samchain/econo-pairs-v1 huggingface dataset:
14  Report of the Swedish National Audit Office 2011, “Measures taken by the authorities to safeguard financial stability: Lessons in the light of developments in the Baltic countries 2005–2007”. BIS central bankers’ speeches  7  Recent developments in North Africa and the Middle East have pushed up the price of crude oil even further. Uncertainty about the future supply of oil has contributed to the oil price now being higher than it was when the Monetary Policy Report was published in February. This illustrates the fact that price trends become even more sensitive to supply disruptions when demand is high in relation to supply. The earthquake in Japan is the greatest catastrophe the country has suffered since World War II. The consequences for the Japanese people are devastating and the material damage is huge. It is still too early to determine what the economic consequences of the earthquake will be. In the short term it has already led to production losses, but later this year production may rise in connection with reconstruction work following the disaster. The fact that some nuclear power stations are now out of operation has already led to disruptions in the supply of electricity and in production, but in the longer term a reduction in the capacity to generate electricity using nuclear power in both Japan and other countries may lead to rising prices for other types of energy, including oil.

Culture is at the heart of many of these issues, and addressing the root causes of misconduct must remain a high priority for the industry and regulators. The Supervisory Approach Given this imperative for change, the question is, what can we do to improve culture in financial services? Culture is like many of the risk management issues challenging businesses. Cyber threats, digital transformation, and climate change are all facts of life that companies face today, and will be facing 10 years from now. But I don’t hear any CEOs saying that securing their servers is a project that can wait until 2029. Nor does anyone think that there are “once and done” fixes for these problems. Indeed, one important lesson from cybersecurity is that this is not purely a technology problem, but one that requires a fundamental shift in mindset and culture over the long term. So the first thing is the industry, the regulatory agencies, and the banks need to take culture seriously, now. A major and essential part of this is that there must be meaningful consequences for firms and people when things go wrong. We have learned that simply levying large fines on companies is not enough to create lasting change. More is needed. Regulators must hold management and boards of directors to account. The legal element of supervision will always remain paramount. And a scandal often spurs change. But if leaders wait until things have gone wrong to think about culture, they’re leaving it too late.
Inflation has risen to levels not seen for decades, and its negative effects on households are reflected in public concern about this phenomenon. In addition, the two-year inflation expectations of economists and financial traders remain above 3%, and business expectations over longer horizons have also risen. It is important to note that long-lasting high inflations become more persistent and evidence shows that the cost of adjusting to them rises, with the consequent impact on the welfare of the population. The Board will be carefully monitoring the evolution of the macroeconomic scenario, ensuring that inflation convergence to the target is secured over the two-year policy horizon. Concluding remarks  Dear senators in this Commission, in closing I will share with you some good news and a personal thought. About the good news, as we announced in September 2021, on 23 June we will publish regional GDP on a quarterly basis. This is an important leap forward in the process of improving our economic statistics; it provides valuable information both for economic analysis and for public policy decisions, as it increases the frequency and timeliness with which we will be able to know the state of the regional economy, information that until today existed only in annual frequency. It is also a long-standing wish of many senators who, because of their close ties with the regions, require more detailed and regular information on the performance of the areas they represent.

10  Figure 1 Inflation (1) (2)  Core inflation (1) (2)  (annual change, percent)  (annual change, percent)  18  Headline CPI  14  Core CPI  Volatiles CPI  15  Goods  Services  12 10  12  8 9 6 6  4  3  2  0  0 15  16  17  18  19  20  21  22  -2  15  16  17  18  19  20  21  22  (1) Dotted vertical lines show statistical close of March 2022 Report. (2) For details on the different groupings and their share in headline CPI basket, see box IV.1 in December 2019 MP Report, Carlomagno and Sansone (2019), and Economic glossary. Sources: Central Bank of Chile and National Statistics Institute (INE). Figure 2 Cumulative inflationary surprises in MPR reports (percentage points) 2  Core goods excl. foods Other volatiles  Total foods (*) Core services  Volatile energy Total surprise  1,6 1,2 0,8 0,4 0 -0,4 Jun.21  Sep.21  Dec.21  Mar.22  (*) Sum of volatile and non-volatile foods. Sources: Central Bank of Chile and National Statistics Institute.
In the first phase, the crisis generated a significant decline in firms’ revenues relative to fixed costs (such as supplies, rentals, labour costs) that led to an increase in firms’ liquidity needs on top of those derived from the amortisation of pre-existing debt. In turn, this raised the risk that some of these corporates would not be able to meet their payment obligations (liquidity risk) together with a non-negligible probability of negative spillovers to other companies. The decisive and forceful action of economic policies has helped mitigate this risk to a great extent, so that a large proportion of these firms with liquidity needs were able to cover them. Key measures included, for example, furlough schemes that help to alleviate fix costs, and also public guarantees for business financing that have allowed for the liquidity needs to be financed. However, as the crisis unfolds, concern is shifting from liquidity risk to the deterioration of the solvency position of firms, associated with the combination of higher levels of debt as a result of the crisis with still low profitability expectations for the coming quarters, especially in sectors most impacted by the crisis and irrespective of whether these firms are viable in the long term. And this situation leads to the following two related concerns. First, it is obvious that it increases the probability of defaults which could lead to viable firms going out of business, thus making the costs of the crisis deeper and protracted.

Pablo Hernández de Cos: How to preserve pandemic-struck viable firms for a stronger recovery Introductory remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the European Systemic Risk Board (ESRB) virtual seminar on “Corporate insolvencies and public support measures”, 29 April 2021. * * * Many thanks to the ESRB Secretariat for organising this seminar. And let me also thank and welcome all participants to this event. I will devote these brief opening remarks to outline why, at the ESRB, we consider the topic of the seminar “Corporate insolvencies and public support measures” a very relevant and timely one. The starting point is our perception that, in the context of the current crisis, even if the macrofinancial outlook has improved, uncertainty remains high. And one of the main elements of this uncertainty is precisely related to the extent of the damage inflicted by the crisis on the corporate sector, whose magnitude will be a key determinant of the persistence of the crisis and the strength of the economic recovery. Therefore, we need to measure this risk carefully and be ready to adapt our policies to mitigate it to the extent possible. And this is particularly relevant in the current phase of the crisis.
The greater the distance the circle is from the center of the target, the greater are  3  Putting equal weight on (squared) inflation and unemployment deviations is reasonably standard. Given Okun’s law, this is equivalent to a formulation that weights inflation deviations four times more heavily than output deviations. In his seminal 1979 analysis, John Taylor noted that any heavier weight on inflation would reflect “extremely uneven concerns about inflation.”  BIS central bankers’ speeches  3  our policy misses. And the greater our policy misses, the greater are the social gains from aggressive monetary and other public policy actions to correct them. The bull’s-eye scorecard approach has three benefits. First, it provides accountability by clearly describing success and failure to achieve our mandated goals. Second, it renders operational the concept of the FOMC’s intent to take a balanced approach in achieving our goals. Third, the bull’s-eye guides the public’s judgment of the FOMC’s likely response to current economic conditions. While we have made considerable progress toward our goals since 2011, we still have some ways to go to reach the bull’s-eye. Missing on the full employment mandate That’s certainly clear in the case of our employment mandate. While we’ve made much progress since the onset of the Great Recession when unemployment reached a high of 10 percent, 6.7 percent is still well above the 5–1/4 percent rate I think is the longer-run normal. Indeed, 6.7 percent is higher than the 6.3 percent peak unemployment rate in the previous recession.

Ardian Fullani: The fight against money laundering Luncheon speech by Mr Ardian Fullani, Governor of the Bank of Albania, at an Anti Money Laundering workshop, Tirana, 22 June 2005. *  *  *  Dear participants, The subject of today’s workshop is, as you well know, a matter of great concern worldwide. The way we fight money laundering (ML) and counter the financing of terrorism (FT), does not have an impact on us only, but also on our neighbours and any other country with which our citizens and companies perform trade and financial relations. In these last years, to this issue has been devoted considerable time and efforts by you, by Albanian authorities and by international organisations. Besides meeting each other again and exchanging opinions on general issues, I want to use this opportunity to share with you some thoughts about the importance of the existence of a culture against ML in the institutions we represent. I will refer in this case to banks, meaning non-bank financial institutions as well. Following that, any consideration about ML will be valid also for the FT, for which I am convinced that our awareness and that of the public, is complete. With the term “culture” on anti-money laundering (AML), I refer not only to the existence in the bank of structures responsible for AML and its related procedures.
Loan conditions are more favourable and the terms on sight deposits are better than they would be under a sovereign money system. Since banks have to compete with each other, they are left with only enough of the profits from money creation to enable them to remain in business. In a sovereign money system, money creation would be centralised at the SNB, from where the corresponding profits would be distributed. But total profits would be no higher than under the current system. For the general population then, the whole thing would be, at best, a zero-sum game. Damaging effects of sovereign money The fact that the Swiss sovereign money initiative promises too much is only one issue. Even more serious is that adoption of the initiative would have profound implications for Switzerland on three levels, namely the real economy, monetary policy and economic order. Real economy  The initiative would negatively impact the real economy through lending because banks would no longer be able to draw on sight deposits. Instead, they would have to attract liquidity from other sources. A key such source would be savings deposits. However, since  Page 5/8  savings – like any funds which investors forego for an extended period – are more expensive than sight deposits that can be withdrawn at any time, borrowing becomes more costly in a sovereign money system. The Swiss sovereign money initiative affects us all directly, as borrowers and savers. Of the loans granted in Switzerland, 94% go to households and SMEs; 86% are mortgages.

In financial crises, savers and investors lose money for two reasons: first and foremost, because their pension funds and direct investments such as stocks, bonds and real estate lose value, and also second, because taxpayer money has to be used to rescue banks. Financial crises occur when risks are underestimated and price expectations of investments are exaggerated. This can lead to credit and asset price bubbles which sooner or later burst. When banks do not hold enough equity capital to absorb the losses they incur, they fail. Sovereign money would do nothing to change this situation. Risks can be underestimated and future returns overestimated in a sovereign money system too. Even without recourse to sight deposits, banks can grant loans which are too risky, hold too few provisions for times of crisis and become insolvent if a bubble bursts. Moreover, a key problem in the financial crisis was banks’ heavy reliance on short-term financing from the money market. These interbank loans proved to be a less stable source of financing than private customers’ sight deposits; in fact they dried up at the very start of the financial crisis in 2008. Sovereign money would not help to eliminate this risk of instability either. There are other, far more effective approaches to stave off credit and asset price bubbles than sovereign money. The significant increase in the capital and liquidity requirements for banks in the aftermath of the financial crisis is one such approach.
I do not know which of the two sides, benefited more from the cooperation between the World Bank and the Republic of Macedonia. But I strongly believe that the cooperation with the World Bank has played (and still plays) very important financial and advisory role in strengthening the institutional capacities of our country and in boosting the economic development. The amount of capital invested by this institution in the Republic of Macedonia is known, in the years when it was most important to us, when our access to other sources of funds was incredibly difficult and much more expensive. Reforms that were and still are implemented in our country with the assistance of the World Bank are well known: the judiciary, health care, tax system, pension system, decentralization, increasing competitiveness, etc. The positive role of the World Bank in the issues that are extremely important for us is clear, and we call it by the common name – structural reforms, a set of issues without whose advancement we would not have approached the doors of the Euro-Atlantic integrated systems. I think that for that contribution, i.e. the result of our partnership with the World Bank we should use every opportunity to say thank you. Working together on the structural reforms, many of our institutions, members of the administration, and even politicians became acquainted with the best practices in the world in many important areas of the economy, and in general the organization of work, important for improving the quality of life.

Petar Goshev: Opening of the Joint Public Information Center of the National Bank of the Republic of Macedonia and the World Bank Address by Mr Petar Goshev, Governor of the National Bank of the Republic of Macedonia, at the opening of the Joint Public Information Center of the National Bank of the Republic of Macedonia (NBRM) and the World Bank, Skopje, 16 December 2010. *  *  *  Dear Ms. Lilia Burunchuk, Director of the World Bank Office in Skopje, Dear Mr. Alexander Tieman, IMF Resident Representative for the Republic of Macedonia, Your Excellencies, Dear guests, Dear ladies and gentlemen! Please allow me to greet you and express my pleasure that today we have the opportunity to attend two important events. The first, which we will gladly enjoy for a longer period of time – the official opening of the Joint Public Information Center of the NBRM and the World Bank. And the second, the presentation of the Annual Regional Report of the IMF, an event which is always extremely interesting because it is an analysis made by a highcaliber institution, such as the IMF. Dear guests, The partnership of the Republic of Macedonia and the World Bank lasts for nearly two decades. Good results of this partnership are evident. The partnership by definition rests on the benefit for both parties, i.e. for all who gathered together in achieving a goal.
The oil price futures used in our forecasts turned out to be poor predictors in volatile oil markets.2  1  2  A recent BdF working paper argued that short-term unemployment is more meaningful than total unemployment when looking at the Phillips curve in the US. Cf. Ferrara L. and Sestieri G. in Banque de France, Quarterly Selection of Articles, No. 36, Winter 2014-2015. Bec, Frédérique and Annabelle De Gaye (Nov. 2014), “How do oil price forecast errors impact inflation forecast errors? An empirical analysis from French and U.S. inflation forecasts.” Banque de France Working Paper 523. BIS central bankers’ speeches  1  But downside surprises also occurred for core inflation suggesting the need for complementary explanations. One candidate is the continuous appreciation of the euro between mid-2012 and the beginning of 2014, which has lowered prices of many imported non-energy industrial goods. One can expect this impact to be transitory as the euro has subsequently depreciated since the middle of 2014. This depreciation reflects the differences in the growth cycle between the euro area and its main partners and accordingly the differences in monetary policy. Those explanations do not account for the slowdown in domestic prices, which must then be attributed to an increase in domestic slack. For the European Commission the output gap widened from −2% in 2012 to −3% in 2013.

Nevertheless, in the last couple of years, most measures of inflation expectations, be they survey-based or market-based, have pointed in the same direction of a prolonged period of too low inflation, well below our target of being close to but below 2% over the medium term. As a consequence, monetary policy has become progressively more accommodative. First, in a context of fixed rate full allotment introduced on the 15th of October in 2008 to offset liquidity risk in the market by ensuring banks’ continued access to liquidity, we have introduced forward guidance to avoid an unwarranted tightening of the effective monetary policy stance. Initially implemented in July 2013, this guidance was “firmly reiterated” in early 2014 and remains in place today. Second, the Eurosystem introduced targeted longer-term refinancing operations (TLTROs) and the asset purchase programs for covered bonds and asset-backed securities in June 2014, with the goal of improving the transmission of our monetary policy. Third, the main refinancing rate was cut to 5 basis points and the deposit rate entered into negative territory in two steps (–20 basis points). However, by January this year it was clear that economic recovery as well as monetary and credit indicators were too weak to bring medium term inflation close to but below 2%. Marketbased measures of inflation expectations, even if prone to liquidity shocks, had been falling further below the target and at longer term horizons. The Governing Council was determined to act boldly to counteract the risk of a too low for too long inflation.
As experience is gained, our strategy will be reviewed and may evolve, possibly in the direction of greater emphasis on one of the two pillars. However, this has to be a prudent process, since one of the main functions of a strategy is to provide a tool to facilitate the communication of monetary policy preparations and decisions. Continuity is therefore a major feature of any monetary policy strategy. The effectiveness of a monetary policy strategy and related decisions depend to a large degree on the credibility of the institution. Transparent and accountable policymaking can help to build up a reputation and, hence, credibility. Openness, transparency and predictability therefore rank high on the agenda of the ECB and the Eurosystem. Monthly press conferences given by the ECB’s President and myself are an important part of our communication policy. They take place immediately after the first Governing Council meeting each month, thus providing an opportunity to explain our decisions and the basis on which we have taken them, and to answer questions from journalists. As far as I know, no other central bank communicates with the public in such a prompt manner. Communication is and should not be a one-way street. The ECB must also take note of and be sensitive to its environment in order to be effective in its own polices. But, still, monetary policy has to be conducted independently of short-term political considerations.

And I believe that the best way of managing risks is for those concerned, not just the authorities responsible for the maintenance of systemic monetary and financial stability but more importantly also those actually assuming risks, whether as investors or as financial intermediaries, to be alert to them, and to understand that they may have peculiar characteristics. Then there are importantly those innocent parties in society, who are often hard-pressed to make ends meet or struggling to acquire a dwelling place, who could be further disadvantaged if there were monetary and financial instability, should the risks materialise to the extent of causing a shock of systemic dimension. Sub-prime crisis The FIRST such issue is the sub-prime crisis in the United States. The use of the word "crisis" is not an exaggeration on my part, notwithstanding the absence so far of anything approaching a crisis in Hong Kong. It is the word that is increasingly being used in the developed markets and in international finance when talking about the current difficulties in the United States and Europe that originated from sub-prime mortgages. At the risk of oversimplifying something that is really quite complex, let me make a few observations that might help understand what is going on. First, sub-prime mortgages are really mortgages extended to those who are, to put it bluntly and simply, not credit worthy. And as mortgages are assets on the books of the lenders, subprime mortgages are really sub-standard financial assets.