samchain/econo-pairs-v1 huggingface dataset:
However, if we look at the spread between the cost of borrowing and the lending rate for mortgage institutions, there is no indication that the interest margin for mortgage institutions has fallen as a result of increased competition (Figure 5). Mortgage institutions´ long term interest margin. 12 10  %  8 6 4 2 0 Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep 1995 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 Interest rate on mortgage institutions´ borrowing, 5 years Mortgage institutions´ insterast rate on lending, 5 years. 3  BIS Review 99/2000  The new Internet-based players on the mortgage market are made up of those who mediate loans via the Internet and those who issue credit over the Internet. Players such as Blockbid, Bolånebörsen, Comboloan and E-loan search for and mediate the cheapest mortgages for borrowers. Europeloan, on the other hand, is an Internet-based credit issuer that has operated in Sweden since February 1999. The company, which also operates in Belgium and Germany, finances mortgages through securitisation. As more than 70% of the households have chosen floating interest rates on their new loans raised in the mortgage institutions during the last year, it could be suitable to look at the interest margin between short borrowing interest rates for mortgage institutions and floating interest rates on housing loans (Figure 6). This diagram suggests that the interest margin for mortgage institutions is now about 1.2% compared to about 1.5-1.7% during 1996. %  Mortgage institutions´ short term interest margin.

This separate company is then financed through issuing bonds on the market. The special purpose vehicle has a clearly defined risk scenario and does not pursue any business activities other than acting as holder of the specified loans. Consequently, the company is not subject to the capital adequacy regulations that apply for mortgage institutions. Securitisation has several advantages, the main one being that it enables mortgage institutions to reduce their share of equity and thereby their total financing cost, since equity is a more expensive source of financing than loan financing. Furthermore, mortgage institutions can streamline their operations by selling claims and by specialising in issuing loans. Securitisation can also increase the stability of the financial system as credit risks can be transferred from institutions subject to regulation to players that are less sensitive to heavy credit losses. Securitisation using a special purpose vehicle located in Sweden is permitted, but in practice it is unprofitable since, under the current regulations, the special purpose vehicle will be subject to the same capital adequacy regulations as the mortgage institutions. A proposal to improve the conditions for securitisation in Sweden is currently being prepared by the Ministry of Finance. The Budget Bill for 2001 states that the government intends to put forward a bill on improved conditions for securitisation during autumn 2000. To date, three Swedish mortgage institutions, SBAB, SEB-Bolån and Bokredit have undertaken securitisation via special purpose vehicles abroad.
With regard to the composition of this adjustment, according to the Stability Programme the public deficit path projected for the period 2017-2020 will be achieved mainly through control of total primary public expenditure, i.e. without including public debt interest payments. Specifically, if the projections are fulfilled, the weight of primary public expenditure in GDP will be reduced by 3 pp over this period, to 36.6% in 2020. At the same time, government revenues are expected to grow moderately, by 0.9 pp of GDP over the programme’s horizon, to 2020. On the expenditure side, the Government projects moderate growth in its wage bill, basically reflecting the 1% rise in the remuneration of public-sector employees approved for 2017 and the impact of savings arising from reforms approved in previous years. At the same time, the Stability Programme assumes that the downward trend in spending on unemployment will continue, in line with favourable labour market developments; that the application of the adjustment factor to pensions will continue to hold down pension spending, in a positive inflation environment; and that current spending on goods and services will continue to be firmly controlled over the coming years. 5/8  As for public investment, the Stability Programme projects an increase in general government investment of 10% in 2017.

However, as mentioned, real GDP may behave more positively in the short term than in the Stability Programme. As regards the budget, the path projected for the overall general government deficit is in line with the requirements of the Stability and Growth Pact: declining from 3.1% of GDP in 2017, to 2.2% in 2018 and 1.3% of GDP in 2019. In 2020 a budget deficit of 0.5% of GDP is projected. This path of reduction of Spain’s budget deficit needs to be achieved if the excessive deficit situation (a deficit of more than 3% of GDP) is to end in 2018. Public debt, according to the Stability Programme, is expected to fall gradually, to reach 92.5% of GDP in 2020. In the current environment of high economic growth and low general government financing costs, the budget consolidation required to achieve the deficit targets for the period 20172020 (as measured by the change in the primary structural balance) is relatively small. The Stability Programme includes the stability objectives for 2017 – for each sub-heading of public expenditure – that were approved by Parliament in December last year and extends them to 2020; then, budget balance is projected for all levels of general government, except the Social Security system, which would still record a deficit of 0.5% of GDP. Central government, which currently has the largest deficit, will be responsible for making the bulk of the projected adjustment.
Ultimately, this exercise would provide valuable insights on how to 3/5  BIS central bankers' speeches  best integrate climate-related risks into the Bank’s macroeconomic and financial surveillance activities and feed into wider policy responses to climate change. Third, we will need to address the appropriate treatment of climate risks within the prudential and supervisory frameworks for financial institutions. As a start, the Bank will require financial institutions to report their exposures to climate risks once work on the green taxonomy has been finalised. Information gathered through this process will be used by the Bank to consider changes to prudential standards to better reflect risks from climate-related exposures. Concurrently, the Bank also intends to align, where relevant, the reporting requirements for climate-related risks with the Value-Based Impact Assessment Framework (VBIAF), which will be finalised by October this year, as well as its corresponding VBIAF Sectoral Guide, which is currently being developed. In addition, the Bank will increase its engagements with individual financial institutions to better understand how they consider climate risks in their risk management approaches and practices. Fourth, we need to strengthen the use of disclosures more broadly, to provide greater transparency on how climate risk considerations are integrated into business decisions. Such disclosures, by both financial institutions and non-financial firms, will help drive action towards more effective risk mitigation and better adaptation to climate change. To this end, the Bank will work with the industry to implement the recommendations of the FSB Task Force on Climaterelated Financial Disclosures (TCFD) in Malaysia.

The number of people in employment has recently reached an all-time high in the UK as a whole; and it is very close to its all-time high also here in Scotland. And the number of people claiming unemployment benefit is at a 27-year low both in the UK as a whole and, again, up here north of the border. Meanwhile retail price inflation - on the Government's target measure - has averaged 2.5% over the past 10 years. That is exactly in line with the present inflation target which recognises that consistently low inflation is a necessary - though not in itself a sufficient - condition for sustainable growth. And that of course is the universal central banker's mantra! That's the good news. The bad news, of course, is that over the past two years the imbalance within our overall economy which I referred to when I last spoke to you - between the internationally-exposed sectors including much of manufacturing industry, and more recently some parts of the financial services industry, which have been under intense pressure, and the more domestically-oriented sectors, where I don't say things have been easy but where the pressures have been less severe that imbalance has persisted, and indeed it has got worse. The grim fact is that there is nothing that we in the UK can do directly to address the global economic weakness which has been at the heart of our problem.
FX depreciation (bp)  Figure 1: ER and long-term yields in reaction to US MP shocks (CHL vs MEX) (†) Chile Mexico 400  400  300  300  200  200  100  100  0  0  -100  -100  -200  -200  -300  10-Year interest rate (bp)  -400 -20 -15 -10 -5  -300 y = 5.4 + 6.1x -400 0 5 10 15 20 -20 -15 -10 -5  20  20  15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15 -20 -20 -15 -10 -5  y = 16 + 1.19x 0 5 10 15 20  -15 y = -0.5 + 0.15x 0 5 10 15 20  -20 -20 -15 -10 -5  y = -1.9 + 1.1x 0 5 10 15 20  US monetary policy shock (bp)  (†) A rise in FX indicates a depreciation of the domestic currency against the dollar. The sample corresponds to the post Nov-08 average. Source: Central Bank of Chile. Recent research conducted at the Central Bank of Chile highlights this point. Figure 1 shows the impact of US MP shocks (changes in US short-term rates around Federal Reserve meetings) on ER and long-term bond prices in Chile (with clean floating) and Mexico, which has actively intervened in recent years.

7  But, when this architecture is put in place and preserved over time, the floating ER regime may be just the expression of a broader arrangement of institutions and policies. Perhaps it is such arrangement, rather than the ER policy itself, the factor that may really protect EMEs from major global shocks, but this is not material to the end result: substantial smoothing of external volatility over the local economy. Finally, a greater convergence to the international standards on banking capital requirements defined by Basel III, especially for global banks, is among the macroprudential policies currently promoted to reduce the impacts of greater external volatility. Thank you. ***  8
Normally these things carry on uninterrupted during recessions: output of public services is in general less volatile than private-sector output (Chart 3). But on this occasion, sweeping all before it, the pandemic curtailed many of these more standard activities, even after the full lockdown was ended in the summer. In the third quarter of this year, for example, real healthcare output – as estimated by the ONS – was still more than 20% lower than in 2019Q3. Taken together, measured declines in measured health and education output accounted for a quarter of the near-9% drop in aggregate GDP during the course of that year. Note that there’s been no decline in nominal spending on public services, or the collective incomes of people who work in them. Employment in public services has continued to rise and so have average wages. It’s just that, at least as measured in the national accounts, productivity in that sector has declined and the implicit price of those services – the so-called “deflator” – has risen. The result is an additional wedge, relative to any normal downturn, between (measured) real GDP and household incomes. Chart 3: Drop in GDP partly reflects a steep fall  Chart 4: Households protected from fall in  in measured output of public services. This has  national income  no impact on household incomes  Sources: ONS and Bank calculations. Sources: ONS and Bank calculations.

But this divergence in demand may help to explain why, at least on impact, the pandemic has depressed inflation by a bit less than we and others anticipated when it began. Various things have contributed to gap between real GDP and retail spending Expenditure switching certainly isn’t the only reason for the contrast in Chart 1. I want first to run through a number of other things that have probably contributed to it. One is the weakness of spending – on durables in particular – during the lockdown in the spring. At that time there were many things people were simply unable to buy. For durable stuff, much of that spending is likely to have been delayed rather than cancelled. If you needed a new fridge or a new car in March, you presumably still needed one in June, when the lockdown began to be eased. One would’ve expected most of that catch-up to occur during the summer but some of it may also have leaked into the autumn and early winter. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  Second, part of the drop in GDP reflects an unusually large decline in the measured real output of public services, something that has no consequences for people’s incomes or their ability to spend. To construct these estimates the Office for National Statistics uses detailed information on things like the numbers of pupils in school and operations in hospitals.
The Bank sought to do this by cutting interest rates to buoy up consumer spending. And the Government stepped up its own spending, which was helpful given the international environment. Although we couldn't avoid an overall slowdown altogether - the economy on the latest data ground to a halt in the fourth quarter of last year - we have managed for most of the time to keep the UK economy as a whole moving forward despite the recession in the internationally-exposed sectors of manufacturing. Of course we'd all have been much happier with better balanced growth. Stimulating domestic demand to offset the external weakness - the only option available to us - was very much a second best option. It was not without its own risks including the build-up of household debt and the current exuberance in the housing market. But it was better than doing nothing at all. That would have meant a much sharper slowdown, and probably recession, in the economy as a whole. And, given that inflation was well under control, it would have meant a quite unnecessary loss of overall output - and income and employment. In effect we took the view that unbalanced growth was better than no growth. It is perhaps less obvious that we could not have done more to weaken the exchange rate. At around $ - 1.50, sterling's value against the dollar through this period was not seen by most people even in the internationally - exposed sectors as a particular problem.

The Rt Hon Sir Edward George: The Bank of England’s monetary policy objective and recent challenges Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, to the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) Birmingham, 11 April 2002. *  *  *  I've had a long-time interest in the RSA. I was honoured to be elected as a fellow in 1986. But this is the first time I've participated in one of your programmes. The Society, unusually, brings together people from different backgrounds and disciplines - across the arts to the sciences, but with a common interest in social and economic progress in the broadest sense. That diversity, but also commonality, of interest is reflected in the RSA Journal, which I find a fascinating read - whenever I get the time. It's reflected, too, in your lecture program so that I find myself slotted in between a lecture entitled "The feel good factor", on a medical theme, and another entitled "Chaos is good for you!" describing a creative approach to business management! In fact I have been invited to talk about the "Monetary Challenges" we are currently facing - and, when you've heard what I have to say, you may feel that this juxtapositioning is not wholly inappropriate. But let me begin by explaining what it is that we are trying to do through monetary policy at the Bank of England, and why.
they do not focus only on stabilising inflation but also take account of real economic developments and possibly other factors too. However, the present degree of flexibility in inflation-targeting policies has probably not always been regarded as so obvious as it is today. At least as far as Sweden is concerned, I think I am right in saying that it has been a gradual process that has brought us to where we are today. That is probably also true for many other inflation-targeting countries. Immediately after the announcement of the inflation target in 1993, the Riksbank tended to formulate policy as if the intention was to be anything but flexible. This may have been because the credibility problems in the 1970s and 1980s were considered damaging and were deemed to warrant “tough talk”. Whether it was a wise strategy to begin in this way with a one-sided focus on inflation is perhaps open to question. One could argue that it would have been better to choose a more balanced line from the outset. It might then have been possible to counteract some of the criticism levelled at the Riksbank for supposedly “focusing exclusively on inflation and completely disregarding employment”. From the mid-1990s and onwards, though, the Riksbank tried in various ways to clarify that we were not focusing solely on stabilising inflation. I believe it is correct to say that the implementation of policy also began to become more flexible around that time.

It does however claim that there is a discrepancy between word and deed that raises questions regarding what status the stabilisation of the real economy really has in relation to stabilising inflation. I should perhaps underline here that this criticism, as I understand it, does not say that there has been greater clarity in countries that do not have specific targets for inflation. In my opinion, the assertion that the communication of inflation-targeting central banks generally tends to focus a lot more on the stabilisation of inflation than of the real economy is essentially correct. Inflation forecasts undeniably have the leading role in the reports published by these central banks, and it is usually on the basis of these forecasts that the banks explain their policy decisions. So why have central banks that pursue a flexible inflation targeting policy chosen to concentrate on inflation in their communication and often been rather vague as regards how they look upon the trade-off between stabilising inflation and stabilising the real economy? One important explanation, which I already have touched upon, is probably that many of the economies that have adopted inflation targeting policies were previously beset with high, sharply fluctuating inflation. The task, accordingly, was to create broad understanding and credibility for a new policy focused on price stability.
Bank lending to business has risen more sharply in France than anywhere else in Europe: up 4.5% in annual terms at end-November 2015, compared with a rise of 1% in Germany, and 0% in Italy. Moreover, interest rates in France are among the lowest in Europe. Interest rates on new bank lending are currently below 2% on average, compared to 5% in 2007. However, I would like to stress the fact that access to cash loans is more difficult for very small enterprises. Their fragile financial position may be one reason; but there is an ongoing misunderstanding with the banks that the latter must seriously address. French households’ savings must also adjust to the low interest rate environment. This is an opportunity to encourage more “risky” and more long-term investments, both in the interest of investors themselves and of our economy. Today only 31% of French households’ financial investments are made up of risky assets, against 45% in the euro area. This requires taking action in two directions. First, the decrease in interest rates should be gradually passed on to risk-free investment returns – this is why I proposed lowering the rate on the PEL, the French housing savings plan, this is also why we must resolutely continue to lower the returns on life insurance invested in euro funds. Second, new products should be developed: probably less liquid, with or without a capital protection over the long term, and possibly offering the best equity performance over time.

François Villeroy de Galhau: Challenges for France’s economy and financial sector in 2016 New Year Address by Mr François Villeroy de Galhau, Governor of the Bank of France, Paris, 18 January 2016. *  *  *  Ladies and gentlemen, Thank you for coming here today to this magnificently restored Golden Gallery. This is the first time that I am giving this address as Governor of the Banque de France, but it is an auspicious tradition that brings us together. I would like to start by extending my warmest wishes to you, your colleagues and your institutions. 2016 has already been marked by volatility: weak financial markets and commodity prices, from China and the Middle East; political uncertainty in Europe, in Southern Europe, in Eastern Europe, North-Western Europe with the British referendum, and even in Central Europe with the refugee crisis. It is our duty to be vigilant, but we must also, on the one hand, distinguish real information from background noise and real challenges – and there are no shortages of them – from the sensational and sometimes excessive statements at this start of this year; on the other hand, in the face of current volatility, we must stick to our mediumterm objectives. This evening I will not discuss the Eurosystem’s monetary policy as we are in the “silent period” leading up to the Governing Council meeting this Thursday. Such longterm strategies also apply to the reforms in Europe and in France.