samchain/econo-pairs-v1 huggingface dataset:
Our research suggests that the sharp buildup of student debt has contributed to large behavioral  BIS central bankers’ speeches  5  changes among the Millennial generation. First, among those with student debt, a growing share continues to live with their parents. For example, we see that states that have experienced sharper climbs in average student debt per graduate since the recession have also shown steeper growth in the rate at which 25 year olds live with their parents. Similarly, our research suggests that student debt has contributed to a decline in home and car purchasing. As shown in the next chart [Chart 7], the proportion of 30 year olds with a home mortgage and the share of 25 year olds with a car loan have dropped much faster among those with SL debt. More serious econometric research indicates that the relationships between increased student debt and both higher coresidence with parents and lower home buying at age 30 are in fact causal and exist whether or not one controls for educational attainment. Holding other factors constant we find that in states with larger increases in student debt per graduate there was a greater decline in home buying by young individuals. Overall, the high level of existing debt and the apparent new norm for college financing, have important long-term implications for the housing market.

Perhaps the most pertinent question, however, is whether these historical “forecasting errors” would have had any decisive consequences for monetary policy if they had been anticipated well in advance. The answer in my opinion is: probably not. Even if we had allowed for the interest expenditure item’s downward effect on CPI inflation in 1996–97, we would still have lowered the repo rate. Neither would it be realistic to suppose that the Riksbank would have, as it were, chased its own tail and lowered the interest rate appreciably more on the grounds that CPI inflation was below the target. In the period in the late 1990s, resource utilisation was already rising rapidly and an even more expansionary monetary policy would hardly have been justified. The instrumental rate in Sweden was a good bit lower than in the United States in these years and also lower at times than in the euro area, at the same time as the Swedish krona was comparatively weak. Concerning the past year’s increase in inflation, it was not the supply shocks that prompted the decision in March to raise the repo rate but the picture that was beginning to emerge of the Swedish economy being rather close to or even somewhat above full resource utilisation. This may be a major problem, not for current inflation but rather for future inflation as activity continues to strengthen.
There is reason to underline the fact that this would already occur during the ERM2 period, even if the shift in responsibility for  BIS Review 29/2003  3  stabilising the economy from monetary policy to fiscal policy would be a gradual one. As the effects of economic policy are exerted with a time lag, this is something that fiscal policy decisionmakers should already be considering. For the Riksbank, the issue would be to define a strategy for monetary policy in the light of the boundaries imposed by fiscal policy and the central rate and conversion rates chosen for the krona versus the euro. Essentially, it is a question of conducting monetary policy in a way that would make the conditions as favourable as possible for ensuring both the attainment of the price stability target and the objective of holding the exchange rate close to the central rate. This is a pre-requisite if we are to meet the entry requirements, or convergence criteria, of monetary union. From this perspective, it is interesting that the forecasts of the development of the exchange rate and inflation indicate that a relatively stable development for both of these variables is to be expected over the coming years. In ERM2, the Riksbank would still have control over the repo rate. Given the boundaries established by fiscal policy in particular, this should be set with the aim of ensuring price stability, as is the case today. Normally, this should not constitute a problem as regards the exchange rate.

It is important that we have both insight and influence in this process in order to be able to do a good job at the Riksbank and also to be able to contribute to creating the best possible conditions for the Swedish financial sector. 8  BIS Review 29/2003  Finally, I mentioned the Riksbank’s own activities after a potential entry into monetary union. Media interest in the Riksbank would certainly diminish somewhat if we no longer set the repo rate. However, our work tasks and operations would not be affected that much. Most important would be changes in the area of monetary policy. Our perspective would have to become more European, while we would also be an important part of the domestic debate on economic policy. In conclusion, allow me to note that a “no” to the euro would not entail any major changes for the Riksbank’s day-to-day business. I expect that we would continue to conduct our operations in much the same way as before. There is a risk, however, that our significance in the international arena would diminish further. BIS Review 29/2003  9
Going forward, ASEAN with a sizeable population of 618 million offers vast investment prospects as the economy is expected to grow strongly for the next few years. ASEAN leaders have also embarked on an ambitious vision to create a single “common market”. Realisation of this vision will lead to a freer flow of goods and services, capital investment and skilled labour across the region. Many initiatives and measures have been implemented under the ASEAN Economic Community Blueprint since its launch in 2007 and many more areas of importance are being discussed and negotiated. Like most regional economic community, ASEAN aims to promote greater regional connectivity in which lessons of history in economic development had shown, would expand economic growth potential. Data has also shown that intra-regional trade flows have already grown substantially among ASEAN-10 members countries reflecting the increasing phenomenon of freer trade with its neighbouring countries in recent years. Consequently, the share of intra-regional trade has also increased, from 22.5% in 1999 to 25% in 2011. Against this backdrop, ASEAN financial markets had also grown significantly in tandem. In particular, the ASEAN fixed income markets, are instrumental to support the growth of intraregional trade, financing and investment in infrastructure. ASEAN fixed income markets have expanded by more than six folds since 2000, and now stand impressively at USD1.1 trillion.

But when asked a subtly different question, about the relative importance of job security for employees versus dividends for shareholders, a strikingly different pattern emerges. A majority of Japanese, German and French company executives put employee job security above shareholder dividends. For UK and US companies, a strong majority place the balance the other way around. This suggests a very different set of managerial objectives and incentives across countries. Empirical evidence on the relatively efficacy of these different models does not give a clearcut answer. Prior to the crisis, some papers pointed to broader stakeholder representation boosting market value (Fauver and Fuerst (2006)), others to it reducing value (Gorton and Schmid (2004)). Experience since the crisis might provide clearer clues. For example, banks with shareholder-friendly boards in general fared worse during the crisis (Belratti and Stulz (2009)). The debate here seems set to continue and this is a place where further research would be valuable. BIS central bankers’ speeches  15  Conclusion Challenges to the shareholder-centric company model are rising, both from within and outside the corporate sector. These criticisms have deep micro-economic roots and thick macro-economic branches. Some incremental change is occurring to trim these branches. But it may be time for a more fundamental re-rooting of company law if we are to tackle these problems at source. The stakes – for companies, the economy and wider society – could scarcely be higher.
Watts, D (2002), “A simple model of global cascades on random networks” Proceedings of the National Academy of Sciences of the United States of America, Vol. 99, No. 9. Available at: http://www.pnas.org/content/99/9/5766.full World Bank (2008), “Globalization and international trade”, World Trade Report. Available at: http://www.wto.org/english/res_e/booksp_e/anrep_e/wtr08-2b_e.pdf  BIS central bankers’ speeches  13

The impact of soaring food and energy prices on catering and transport services became more significant in the first quarter of 2010 (Figure 12). Consequently, annual services inflation, which has been declining since the third quarter of 2008, increased by 1.9 percentage points in the first quarter of 2010. Seasonally adjusted data also indicate that price increases in the services group accelerated compared to the previous quarter (Figure 13). The low base of the previous year caused by the tax cuts in durable goods and the inventory destocking process have been major factors accounting for the increase in core inflation indicators (Figure 14). Reverberations of the rise in cost factors and the limited rebound in demand are also seen in the seasonally adjusted data (Figure 15). Parallel to these developments, medium-term inflation expectations, which started to increase in the last quarter of 2009, maintained this trend in the first quarter of 2010 (Figure 16). While expectations displayed an increase in all maturities, the difference between expectations and targets became wider (Figure 17). However, the increase in medium-term expectations remained relatively limited. 2. Monetary policy response  After commenting briefly on inflation developments, I would now like to cover the policies pursued by the Central Bank during the last quarter. Anticipating that inflation would decrease sharply following the last quarter of 2008, the Central Bank of Turkey (CBT) focused on alleviating the potentially harsh impact of the global financial crisis on the domestic economy.
3  All speeches are available online at www.bankofengland.co.uk/speeches  3  But before you all rush to sign up as central bank Chief Risk Officers, free forever from the headaches of commercial capital management, a word of caution. Central banks cannot create money willy-nilly without imperilling inflation, undermining their own monetary stability goals. They typically only lend large amounts on a secured basis – so their lending is limited by the supply of collateral available in the private sector. And, perhaps most profoundly of all, weakly capitalised central banks may find it hard to convince markets that they retain the ability to pursue their broader policy objectives without potentially costly recourse to fiscal resources, or further currency debasement. These limits on central bank balance sheet expansion – 1  sometimes referred to as ‘policy solvency’ constraints – can be every bit as binding as financial solvency requirements. Recent developments in the Bank of England’s own financial risks Despite central bankers’ readiness to enter burning buildings, and the lack of a binding financial solvency constraint, the Bank of England’s balance sheet was actually very modestly sized in the decades leading up the financial crisis, at less than 5% of UK GDP (Chart 2). The Bank did provide emergency assistance in the 2  mid-1980s and early 1990s , but (by recent standards at least) those exposures were small and short-lived. Other than that, the Bank primarily held high quality, low-duration assets to back a relatively stable stock of sterling banknotes and commercial bank reserves.

•  RMB deposits grew more than 20% year-on year. •  Average daily RMB FX turnover grew more than two times in 2014. RMB is now one of top 5 most actively traded currencies in Singapore. •  Aim in coming years is to: o  Grow RMB capital market activities, including through promoting RMB bond issuance;  o  Enhance RMB asset management capabilities, leveraging on RQFII; and  o  Promote cross-border RMB financing, building on RMB pilot for Suzhou Industrial Park and Tianjin Eco-city. Making concerted efforts in two areas that cut across asset classes: skills and technology. 63. First, SkillsFuture. •  We want to be a financial centre that is among leaders globally in workforce skills and expertise, with a strong core of Singaporeans at every level. BIS central bankers’ speeches  9  •  MAS in partnership with industry and educational and training institutes, will undertake initiatives to strengthen support for finance professionals to: o  o o  learn continuously, develop expertise, and make strong contributions throughout their professional careers. 64. Second, Smart Financial Centre. •  We want to be a financial centre where innovation is pervasive and technology is used effectively to: o o  o  o •  10  increase efficiency, create new opportunities, manage risks better, and improve people’s lives. MAS in partnership with industry will drive initiatives to create a vibrant ecosystem for innovation and adoption of new technologies while fostering safety and security. BIS central bankers’ speeches
The average annual growth rate of above 2.5 per cent is higher than the average in the boom period in the 1980s. In a way, perhaps this is hardly surprising. The weak exchange rate gave exports a strong impetus and there was plenty of unutilised capacity. But I do not think many people expected that such high growth could be combined with low inflation. In these years Sweden has rejected the policy from the decades of high inflation and reinstated the time-honoured tradition of annual price increases around 2 per cent. Inflation has also been low in an international comparison. Judging from the expectations of economic agents, a low-inflation regime has now been established. The composition of growth has also been favourable. After decades of growth that was generated to a high degree by rising consumption—with an accumulation of external debt—it is a healthy sign that expansion been associated with strong export demand and industrial investment. One result of this, the large current-account surpluses since 1994, has made it possible to repay external debt. A dramatic turnaround has also been achieved in government finances. Massive budget deficits have been succeeded by a surplus. This trend is primarily a consequence of the economic recovery, just as declining activity was the main cause of the earlier fiscal collapse. But without the extensive measures for budget consolidation, neither the economic upturn nor the improvement in government finances would have been feasible. Tax increases and spending cuts on the scale we have experienced in recent years obviously leave their mark.

Against this background, the Stability Programme Update considers a continuation of the fiscal adjustment which, in any event, would still entail in 2021, eight years after the start of the economic expansion, a structural deficit of over 1 pp of GDP and public debt of almost 90% of output. Maintaining levels of public debt around those currently prevailing in the Spanish economy involves significant costs that need to be taken into account. It entails the deviation of major resources for interest payments and, above all, vulnerability in the face of episodes of tightening financing conditions on international markets, restricting the possibilities of pursuing a countercyclical fiscal policy at times of economic recession. In sum, it is most important to harness the current favourable circumstances of the Spanish economy to redress, as soon as possible, our structural deficit and public debt levels, bringing them in line with the standards set by our legislation and European regulations. I would underscore, too, the challenge posed by the ageing of our population, in particular for our pension system. This is essentially a medium and long-term challenge; but for that very reason, tackling it appropriately is more difficult than other, shorter-term challenges. The latest Social Security reform, in 2013, introduced two automatic adjustment mechanisms (the Sustainability Factor and the Revaluation Index) which sought to ensure a balance between the system’s revenue and expenditure.
Lars Nyberg: The Swedish card payment market - current challenges and future developments Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at Scandinavian Card Markets, Stockholm, on 3 February 2003. *  *  *  To begin with, I would like to thank you for the invitation to participate in this conference. Given the short time at my disposal, I will confine myself to discussing a few of the salient features of the evolution of the card payment market in Sweden, identifying also the forces that appear to have driven this evolution. Judging from the latest innovations in this area, I will touch upon possible future developments. Lastly, in my capacity as central banker, I will talk about some relevant policy issues. The evolution of the card payment market in Sweden Let me start by making a few observations concerning the market development in Sweden. 1. Card payments have grown rapidly, but the use of cards is still far behind that of the other Nordic countries (fig.1). Between 1990 and 1997, the number of card payments per capita in Sweden grew at a steady pace, picking up speed quickly at the end of the decade. Still, when the new millennium started, the number was no more than half of what can be observed in the other Nordic countries. This is somewhat surprising, considering that payments systems and payment patterns are otherwise quite similar in these countries.

26.10.2020  The banking sector and the challenges posed by the pandemic III Foro Banca de El Economista: The present and future of the financial system Pablo Hernández de Cos Governor  *English translation of the original speech in Spanish  Ladies and gentlemen, good morning: I should like to start by thanking the organisers of this event for inviting me to participate in the III Foro Banca. Allow me also to mention in relation to the content of my address that, as a member of the Governing Council of the European Central Bank (ECB), I am required to observe the so-called “quiet period” preceding meetings at which monetary policy decisions are to be taken. Accordingly, my reflections should not be interpreted as indicating the monetary or economic outlook. In the context of the COVID-19 pandemic and its already significant impact on the economy, the specific challenges facing the banking sector, both in Spain and internationally, are particularly relevant, given the role it plays in supplying financing to the productive sectors of the economy and households. It is evident that the crisis generated by the pandemic has intensified the credit, market and operational risks faced by the banking sector. It is also evident that the improvements made by the sector over the last decade, as regards the quality of its balance sheet and its solvency levels, have placed it in a better position to absorb this crisis and to continue supplying the financing that the economy requires.
They are an innovation in the true sense of the term which will affect not only capital headings or financial statements but also business strategies, risk management, etc. Take, for example, the issue of transparency, both in Basel II and in IAS. This does not involve merely disclosing specific information to the market. The requirements in this area represent a far-reaching revision of the means of compiling financial information. That will not only affect financial statements; it will also influence banks’ decision-making arrangements. Undoubtedly, this revision will entail changes to information-gathering systems, both quantitatively and qualitatively. Banks must therefore be prepared for the consequences of greater public scrutiny of how they do business. This involves not only giving more information, but explaining decision-making, and addressing the consequences that greater transparency may have for relations between managers and current and potential investors, analysts, depositors, credit rating agencies, auditors and, also, supervisors. Turning to IAS, the Banco de España, as a supervisor with a legitimate interest in bank accounting, will continue to play an active role in shaping the accounting rules applicable to credit institutions. That said, it is vital that banking institutions should accept the qualitative changes imposed by the new accounting environment. Specifically, IAS impose greater responsibility - the corollary of their flexibility - on bank managers, which is in contrast to the current state of affairs, where the precision of accounting rules largely limits discretionality.

In late 2002 and early 2003, the economic outlook and the trend of financial variables in Latin America improved perceptibly, especially following the positive developments in Brazil and Argentina. The recent crises have highlighted deep-seated shortcomings in the legal and institutional workings of these countries. Emphasis has thus been placed not only on the need to pursue policies supportive of monetary, financial and fiscal stability, but also on how important an institutional framework respectful of property rights and private enterprise is for fostering growth in these countries. Factors of a more global nature have also been pivotal in the recent crises. These have been related to greater risk-aversion on international financial markets, which has caused capital flows to some of these emerging economies to shrink. International markets have, however, tended to be more selective, and there have been fewer episodes of crises spreading from one country to another, although contagion cannot be said to have disappeared completely. The recurrence of these crises has led to reflection on the so-called “architecture” of the international financial system. Numerous reforms have been proposed in this connection. And some have been adopted, and are generally in the initial stages of implementation. Much remains to be done in this area, although the acceptance of sovereign bonds incorporating the so-called collective action clauses, issued by Mexico, Brazil and Uruguay, offer grounds for hope.