 2018, and Christensen, J. and Krogstrup, S. (forthcoming), “Transmission of Quantitative Easing: The Role of Central Bank Reserves”, Economic Journal, who argue for another channel emphasising the relevance of reserves for the balance sheets of commercial banks. [20] In addition to the press conferences following Governing Council meetings the events also include other public communication by ECB President Mario Draghi. At the press conference following the September 2014 Governing Council meeting, the first in the event cluster, the President explicitly answered a journalist’s question with the words “Yes, it was discussed. QE was discussed. […]. A broad asset purchase programme was discussed, and some Governors made clear that they would like to do more”. [21] See Lemke, W. and Werner, T. (forthcoming), “Dissecting long-term Bund yields in the run-up to the ECB’s public sector purchase programme”, Journal of Banking and Finance. [22] At the same time, the dominating role of the term premium is not a general feature or model artefact. As exemplified by the righthand bar in Chart 7, there are events where rate expectations are the dominating factor. The particular date shown there corresponds to an ECB press conference during the financial crisis that induced market participants to adjust markedly their policy rate expectations.
A list of coins drawn up by the coinage commission featured 320 different coin types, although estimates came to as many as 867. If the different embossings are taken into account, there were as many as 6,000 or so. Cf. Meier, p. 72 et seq. 4  Cf. for example, Meier, pp. 29–30 and p. 124, and Ernst Baltensperger: Der Schweizer Franken – Eine Erfolgsgeschichte. Die Währung der Schweiz im 19. und 20. Jahrhundert, Zurich 2012, pp. 49–50. 5  Meier, pp. 124 et seq. 6  Following the revision of the Coinage Act of 1860, the value of one Swiss franc was equivalent to 4.5g of silver or 0.2903226g of gold. This was in line with its model, the French franc. Cf. Baltensperger, p. 83. 7  Moreover, in 1890, more coins were in circulation than banknotes, in terms of value. Coin circulation at the time is estimated at CHF 266 million, while banknotes to the value of CHF 172 million were in circulation. Cf. Heiner Ritzmann-Blickenstorfer (ed): Historische Statistik der Schweiz, Zurich 1996, p. 805. 2  BIS central bankers’ speeches  Our final leap in time brings us to the present day. Nowadays we live with a purely paper currency. Since the collapse of the Bretton Woods system at the beginning of the 1970s, exchange rates have, in principle, been moving freely in relation to one another. During the 1960s, the monetary policy of the US central bank had been too expansionary.

Permit me to pay tribute to all other former Governors who have contributed immensely to our institutional development over the years. I want to take this opportunity to thank them all for their contributions in reforming the Bank and upholding the dignity and effectiveness of our noble institution. Your Excellency, distinguished guests, the recent global economic and financial crisis was a wake-up call to the realisation that low and stable inflation, a sound banking system, as well as high and sustainable economic growth, though necessary, are not sufficient conditions for financial stability. As you are aware, the Bank had developed the Financial Sector Development Plan (FSDP) which was approved by cabinet in 2009, to address the shortcomings in the financial sector. It is expected that funding for the FSDP would be provided under a basket fund arrangement with development partners, including KfW, GTZ, and AfDB, with the World Bank assuming a leading role. The Bank is in the process of setting up a secretariat for successful implementation of the FSDP for which the Head has been appointed. Your Excellency, distinguished ladies and gentlemen, permit me to proceed with the discussion on the highlights of the reform policies to reposition the Bank and the current state of their implementation. Strengthening the supervisory role of the Bank of Sierra Leone Your Excellency, distinguished guests, even though the Bank was granted legal sanction by the Bank of Sierra Leone Act 2000, its powers and operational autonomy are limited.
Meanwhile, AIG Financial Products compensated its employees, including risk officers, on the basis of revenues brought in rather than profits. At Lloyds, incentive schemes which pressured sales staff to meet targets or face demotion also encouraged misselling of payment protection insurance. In all these instances, executives were inclined to focus on immediate outcomes such as revenues and sales targets in order to deliver visible results quickly, without much regard for the risks assumed. Major efforts have since been undertaken internationally to address these issues. The essence of these reforms is twopronged: the first is a greater emphasis on the governance of the compensation framework by the board and senior management; the second is a greater alignment of compensation practices with prudent risk-taking. As risks undertaken today may materialise much later in the future, the latter entails deferring portions of compensation and subjecting them to adjustments, such as bonus-malus and clawbacks. Finally, a strengthened role of market discipline can also shape the governance of finance for the better by reducing information asymmetries between the market and financial institutions. Again, regulations can play a part by enhancing the scope and quality of mandatory disclosures, such as in respect of key information relating to risk exposures, risk management policies and capital ratios. A relevant emerging trend among investors and consumers has been an increasing focus on more sustainable approaches to finance, including those which consider environmental, social and governance concerns.

The baseline scenario has been revised upwards from $ to $ a barrel; the high oil price scenario has been revised downwards from $ to $ Our oil price forecast for 2020–2021 remains unchanged. These adjustments have made no major impact on expected economic growth indicators in the context of the operating fiscal rule. Finalised data suggest GDP growth was 2.3% last year, above our expectations. Our estimates suggest that the accomplishment of major investment projects emerged as key enablers of this growth. With due regard for this, we, first, reconfirm our assessment of the nature of economic growth: the economy is close to its potential; its expansion does not create additional proinflationary pressure. Second, we keep our GDP growth estimate in the baseline scenario at 1.2-1.7% for this year. The growth rates will accelerate to 1.8-2.3% in 2020 and 2-3% in 2021 as the positive effect of national projects and structural reforms provided that these deliver. The oil price adjustments in the forecast carry implications for balance of payments indicators. In the baseline scenario, the forecast current account balance for this year has been upgraded from $ billion to $ billion, chiefly on the back of a higher value of oil and gas exports. The balance of the financial account of the private sector has also been raised from with $ billion to $ billion. This is based on the actual data for the first two months of the year along with greater opportunities for the buildup of foreign assets given the higher export revenues.
The central bank alone cannot, with the instruments at its disposal, steer the exchange rate. During the years when a fixed or stable exchange rate was the objective of monetary policy, fiscal policy was responsible for smoothing fluctuations in the economy. At the same time, incomes policy’s role was to keep wage growth in line with wage growth abroad. The objective of exchange rate stability therefore provided a framework for economic policy. When foreign interest rates moved up, the interest rate in Norway also had to be raised in order to prevent a weakening of the krone. Conversely, interest rates in Norway were often reduced following a reduction in interest rates abroad. One can imagine how this division of responsibility would have been implemented in the face of the disturbances to the Norwegian economy which occurred in 2001 and 2002. The upward tendency of the krone would have led to reductions in the interest rate down to the international level. As a result, interest rates would also have reached a historical low in Norway. Low interest rates would have fuelled lending growth, pushed up house prices and intensified the shortage of labour. In order to prevent another bubble of this type in the Norwegian economy, substantial fiscal policy tightening would have been required in 2001, 2002 and 2003. The fiscal rule stipulates that the central government budget deficit shall over time be equivalent to the expected real return on the Government Petroleum Fund.

However, towards the end of the upturn the economy was facing labour shortages, higher wage growth and a sharp increase in household consumption and debt. Interest rates had to be kept at a high level in Norway. Chart 9. Cyclical divergence Short-term interest rates in the US and Norway 10  10 8  Norway  8 6  6  4  4  US 2  2  0  0 1995  1996  1997  1998  1999  2000  2001  2002  2003  Source: EcoWin  The turnaround abroad took place two years ago, but the Norwegian economy continued to show a high level of activity. This led to a widening of the interest rate differential against other countries. The main explanation for the wide interest rate differential is not that interest rates are high in Norway, but that interest rates are at a historic low abroad. Interest rates in the US have not been at such a low level since the 1960s. 1  Measured by the monthly average of the import-weighted exchange rate against 44 countries, the krone was at its weakest level in May 2000 since May 1994. Measured by the monthly average of the trade-weighted exchange rate index, the krone was at its weakest level in May 2002 since the series was started in January 1971. Measured by both indices, there were a few days in autumn and winter 1998 when the krone was weaker than in May 2000.
But at present, in a very uncertain situation, we all tend to move away from it, and even to distrust it because it would tie our hands. Does it mean that we also abandon predictability? I will here come to my second part, and focus the art/science nexus on the reactivity/predictability trade-off, if you allow me to assimilate the former to intuition and art, and the latter to rationality and science. II. Four possible lights for a new predictability Should art now play a bigger role? At a minimum we should acknowledge the need for modesty, agility and nimbleness. But this is not an argument for returning to the secrecy and unpredictability that characterized central banking until the 1990s. There is no room for what Karl Brunner ironically described forty years ago as “thriving on a pervasive impression that Central Banking is an esoteric art, [whose] esoteric nature is revealed by an inherent impossibility to articulate its insights in explicit and intelligible words and sentences.”vii Instead, we should aim to build a “new predictability”, a different one suited for uncertain times. Let me propose, with humility, four possible lights in approaching it. II.A.

As a result, the household sector’s financial condition today is in unusually good shape for this point in the economic cycle. In relative terms, household indebtedness is low, and—thanks in part to low interest rates—debt service burdens relative to household income have fallen to levels not seen since at least the early 1980s. As we will show in today’s presentation, compared to 2008, a greater proportion of overall debt today is now held by older households that have higher and more stable incomes and more experience as borrowers, on average. Consequently, a much larger proportion of debt is currently held by borrowers with higher credit scores. The resulting higher overall debt quality is reflected in historically low overall delinquency rates. Transition rates into new delinquency are below the levels of the early 2000s, and foreclosure and bankruptcy rates in 2016 are the lowest since our data series began in 1999. Notwithstanding this overall rosy picture, the improvement in aggregate debt quality and performance conceals important underlying changes in debt holdings that could be consequential, with implications for the housing market and for consumer spending over the longer term. While older borrowers hold more debt of all types, there has been a significant shift among younger people toward student debt and away from mortgage and other debt. Student debt has increased more than fivefold over the past 14 years, with more young adults taking out loans and borrowing larger average amounts. And, while debt delinquency rates overall have fallen, those for student debt have remained elevated.
The quality of mortgage lending is crucial for the quality of our banks’ assets and, ultimately, for their solvency and stability. A deterioration in the quality of mortgage assets would affect the conditions on which financial institutions themselves are funded, since it might lead to a downgrading of mortgage market securities and that, in turn, might ultimately worsen borrowing conditions for households and firms. That said, Spanish banks are better placed today than one or two years ago to cope with the increase in the demand for credit that our economy will see with the recovery in activity and higher growth. This is due to three interrelated factors. First, the improvement in financial markets, in particular in the euro area. The monetary policy measures adopted by the European Central Bank and the reforms to the institutional framework of the euro have made a decisive contribution here. Second, the recovery in the Spanish economy, one component of which has been underpinned by the reforms already pushed through, which are contributing to correcting the imbalances built up during the upswing that ended in 2008. However, and this is the third factor, the favourable developments in the Spanish banking sector cannot be understood without considering the transformation it has undergone.

Mario Draghi: ECB press conference – introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Vítor Constâncio, Vice-President of the European Central Bank, Frankfurt am Main, 2 August 2012. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Rehn. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged, following the decrease of 25 basis points in July. As we said a month ago, inflation should decline further in the course of 2012 and be below 2% again in 2013. Consistent with this picture, the underlying pace of monetary expansion remains subdued. Inflation expectations for the euro area economy continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. At the same time, economic growth in the euro area remains weak, with the ongoing tensions in financial markets and heightened uncertainty weighing on confidence and sentiment. A further intensification of financial market tensions has the potential to affect the balance of risks for both growth and inflation on the downside. The Governing Council extensively discussed the policy options to address the severe malfunctioning in the price formation process in the bond markets of euro area countries.