samchain/econo-pairs-v1 huggingface dataset:
It is against this background that the measures adopted to soften the economic and social consequences of the war must be assessed. The National Plan to respond to the economic and social fallout of the war in Ukraine, approved by the Spanish Cabinet on 29 March,5 includes measures that will come at a direct cost of € billion in 2022, according to Government estimates.67 One area of fiscal policy where more resolute action would be desirable is the formulation of a credible commitment to budgetary stability over the medium term. This would help limit the risks of financial market tensions that could be fuelled by the current climate of high uncertainty. This commitment should take the form of a gradual fiscal consolidation programme, to be implemented once the recovery takes hold. A gradual adjustment process minimises the possibility of any abrupt changes in the budgetary policy stance that might hamper the recovery under way. Increasing the economy’s potential output would also help reduce the high level of government debt. This would require reforms that address the economy’s structural shortcomings. NGEU funds could also be particularly useful in implementing these reforms and the investments required to support the changes. 5  See Real Decreto-ley 6/2022 (available in Spanish only). 6  In addition to this amount, there is a contingent liability of € billion linked to the new ICO guarantee facility approved as part of the raft of measures to support business liquidity needs stemming from the temporary increase in energy and fuel costs.

The measures included in this plan would have a positive impact of 0.2 pp on the average GDP growth rate. 3  situation, use of the Next Generation EU (NGEU) funds and financing conditions that, while somewhat tighter than in previous quarters, remain favourable. Turning to the inflation forecasts, in step with the paths of the corresponding futures markets, the upward pressures of the energy component are expected to peak in the second quarter of 2022 and then decelerate. The inflation projections rest on two assumptions: (i) that, in line with the information from the EBAE, the pass-through of higher intermediate costs to final prices will only be relatively moderate (albeit more forceful than envisaged in the December projection exercise); and (ii) that the second-round effects will be limited, i.e. scant feedback effects between inflationary pressures on prices and wages. Inflationary pressures will be partly alleviated by the measures contained in the National Plan to respond to the economic and social consequences of the war in Ukraine.4 Furthermore, these projections do not yet include the possible changes in prices on the electricity market that are currently being negotiated in the European Union. Against this backdrop, the projections see inflation standing at 7.5% in 2022. It will then fall in 2023 to around 2%, thanks, above all, to the moderation of the energy component. Underlying inflation will not start to decline until end-2022, once the upward pressures on firms’ costs associated with energy prices and bottlenecks have corrected.
Conclusion (i): It is important not to lose sight of inflation and inflation expectations My conclusion that it is important not to lose sight of inflation and inflation expectations may seem obvious and trivial to many people, but it is nevertheless worth some reflection. Moreover, the international debate that has arisen recently suggests that it may not be so obvious after all. One apparent reason for keeping sight of inflation is that it has turned out to be surprisingly difficult to bring it back on target once it has fallen, particularly if inflation expectations have fallen too. I have to admit that I, for one, underestimated these problems. One possible explanation is that I, probably along with many others, had been lulled into a belief that the positive developments in the years prior to the financial crisis confirmed that we had succeeded in tackling the more significant problems and that the inflation target was completely credible and more or less a natural element of the Swedish economy. Of course, that it is important not to lose sight of inflation is easy to say, but it is harder to live up to. Obviously, it was not the Riksbank’s intention for inflation to become as low as it did and for such a long time. 11 We made the best forecasts we could and implemented the policies we deemed to be the most appropriate.

SPEECH DATE:  6 Dec 2017  SPEAKER:  Deputy Governor Per Jansson  VENUE:  Fores, Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The ideological debate on monetary policy – lessons from developments in Sweden∗  These are unusually exciting times to be working at a central bank. Challenges have always been present, of course, but I think that it could be claimed that seldom have they been of such a fundamental nature as they are today. One example is the debate on limiting central banks’ independence that has arisen recently. This has come about after several countries have found themselves unable to conduct monetary policy using policy rate adjustments alone. Instead, they have had to complement this with tools that some observers feel have blurred the boundary between monetary policy and other economic policies. Another example is that technological progress within the area of payments has led to the rapid decline of cash usage in a number of countries, not least Sweden. Whether and how this trend will affect the conditions for conducting monetary policy and whether it provides reason for the central banks to issue electronic money as a complement to physical cash will be the focus of intense discussions in the period ahead. These are important and fundamental issues.
Lowering the limit to 80 per cent would lead, over a 10-year period, to about the same effect as the proposed amortisation requirement, and even lowering it to 75 per cent would result in a smaller effect looking 10 years ahead than a debt-to-income limit of 600 per cent. It is clear from what I have said so far that it is hard to find an individual measure which could prevent indebtedness from increasing from a 10-year perspective. A combination of measures may therefore be needed. One example of a “package of measures”, which I have discussed on previous occasions, includes an amortisation requirement, halved tax relief and a debt-to-income limit of 400 per cent. A summary of the effects of these measures offers a very rough estimate of the total effect, and indicates in this case that indebtedness would level out to around the level seen today (see Figure 14).

Figure 11 Household debt as a percentage of disposable income Per cent 220  220 Scenario without measures  210  210  200  200  190  190  180  180  170  170  160  160  150  150  140  140  130  130 05  10  15  20  25  Note. Broken red line shows an estimate of developments over the next 10 years without further measures. Shaded area indicates a feasible lower limit for when the risks are elevated in the economy. Sources: Statistics Sweden and the Riksbank. We have also developed examples to broadly assess how different measures influence the development of household indebtedness, which can then illustrate what is required to help this indebtedness level out. Finansinspektionen’s proposal in the spring of an amortisation requirement means that new mortgage borrowers with loan-to-value ratios above 50 per cent must amortise 2 per cent of the loan per year down to 70 per cent, and then 1 per cent per year down to 50 per cent. 17  It is assumed in the debt forecast that rising interest rates between 2018–2025 will contribute to housing prices rising at a slower pace than the period 2005–2015. The development of housing prices is determined by a model in which price developments are determined in the long term by developments in households’ financial assets, disposable income and mortgage rates after tax. Debts are assumed to follow housing prices.
Summing up, although I described our market infrastructure in Hong Kong as relatively mature, you will have realised - if you were ever in any doubt - that there is no shortage of change and of potential new opportunities, although possibly not so many as in one or two of the other economies, which I reviewed earlier. I hope that all of you will participate in the continuing evolution of Hong Kong’s capital markets, and use Hong Kong as your base for incursions into other territories where similar or greater opportunities exist. Our aim in Hong Kong is to provide an open and welcoming environment for business, and to be judged on our merits as a truly international centre which possesses that all important critical mass across the full range of financial, professional and commercial services and is ideally located as a hub for the region’s future development. Note: FDI=inward foreign direct investment; for India the first three columns are 198896, and the fourth 1991-96. BIS Review 52/1999  4  5  BIS Review 52/1999

Importing the stability-oriented policy that had long been conducted in the EMU's core countries helped to create better conditions for future growth. The policy model we now follow comes originally from Germany. During the entire post-war period they have endeavoured, to a great extent successfully, to maintain price stability. The task of achieving this has fallen to the German central bank - the Bundesbank - which has operated independently, at arm's length from party politics. The Bundesbank model is now copied by a number of industrial nations, which have given their central banks a large degree of independence and the task of aiming for price stability. This policy is also reflected in the Maastricht Treaty and in the Riksbank legislation. My colleagues in the major industrial nations also try - as long as they are sure that inflation is not about to deviate from the desired level to take account of economic activity and unemployment. There are thus considerable similarities and this applies not only in Europe, but also in a comparison with, for instance, the US, although the stipulated targets vary, sometimes for historical reasons. In this sense we are all the children of the Bundesbank! Within the central bank world the methods of working have also become more similar in recent years. Although not all industrial nations with a floating exchange rate say that they use inflation targeting, they actually do so in some form.
With our unique advantages and strengths – including the common law system and world2/4  BIS central bankers' speeches  class financial regulations and market practices – Hong Kong will remain the leading portal for international investors seeking opportunities on the Mainland. 21. T he second trend that is creating opportunity in – and for – Hong Kong is fintech development. We already have a thriving ecosystem for finance and technology businesses here. This has been bolstered by the HKMA’s Smart Banking initiatives, which have catalysed digitalisation in the banking sector, driving faster and more efficient services for customers. I’m sure many of you are finding banking and payments much more convenient than before. 22. We will continue to work with the banking industry to apply technology to enhancing finance for customers in Hong Kong. We will explore greater use of artificial intelligence and data analytics in banking operations. We will also explore improvements to Hong Kong’s data infrastructure so that bank customers, particularly small businesses, can make better use of their own digital footprint to enhance their access to finance. And we will adopt the latest technologies for cross-border applications, such as international payments and trade finance. Our vision for Hong Kong to become a leading global fintech hub will create a wealth of opportunities for local and international players. 23. The third trend driving opportunity is green finance. Hong Kong is already at the forefront of promoting the role of finance in driving the transition to a more sustainable economy.

We believe, rightly, that the banks entrusted with our life savings are prudent. When we transfer money, we don’t worry about whether the payment system will get the funds to where we want them to go. We also expect that the currency we hold will be stable – and that we will not wake up one day to find that our purchasing power has been eroded overnight. 1/4  BIS central bankers' speeches  9. In Hong Kong, you and I expect all of this to run like clockwork. And it does. But it’s only when the smooth operation of our monetary and banking systems is put under test by severe external shocks that we will see a reflection of true resilience. 10. We all know the challenges Hong Kong has faced over the past year, including social events, COVID-19, and the China-US tensions. Despite all these challenges for our economy, Hong Kong’s financial system has remained remarkably stable. 11. The value of the Hong Kong dollar has stayed close to the strong side of its trading band for most of this year. There have been strong inflows to the local currency, partly because of substantial demand for Hong Kong equities, including some large IPOs, and partly because of the very strong market confidence in the Linked Exchange Rate System. 12. There have been talks about capital flowing out of Hong Kong, especially during the peak of the social events last year.
The challenge ahead is to help manage the transition to a monetary system that provides flexibility in the exchange rates of all the major economic areas, and this has to be handled with care. Even with good policy choices here and in other countries, bringing these imbalances down to a more sustainable level will take time. During this period of adjustment, despite our fundamental economic strengths, we will be vulnerable to an elevated risk of volatility in financial markets. This prospect makes this a good time to examine the health of the financial system. The strength of the financial system is a major factor in determining how well economies respond to shocks - weak financial systems amplify the damage to growth. The stronger the financial system, the more effective policy - monetary policy in particular - can be in cushioning the effects of those shocks and helping to restore expansion. We are fortunate in the United States today to have a strong financial system. This system has a tremendous capacity to match capital to ideas, reward innovation, and channel savings to the highest return. And it has demonstrated a capacity for very considerable resilience and stability in face of shocks. What are the main sources of these strengths? Our banks are stronger than they have been in the past. Their larger earnings capacity, higher capital cushions, and the greater diversity of their activities help shield them from a broader range and greater magnitude of shocks than in the past.

The payments system we live with today is a complex mix of national and cross border systems originally designed for a safer, slower, less complex, more segmented financial world. While many improvements have been made to this system over time, it is important that we work to strengthen further the core infrastructure of the payments system. We also need to promote further evolution in the framework of supervision and regulation of our more complex and integrated global financial system. To paraphrase Bob Rubin in a different context, we need a framework for supervision and regulation that is “as modern as the markets” and that stays abreast of the pace of change and innovation. Perhaps the greatest challenge we face – in macroeconomic policy and in financial supervision - is a challenge of imagination: How do we best prepare for the low probability of an extreme event; a crisis not captured by past experience? How do we generate the will today to build a greater degree of insurance against a more uncertain future, particularly if the risk of adversity seems remote and the immediate future looks strong? We can take considerable reassurance from apparent moderation in overall macroeconomic volatility recently, and from the ease with which our system has handled recent stress. Prudent macroeconomic policy actions will increase the likelihood that these beneficial circumstances will continue. But we cannot know with confidence that the future will bring an enduring reduction in volatility and risk, and it would be imprudent to plan for such a world.
There will always be financial firms that fail through making bad judgements and taking risks which crystallise; or because unforeseeable events crop up. We have to allow that to happen in an orderly manner and without the use of public money. But good supervision should make sure that financial firms are focussed on the big issues, are appropriately capitalised, sufficiently liquid and not excessively leveraged. The PRA will focus on those institutions and issues which pose the greatest risk to the stability of the financial system. And their approach to supervision will be to make forward-looking judgements about the risks posed by firms, based on evidence and analysis (and not constrained by a narrow interpretation of either domestic or EU rules). Second, the Financial Policy Committee is now established with statutory powers. Its primary objective is to identify, monitor and take action to remove or reduce systemic risks with a view to protecting and enhancing the stability of the UK financial system whilst having a secondary objective – like the MPC – to support the economic policy of Her Majesty’s Government, including its objectives for growth and employment. Much of the work of the interim Committee on which I served for the past two years was geared towards trying to ensure that banks have enough capital. Frankly, the banks did not like this very much, since raising capital in the current environment would appear to reduce the return on equity in the short term.

But banks and building societies need to be seen as safe and sound to fund themselves and to secure other business. When banks are under-capitalised, raising capital can improve the market’s perception of their creditworthiness and so make it easier for them to borrow more cheaply. If we are to have a set of banks fit to provide credit and offer payments services to the UK economy, they must be better capitalised and less leveraged than they have been in the past. I want to make one point about this debate which bears repeating: if a bank becomes better capitalised that need not be at the expense of lending to the real economy – capital is actually a source of funding which supports lending. And an improved capital position, for most of the large lenders, need not come about by reducing real economy lending but by a number of actions such as restricting distributions (salaries, bonuses or dividends), by raising new capital or by running down other parts of their balance  BIS central bankers’ speeches  1  sheets. The FPC has always been explicit that banks should not meet the need for more capital by reducing lending to the real economy. The new FPC is one of a small number of macroprudential committees in existence. Few other advanced economies have delegated such macroprudential powers to a technical committee. Will it work to make the UK financial system more robust? I hope so.
In particular, it is important that the measures are first and foremost designed to correct false incentives and to guide them in the right direction so that, first, unprofitable financial institutions leave the market of their own accord and, second, potential losses are borne by these institutions themselves, and not by the state. Consequently, in my opinion, measures such as a ban on proprietary trading or the introduction of a narrow banking system, that intervene too strongly in banks’ business models, are not very suitable. Such measures neither target the objective nor are they in line with the basic principles of the market economy. With regard to the TBTF issue, this principle has prompted the committee of experts appointed by the Swiss Government to draw up proposals including the creation of incentives for banks to become less systemically important overall, thereby reducing potential costs for the economy. At the same time, the committee of experts’ proposal will allow for improved resolution in the event that insolvency appears imminent, and this will significantly alleviate the TBTF problem. Are the measures “structural”? A second criterion is that the measures should not just address the specific circumstances of the most recent crisis. In other words, fighting the last war will not win the next one. At the same time, the lessons of history show us that certain basic mechanisms repeat themselves in every crisis. Consequently, it is very important that we recognise these general patterns and include them in regulatory considerations in order to improve our crisis prevention.

Specifically, industries manufacturing and selling consumer and investment goods have increased their financial flows above pre-pandemic levels. In contrast, sectors producing intermediate goods (that is, intended for further processing) and many consumer service industries are still to restore their financial flows and business activity. If we estimate the year 2020 in general, GDP will decline by about 4% owing to high performance in Q3. The economy bounced back significantly in response to the easing of restrictions and support measures. It is also worth noting that, amid limited opportunities to travel abroad this year, households kept over 1.5 trillion rubles earlier spent for outbound tourism. In 2020, these funds could partially be saved, but a portion of this amount was spent in Russia, propping up domestic demand. Fiscal measures provide significant support to the economy. This year, budget spending increased by over 14% against 2019. 2/4  BIS central bankers' speeches  Recovery growth is expected to resume steadily in spring 2021. Given the economic situation and price movements, the ratio of proinflationary and disinflationary factors and risks has altered considerably. Indeed, demand trends, especially amid the drastic aggravation of the epidemiological situation, continue to contain price growth. However, this impact is currently offset by the above-mentioned proinflationary factors. As I have already said, we will assess whether these factors become steady against the backdrop of increased inflation expectations.