samchain/econo-pairs-v1 huggingface dataset:
Because its remit requires it to support strong yet sustainable and balanced growth, in exceptional circumstances, and in consultation with the FPC, the MPC could have to optimise – subject as always to society’s risk preferences – over a longer time horizon in order to avoid inter-temporal disequilibrium, with the 26  E.g. Mian, A and Sufi, A (2014), House of debt, Chicago. See for example, Aikman, D, Haldane, A and Nelson, B, (2015) “Curbing the credit cycle”, Economic Journal, 125(585), June. Though not the only one. Others included the absence of a credible resolution regime for failing institutions, inadequate capital and liquidity standards, excessive complexity and opacity in the financial system, and cultural failings alongside other perverse incentives for excessive risk taking. 29 The full FPC remit can be found here: http://www.bankofengland.co.uk/financialstability/Documents/fpc/letters/chancellorletter160316.pdf 27 28  14  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  14  result that inflation could deviate below target temporarily in order to achieve a more sustainable return to the target and more stable growth beyond the conventional policy horizon. 6. The Current Trade-off How do these factors relate to the recent conduct of monetary policy? In May, the MPC said that the effects of a vote to leave the EU on inflation would depend on the balance of its effects on demand, supply and the exchange rate.

The guidelines are based on the above-specified supervisory bodies’ considered opinion that there is no legal or substantive rationale for the maintenance of the previous interest rates (which were determined with reference to foreign interbank rates) after the portion of loan principal bearing such interest has been uncoupled from the exchange rate of the currency concerned by means of the recent Supreme Court decision. The supervisory bodies are of the opinion that such an interpretation of the Supreme Court judgement, were it implemented to the fullest extent possible, would represent such a heavy blow to financial undertakings’ equity that the Treasury would be forced to contribute substantial new capital to them. That expense would ultimately be borne by other members of society. The method recommended by the Central Bank and the Financial Supervisory Authority will preserve the stability of the financial system even in the event that a majority of loan agreements with exchange rate linkage clauses are deemed unlawful, although it could take quite a long time to determine this conclusively. Financial undertakings’ equity will sustain a considerable blow in any case, if judgements by the Supreme Court ultimately extend to a large portion of their loan portfolios. Offsetting this is the fact that uncertainty will have been eliminated, which could provide an opportunity to re-evaluate economic capital at a later time. The financial system should therefore remain sound. Many borrowers with foreign-denominated loans are in an extremely difficult position. Their anger and disappointment are understandable.
Caleb M Fundanga: Access to finance – corporate governance and sustainability Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the Microfinance and Small to Medium Enterprises Conference on “Access to Finance: Corporate Governance and Sustainability”, Lusaka, 17 June 2008. *  *  *  • Honourable Felix Mutati, MP – Minister of Commerce, Trade and Industry; • Mr Michael Mundashi – Non-Executive Director Standard Chartered Bank; • Mrs Mizinga Melu – Managing Director Standard Chartered Bank • Mr Prashant Thakker – Global Head of Microfinance Institutions of Standard CharteredBank • Distinguished Guests, Ladies and Gentlemen I am honoured to have this opportunity to make keynote remarks at this conference on Microfinance Institutions and Small to Medium Enterprises organised by Standard Chartered Bank, whose theme is “Access to Finance: Corporate Governance and Sustainability”. I wish to extend a warm welcome to all participants, particularly those that have travelled from outside the country. I hope that you will find time to see some of the tourist spots of Lusaka and experience the warm hospitality that Zambia has to offer. Distinguished Guests, following the liberalisation of the Zambian economy in the early 1990’s, the number of small- and medium-scale enterprises (SMEs) has increased significantly as the Government divested from running business in the economy to pave way for increased participation of the private sector.

Jean-Claude Trichet: The economic situation in France and the euro area  Speech by Mr Jean-Claude Trichet, Governor of the Banque de France, at the press conference of the Monetary Policy Council of the Banque de France on 20 December 2000. *  *  *  Ladies and Gentlemen, Allow me to welcome you on behalf of the Monetary Policy Council of the Banque de France. As the euro stands on the threshold of its third year, I shall discuss in the name of our MPC the economic situation in France and the euro area, before commenting upon the latest monetary policy decisions made by the Eurosystem. Activity advanced at a sustained pace in the euro area The upturn experienced by the euro-area economies in the first half of 1999 continued and strengthened throughout 2000. Foreign trade contributed significantly to the rebound. In addition, the euro area benefited from a marked improvement in domestic demand, with household consumption increasing at a fast clip before stabilising at a high level in the third quarter. At the same time, good borrowing conditions and the prospect of robust demand, coupled with a substantial increase in the use of production capacity and improved corporate profitability, gave investment a strong boost. According to the most recent estimates, the conjunction of these auspicious developments should translate into 3.4% growth in euro-area GDP in 2000.
(The City of London is, of course, already a full participant in the European financial markets – indeed it is the major contribution that we can make at this stage in the development of the new currency.) These are very considerable potential economic benefits which will lead to more efficient resource allocation across the euro area. The potential downside is the risk that at times the single European monetary policy will not meet the domestic monetary policy needs in all the individual participating countries – in other words that there will be problems of sectoral and regional divergence which are very familiar in larger economies at the national level, but on a larger, regional European, scale. The jury is still out on this question. Based on our experience it seems clear, as I say, that there is no clear best solution, applicable at all times for all currencies, to reconciling the inherent problem of potential conflict between the needs of domestic and external stability. The choice depends very much upon the country’s particular circumstances. Floating may be more attractive to a country which has a small tradeable sector relative to the size of its domestic economy, but in that case it will need an effective nominal domestic anchor, such as a money supply or inflation target; and it will need an institutional structure – typically an independent central bank – to reinforce the credibility of the commitment to that nominal anchor.

Each option has its pros and cons. Let me start with floating. At first blush the idea of allowing the exchange rate to take the strain, as a kind of buffer, insulating the domestic economy from shocks emanating abroad appears very attractive. Unfortunately it does not necessarily work like that. A floating exchange rate may move erratically in response to market news, causing unwarranted movements in the real exchange rate. That, of course, may be an important influence on domestic costs and prices; it may affect the relative competitiveness of domestically and foreign-produced goods and services leading to changes in the net external trade position, affecting aggregate demand in the domestic economy. So the insulation provided by a floating exchange rate may prove to be more apparent than real. The UK has been floating since 1992. For some years we experienced very little tension between our domestic and external policy needs. But then, from the autumn of 1996 we saw a sudden appreciation of some 20-25% in our Effective Exchange Rate against the core European currencies, and seemingly, largely related to uncertainties about the future characteristics of the European single currency. Whatever the reason the strengthening of the exchange rate had a dampening effect on the domestic price level, and a subsequent deterioration of our trade balance (accentuated over the past year or so by the global economic slowdown) reduced aggregate demand in the economy. Monetary policy accordingly needed to be less restrictive than would otherwise have been appropriate to offset these effects on domestic demand.
As you are all aware, particularly notable in Spain have been the furlough schemes (ERTEs) in respect of employment and the public guarantees for financing granted by credit institutions to firms. These were forceful measures, aimed at mitigating the impact of the crisis on employment and on households’ and firms’ income and liquidity. In the monetary policy realm, where the Banco de España plays an active role as a member of the Eurosystem, the action of the ECB, through a wide range of measures, has been pivotal. It has stabilised financial markets throughout the euro area, avoiding financial fragmentation across countries, and supported the flow of bank lending, which is so important for financing households, SMEs and the self-employed. The ECB response has thus exerted a significant stabilising effect on economic activity in Spain and in the euro area as a whole. 12  Looking ahead, the Spanish and global economic outlook will hinge crucially on how these policies can be adapted to an extremely uncertain and changing environment, so a balance may be struck between their effectiveness and the efficient use of public funds. In the specific area of budgetary policy, and within the time horizon covered by the Draft Budget for 2021, efforts should continue to be geared, as was the case throughout 2020, to combating both the health crisis and the adverse economic consequences of the lockdown measures introduced to alleviate it.

However, in this respect I wish to refer to two aspects from a purely technical standpoint. The first is that, as I have mentioned, in a scenario of already low price dynamics, the risks to inflation forecasts in the short and medium-term are clearly on the downside. In recent months, the headline inflation rate in Spain has been broadly negative (-0.9% in October according to the leading indicator of the CPI published by the INE last week), while core inflation, which is less volatile, has also consistently surprised on the downside and remains at levels close to 0%. In this setting, as it has been the case in 2020 with pensions and public sector wages indexed at 0.9%, which will be above observed inflation (-0.3%, on Banco de España projections), the proposals to raise public sector wages and pensions envisaged in the Draft Budget could give rise to an increase in real terms in compensation for those groups, at the same time as the economy overall is witnessing large-scale destruction of employment and public finances a highly acute deterioration, unprecedented in recent times. That said, in my opinion, rather than adopting widespread wage increases for public sector workers, it would be more appropriate to assess the possibility of introducing more specific increases within that group, for example, for health sector workers, based on objective criteria.
Már Guðmundsson: The Icelandic economy two years after the crash Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at a meeting of the Icelandic-American Chamber of Commerce, New York, 19 October 2010. *  *  *  Chairman and honoured guests, It gives me great pleasure to be with you here today and give a speech at this meeting of the Icelandic-American Chamber of Commerce. In my remarks, I would like to take stock of the current economic situation, two years after the collapse of the bulk of Iceland’s banking system, and assess the prospects for robust recovery. I am well aware that this only gives a partial picture. The saga of economic and financial developments in Iceland during the last decade or so is made up of two separate but interrelated stories. On the one hand, there is Iceland’s boom-bust cycle and problems with macroeconomic management in small, open, and financially integrated economies. This is a well-known story that has played out in other countries several times. On the other hand, we have the story of the rise and fall of three cross-border banks operated on the basis of European Union legislation (the European “Passport”). That story, at least for smaller countries, is much more unique than the first. Today I will focus on the first story and will have to refer you to another speech 1 and a forthcoming article 2 for my views on the latter.

It is therefore no wonder that concerns about Icelandic sovereign debt default have largely evaporated. This can be seen in the spread on Iceland’s sovereign credit default swaps, which has fallen significantly this year and is currently at 288 basis points, well below those of Ireland and Portugal. Before turning to the outlook and near-term policy challenges, let me mention two important problems that Iceland will not face if present policies remain on course. The first is an unsustainable public debt level. As Graph 6 shows, the gross debt of Iceland’s general government (central and local government) exceeded 100% of GDP at the end of 2009. That is very high, of course, although there are countries with higher gross debt, as the graph shows. However, Iceland’s net public debt is significantly lower and is sustainable given the prospects for repayment of Treasury debt in net terms from 2013 onwards. In addition, if we factor in the Central Bank’s foreign exchange reserves, the bulk of net public debt is denominated in Icelandic krónur. But what about the unsettled Icesave debt? The answer is that it will not fundamentally change the picture, as present estimates of the amount and speed of recovery of the assets of the failed Landsbanki and indications of what might be on the table in terms of financing costs in a new settlement suggest that the net present value of the settlement will be significantly lower than in previous agreements.
But, as I said, this is a vision and nothing that lies just around the corner. 27 Among other things, this has led the European Central Bank (ECB) to develop a pan-European system for instant payments, Target Instant Payment Settlement (TIPS). 14 [21]  If history provides us with any guidance, I do not believe it is appropriate to completely cede the design of the monetary system to the private sector. Furthermore, a design of “fiat money” and an inflation target require some form of legislation. To sum up Let me round off with a short summary. I have gone through three aspects of developments in Sweden since the financial crisis: That the Riksbank is probably the only central bank that, at least for the time being, has needed to abandon the strategy of “leaning against the wind” due to weakening confidence in the inflation target; that the policy we have had to conduct to bring inflation back to target has been lively debated, despite its aim merely being to fulfil the Riksbank’s de facto remit; and that cash use is declining more rapidly in Sweden and today is lower than in any other country. As regards the first aspect, I noted that, although I myself think that a policy of “leaning against the wind” can very well be justified under normal circumstances, it is also a policy that in practice is difficult to maintain when confidence in the inflation target is under threat.

3 It may be worth noting that Sweden, together with countries like Australia, New Zealand, Canada and Norway, belongs to a group of small open economies with floating exchange rates and inflation targets that have relatively similar challenges and problems: Via free capital movement, we have imported low real interest rates, there is downward pressure on inflation via, among other things, globalisation, private debt is high and there are problems on the housing market. 2 [21]  When you have to choose between “leaning against the wind” and the inflation target One of the conclusions from the global financial crisis is that financial factors and conditions must be given higher priority in economic analysis and be considered to a greater extent when designing economic policy. Above all, the crisis was a signal that greater effort must be made to avoid financial imbalances causing problems on the macro level. The most concrete expression from this was the emergence of macroprudential policy, which, in contrast to traditional supervision of individual banks and financial institutions, focuses on the entire financial system and the economy as a whole. 4 Some of the discussion has been about the extent to which monetary policy should be used to counteract the build-up of financial imbalances, for example a substantial and sustained credit expansion.
The sector, in the banking and insurance industries, now provides employment to more than 123,000 Malaysians. Despite conditions that have remained challenging for a large part of the decade, the banking system remained consistently on solid financial ground with a risk-weighted capital ratio of over 13%, low NPL ratios, and continued profitability for eight consecutive years. Substantial progress has been made towards consumer retail finance and access to banking services. Such consumer lending has increased from RM134 billion to RM343 billion while loans disbursed to small and medium enterprises have increased from RM71 billion in 2000 to RM108 billion in 2007. Domestic banking institutions are also building on their strong domestic performance to expand beyond Malaysian borders. Today, six domestic banks have presence in 10 countries around the region. The current encouraging state of the banking system, however, should not make us complacent on the need to continually transform and reinvent. The road in front of us is likely to be significantly different from the one we have traveled on. As our previous experience has shown, we need to constantly recognize that strategies that serve well in today's environment would not necessarily be a formula for success in tomorrow's environment.

This can be achieved through strategic partnerships with training providers, actively contributing towards industry-wide efforts to support the training agenda and continuous improvements to internal learning programmes. This is also the option that is by far more challenging, but ultimately the one that provides the optimal payoff for individual institutions, for our financial sector, and the economy. The magnitude of the task, however, demands our collective efforts to secure a sustainable pool of talent that will serve both the present as well as future needs of the industry. The industry also needs to participate in the formal learning programmes by the institutions of higher learning. It is encouraging to note that several have volunteered following the recent dialogue earlier this year organised by Bank Negara Malaysia and the Ministry of Higher Education . By contributing towards positive reforms in the academic curriculum and providing other forms of practical support, the industry is making an important investment in its own future. To take this effort further forward, Bank Negara Malaysia is initiating an extensive programme to train and prepare at least 1,000 deserving graduates for immediate placements in banking and insurance institutions. This effort will be undertaken in collaboration with the industry and training institutes and is aimed at boosting the supply of well-trained and competent personnel for the financial services industry. The selection process will be rigorous, and the training programme will be designed to produce first grade candidates for employment at the management trainee level.
Out of the 35 OECD countries, that with the second highest real GDP growth was Ireland at 4.3% in 2016, and Spain is also growing strongly, at 3.2%; the country with the lowest government debt at end-2016, was Estonia, at 9.5% of GDP; several countries in the area, including Austria and Germany, boast almost full employment, at between 4% and 6% in 2016; Estonia and Finland are among the top 3 countries in terms of science scores in the PISA test. So the euro is not to blame, it is the different national policies. Admittedly, with the euro we have lost the tool of currency devaluation. Devaluation can have positive effects in the short term as it lowers the price of exports, but, in the medium term, it can have significant negative effects: it can exert inflationary pressure via the rise in import prices; it can make the country poorer, via the reduction in the value of its assets, and conversely the increase in its external debts; and lastly, it creates the risk of a trade war, with chain devaluations, as was the case in the 1930s. On average, we have a suitable exchange rate with the euro. But no lasting success in economic history has been built on a weak currency; all have been built on a good structural environment, corporate innovation, and a high level of specialisation among firms. Italian creativity, your commercial ingenuity, dating back to Venice, Genoa and Florence, count much more than the facility of a weak lira.

However, in more recent weeks, the more positive data in the US has resulted in some flow-back to the US markets. This more variegated and dynamic landscape means financial markets are likely to remain volatile in the months ahead. We need to be prepared to manage this volatility. 9. Second, policymakers not only have to grapple with the aftermath of the financial crisis, but also the medium term structural challenges facing their countries. There are significant differences in the pattern of saving and investment across economies. Many of these reflect structural factors such as demographics, as well as the particular path of growth and development. To sustain global growth, some changes in the global saving-investment pattern will be necessary. This cannot happen overnight. Instead, we need sustained and coordinated policy action across all the major economies. The IMF and global bodies like the G20 will have to continue to focus and provide direction on these structural issues. 10. Third, the financial crisis shows how critical the nexus is between the health of the financial system and the health of the economy. Global regulatory reforms are necessary to address many of the weaknesses uncovered during the crisis. Yet, we have to tread a fine balance to build not just have a resilient global financial system, but also one that can support sustainable economic growth. Given the varying pace of economic recovery and the different phases of economic transition, regulations need to be appropriate to local circumstances, while preventing regulatory arbitrage.