samchain/econo-pairs-v1 huggingface dataset:
Luis M Linde: The challenges of the Spanish economy Opening remarks by Mr Luis M Linde, Governor of the Bank of Spain, at the XXIII Meeting of the Financial Sector, organised by ABC, Deloitte and Sociedad de Tasación, Madrid, 19 April 2016. *  *  *  Introduction Let me begin by thanking Deloitte, Sociedad de Tasación and ABC for their kind invitation to deliver the closing address of this first session of the XXIII Financial Sector Meeting, devoted to analysing the challenge of profitability in an environment which is most definitely uncertain. I would like to address the situation of the Spanish economy and its main challenges. The recovery of the Spanish economy over the past three years has been one of the highlights of recent developments in the euro area. To explain it, we must consider both structural or more durable factors, and temporary ones, some of which have been given by the international context. The structural factors relate to the still-incomplete correction of the main imbalances built up during the last cyclical upturn and during the crisis, but also to the improved financial landscape. The job creation observed since 2013 has been a significant prop for demand and, by sustaining household disposable income, for the improvement in confidence. In the course of 2015 there was further progress in the ongoing deleveraging of households and firms, and Spain posted an external surplus or net lending, based largely on the gains in competitiveness achieved since the onset of the crisis.

This course will provide first and foremost, an overview of the international standards relating to AML/CFT supervision matters, operational aspects of the supervision work by incorporating publicly available case studies in the training modules, technical aspects of anti-money laundering and combating the financing of terrorism, supervision of banks, conduct of on-site and off-site bank supervision, and sharing of real bank cases on supervision on AML/CFT. BIS central bankers’ speeches  1  I do hope that aside from benefiting from the course, participants will make full use of these forums as a platform to network and exchange views on key AML/CFT supervisory issues, collaborate, compare practices and share relevant information. On that note, I would like to once again thank all of you here today for attending this workshop and for the speakers, Mr Stuart Yikona, Ms. Pramita Moni Sengupta, Mr. Mehmet Kerse, Ms. Desiree Ann Chereebin and Ms Leonora Emini who are willing to share your experiences for the collective benefits of everyone here attending the workshop. Our appreciation again to the Government of Canada for the support for this programme. I wish all of you a successful and productive workshop ahead and please take the time to explore Kuala Lumpur and its surroundings. Thank you and have a pleasant and enriching day ahead. 2  BIS central bankers’ speeches
This may become a problem for the euro area, if such differences become persistent and hamper the transmission of monetary policy and the smooth functioning of the currency union. The ECB can only make monetary policy for the euro area as a whole, without tailoring it to the needs of any particular country. This makes it vital that such divergences in national inflation and real interest rates are kept in check by national structural and fiscal policies. Government support measures that are taken to shield the economy from the impact of high and volatile energy prices must be temporary and well targeted so that they preserve the right incentives for consumers and energy producers, and do not overburden government finances. In setting monetary policy, central banks must not hesitate to fight high and persistent inflation. Keeping prices stable is the best contribution we can make to the economy, and doing so is essential if we want to see purchasing power recover and businesses regain the confidence to invest and create jobs. If we hesitate, we may later have to raise interest rates much higher, and keep them high for much longer, in order to get inflation down to its target of two per cent and to keep it there. With this I will conclude. Thank you for your attention, and I will be happy to answer any questions you might have. 7/8  BIS - Central bankers' speeches  1 ECB Economic Bulletin 7/2022 2 Bruegel: Does inflation hit the poor hardest everywhere?

Against the backdrop of a dramatic appreciation of the Swiss franc, the Swiss National Bank resorted mainly to interventions in the foreign exchange market, supplemented for a while by a minimum exchange rate for the Swiss franc against the euro. Since the discontinuation of this minimum exchange rate, the SNB has charged interest – known as negative interest – on the sight deposits of banks. The aim of all these measures has been to stabilise price developments and to support economic activity. The financial crisis has had the effect of generally raising the level of public interest in monetary issues – not least the question of how, given the strong expansion of liquidity, the interaction between central banks, banks and the public affects money and credit aggregates. 1 For obvious reasons, the financial crisis also spurred debate in the world of financial market regulation, with central banks and financial market supervisory authorities grappling with weaknesses exposed by the crisis. Their conclusions are reflected in the new international minimum requirements known as Basel III, as well as in supplementary national regulations. The most important adjustments include stricter capital requirements and the introduction of international liquidity standards for banks. Some radical proposals have also gained traction as a result of the crisis. In Switzerland, the sovereign money initiative attracted enough signatures to ensure a popular vote. The initiative demands that the creation of money and the granting of loans be separated by barring commercial banks from creating deposits through lending.
Likewise, some of our new instruments could be more efficient to address financial stability concerns. For instance, under some dimensions, balancesheet policies differ markedly from interest-rate policies. By providing valuable safe assets to banks – central bank reserves – a high level of central bank reserves can support their smooth functioning. Even more importantly, it can mitigate the risk that banks will try to supply the demand for safe assets by engineering them themselves. Privately issued safe assets are poor substitutes for public safe assets. xiv b/ Keeping the purchase of private assets to a minimum In any case – and this is my second remark – the purchase of private assets by the central bank should be kept to a minimum. Indeed, the asset-side of the balance-sheet – what assets the central bank buys with the reserves it issues – matters a lot. Buying an excessive amount of private assets such as corporate bonds could run the risk of distorting the signal that asset prices convey on the assets’ riskiness. The present compression of risk premia and credit spreads might already increase risks to financial stability. **  Page 9 sur 11 Conclusion I have restricted my remarks on financial stability to the policies that fall, at least in part, within the realm of a central bank. However, as I have emphasized earlier, monetary and prudential policies are not the only policies available.

19(2), pages 04-77 -Woodford (2018), Monetary Policy Analysis when Planning Horizons are Finite, NBER Working Paper No. 24692  i  I would particularly like to thank Matthieu Bussière, Stéphane Dupraz, Mark Deen, and Olivier Garnier for their help in preparing this speech. ii On the measurement of the natural rate of interest and the uncertainty surrounding its long-term component, see e.g. Holsten, Laubach and Williams (2017), Hamilton et al. (2019), and Brand, Bielecki and Penalver (2018). iii On the opportunity of relying on fiscal policy in a low-rate environment, see e.g. Blanchard (2019). iv On the issues surrounding the measurement of potential output and natural unemployment, see e.g. Orphanides and van Norden (2002), Coibion, Gorodnichenko and Ulate (2019) and Aiyar and Voigts (2019). v For early research on firms’ expectations, see e.g. Coibion, Gorodnichenko and Kumar (2018) and Coibion, Gorodnichenko and Ropele (2018). vi On the forward-guidance puzzle and possible solutions to it, see e.g. Del Negro, Giannoni and Patterson (2012), Nakamura, Steinsson and McKay (2016), Gabaix (2019), and Woodford (2018). vii See e.g. Bernanke, Kiley and Roberts (2019). viii Monnet (2014) and Monnet and Vari (2019), among others of his work. ix Stein (2013). x Protocol on the Statute of the Eurosystem and the ECB, Article 3.3. xi For recent historical accounts of the ECB’s monetary policy in general, and monetary pillar in particular, see Hartmann and Smets (2018) and Rostagno et al. (2019). Page 12 sur 11 xii  See Svensson (2017) and Ajello et al.
But maps of the topology or wiring of the financial sector can be revealing about the strength, direction and complexity of the counterparty links between, and interactions among, financial firms. As one example, Chart 6 looks at the interbank connections between UK banks in 2013. 10 This suggests the wiring of the interbank network is messy and dense. The network’s epicentre is a small set of large banks with a very large number of connections – “superspreader” banks. There are, in addition, a large number of peripheral banks with few connections. In other words, the interbank system has all the properties of a classic scalefree network. Chart 7 looks at the pattern of interbank funding exposures among UK banks. It, too, suggests a complex web with scale-free properties. Networks with these properties are prone to failures among the super-spreader nodes. Since these are likely to be the entities most exposed to “too complex to manage” problems, this topology harbours a potential systemic vulnerability, the type of which was exposed in 2008. 9  “True Cost of complexity in the banking sector”, Simplicity Consulting (2012). 10  It is taken from Langfield, Liu and Ota (2014). Exposures comprise unsecured loans, marketable securities, CDS sold minus CDS bought, securities lending and repo and derivatives exposures. BIS central bankers’ speeches  7  Complex interactions are not confined to the banking sector. The non-bank (“shadow” banking) sector has become increasingly important over recent years.

This is particularly the case when the network has scale-free properties – in other words, a coreperiphery-type topology. These points can be brought to life using some simulations of the statistical distribution of a simple set of systems of systems. These are constructed by mixing together component distributions, which proxy the layers or sub-systems. These layers may themselves be complex. This mixing of layers, or distributions, is done using an assumed distribution of correlations, which may itself be non-normal and complex. In other words, there are multiple layers of complexity in this system of systems. The inputs to the simulations are shown in Table 1. Chart 1 shows a set of joint (system-wide) distributions from these simulations, where each line represents a probability contour of the distribution. 3 Chart 1a is the baseline case. It involves a mix of two normal distributions with a low correlation coefficient (0.3) where these correlations are themselves normally distributed. 4 This joint distribution represents a twolayer system of systems, with neither layer complex (hence the normal distribution for each) and where the correlation between the sub-systems is weak and regular. The resulting joint distribution is slightly more elliptical than the normal – meaning a greater likelihood of large positive or negative outcomes occurring simultaneously – but is otherwise unexceptional. 5 We can now add progressively greater degrees of complexity to this base case to assess its impact on the distribution of systemic risk.
The Swedish debate has also been stormy. Something that I feel is often disregarded in this debate, or at least underestimated, is that the Swedish repo rate is not set in a vacuum. We must take account both of the fact that global real interest rates are very low and that monetary policy abroad is highly expansionary. Both of these factors put restrictions on which monetary policy it is possible to conduct. I shall return to this shortly. Of course, it should also be remembered that the introduction of negative interest rates means a fairly marginal increase of monetary policy scope – when all is said and done, it is hardly possible to cut the rate into negative territory by several percentage points. Many central banks have also attempted to increase scope for monetary policy by purchasing various securities. It seems highly likely that this has contributed towards preventing considerably weaker economic development. But it is still not easy to determine how efficient this kind of policy actually is. Above all, it is uncertain whether it can form an adequate alternative to adjustments of the policy rate if the global level of interest rates should remain very low for an extended period. I will return to the low global level of interest rates soon. Until then, allow me just to observe that this is an important reason for why monetary policy is more difficult to conduct today than it was a decade ago.

Third parties like the media and research analysts also have a role to play. They can shine the spotlight on exemplary companies as well as highlight questionable practices. Let me cite two commendable initiatives. •  The National University of Singapore and the Business Times have developed and publish regularly a Governance and Transparency Index, which assesses and ranks companies based on their corporate governance practices and the transparency of their financial results. 2  BIS central bankers’ speeches  •  The Securities Investors Association (Singapore) will introduce a new corporate governance page on its website to provide investors with more information on the corporate governance practices of the top 100 companies selected through the use of a corporate governance scorecard. 15. It is also encouraging to see an increase in local media coverage of corporate governance issues. But there is one area where I believe the media can do better. Media reports following a company’s AGM tend to focus excessively on the remuneration of the CEO and the directors, with precious little commentary on the company’s performance, business strategies, or risk management. I am not suggesting that remuneration issues are not appropriate areas for scrutiny – they very much are – but we need a more holistic assessment of our companies, and the media plays an important educational role in this regard, especially for retail investors. Building board competencies 16. A second area where we need to go beyond the rules is in raising the competency levels of our Boards.
Jean-Pierre Danthine: Market developments, Swiss monetary policy and foreign exchange reserve management Introductory remarks by Mr Jean-Pierre Danthine, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 16 June 2011. *  *  *  In my remarks, I would like to examine three topics. First, I will comment on developments in the international financial markets. Then I will briefly address the situation in the Swiss franc money market and the implementation of monetary policy. Finally, I will talk about the management of the foreign exchange reserves. Developments in the international financial markets Developments in the international bond, share and foreign exchange markets are mixed and, as before, characterised by relatively high volatility. The relatively favourable global economic developments and the fact that the balance sheets and the liquidity situation of corporations outside the financial industry are in relatively good – in some cases very good – shape are having a positive effect. By contrast, the balance sheets of many governments reflect the consequences of crisis measures and increasing structural debt problems. Thus, in recent quarters, the financial markets have presented a mixed picture. Signs of an improvement in the prevailing mood have been followed by setbacks attributable to the serious impending challenges. At the beginning of the financial crisis, these were mainly concentrated in corporations’ balance sheets. Since then, the market has increasingly shifted its focus towards the risks associated with government debt.

It is thus due to the instruments available on the market that the largest part of our foreign currency investments is in euros (55%) and in US dollars (25%). The remainder of our investments is composed of yen (10%), Canadian dollars (4%), pounds sterling (3%) and other currencies (3%). Finally, taking a general and somewhat longer-term view, the following point should be noted. The SNB’s currency reserves are made up of foreign currency investments and gold. In a risk-averse environment, losses tend to occur on foreign currency investments and profits on gold, while in a risk-friendly environment the opposite is true. Consequently, diversification of a portfolio to include gold and foreign currency helps to stabilise earnings over an entire risk cycle. BIS central bankers’ speeches  3
This line of research points to the wide range of subjects that interest Thomas Philippon already shown in his 2007 book “Un capitalisme d´héritiers: la crise française du travail” 12  6  See speech by Vítor Constâncio: Banking Union: meaning and implications for the future of banking at the Banking Union Conference, Navarra University, Madrid 24 April 2014. 7  See the opening speech entitled “The implications of bail-in rules for bank activity and stability” by Benoît Cœuré at the conference “Financing the recovery after the crisis – the roles of bank profitability, stability and regulation”, held at Bocconi University on 30 September 2013. 8  Acharya, V., L. H. Pedersen, T. Philippon and M. Richardson, (2010) “Measuring Systemic Risk,” working paper. 9  See, for example, the Vox article entitled “Finance and growth: Too much of a good thing?” by Thorsten Beck, 27 October 2013. 10  Philippon, T., (2010), “Financiers versus Engineers: Should the Financial Sector be Taxed or Subsidized?”, American Economic Journal: Macroeconomics, 2(3), 158–182. 11  Philippon, T. and A. Reshef, (2012) “Wages and Human Capital in the U.S. Finance Industry: 1909–2006”, Quarterly Journal of Economics, 127(4), 1551–1609. 12  Philippon, T., (2007) “Un capitalisme d´héritiers: la crise française du travail”, Éditions Seuil. BIS central bankers’ speeches  3  where he musters a lot of empirical evidence to show that the labour crisis in France stems from bad employers-employees relations associated with a system that “preserves inheritance, direct or sociological”.

Vítor Constâncio: Thomas Philippon’s contribution to macro-finance Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the ceremony awarding the Germán Bernácer Prize for Promoting Economic Research in Europe to Thomas Philippon, Madrid, 3 November 2014. *  *  *  I wish to thank Angela Maddaloni and Agnese Leonello, from the Directorate General Research, for their help in preparing this speech. Ladies and Gentlemen, I am delighted to be here today to award the 2013 Germán Bernácer Prize to Thomas Philippon, Professor of Finance at the Stern School of Business at New York University. Thomas Philippon is a renowned scholar with a wide-ranging research agenda, both theoretical and empirical. The numerous prizes he has won throughout his career, including “best paper” awards in several top journals, speak loudly about the academic quality of his contributions. Thomas’s research – being right at the intersection between macroeconomics and finance – is also highly policy-relevant, not least from a central banker’s perspective, as I will try to highlight today. In fact, many central banks and the ECB in particular have devoted considerable attention and actively contributed to the burgeoning literature on macro-finance. The financial crisis underscored the need for a better understanding of the linkages between the health of the financial sector and the performance of the real economy. Promoting economic research in this field is an essential step in the process of developing effective policies to ensure the stability of the financial sector and, ultimately, to foster economic growth.
I am optimistic that Europe will come out of the crisis stronger and more robust. But that won’t be true of the euro area’s growth potential, will it? Many economists now think that will be much lower. We don’t traditionally publish our estimate of that. However, we must work on the assumption that the potential growth rate has slowed down – owing to the lower use of labour and, especially, the fall off in investment. The long-term development is still unclear. If the crisis is used to push through the necessary reforms, potential growth may accelerate. But we also need to consider the rapid ageing of the population, which will depress potential growth. Let’s now look at the current situation. The ECB is more sceptical than many economists – many would even say “pessimistic” – when it comes to the economic outlook. What is that assessment based on? I wouldn’t say that we are pessimistic. We are currently seeing the confirmation of what we have been expecting since December: the euro area is recovering very slowly in the course of the year, and that improvement will continue next year. However, there is no reason for our growth forecasts to go shooting up, and that is why we remain cautious. And that is why the ECB is continuing to try to use its forward guidance to shield the euro area economy from rising market interest rates in the event that the ultra-loose monetary policy in the United States comes to an end?

Our forward guidance comprises two elements: it aims to further clarify our views regarding the economic situation and the manner in which we intend to react to it. It is important to note that the United States and the euro area are at completely different stages of the economic cycle. Here in the euro area economy, an imminent change in the direction of monetary policy would certainly come far too early. But how realistic is decoupling from the United States? The markets, at any rate, don’t seem to have all that much faith in that prospect, if you look at the rising money market rates. I think it’s a little early to be judging that. Overall, we believe that we’ve been successful in reducing the volatility of rates. We’ve been moderately successful as regards the actual level of interest rates. Rates have risen on account of positive economic data. It remains to be seen how the situation will develop in the likely presence of further cautiously positive data. And if things do not go according to plan, will the ECB reduce its key interest rates again or conduct new LTROs? We will continue to monitor the situation. We haven’t said any more than that. Sometimes you have to keep calm, rather than coming up with something new every month. Why is the ECB not publishing inflation projections beyond 2014?