samchain/econo-pairs-v1 huggingface dataset:
Chart 4: Investment consistently weaker post-crises Average financial recession Cumulative change (per cent)  Average normal recession  20 15 10 5 0 -5 0  1  2  3  -10  4  5 Years  -15 -20 -25 -30 Source: Jordá, O., Schularick, M. and Taylor, A. (2013), ‘When Credit Bites Back’, Journal of Money,Credit and Banking, Vol. 45, Issue s2. Notes: The chart shows the cumulative change in per capita investment. The grey shaded area shows a 95% confidence interval around the average normal recession. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Chart 5: UK, US and euro-area capital overhangs being worked off  UK capital to output ratio  Euro area capital to output ratio Euro area trend capital to output ratio US capital to output ratio US trend capital to output ratio Per cent 340  Per cent 130  UK trend capital to output ratio  120  320  110  300  100  280  90 80  260  70  240  60  220  50 1995 1999 2003 2007 2011 2015  200 1995 1999 2003 2007 2011 2015  Sources: BEA, OECD, ONS and Bank calculations.

As I have previously stated, against the background of the drawn-out recovery and the weak labour market, we at the Riksbank expect a wage increase rate for 2010–2012 of approximately 2.5 per cent per year, lower at the start and higher towards the end of the period. This is a very low rate of increase, historically. Our forecast will no doubt be considered to be too high by many on the employer side and, likewise, too low for many on the union side. The wage development we expect is consistent with an underlying inflation rate reaching 2 per cent by the end of the forecast period. All other factors being equal, higher wage increases in this situation tend to lead to higher inflation, higher interest rates and a weaker development of production and employment. Similarly, lower wage increases tend to lead to lower inflation, an ability to maintain low interest rates for a longer period of time and a stronger development of production and employment. 6  BIS Review 11/2010  One factor that will undoubtedly play a major role in the approaching rounds of wage bargaining is the division of the Swedish economy. The differences in the ability of various industries and companies to bear a certain rate of wage increases are currently unusually great. The development of wages along similar lines in different parts of the economy would lead to smaller pay differences, but also to a faster transformation of the economy.
That is, an environment where competition increases the supply of new ideas and pushes frontier firms to innovate and produce new technology; where well-functioning markets  BIS central bankers’ speeches  5  diffuse that technology, causing it to be adopted more widely; and where resources are quickly reallocated from failing to growing firms, so that the economy as a whole can reap the returns of innovation, and entrepreneurs have the financial incentives to undertake risky projects. So, when thinking about how to raise productivity, it is helpful to think in terms of these three categories: innovation, adoption and reallocation. And in each case, our policy frameworks are at present not as effective as they could be, especially in comparison with the US. In terms of innovation and competition, recent research shows that size of entering and exiting firms tends to be smaller in the US than in Europe, and successful young firms tend to expand relatively more quickly in the US than elsewhere. In other words, successful firms in the US grow faster and unsuccessful firms shrink faster.13 These differences are in a large part due to labour and, in particular, product market regulations that affect firm entry and turnover. Despite recent improvements, according to the OECD index of product market regulation the euro area still lags some way behind the US. The obstacles in the euro area are in part structural – that is, legally protected professions. But they also stem from a generally onerous business environment.

Distinguished Ladies and Gentlemen, the contribution of financial services to individual entrepreneurs as well as small and medium sized businesses cannot be over-emphasised. As you are no doubt aware, following the liberalization of the financial sector in the early 1990’s, the financial sector in Zambia has evolved rapidly spurred by increasing competition. Similarly, policies and the legal and regulatory frameworks have been developed to take into account the fast changing liberalised environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers. Therefore, the banking sector has over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit in the recent years and accounted for 22% in November 2009. Small and Medium Enterprises have also significantly benefited from credit expansion. The resultant credit expansion has no doubt brought significant benefits to the economy as resources are increasingly channeled through to the lower end of the market. However, most of the credit extended by banks and microfinance institutions is targeted at individuals in formal employment or already established enterprises. Only an insignificant amount is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans.
Given that markets are forward-looking, they would try to anticipate any difficulty faced by a sovereign by short-selling their positions, thus triggering the crisis. This would discourage investment in the euro area because of its potential volatility and perverse market dynamics. Finally, such a measure would delay any return to the market by a sovereign, because no market participant would be willing to start reinvesting in the country for a long period if they know that this kind of investment might at some stage be penalised. This would thus discourage private sector involvement and oblige the official sector to increase its financial contribution. A clear example is the fear that private sector involvement would be sought automatically under the European Stability Mechanism. Faced with such circumstances, investors would be sceptical about buying government bonds maturing after 2013. And the statement which is often made in this country that “there will be no restructuring before 2013” does little to reassure investors, as it implies that there might be one afterwards. The proof of what I have just mentioned can be found in the data. Just looking at the yield spreads between the government bonds of the three stressed countries and those of Germany, it can be seen that they were gradually coming down last autumn until the day of the Deauville agreement and then spiked up after the October European Council, in which it was mentioned that preparatory work on the ESM would include “the role of the private sector”.

But if activity were rather to show signs of freshening, there is a risk of the existing high inflation continuing and being incorporated in our  2  BIS Review 15/2002  perceptions of inflation in the longer run, with possible effects on, for example, future wage negotiations. That of course must not happen. A scrutiny of the current cyclical picture reveals a growing number of signs that activity abroad, above all in the United States, is on the way to improving. This is something that also affects conditions for the Swedish economy. A majority of leading indicators point in that direction. Although the upward phase does contain risks to which I shall be returning, there is still a good deal of evidence that a recovery in the rest of the world as well as in Sweden may be on the way to materialising later this year. A factor that often contributes to a cyclical swing is movements in stocks. When stocks are plentiful and sales are falling, firms often cut back production so that this falls more than demand. In this way, stock adjustments initially accentuate the cyclical downturn. When the reduction of stocks ultimately comes to an end, firms may step up production again even though demand has not yet started to recover. This drives a cyclical upturn and perhaps it is just such a positive effect that may be on the way. There are signs of this in the United States in particular but also in Sweden.
Turalay Kenç: Fostering longstanding relations – opening of the Bundesbank Representative Office in Istanbul Speech by Mr Turalay Kenç, Deputy Governor of the Central Bank of the Republic of Turkey, at the Opening Ceremony of the Bundesbank’s Representative Office, Istanbul, 26 November 2013. *  *  *  Excellency Wolke, Esteemed Dr. Dombret, Distinguished Participants, Ladies and Gentlemen, At the outset, allow me to express the pleasure and appreciation of the Central Bank of Turkey on the occasion of the opening ceremony of the Bundesbank’s Representative Office in our beautiful city of İstanbul. It is a distinct honour for me to have the opportunity to deliver a couple of remarks before distinguished participants in this historical opening event, as this is the first representative office in Turkey of a fellow central bank. First of all, the Central Bank of the Republic of Turkey (CBRT) is very pleased with the signing of the memorandum of understanding (MoU) this year with your esteemed central bank. This is so, not only because the majority of the Bundesbank policies have been regarded as gold standards in central banking, but also because the Bundesbank is the central bank of Germany that is our main trading partner and highest ranking foreign capital provider. The MoU agreement manifests the commitment of both institutions to foster long standing relations.

The main reason is that the single currency has made corporate debt financing more attractive by creating a much larger home-currency investor base than it was the case for any single country of the area before EMU and encouraged international underwriting business for euro-denominated corporate bonds, driving down issuing costs. In 2002, corporate issuance represented about half of the overall bond issuance in the euro area, that is four times more than its share in 1998. In 2002, the gross issuance of eurodenominated bonds accounted for more than a third (38%) of all bond issues (US dollar issues: 47%). Not only have the size of the bond market grown, but also did its liquidity, transparency and standardisation. An increasingly competitive environment, and the development of electronic trading systems, contemporary to the launch of the euro, are among the factors that contributed to these improvements, on the secondary market for government debt initially, and increasingly nowadays on the corporate segment. In that regard, it is worth reminding the success story of the MTS group, an original Italian concept which has translated over a few years into a true pan European electronic platform for fixed-income products with offshoots throughout the continent. Developments witnessed on the short term securities market may appear somewhat uneven and less dynamic. And indeed, efforts remain to be done as regards for instance products characteristics, issuers’ information memoranda settlement practices in order for cross border activity to effectively develop and market integration to gather momentum.
For this reason, the commission found difficult in making a selection as all topics were coherent, interesting and properly addressed. Nevertheless, we succeeded to identify carefully those minor variations and distinguished nuances which make the difference to the winning theses amid all the presented works. Eventually, we have come to a decision on the “Governor’s Award for the Best Diploma Theses” for 2021. Though, I would like together with the winners to thank and congratulate all the participants in this contest for their engagement, ideas, the applied methods and findings based on the appropriate methodologies. I wish this passion and devotion is part of your commitment as you advance in your careers. Let us now present the winning contestants. Thank you and happy holidays! 2/2  BIS central bankers' speeches

One may have expected that gap to close rapidly. Even today, however, only around four-fifths of small firms have a website. E-commerce is another technology that has arguably been surprisingly slow to propagate through the UK economy. In 2016, over 80% of UK individuals ordered goods or services online, more than any other OECD country. One may have expected that to have been mirrored by a large share of UK businesses selling online. In practice, the UK is only marginally above the OECD average. And between 2009 and 2016, the share of UK businesses making e-commerce sales increased by only 6pp, from 17% to 23%. If the story, then, is one of diffusion dynamics being more sluggish in the UK than elsewhere, what might be done to improve matters? Institutions, and within that universities, may well have a role to play. At present, a relatively small sub-set of the UK’s universities operate as innovation hubs. They conduct world-leading research using world-leading researchers. And, in an increasing number of cases, they are doing so in tandem with businesses in spin-off science parks, acting as incubators of innovation. 72 73 74  Schneider (2018). Haldane (2017), Jacobs et al (2017), Swinney (2018), for instance. OECD data. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  What the UK may lack is some diffusion spokes to accompany these innovation hubs – spokes that could help spread new and existing technologies, new products and practices to the long and lengthening lower tail of companies.
The combination of these three imbalances is the source of the economic slowdown under way, above all in the United States, accompanied by strong inflationary pressures and by financial turbulence unfolding since the last summer. Overcoming the current economic phase implies some correction of the imbalances I have just mentioned. Two questions come to mind: 1. How long will the current critical economic and financial phase last? 2. What can economic policy do to speed up the correction and alleviate its costs? The reply to the first question is that probably more time will be needed than is thought to overcome the current adjustment because the imbalances that underlie this critical period go back a long way and will take time to unwind. Time will be needed, in particular, before American households start saving again in a significant way, to run down part of their debt. In the short term, this may involve slower growth for some years. Time will be needed before the financial operators regain trust in the capacity to resort to sound sources of finance so as to be able to reduce their current high appetite for liquidity. Some financial instruments will remain relatively illiquid, until the prospect of a capital gain will not become realistic gain. It will not however be possible to return to the very low levels of risk remuneration seen in recent years. Credit institutions will have to rethink their business models in order to better assess the opportunities for growth based on the availability of capital.

BIS Review 61/2008  3  was characterised not only by its deepness but also by the policy mistakes committed at the time, which introduced protectionist barriers with the aim of protecting national economies from international competition in the hope that this would succeed in better coping with the crisis. Many countries adopted measures to restrict trade with the aim of favouring local production at the cost of imports and trying to protect jobs. In June 1930 the United States introduced the Smoot-Hawley Tariff Act, which imposed disproportionately high duties on imported goods. Other countries took retaliatory measures. International trade declined (some say it contracted sharply), deepening the depression and delaying the recovery. 2 At the current juncture one the few factors supporting growth is international trade, driven in particular by emerging economies. Without this contribution, growth would be stalling completely in advanced economies. Under these conditions, thinking of curbing international trade would be a mistake in the same way as in 1929. To isolate a country from globalisation means weakening it economically. The empirical evidence shows that there is a clear relationship between a country’s degree of integration in the global economy and its economic performance over a relatively long period of time. It is the more integrated countries that compete better and develop, not those which shut themselves off from competition. The microeconomic evidence confirms the macroeconomic trends.
Second, as recently laid out by Governor Tarullo,2 a problem in one firm can spread via the domino effect created by chains of counterparty credit exposures; forced asset sales; or contagion due to the reality or perception of common problems. 2  2  Daniel K Tarullo, “Regulating Systemic Risk”, March 2011. BIS central bankers’ speeches  And, to be clear, this is not just a vulnerability of firms. Markets too can suffer a self-fulfilling evaporation of liquidity. A central element of the recent crisis was, indeed, the drying up of liquidity in the ABS markets and the money markets. As liquidity premia soared, many asset values collapsed, and the net worth of many traders and banks was eroded. This was a vicious circle, because the liquidity of many financial markets depends on short-term traders being ready and able to trade, since end-buyers and sellers will not always want to transact at the same time. Those traders often depend, in turn, on maintaining access to financing from banks. Everyone has been reminded, therefore, that the liquidity of markets and the well-being of leveraged, maturity-mismatched firms are inextricably intertwined. Our capital markets and much of the “plumbing” of the financial system – notably the payments system – rely on confidence in the integrity of the assets being traded, in the robustness of counterparties, in the reliability of infrastructure. Crises nearly always involve that confidence sliding away. So, although financial systems look solid most of the time, they can in fact prove brittle.

The Objective of the FPC The UK government has proposed that the FPC’s main responsibility should be taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system (my emphasis). “Systemic risk” is defined to embrace both faultlines in the structure of the financial system, ie the way its components are joined up; and cyclical threats from unsustainable levels of leverage, debt or credit growth. Two glosses on that are warranted. First, the government’s plan does not entail the FPC being held accountable for fine tuning the credit cycle, but rather for ensuring stability by maintaining the resilience of the financial system. An example might help. Say that in the face of a credit boom, the FPC raised banks’ capital requirements. That might help to slow the boom, and it would be helpful if it did so. But even if the boom continued, by virtue of having higher capital ratios the banking system should be more resilient when the bubble burst. If those FPC actions prevented the banks going bust, the downswing in the credit cycle, and so in the business cycle, would be less severe because the flow of credit services could be sustained. That would be a success. Perhaps not always a glorious success, but a whole lot better than where we are right now.
What do you get up to? I love art, as well as literature and opera. We are privileged in Europe, and there are some wonderful exhibitions here in Frankfurt. But you must surely miss the spectacular cultural opportunities that you had when you lived in Paris? Paris is of course wonderful, but I have to say that the Rhine-Main area really was a very pleasant discovery. Within 30-45 minutes of my house you have the opera houses and theatres of Frankfurt, Wiesbaden, Mainz and Darmstadt. Where else can you find so many in such a small area? If you already live in Germany, do you also read German literature? Yes, indeed. Heine, for example. You know, a good poem is like a gold coin that goes into circulation and doesn't lose its value. It's something that lasts forever. I also read Rilke, but I only read him in French. Your German's coming along well. I'm learning German. That's also important to me for my work. Germany has the largest population and the largest economy of all the EU Member States. If you understand the language, you gain a profound understanding of how the people think. Because of their language, the Germans are more direct than the French or the English. For instance, simply saying "no" in French or English is always somewhat more complicated! But the most recent French criticism of the ECB's stability policy has been distinctly direct.

These instruments are becoming increasingly relevant investment alternatives but overall remain a minor portfolio item. Challenges We have several sources and data providers to shed light on the evolution of sustainable finance instruments, but what exactly is a sustainable bond market? The information presented above provides an overview of euro area residents’ issuances and holdings of debt instruments with sustainability characteristics. These indicators provide information on the proceeds raised to finance sustainable projects. In the case of 2  green bonds, they are identified as “debt securities where the proceeds are used to finance projects with clear environmental benefits” and various sources are used to gain a broader picture. Since debt securities are considered sustainable if they are at least labelled as such by their issuers (i.e. self-labelled), in addition to the information provided by data providers, the loosest level of assurance is relied upon. The ECB notes that remaining limitations are mostly due to the lack of internationally accepted harmonised definitions of certain concepts.2  In recent years, financial market initiatives have moved ahead of legislation and several private providers have developed labels to identify green bonds and other sustainabilityrelated bonds, for example, the International Capital Market Association and the Climate Bonds Initiative. However, this does not mean that there is a single definition. In the European Union, the European Commission has been working over the last few years on the development of a European Green Bonds Standard in order to establish uniform requirements for issuers of this type of bond.