samchain/econo-pairs-v1 huggingface dataset:
Christian Noyer: France’s Prudential Supervisory Authority and Financial Markets Authority – enhancing the protection of French consumers Introduction by Mr Christian Noyer, Governor of the Bank of France, President of the Prudential Supervisory Authority (Autorité de contrôle prudentiel) and Chairman of the Board of Directors of the Bank for International Settlements, at the ACP-AMF academic symposium, Paris, 11 May 2012. *  *  *  Dear Mr President, Ladies and gentlemen, I welcome you to this symposium organised today by the Prudential Supervisory Authority and the Financial Markets Authority. Before saying a few words on the subject of this morning’s discussions, I would like to say just how much Jean-Pierre Jouyet and myself are attached to fruitful collaboration between the two authorities that we preside. Since the creation of the ACP two years ago, the ACP and the AMF have united their efforts to durably enhance the protection of French consumers. A common division has been set up. Apart from the public information platform, Assurance Banque Épargne Info Service, which the general public is increasingly aware of, the two authorities have also conducted numerous consumer protection initiatives. For example, in 2010, the simultaneous publication of an ACP recommendation and an AMF guideline allowed the establishment of a framework for the marketing of complex products whatever their distribution channel. In order to limit the excesses sometimes encountered, these two texts underscored the need for contracts that are intelligible to non-professional consumers. In 2011, the number of jointly conducted control missions increased.

Late last year, as the long, dark winter closed in, there were considerable jitters in financial markets, with some observers fretting that the economy may be on the verge of a hard landing. Indeed, there was a lot of talk about the possibility of a recession looming. I am happy to report that the economy has emerged from the New York freeze. The sun is out, the tulips and the cherry blossom are now in full bloom and the picture of the economy is similarly rosy. In the first four months of the year, the U.S. economy added over 800,000 jobs, and the unemployment rate is now 3.6 percent—the lowest level in nearly 50 years. The latest GDP numbers indicate that the economy remained in high gear through the first quarter, with growth clocking in at an impressive 3.2 percent annual rate. Despite this very strong economy, we are not seeing any signs of inflationary pressures. In fact, the latest inflation data have come in lower than expected, with core inflation over the past 12 months dipping to 1.6 percent. Now, most people don’t seem that bothered by inflation that is a touch too low, but at the Federal Reserve we have set a long-run inflation goal of 2 percent. When inflation runs persistently above or below that goal, we take that very seriously. So far, the recent downward movement appears mostly to reflect normal volatility in inflation statistics.
Denis Beau: What European financial sovereignty in a digital world Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference "Assises de la Technologie Financière", Paris, 17 October 2019. * * * Ladies and Gentlemen, I would like to thank Ms. de la Raudière for her invitation to this conference, which reflects the financial community’s ever growing interest in the ongoing evolution of the banking and financial system. The organisers of this conference asked me to give you my perspective as central banker and supervisor on the complex issues involved in the boom of digitisation in the financial sector. I will attempt to meet this challenge, by first observing that, for some years now, Europe has entered a world where digital technology is profoundly changing the business models of many economic sectors. The banking and financial sector is no exception. New players are entering the market with new proposals, more suited to the uses and requirements of the “digital” consumer. They challenge established players by fragmenting a traditionally highly integrated value chain. The first of these new entrants are FinTechs. These start-ups are able to outperform the historical players on a link in the value chain, providing new services to consumers or reducing costs. The second are BigTechs.

Taken at face value, these patterns are both striking and puzzling. Not only do they sit oddly with Classical growth theory. They are also at odds with the evidence of history, which has been that rates of technological diffusion have been rising rather than falling over time, and with secular trends in international flows of factors of production. At the very time we would have expected it to be firing on all cylinders, the technological diffusion engine globally has been misfiring. This adds to the productivity puzzle. Sectoral Productivity Trends  Some further insight into these puzzles comes from looking at the productivity data in more granular detail. 42  We start by considering sectoral patterns of productivity among UK companies. Sectoral shifts in the economy could plausibly account for some of the fall in productivity growth. There has been a secular shift over time away from manufacturing and towards services, with the employment share in 39  Rodrik (2011). Based on the following equation: 𝑃𝑖𝑡 − 𝑃𝑓𝑡 = 𝑎𝑖 + 𝑏𝑖 ∗ 𝐺𝐴𝑃𝑖 where 𝑃𝑖𝑡 is growth in TFP for country i in year t, Pft is the growth in TFP for the frontier country (US) in year t, GAPi is the gap between the level of TFP in country i and the US as a percentage, ai is a constant capturing the average pace of convergence and bi captures how much of the speed of convergence depends on the TFP gap.
As a recent paper by IMF staff stresses, a branch model for internationalization may be cheaper than one based on subsidiaries. However, it may also be riskier, both for the host and the home markets. Although nobody expects that these banks will need to be liquidated, we have seen sufficient black swans in recent years to show us that we need to hope for the best but be prepared for the worst. And if liquidation were needed, a stand-alone subsidiary model would have important advantages over a branch model, especially if there is substantial deposit taking activity at the local level. I am not saying that the liquidation of a global bank organized through subsidiaries would be an easy task. What I mean is that it would be much easier than for global banks which are deeply interconnected across countries through branches. 2  BIS central bankers’ speeches  The stand-alone subsidiaries model has an additional advantage, from the perspective of the supervisor. It is far more symmetric for the local supervisor than the alternative model, allowing them to really supervise the institution. And as a home supervisor, if a foreign bank has a significant share of a domestic market, I would rather have the domestic supervisor deeply involved in the monitoring of that bank. Our experience has taught us that local supervisors usually have a deeper knowledge and more accurate information on developments in their home banking sectors than distant parent company supervisors.

The taxpayers of some of the most developed countries of the world have been called on to support global banks headquartered in their countries. Indeed, after the Lehman bankruptcy, it is fair to say that the entire global financial system was put at risk by the difficulties of some banks operating worldwide. It quickly became clear that an unprecedented and unacceptable level of systemic risk had built up over the “boom” years. And that a significant amount of taxpayer’s money had been put at risk as a result. This prompted a forceful, and understandable, reaction from all sides. The public, bank investors, regulators, supervisors and politicians alike all agreed that we needed a profound overhaul of the treatment of systemic risk. I believe that the reactions to this challenge from the G-20, at the highest political level, as well as from the Financial Stability Board (FSB) and the Basel Committee of Banking Supervisors (BCBS), have been proportionate to the size of the problems and risks we have encountered since the outbreak of the crisis. The costs have been huge and there is widespread agreement that we cannot allow this to happen again. Nevertheless, we should also recognize that a number of global banks have managed to navigate these rough and unchartered waters without capsizing, Indeed, if you allow me to extend the metaphor, some have even been able to help to calm the waters.
In the past, the major part of the chain of manufacturing and services used to be located in a given country, which meant that, from the monetary policy perspective, the domestic demand was of great importance, and in particular — the size of output in relation to its potential level i.e. the so-called output gap. The impact of the global economy, on the other hand, was observed mainly due to changes in the terms-of-trade i.e. the ratio of export to import prices, which in turn was affected by, among others, commodity prices and changes in external demand. Nowadays, inter alia as a result of globalisation of production and services, the role of the domestic output gap in explaining inflation has decreased significantly, as shown by the BIS research 6 . As in the case of the model applied by the NBP in forecasting inflation, the role of the output gap as a factor that determines inflation is much smaller than it used to be. In old books on macroeconomics inflation is treated largely as a local development, i.e. dependent in a great measure on domestic factors (such as the domestic output gap and inflation expectations). Today, inflation is becoming increasingly less local, and in turn, becomes more and more dependent on global factors, i.e. the relationship between global demand to global supply. Research that analysed the course of inflation in 22 OECD countries between 1960 and 2003 has shown that 70% of inflation volatility may be explained by a common factor 7 .

Number of work permits in the UK, Ireland and Sweden issued to citizens of new Member States following the EU accession In thousands UK *  Ireland**  Sweden***  Total  In % of workforce †  Lithuania  44.72  26.37  0.37  71.46  4.4  Latvia  23.03  12.94  0.16  36.14  3.2  Estonia  4.68  3.39  0.36  8.43  1.3  Poland  204.90  70.14  2.16  277.20  1.6  Czech Republic  20.01  6.39  0.07  26.47  0.5  Hungary  10.35  3.83  0.20  14.37  0.3  Slovakia  36.36  10.93  0.09  47.38  1.8  *Source: Accession Monitoring Reports, http://www.ind.homeoffice.gov.uk. The data include the period between May 2004 and December 2005. NBP calculations. **Source: Skills needs in the Irish economy: The role of migration, A submission by the Expert Group on Future Skills Needs and Forfás to the Minister for Enterprise, Trade & Employment, http://www.skillsireland.ie. The data include the period between May 2004 and August 2005. ***Source: Migracje specjalistów wysokiej klasy w kontekście członkostwa Polski w Unii Europejskiej. Centre for Migration Research, Warsaw University. The data include the period between May 2004 and December 2004. †Workforce – people of 15 and more years of age in Q1, 2004. 10  HSBC “The Great Migration. How China’s 200 million new workers will change the economy forever”, HSBC Global Research, October 2005.
Aside from the important role that the solutions being considered in the European Union to better control budget deficits must play, overcoming the recessionary tendencies experienced by the Spanish economy since 2008 requires the correction of some structural features that hinder its ability to adapt. The fall in employment, which has been much greater in Spain than in the other euro area countries during the crisis, is largely explained by the insufficient adaptation of labour conditions. Indeed, wages and prices continued to grow as if no significant cyclical change had occurred. The labour market reform has addressed the serious distortions that have existed in this area for decades. Their effects on wage moderation have already begun to be noted and, although the improvement in terms of job creation is taking longer, I have no doubt that it will materialise, if the possibilities opened up by the reforms are fully harnessed and completed. The sharp deterioration in public finances since 2008, which only began to be corrected seriously in 2012, has unavoidably required the implementation of severe and unpopular austerity measures and reforms. Despite their initially restrictive impact, they are vital for restoring confidence in the sustainability of our public finances and for normalising our access to international financing, which is essential for our exit from recession and for the resumption of growth in the euro area.

2  BIS central bankers’ speeches  The adaptation of the Spanish economy to the euro was incomplete Turning now to the Spanish economy, our adaptation to the new rules of play derived from, or imposed by, monetary union has been insufficient and belated. Our membership of the euro area compelled us to desist from long-established practices among economic agents who regarded exchange rate devaluation as the “normal” means of resolving the problems of competitiveness caused by inflation and did not consider fiscal discipline as vital for maintaining economic growth. True, in the years before we joined the euro area, we took steps to adjust economic policy rules to a low-inflation environment and set in train some reforms so it would function more flexibly. Two factors were particularly important in achieving this goal. First, the anchoring of inflation expectations, which required fulfilment of the price stability convergence criteria. And second, in the area of budgetary policy, the enactment in 2011 of an initial Stability Law laying the foundations for preventing excessive budget deficits. The transition to Monetary Union was also easier because the peseta/euro conversion rate agreed in 1999 was quite competitive as a result of the devaluations which had taken place between 1992 and 1995 during the functioning of the European Monetary System. However, those devaluations were a clear sign of the difficulties awaiting countries that make exchange rate commitments if these are not accompanied by price and cost discipline.
As I mentioned earlier, during 1999 and early this year a number of observers saw rising share prices as a strong reason why the Swedish economy might become overheated. At the Riksbank we were more inclined to wait and see. There is no reason now to adopt a different view and exaggerate the risks of the share price fall. Consumption is being sustained in the first place by a strong development of income that stems from increased employment, a good increase in real wages and a fiscal stance that is less restrictive than before. There is some cause for concern in the present round of wage negotiations. In a sense, that is inevitably the case when many settlements are being concluded simultaneously and the wage share is approximately two-thirds of the economy. That means that no other single factor is anything like as important as the wage trend for the path of the Swedish economy in the coming years. The picture of the negotiations that are now beginning is mixed. The outcome to date has been a positive surprise. It also looks as though the negotiating parties are formulating their bids on the basis of the inflation target. Moreover, the available picture of future wage expectations looks relatively good (Chart 3). Here we see the wage outcome, wage expectations and unfilled job vacancies. It is evidently becoming increasingly difficult to find the right people for the jobs that are advertised. This presumably makes the risk of wage drift greater than in previous years.

Post-September 11, Middle Eastern countries have started to look East to lessen their reliance on the West for management, science and technology, education, governance systems and developmental models. They are also increasingly aware of the dynamism of a rising Asia. Singapore began to take a focused interest on the Middle East three years ago. My overall impression is that the Middle East is at a tipping point. The region faces major political and security challenges like the Palestinian-Israeli conflict, situation in Iraq and Iranian nuclear issue. These are deeply complex and inter-connected issues, made even more complicated by a long history of distrust and religious conflict. We in Asia wish the Middle East well. We hope that the Middle Eastern countries can find ways to either resolve the issues or at least manage them in such a way as to avoid the region from tipping over. Despite the challenges, there are many positive developments to balance the negative challenges in the Middle East. Breathtaking physical transformation and impressive development are taking place  BIS Review 21/2007  1  there. High oil prices and sound policies underpin this strong economic performance. Within the region, the Gulf states are taking the lead to modernise and diversify their economies in as quick a time as possible. If these positive forces tip the region in the direction of peace, cooperation and development, the Middle East will, together with Asia, transform the world in this century. Asia's growth story is already well-known. China and India will be the lead players.
An improvement in the workings of the economy can show up just as a larger supply of resources, be they capital or labour. To date in 1999, for instance, employment has been provided for more than 100,000 people without any signs of appreciable shortages. To me at least this is a welcome surprise. But one should not make too much of it; if we have in fact seriously misjudged how the labour market is functioning, one would expect wage increases to be lower than has been the case. It is also worth noting that the rate of wage increases in Sweden continues to be higher than elsewhere. Another difficult matter is the effect on inflation from a given level of resource utilisation. This was examined in a box in the latest Inflation Report. The results suggest that the Swedish economy can cope with somewhat higher resource utilisation than before without an acceleration of inflation. There is also a good a priori case for this. Raising prices, for example, should be more difficult in an economy where prices fluctuate less. It follows that firms should then put up more resistance in wage negotiations. It is also conceivable that increased international competition, for instance, has left firms with less room for price increases, at least for a time. Finally, then, what about the role of inflation expectations? They have indeed come down substantially in the 1990s, from 6–8% to 2%.

Economic growth in the United States had been higher than expected and the first signs of a recovery in Europe were now visible. Meanwhile, a distinct upturn in the Swedish economy was increasingly apparent. The forecasts were revised upwards and the Executive Board now agreed that further interest rate reductions were no longer on the agenda. By the middle of August, at the monetary policy meeting on the 12th, the picture of a stronger economic development in Sweden was even clearer. The Board therefore concurred on a high future growth rate that would call for a tighter monetary stance. But price increases were low and the available statistics, on capacity utilisation and the labour market, for example, did not point to a rapid future increase in inflation. The Board’s majority therefore considered that an immediate tightening was not needed. With inflation expectations firmly anchored around the 2% target, we judged there was scope for waiting with an interest rate increase. Calmer monetary policy discussion Some of the earlier autumn conferences were preceded by monetary policy discussions that were rather intensive. In that respect the past year has been relatively calm, even though the situation has changed so rapidly. Last autumn there was, of course, considerable anxiety but the Riksbank’s quick succession of interest rate cuts was well received. In Sweden, moreover, we were spared most of the European discussion about political pressure on monetary policy.
This downside risk is only partly balanced by a domestic upside risk to do with inflationary pressure and wage formation in Sweden. All in all, the balance of risks for inflation is accordingly on the downside. The Riksbank’s overall assessment today is that with the risk spectrum taken into account, inflation one to two years ahead will be approximately in line with the target, albeit somewhat on the low side. The most probable outcome in the years ahead continues to be that economic activity becomes stronger. Together with the difficulties in assessing the situation - not least on account of the fluctuations in the financial markets - this has led the Riksbank to opt at present for leaving the repo rate unchanged. But the financial market developments and their economic effects warrant close attention. The Executive Board therefore decided to hold an extraordinary monetary policy meeting at 1 p.m. on 14 November in order to make a renewed judgement. BIS Review 59/2002  3

Against this background, we expect price stability to be maintained over the medium term, thereby continuing to support the purchasing power of euro area households. As the transmission of monetary policy works with lags, we expect that our policy action will progressively feed through to the economy in full. Hence, with all the measures taken, monetary policy is providing ongoing support for households and corporations. Once the macroeconomic environment improves, the Governing Council will make sure that the measures taken are unwound in a timely fashion and that the liquidity provided is absorbed in order to counter effectively any threat to price stability over the medium to longer term. By so doing, the Governing Council will continue to ensure a firm anchoring of medium-term inflation expectations. Such anchoring is indispensable to supporting sustainable growth and employment and contributing to financial stability. Accordingly, we will continue to monitor very closely all developments over the period ahead. As regards fiscal policies, the latest quarterly euro area data and developments in individual countries confirm a substantial deterioration of fiscal positions in 2009, which is projected to continue in 2010. In finalising their 2010 budgets and medium-term fiscal plans, governments must now substantiate their commitment to ensuring a swift return to sound and sustainable public finances in line with the Stability and Growth Pact. In particular, it is crucial that ambitious and realistic fiscal exit and consolidation strategies, underpinned by concrete structural measures, are put in place.