samchain/econo-pairs-v1 huggingface dataset:
While there is still a high degree of uncertainty, recent economic data confirm the positive underlying momentum of economic activity in the euro area. The sovereign crisis in Europe While economic prospects have improved, we still face challenges. The most important one is certainly “the sovereign crisis” in the euro area. Broadly speaking, opinions and views  BIS central bankers’ speeches  1  expressed on this by people outside the euro area can be divided into three categories: hostility, skepticism and support. First, outright hostility: gloomy predictions about the imminent demise of the euro came predominantly from deeply anti-European commentators. While these views, like all opinions, should be treated with respect, there is no point in trying to refute arguments that are largely irrational and mainly reflect wishful thinking. Second, skepticism: it comes mainly, but not only, from academic circles. Prestigious and well-respected economists have been pointing to the fact that the euro is not an optimum currency area and that some form of fiscal federalism is missing to compensate for insufficient labour mobility. Let me simply recall a few facts. The benefits of the euro cannot be assessed exclusively through the lens of the optimum currency area theory. The euro has brought to more than 300 million European citizens unprecedented stability: price stability, of course, with inflation averaging 1.97% over the past decade, but also financial stability. It is always useful to think of counterfactual (?) when assessing a situation.

Our “universal banking model”, based on a diversity of activities and sources of income has proven its resilience. Obviously, there is a circular causality between government debt and the banking sector. Spreads on public debt naturally act as floors for the funding costs of banks. And, conversely, doubts about banks’ solvency create expectations of public support and lead to a deterioration in public finances. This gives rise to multiple equilibria where sudden shifts in confidence can be self-fulfilling. In this context, the main purpose of stress testing is to break that circularity. Our first European tests included 81 banks, compared with only 19 for the United States. The basic exercise was sound and taken as such by analysts when it was published. Somehow clumsily, however, a few banks were added at the last moment, with only limited investigation, and these are precisely the banks which proved problematic afterwards and which undermined the credibility of the whole exercise. This mistake will not be repeated and the coverage for the new stress tests has been carefully examined. A lot has been made of the fact that no sovereign stress was made on the banking book. And indeed, as regulators, we did not want to give any credibility to a scenario that we consider unacceptable. However, there will be, like last time, full, total, and transparent disclosure of exposures to sovereigns for each individual bank. Everybody will therefore be free to make their own assumptions and calculations.
Even though we have called a pause in our asset purchase programme, the effects of past purchases will continue to work through the economy for some time to come. The aim of quantitative easing is to boost the supply of money, push up a wide range of asset prices and facilitate finance through the capital markets, thus raising nominal demand in the economy. How well is quantitative easing working? Chart 3 shows, for the two days following each successive announcement about the scale of the asset purchase programme, the movements in: average gilt yields; the expected average level of Bank Rate over the same maturity (from Overnight Indexed Swap rates); and the spread between them 1 . That suggests gilt yields are lower as a result of the programme by a total of around one percentage point. Moreover, since the programme began, investment-grade corporate bond yields have fallen by almost four percentage points, equity prices have recouped half their  1  The impact is measured by the change over two days in the average 5 to 25 year (zero coupon) gilt spot rate.

We also focus on topics that influence the development and regulation of companies’ input factors – both regarding human resources such as labour, in particular children’s rights, and natural resources such as access to clean water and clean air. Norges Bank’s Executive Board has established a set of principles and a strategy for the exercise of ownership rights. Openness and transparency are key principles in the management of the Government Pension Fund – Global, and we aim to be as open as possible about our active ownership work. Our active ownership is practised in a number of different ways: through the exercise of voting rights, through dialogue and engagement with individual companies, through collaboration with other investors, through submissions to the regulatory authorities, and through research and public communication. We aim to vote at all general meetings of the companies in which the Fund has shares. We voted on 68 724 items at 7 871 general meetings in 2008. 4  BIS Review 58/2009  The impact of the crisis on the Norwegian Fund The Norwegian Fund has been hard hit by the crisis. In 2008, the total return on the Fund was a negative 23 per cent, the weakest in the Fund’s history. There was a negative return of 41 per cent on the equity portfolio, while the return on the fixed income portfolio was close to zero. The real rate of return after costs has been 1 per cent since 1998. This is well below the assumed long-term return of 4 per cent.
Thus, this episode has shown that structural policies that foster the integration and interconnection of European markets – in particular energy markets – and strengthen the 12  single market will not only generate greater resilience to shocks, but also drive competitiveness. Joint funding arrangements should be established to safeguard this common effort and avoid any excessive or highly unequal impact on national public finances. Common funding arrangements would enable financing for large-scale programmes based on shared quality standards and provide for a uniform approach for assessing programme execution. Headway must also be made in the expansion of the public and private risk-sharing arrangements in the EU. The euro area needs a permanent macroeconomic stabilisation mechanism – with revenue-raising and borrowing capacity – to complement the single monetary policy. It is also imperative that the banking union be completed with the establishment of a European deposit guarantee scheme. Lastly, we must press forward with constructing a capital markets union. 4. Concluding remarks In short, with war on European soil and a sharp rise in geopolitical tensions, the challenges we face are very complex. These developments, together with the additional series of shocks on an unprecedented scale from the pandemic, have pushed inflation to persistently very high levels both in Spain and in the euro area as a whole. Given this situation, monetary policy needs to be steered to ensuring that the direct effects of these shocks are not included in the formation processes for other prices and wages.

Following on from these ideas, the ECB has also announced a series of experiments across the euro areavii which could begin in 2024. As part of this process, we are prepared to support the new European pilot programme directly by making CBDC available as a settlement asset.   Providing a tokenised settlement asset could also be rounded out by a  European infrastructure – in the euro area - that would bring together all tokenised assets (CBDC, deposits, financial assets), to guarantee interoperability between the different assets as well as the singleness of the currency. This European platform would prepare for the approach being advocated by the BIS, i.e. the creation of a unified ledger at international level to facilitate cross-border payments. These ideas are also developed in a recent IMF publicationviii. *** I would like to conclude with the words of André Gide, "there are many things that seem impossible only so long as one does not attempt them". Let's work together to unlock the full range of possibilities. Let's pave the way for sustainable innovation for the benefit of our fellow European citizens. I really believe that what we have done for Paris post-Brexit, we can also do for payment systems. Thank you for your attention. Page 7 of 6 i  Bloomberg, Banks betting on Paris say there is life after London, 18 April 2023 Banque de France, Assessment of Risks to the French Financial Systems, June 2023. iii The Eurosystem will have no knowledge of the details of any transaction.
•  Second, the central banks in developed economies are increasingly focused on more subtle analyses of the financial system stability in their countries, and inevitably, as a result and consequence of the globalization, in wider terms. It requires access to various information. We also face this imperative, if seeking to successfully address the potential financial market vulnerabilities and crises. Thus, the role of the financial sector in the economy and its interdependence with all other sectors created a need of establishment of a proper financial account statistics. Statistics that shows the flow of the financial assets across each sector in the economy. The successful delivery of this project needs joint work and cooperation between the National Bank and the State Statistical Office. I believe that the team of Ms. Novkovska and the experts of the National Bank will deliver this project successfully. Without this type of statistics, our financial stability analyses will lie on less certain ground. •  Third, there is a higher need of statistical treatment of the funds with the household sector. The steady increase in the funds of the household is an important trend which is present in the modern economy, and lately in our country, mainly owing to the fact that they have better access to banking credits. Considering the importance of this sector in the economy, there is a need of increasing the range of statistical information that refer to the household sector with a view to more relevant determining and analyzing of their current and future behavior.

Same as most central banks throughout the world, the National Bank, as specified by the Statistical Research Program generates three sets of macroeconomic statistics: •  Monetary statistics that includes processing and presentation of data on the money supply (monetary aggregates), banks' interest rates on approved credits and accepted deposits, and many other data on the banking sector;  •  Balance of payments statistics that includes processing and compiling data on the developments in the balance of payments in the Republic of Macedonia; and  •  External debt statistics that includes processing and presentation of data on the foreign debt of the country. The National Bank has developed all these major sets of macroeconomic statistics in line with the international recommendations and standards. The harmonization of the method of developing such statistics with the international recommendations and standards has permanently been subject to verification by international institutions and organizations, primarily by the International Monetary Fund, as an institution that creates the methodological standards and recommendations in the area of central banking statistics. I would like to take this opportunity to mention the report of the so-called IMF ROSC (Report of the Observance on Standards and Codes) Mission, where the assessments of the  BIS Review 100/2006  1  central bank statistics are particularly positive, i.e. the development of the NBRM monetary and balance of payments statistics is largely harmonized with the international recommendations and standards.
Furthermore, as my fellow panelist Prof. Baumeister has highlighted, it is important to identify the original source behind the energy price movements in real time. This may become more challenging as the green transition involves a wide range of sectors and products. To help us navigate we might need new analytical tools and new models. Second: Central banks are not unfamiliar with fluctuations in energy prices, but should the frequency and persistence of supply shocks increase ahead we may more often be faced with the challenging short-term trade-off between stabilising inflation and promoting high and stable employment. Deciding on the right timing and dosage of monetary policy will be crucial. The appropriate response of monetary policy to energy prices depends on the source and nature of the disturbances and their expected persistence. It also depends on whether energy price shocks fuel inflation via second-round effects on other prices and wages, for instance through inflation expectations. Failing to respond to secondround effects, we may risk persistent overshoots of our inflation target and ultimately, a deanchoring of inflation expectations. On the other hand, wrongly interpreting temporary movements in energy prices as persistent, we could have larger output losses in the short term and may even increase inflation volatility. Moreover, changes in relative prices, for instance due to higher carbon prices, are effective signals that push the transition in the right direction. An appropriately flexible and forward-looking monetary policy would help those necessary changes in relative prices to feed through.

We are already seeing that technology developed in the petroleum sector serves as a springboard for jobs in the green sector. Turning to my next topic, how are the structural changes in energy markets shaping the outlook for energy prices and inflation? On this, I will be humble and say, that predicting the level of energy prices in the years ahead is difficult. As we have already heard, different aspects of the green transition will affect prices differently, and possibly, with opposite signs. Outcomes will depend on technological developments, the supply of raw materials and minerals and on political decisions related to climate and energy security. In the short to medium term, we should be prepared for a potentially higher frequency of negative, and possibly, more persistent supply-side shocks originating in the energy market. [1] With an increasing share of intermittent renewables in the energy mix and insufficient energy storage systems to act as balancing mechanisms, supply could become more unpredictable. Coupled with low short-run demand elasticities, shortrun fluctuations in supply could potentially trigger large price movements, reinforcing a well-documented characteristic of energy markets. Turning to how movements in energy prices feed into inflation. Although household energy costs make up a fairly small share of the CPI basket, as we all witnessed last year, large movements in energy prices can have a material impact on headline inflation. Energy price changes also have an indirect effect through firms’ input costs.
I anticipate this could play out in three dimensions: •  First, there will be a need to facilitate the further development of the RMB banking market so that offshore RMB liquidity can be efficiently allocated, which would enable banks in need of RMB to easily obtain it from banks with surplus liquidity. We can already see the market moving in this direction as banks begin to diversify and expand their RMB assets progressively. Meanwhile, the introduction of a crossborder collateral management arrangement opens an efficient channel for financial institutions to widen their liquidity sources and obtain offshore RMB liquidity from Hong Kong, using even non-RMB papers for repos. •  Second, there will also be a need to facilitate the development of RMB capital markets. On this front, Hong Kong’s dim sum bond market has shown encouraging development. Already, multilateral companies and international financial institutions such as the World Bank and the Asian Development Bank have tapped the dim sum bond market. For the market to develop further, there will be a need to continue to broaden the participation of both issuers and investors. Additionally, the tenor and variety of debt instruments will need to increase to meet the financing requirements of different issuers while satisfying the appetites of different investors. There has been repeated RMB sovereign bond issuance by the Ministry of Finance and more regular issuance in due course will help to gradually build a benchmark yield curve.

Intermediation among non-residents The third set of characteristics involves the provision of intermediation among non-residents. The Eurodollar market provides efficient intermediation among non-residents. For example, it allows for Eurodollar bonds to be issued by non-US entities and bought by non-US investors. To an increasing extent, the offshore RMB market is functioning as a platform for RMB financial activities conducted by non-residents. The pool of RMB deposits in Hong Kong, being deposits of mainly non-Mainland individuals and corporates, is exceeding RMB 800 billion. Adding to that is the dim sum bond market, which has a size of RMB 260 billion at present. Offshore RMB bonds are being issued by Mainland Chinese entities as well as multinationals, and they are being bought by offshore investors. At the same time, banks in Hong Kong are extending RMB loans to customers, with the outstanding amount of such RMB loans currently stands at close to RMB90 billion. 2  BIS central bankers’ speeches  As the market deepens and a greater variety of RMB products become available offshore, we will eventually see more RMB intermediation within the offshore markets, especially as non-Chinese residents become willing borrowers of RMB. However, for that to happen, work on different fronts needs to be pursued and market efficiency furthered through innovative solutions and active participation by different market players.
Private sector’s consumption expenditures rose by 36.4 percent in real terms in the period from 2001 to third quarter of 2006, while public expenditures rose by 15.5 percent with the acceleration especially in the last two quarters. Looking at the investment side, we see that the private sector’s investment spending increased by 134.3 percent in real terms while the public investment spending went up by 14.1 percent. The high increases observed in investment spending also indicate that the investment-oriented basis of growth is widening and so the production capacity is increasing. Another resource for growth is the high increase in efficiency. Accumulated efficiency increased by 39.3 percent in the last five years. The high efficiency rates support the growth process without inflation on the one hand and they contribute to the sustainability of growth on the other. The exports have had great contributions in growth in recent years and this contribution keeps growing gradually. The Turkish economy is opening its doors. Accumulated annual exports rose by 167.5 percent as of November 2006 compared to the year 2001. The total trade volume in the last year reached 220.8 billion USD and it constitutes 57 percent of the national income. BIS Review 28/2007  5  Dear Guests, The new structure of the growing process in our country is an indicator of the significance of macroeconomic stability, which lies on the basis of price stability for growth and competition.

It would not be easy to reduce the central government deficit in a situation with declining oil revenues. We might, of course, be fortunate enough to experience a rise in oil prices again, so that we do not have to deal with this problem. Perhaps the oil price is abnormally low at present. But it is important to be aware that the government, in expanding welfare programmes and public sector activities, has not taken due account of the possibility that oil prices will remain low over a longer period. 15  BIS Review 20/1999  We have already witnessed a depreciation of the krone in response to the deterioration in Norway’s terms of trade. This may reflect expectations of continued low oil prices and lower revenues in the long term. This also compromises confidence in the government’s long-term financial position. It is risky to increase expenditure and reduce taxes when there is doubt regarding the long-term balance of the economy. An expansionary fiscal policy could increase uncertainty and the fluctuations in the exchange rate, and reduce Norges Bank’s freedom of manoeuvre. On the contrary, fiscal policy should be oriented to provide room for lower interest rates that can counter a cyclical downturn in an environment of stable wage and price inflation. The authorities must be very cautious about further embedding fixed long-term priorities in the central government budget.
As with any innovation and application of new technology, critical questions are emerging. For example, reliance on complex algorithms or machine learning tools raises issues around “explainability” and a clear audit trail. Lawyers will inevitably opine on a variety of issues, including data protection and privacy. Beyond strictly legal issues, firms will have to wrestle with questions about fundamental fairness and the consequences that techniques perceived as unduly intrusive and untrusting may have on employee morale and industry retention. As new technologies spread and their use grows in areas related to compliance and internal assessments, we will need to confront these issues. Conclusions To conclude, the culture of a financial firm, and of the industry as a whole, is a complex phenomenon that is not easy to measure or manage. Collectively, however, we must not ignore this issue. Looking ahead, members of the financial industry with different roles and perspectives can each take practical steps to move this dialogue forward. Financial firms should continue to develop and implement programs to build cultural capital, with directors, senior management, and staff each having distinct responsibilities and perspectives. Supervisors around the globe should remain committed to staying up-to-date on industry advances while continuing to develop and implement innovative supervisory approaches. We should continue to collaborate with the industry, the academic community, and other parts of the official sector. We should continue to monitor progress on industry benchmarking as more jurisdictions take up these efforts.

In December 2017, the chief executives of the five main retail banks in Ireland informed the Department of Finance of their intention to establish an Irish Banking Standards Board.12 In the U.S., the idea of industry benchmarking has been raised and discussed in the past, but no industry action has emerged to move this idea forward. At the New York Fed’s workshop on culture measurement and assessment, several participants recommended either joining the BSB’s benchmarking survey or creating a similar U.S. organization.13 Some noted that it would be helpful to include non-banks in the effort, and to collaborate with other corporations that have experience building strong cultures. Participants also discussed the importance of sharing 3/6  BIS central bankers' speeches  “lessons learned” and developing best practices as an industry. In my view, these types of industry-led initiatives can offer useful insights as firms compare and contrast their efforts and outcomes with peers. Official Sector A final perspective is that of the official sector. In my view, there is a clear role that follows the traditional focus on prudent risk management and the goal of building resilience. This reflects both the direct impact to firms mentioned above and the potential for industry-wide spillover if conduct and performance issues at one firm cause customers, counterparties, and investors to lose trust in the industry as a whole. This type of spillover suggests a role for the official sector to coordinate efforts and push the industry forward.