samchain/econo-pairs-v1 huggingface dataset:
Secondly, banks should strengthen their capital and the liabilities susceptible to be used in the event of bail-ins in order to face on an optimal footing the regulatory challenges still pending, particularly in respect of resolution. Thirdly, the financial sector should strive in particular to enhance its reputation and to introduce measures mitigating the risk of misconduct. Fourthly, banks should address the challenge of increasing their profitability, although this cannot be at the expense of an undue easing of lending standards. Finally, and clearly not least importantly, the new technological environment, while a major challenge for the sector (in particular because of the emergence of new competitors and services), is also an opportunity that Spanish banks should take advantage of. Allow me to conclude by pointing out that, with a view to furthering the current growth phase and entrenching the Spanish economy’s potential, it is essential in my opinion to harness the still-favourable cyclical juncture to create budgetary space ahead of future recessions and introduce reforms to take over from the expansionary demand-side policies of recent years. It is likewise vital to address the challenges the banking sector has still to face, such as the reduction in non-earning assets, the improvement of its capital structure and profitability, the strengthening of its reputation and the optimal harnessing of technological developments.

In the office space sector, new square meters built were not matched by an equivalent increase in demand, generating a significant increase in the vacancy rate, as we warned in previous Reports. These levels could remain for a prolonged period due to the inertia of the market and the incorporation of new projects (figure 11). Aggregate household indicators remain relatively stable, but with some of them showing a marginal deterioration. The debt over disposable income rose in 2014, while the financial burden remained around 14 percent of income, due to low interest rates (figure 12). The lower interest rates facing households are also the result of a change in debt composition, away from higher-rate consumer loans to lower-rate mortgage loans. No changes in indicators of bank default are seen, whereas in non-bank lenders a new increase is observed. This latter phenomenon is partly explained by regulatory adjustments, although a worsening of the credit portfolios of said lenders cannot be ruled out. Commercial and consumer credit exhibit bounded growth rates, not so mortgage loans, which remain strong (figure 13). The behavior of commercial and consumer loans is in line with the slower growth in private spending. Demand-side factors could be behind these dynamics, as suggested by the Bank Lending Survey. The expansion of mortgage lending is largely explained by the increase in the average debt, which is consistent with the dynamic of housing prices and debt to collateral ratios, which have remained stable. Bank financial indicators have been stable.
I try to sum up these principles which guide us not only in weathering this storm, but also in sunnier days, when the role of crisis prevention cannot be overlooked. The first and foremost principle rests upon the authorities’ ability to carry out prompt and preemptive actions with the best set of available information in dealing with changes in the market conditions and practices. Of course, we all know that to be able to identify where the risks are is no longer a simple task in this current environment. But once any significant sign of imbalances in the economy is detected, central banks need to be vigilant and act in a timely manner. True, it is difficult to counter the sentiments of the government, investors and  BIS Review 120/2008  1  the public alike if central banks play their role of “taking away the punch bowl when the party gets going”. In a nutshell, this implies that we central bankers need to be watchful and decisive, not to be swayed by these voices. Second, we also need to maintain flexibility in the conduct of central banking policies. By this, I mean flexibility in terms of policy instruments and also in terms of using innovative methods to deal with the evolving challenges. For example, we may not be able to just rely on, say, using traditional solutions of raising interest rates to address rising inflation, but we may also have to resort to a mix and match of the toolkit available to us.

The domestic economy is expected to slow down during the rest of year, being conditioned by the weakening of the domestic and foreign demand. Given the consolidated fiscal behaviour and the slowed foreign demand, the performance of the private domestic demand will determine the economic activity growth. However, its two components, consumption and investments, have not shown any recovery signal so far. Expected developments at home and abroad result in a contained balance of inflationary pressures, determining a slow increase in consumer price in the future. The demand growth  BIS central bankers’ speeches  3  below the potential of the economy in the upcoming period will continue to exercise low inflationary pressures. At the same time, the pressures generated by supply-side factors appear contained. Based on the insofar developments of the determinant factors of inflation and the projections for their development in the future, with 90% probability, inflation will range within 1.0% – 3.3% band after 12 months. *** Based on the analyses of the information set out above, the Supervisory Council holds that pressures on consumer prices at home remain low over the monetary policy relevant horizon; they have been, however, on the downside over the recent months. On the demand side, below-potential economic growth will continue to generate low inflationary pressures, while shocks from the supply side are expected to be moderate. The expected developments in economy and inflation imply that the simulating nature of the monetary policy will be retained during the period ahead.
18.05.2020  Pablo Hernández de Cos Appearance before the Parliamentary Economic Affairs and Digital Transformation Committee Governor  Ladies and gentlemen, I appear before you today in particularly difficult circumstances. Our country, like many others, is experiencing an enormously complex situation. My initial words are for all Spanish citizens, whose behaviour is proving exemplary. And most particularly they are for all those professionals who, putting their own health at risk, are working so resolutely to preserve the health of others and keep essential services operating. Naturally, these initial words are also to convey condolences to all those who have lost loved ones in this pandemic. We are facing an unprecedented situation. From the standpoint of its economic impact, it has three characteristics I wish to highlight, given that they condition the optimal economic policy response. First, the scale of the shock is immense. Unfortunately, we have seen how, in just a few days, the pandemic stretched our health system to the limit, cutting short thousands of human lives and leaving a deep scar on their families and on Spanish society as a whole. The situation has led our authorities, like so many other governments worldwide, to adopt drastic social distancing measures that severely limit people’s movements and a practical complete shutdown of activity in some productive processes. The economic impact of these measures is most acute because of the reduction in the supply and demand of goods and services.

This would cause both an inward shift, and steepening of, the Phillips curve, raising the price level and increasing its responsiveness to upward demand pressures. The UK has been a particular beneficiary of demographic trends over recent years. The UK working age population has risen, on average, by over ½% per year over the past two decades. It has also experienced rising rates of labour market participation, in particular among older workers and women. The first, and possibly both, of those factors are now in reverse gear. The share of the total UK population of working age has been falling since 2008. Globally, dependency ratios – the fraction of the population not in the workforce – is forecast to start rising from around now for the first time since the 1970s (Chart 15). This rise in dependency ratios is fastest in high-income countries, such as the UK. Until recently, this effect had been more than offset by rises in the UK population. But that, too, is changing. Recent estimates suggest the UK population may have shrunk by as much as 1.3 million people over the past year.18 If these demographic trends continue – a smaller population fewer of whom are in work – this would turn the demographic tailwinds of the past decade into a headwind looking ahead, constraining supply and potentially amplifying inflationary forces. 16  Friedman (1961). Goodhart and Pradhan (2020). 18 See O’Connor and Portes (2021). The authors themselves describe this estimate as an upper bound.
As that uncertainty dissipated and households began to feel more confident about the outlook, so the saving rate fell back (Chart 1). There is probably some scope for it to fall a little further, but continued firm consumption growth really depends on us seeing a pickup in household income growth, of which I will say more shortly. There is more scope for housing investment to continue driving growth. Housing starts and the level of housing transactions are still respectively around 25% and 10% below their averages during the pre-crisis decade (Chart 2). But the supply of new housing is not as elastic as one would like, because of planning restrictions and the like. Consequently there is a risk that increased demand for housing ends up mainly in higher house prices rather than more houses. In turn, if associated with excessive expansion in mortgage lending, that may create future financial stability risks. For that reason, the Bank’s Financial Policy Committee, which is charged with maintaining the overall stability of the financial system, is keeping a beady eye on the housing market. BIS central bankers’ speeches  1  For the recovery to be both sustained and sustainable, however, we really want to see three things happen. First, business investment needs to pick up the baton in supporting demand growth. Second, we need to see a revival in productivity growth, which in turn would sustain both higher real wages and higher profits, thus supporting continued household and business spending growth.

Page 15 sur 14 i  Delors J., Speech on the occasion of the opening of the academic year at the College of Europe, “50 ans Collège d’Europe”, September 1999 ii European Commission, Eurobarometer 93, October 2020 iii De Tocqueville A., Democracy in America, 1840 iv Blanchard O., “In defense of concerns over the $ trillion relief plan”, Peterson Institute for International Economics, February 2021 v Gordon R. J., “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds”, National Bureau of Economic Research, August 2012 vi PatentSight vii Hanushek E. A. and Woessmann L., “The Economics of International Differences in Educational Achievement”, Handbooks in Economics, Vol. 3, 2011 viii Spain and Italy have the lowest PIAAC scores (respectively 252 and 250) in terms of adult literacy with France third but slightly above (262) vs. Netherlands (284), Norway (278) and Sweden (279). France has a 22% share of low-skilled workers, Spain and Italy around 27%, Sweden and Norway around 13%. Share of high-skilled workers: France 8 %, Spain 5 %, Italy 3 %, Sweden 16 %, Norway 14 %. Based on PIAAC 2012 and OECD 2013. ix The share of high-skilled adults among the population in the Netherlands, or in Finland, is more than twice as large as in France (17% and 19% respectively vs. 8% in France).
The crucial factors for this are quite different, such as capital formation, demographic trends, advances in technology and education, how the economy functions, etc. Some scope for stimulating the economy may exist in the short run but this presupposes an established confidence in economic policy’s commitment to price stability. If economic agents have doubts about economic policy, attempts to stimulate demand will be liable to elicit an upward shift in the rate of inflation that is expected by firms, households, trade unions and others. Wages and prices may then start to chase each other as they did in the 1970s and 1980s. The longer market rates of interest, which the Riksbank can influence only marginally, will begin to move up and the ultimate effect on demand may be the opposite of what was intended. The outcome may be a combination of low growth and high inflation. Much accordingly depends on the confidence that the price stability policy enjoys. In an economy where a low inflation policy is firmly established, it is easier to lower the interest rate without eliciting uncertainty about monetary policy’s long-term commitment. There is, quite simply, more room to manoeuvre. But this does of course presuppose that the outlook for future inflation condones such a policy. Independence and accountability The institutional framework for monetary policy is important for underpinning confidence in long-term economic policy.

Caleb M Fundanga: Trends in central bank governance Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the seminar on “Trends in Central Bank Governance”, Livingstone, 28-29 February 2008. *  *  *  His Honour the Vice President Her Grace the Mayor of Livingstone The Chairperson Central Bank Governors and Deputy Governors Board Members of Central Banks Resource Persons Distinguished International Participants Ladies and Gentlemen On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important seminar on “Trends in Central Bank Governance.” To our colleagues from outside Zambia, I wish to extend a special welcome to you to Zambia, in particular to Livingstone, our tourist capital especially at this time of the year. Like the rest of Zambia, Livingstone is a city of tranquility with an easy-going African charm. Apart from the famous Victoria Falls, there are many other tourist spots such as the Mukuni Cultural Village, curio markets, the Game Park, the National Museum, railway museum, e.t.c. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Livingstone can offer. Like other participants, I am glad to be part of this rare gathering of imminent experts.
The fiscal rules have provided a framework for assessing fiscal policies but have at times proven difficult to enforce and hard to explain to the public. In the area of structural policies, the Country Specific Recommendations have had a limited impact, with less than 10% of recommendations [33] 5 / 10  BIS central bankers' speeches  being substantially implemented each year. [33] The disparity between the outcomes of the two methods does not stem from any difference in the quality of European and national authorities. Instead, it is a consequence of the inherent difference between rules and institutions. There are two reasons why institutions have proven superior. First, rules are generally static and require countries to adhere to specific actions, whereas institutions are required to achieve prescribed objectives. Rules therefore cannot be updated quickly when unforeseen circumstances arise, whereas institutions can be dynamic and employ flexibility in their approaches. That distinction matters hugely when underlying parameters and economic relationships change – as they often do. The distinction also matters for citizens, who ultimately care most about the results of economic policy rather than the actions taken by governments. The ECB’s monetary policy during the crisis is an example of the greater flexibility of action afforded by an institution-based approach. The ECB was faced with a range of challenges that few could have predicted when our mandate was defined. But the Treaty combines our mandate for price stability with discretion over the tools we could use to achieve it.

  A thematic review across a number of smaller Lloyd’s managing agents, to assess how distribution channels are changing. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3    Reviews of underwriting and risks around pricing at a number of motor insurers. For example, we will assess how insurers protect themselves against the risk that under-pricing leads them to take on a large number of policies quickly, particularly through price comparison websites. Life insurance risks and supervisory priorities  In the life sector, the search for yield on Solvency II capital is taking insurers in different strategic directions. Some are taking a ‘capital-light’ approach, focused on unit-linked liabilities and asset management. Others are growing their annuity books, particularly by taking on the liabilities of defined-benefit company pension schemes. One of the most direct and notable consequences of Solvency II has been growth in reinsurance of longevity risk. On average, between 2015 and 2016, longevity risk transfer increased by nearly 25% across UK annuity writers. Long-dated insurance risks, such as longevity exposures, attract a high risk margin. We 2  have been clear that we think the Solvency II risk margin is too sensitive to the level of market interest rates . It is therefore too high at current low levels of interest rates, encouraging insurers to transfer longevity risk through reinsurance. The risk margin is our first priority as part of the Solvency II review. We are working in EIOPA to achieve a sensible outcome.
The availability of goods and services around the clock on-line raises the question of why it should take longer to make a payment than it does to send a text message or private message via Facebook. All of this leads to demand for real-time payments. Instant payments, meaning the possibility of paying person to person in real time around the clock, have been made possible by digitalisation and new technology. In other words, this is a matter of small payments between private persons and is thus something other than what the Riksbank’s system has traditionally handled. Previously, verification, clearing and settlement has taken time to implement, but, at present, using new technology, it takes a few seconds instead of a few days. In Sweden, the number of users of the mobile application Swish has increased to over 6 million since its launch in 2012. 20 Swish is a system that makes it possible to execute instant payments between private persons. This means that I can enter a payment into my mobile phone and, a few seconds later, show you that it has been executed without having to wait a few banking days for account transfers. In addition, we can make payments with the system around the clock. In this way, it is reminiscent of cash. When banknotes change hands, the payment is completed, at the same time as the possibility of paying does not depend on the opening hours of the system or the banks.

The immediate consequence of such an increase in demand relative to output is a current account deficit and inflationary pressures. This is not a new point. It was prominent in the post-mortem examination of the UK boom and subsequent bust in the late 1980s. Nigel Lawson wrote in his memoirs “in the mid to late 1980s, there was a substantial upward revision of the permanent element [of income], particularly if we include capital gains, notably from home ownership. In part this was wholly justified, given the undoubted supply-side improvements that had occurred. But it clearly went too far”. (Lawson, N, The View from No 11, Bantam Press, 1992, p 632.) And there is the rub. Provided the increase in productivity materialises, families and firms will be able to repay the debts incurred to finance the increase in spending. The levels of spending and output will converge, and the current account deficit will steadily subside. But if optimism has run ahead of reality, then, at some point an awkward downward adjustment to spending must take place. In such circumstances, the adjustment to quantities - both spending and the trade deficit - are likely to follow sharp adjustments in asset prices - both stock markets and exchange rates - when expectations come back into line with the underlying increase in productivity. My final question was what does this mean for the economic see-saw in the UK? At present domestic demand is up and external demand is down.
This is sometimes known colloquially as r*. Policies which boost r* mean that a given interest rate is likely to impart greater stimulus. Or, put differently, they mean the same level of demand in the economy can be achieved with a higher interest rate. And a “pivot” in the mix of policies, with somewhat less of a contribution from monetary policy and more from structural policies, would probably be desirable. Not least, it could help mitigate any adverse impact of accommodative monetary policies on productivity or the distribution of income and wealth. Conclusion  Productivity is a gift for rising living standards, perhaps the greatest gift. It is not, however, one that always keeps on giving, as recent events attest. Whether in supporting living standards, or in shrinking their distribution, tackling the global productivity puzzle is among the most pressing public policy issues today. If history is any guide, there is unlikely to be any single measure which puts productivity growth back on track. But measures which support the long tail of companies, currently operating at low levels of productivity, have the potential to do considerable good. As Olympic athletes have shown, marginal improvements accumulated over time can deliver world-beating performance. Applying those marginal gains to the population of UK companies could significantly improve UK living standards, even if those are harder to measure than gold medals.

Yet given their scale, the returns to modest improvements in these firms could be dramatic. As a thought experiment, imagine productivity growth in the second, third and fourth quartiles of the distribution of UK firms’ productivity could be boosted to match the productivity of the quartile above. That sounds ambitious but achievable. Arithmetically, that would deliver a boost to aggregate UK productivity of around 13%, taking the UK to within 90-95% of German and French levels of productivity respectively. The policy question is how to effect those improvements. One idea which offers real potential comes from the Productivity Commission chaired by Sir Charlie Mayfield. 64  This starts from the assumption that not only  is there a long tail of companies, but that many are unaware of that fact. For the same reason most car-owners believe they are above-average drivers, most companies might well believe they have above-average levels of productivity. In fact, we know most companies have below-average levels of productivity and a large fraction of them have seen no productivity improvement for several decades. The Mayfield Commission aims to create an app which enables companies to measure their productivity and benchmark themselves against other companies operating in similar sectors and regions. By shining a light on companies’ relative performance, the aim is that this would serve as a catalyst for remedial action by company management. Indeed, the aim is to provide firms not only with a means of benchmarking themselves, but with tools to improve performance along identified areas.