samchain/econo-pairs-v1 huggingface dataset:
Durmus Yılmaz: Central bank achievements and opportunities in Turkey Speech by Mr Durmus Yılmaz, Governor of the Central Bank of the Republic of Turkey, to members of the press at the Central Bank of the Republic of Turkey, Ankara, 18 April 2006. *  *  *  Dear Press Members, I have been appointed Governor of the Central Bank, which was vacated by Former Governor Mr. Süreyya Serdengeçti due to his retirement after having completed his five-year term on 14 March 2006 at the end of the business hours, and which has been filled temporarily by Dr. Erdem Basçı as Acting Governor since then. I have worked in various positions of the Central Bank of the Republic of Turkey since 1980. As you have been closely following, many achievements have been made since then, especially in the last couple of years, that will always be remembered as the turning points in our economic history. Distinguished members of the press, As a result of the legal amendments made in 2001, the greatest achievement in the area of monetary policy has been the attainment of the “Central Bank Independence”. Accordingly; “The Bank shall, with the objective to achieve and maintain price stability, be authorized to utilize monetary policy instruments described in this Law and shall also be authorized to directly determine and implement other monetary policy instruments that it deems appropriate.” as expressed in the Law on the Central Bank. Such an authorization is called “instrument independence” in the modern economic literature.

We introduced this concept exactly three years ago. You are acquainted with the main elements: definition of price stability, inflation forecast as main indicator and target range for the three-month Libor rate as operational target. Overall, our experience with our monetary policy concept has been good. Recently, this experience was discussed at an internal conference. Since the new concept was adopted, we have widened the basis of our monetary policy decisions and further developed our analysis of indicators and models. The more extensive use of relevant information enabled us to react more swiftly and with more foresight than formerly to changes in the economic situation. Our monetary policy concept met with a positive public reception in Switzerland. The same applies to the financial markets and international organisations such as the IMF and the OECD. The concept has vastly improved transparency. By publishing studies on internal decision-making processes and the forecasting models used, we have made further relevant information accessible. The public is thus in a better position to understand the reasoning behind monetary policy decisions. 2  BIS Review 73/2002  So far, we have published our inflation forecasts regularly in June and December. We should like to take this a step further and will in future publish an updated inflation forecast after every quarterly assessment of the situation. This will further help to improve transparency. From 2003 onwards, we will also inform the public of our monetary policy by publishing new inflation forecasts in March and September.
For this reason, it is important that a detailed strategy be designed as soon as possible for achieving a gradual and sustained reduction in fiscal imbalances, to be implemented when the pandemic has been overcome. This strategy should also place the emphasis on improving the quality of public finances, from the viewpoint of their composition, in terms of the various types of revenues and expenditures, to ensure that it is geared towards boosting long-term economic growth. And it is important to stress that although, as I have already mentioned, this fiscal consolidation strategy should only be implemented when the economic effects of the crisis have been overcome, the design and communication of its basic aspects should be undertaken without delay, as this would boost economic policy credibility and, in consequence, the expansionary effects of the current fiscal measures. The size of the challenge is so large that successfully addressing fiscal consolidation will require a comprehensive review of the tax system and of all expenditure items. Also, this objective will be facilitated by the implementation of the structural reforms that I spoke of earlier. 4 Conclusion I should like to conclude with a reflection which I think needs to be clarified, especially in this seat of popular sovereignty. In the last part of my address, I have referred to a set of economic policy actions that involve changes (some of them substantial) to the institutional 10  See J. Pijoan-Mas and P. Roldán-Blanco (2020), Dual Labour Markets and the Equilibrium Distribution of Firms, mimeo.

In a context of persistent recession, this strategy would have important benefits, in the form of an increase in the economy’s potential growth, generated by the reforms, and an improvement in the credibility of the sustainability of public finances in the medium term, which would in turn expand the fiscal headroom available and boost the expansionary effects of the current fiscal actions. In short, to have the fiscal space necessary to be able to expand the support measures for the economy should the course of the pandemic make this necessary, the reform agenda needs to be implemented decisively, fiscal consolidation  5  See R. Blanco, S. Mayordomo, A. Menéndez and M. Mulino (2020), Spanish non-financial corporations liquidity needs and solvency after the COVID-19 shock, Occasional Paper No 2020, Banco de España. 17  needs to be planned and support instruments need to be reformed to make them more flexible and focused. In the case of structural reforms, the Annual Report, which I am presenting to you today is a veritable catalogue of the main challenges that, in the opinion of the Banco de España, the Spanish economy faces in order to raise aggregate well-being. These challenges are wide-ranging in type and require the following issues to be addressed: low productivity growth, labour market duality, high unemployment, population ageing, inequality, climate change action, changes in the globalisation model and the speed of digitalisation of the economy.
In Sweden and many other countries, the old idea, in the 1950s and 1960s, that a trade-off exists between inflation and unemployment resulted in an increasingly high level of trend inflation. When the drawbacks of active economic policies of this type became apparent, people in general and their representatives also feared the other extreme - a monetary policy that consistently aimed at keeping inflation as low as possible. Some countries, of which Sweden is one, are basically averse to deflation. So a regime whereby monetary policy has a systematic, long-term commitment to keeping inflation at a predetermined level of 2 per cent, neither more nor less, represents what many people perceive as a balanced approach to avoiding deflation as well as inflation. This has made it easier to establish the legitimacy of the regime in the public mind. Some relevant issues for a practitioner Let me now turn to some matters which a practitioner finds important and which will also be touched upon during the coming two days. BIS Review 58/1998  -3-  One issue concerns the indicator of inflation that is appropriate to use as an explicit target. The practical considerations in this respect are complex and are currently being debated in Sweden. The consumer price index has the advantage of being familiar to a wide public. Besides measuring trend inflation, however, it also gives information about price fluctuations that stem from transitory supply-side shocks, for example changes in indirect taxes and interest costs.

Conclusion Now when we are assembled here for an important conference, with interesting contributions from a number of the world’s leading experts in the field, we would do well to be temperate in our appraisal of what we believe we know today. To this end I shall quote Lawrence Summers. In connection with the Federal Reserve Bank of Kansas City’s symposium on “Achieving Price Stability”, Summers considered the major changes that have occurred in macroeconomic thinking in the past two decades and then rounded off by saying: “It would be a misreading of history to think that we have now identified final truth or that some of the views expressed here will not look archaic twenty years from now.” That is a stimulating and challenging statement. Think how dull life would seem if we ever arrived at the final truth. As luck would have it, the increasingly complex reality in which we live is an endless source of challenges for researchers as well as central bank colleagues throughout the world. References Alchian, A. & Klein, B., (1973), “On A Correct Measure of Inflation”. Journal of Money, Credit and Banking, vol. 5, no. 1, February, pp. 173–191. Goodhart, C.A.E., (1995), “Price Stability and Financial Fragility”. In The Central Bank and the Financial System, pp. 263–302, Macmillan, London Summers, L., (1996), “Commentary: Why are Central Banks Pursuing Long-Run Price Stability?”. In Achieving Price Stability. A Symposium Sponsored by Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 29–31, pp. 35–43. BIS Review 58/1998
According to a study by the ECB, 43 banks and banking groups are active in more than three EU countries.1 Only some years ago, cross-border banking M&A in the EU was only taking place between small countries or vis-à-vis the new member states – Austrian banks’ expansion into some Central European countries is a good example of this phenomenon. Now this is changing. Today French, Spanish, German and UK banks are all trying to build European platforms. For instance, as you all know, Spanish Grupo Santander now owns the fifth biggest UK bank, and Barclays of UK owns the sixth largest private sector bank in Spain. And this spring, we are all witnessing the takeover battles, started by foreign bids, for two Italian banks. …is good news for the economy but raises challenges to supervisors and central banks At the Riksbank, we welcome this development. We believe financial market integration is strongly positive for economic efficiency and hence for growth and welfare in the EU. But we admit that integration presents some complex and multifaceted challenges to us as authorities. At the outset, integration is obviously hindered by differences in language, business culture and national laws and regulations. But once it happens, integration tends to follow the logic of business, not the “logic” of country border or national law. For instance, for financial groups which are expanding cross-border a part of the synergies is derived from centralising functions.

Another practical example on how to reduce the regulatory burden would be for countries to agree on a common and centralised reporting standard for large cross-border groups. The home-host relationship… The home-host relationship is the underlying theme running through a number of issues in the regulatory debate. Broadly speaking, the home-host relationship is about how we should divide tasks, powers and responsibility between different countries when it comes to supervising, monitoring and, in the worst case, sorting out financial institutions in distress. Formally, the home-host relationship only refers to the division of responsibility between supervisors, which currently is based on the principle of home country control. The home country is the country where the bank is licensed. For a bank, this means that the home country is responsible for supervising the bank and its foreign branches. The home country’s deposit insurance also covers its banks’ foreign branches. In the case of a group, it means that the home country is also responsible for supervising the entire group on a consolidated basis, while the host countries are responsible for their respective subsidiary banks and deposits. At this very moment, the CEBS is drafting the so-called home-host paper giving guidance on how the home-host supervisory relationship should be arranged given existing EU legislation. Even if there are no legally binding rules regarding the relationship between countries in crisis management or crisis resolution, these aspects of regulatory involvement have borrowed the terminology of the supervisory home-host concept.
Pablo Hernández de Cos: How to preserve pandemic-struck viable firms for a stronger recovery Introductory remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the European Systemic Risk Board (ESRB) virtual seminar on “Corporate insolvencies and public support measures”, 29 April 2021. * * * Many thanks to the ESRB Secretariat for organising this seminar. And let me also thank and welcome all participants to this event. I will devote these brief opening remarks to outline why, at the ESRB, we consider the topic of the seminar “Corporate insolvencies and public support measures” a very relevant and timely one. The starting point is our perception that, in the context of the current crisis, even if the macrofinancial outlook has improved, uncertainty remains high. And one of the main elements of this uncertainty is precisely related to the extent of the damage inflicted by the crisis on the corporate sector, whose magnitude will be a key determinant of the persistence of the crisis and the strength of the economic recovery. Therefore, we need to measure this risk carefully and be ready to adapt our policies to mitigate it to the extent possible. And this is particularly relevant in the current phase of the crisis.

And, as second-round effect, this could also impact the profitability and creditworthiness of financial institutions, and, if insolvency problems affect a significant proportion of firms, it could potentially trigger negative financial loops. Second, a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the years to come, lowering productivity and economic growth. The experience from the global financial crisis indeed shows that highly indebted firms are less dynamic in terms of capital investment and employment. And these two implications of high indebtedness can feed back into each other. The contraction of investment reduces future profitability and repayment capacity, and higher default rates make it more difficult to obtain additional financing, thus reducing investment. 1/2  BIS central bankers' speeches  These considerations can provide a rationale to use public resources to support firms with a high level of debt resulting from an exogenous shock, as has been the case with the pandemic, but which are nonetheless viable based on their medium-term perspectives in terms of profitability and productivity considerations. In this regard, the design of public support programmes to help viable firms improve their solvency position poses at least two fundamental challenges, related, first, to the selection of the firms targeted by the aid; and second, the design of a structure of incentives for those firms participating in these programmes.
In part the policy stance of the European Central Bank has to the extent possible been guided by efforts to drive growth with low interest rates, while the Central Bank of Iceland’s objective has by and large been to contain economic overheating. The current account deficit and the labour market Iceland’s external balance has been volatile in recent years. A current account deficit equivalent to 10% of GDP in 2000 was virtually eliminated within two years, but widened sharply again in 2003. After reasonable balance in the first quarter and a sizeable merchandise account surplus, the deficit in the second and third quarters was the largest since the beginning of 2001. For the year as a whole, the current account deficit was equivalent to 5½% of GDP. A recession in exports was a strong contributing factor, along with rising imports driven by private consumption, but much of the widening current account deficit may be ascribed to imports of investment goods for a hydropower project. In this respect the deficit is benign in origin, although the pace of increase so early on in the upswing is a cause of some concern. As is commonly the case at the onset of a growth episode, the increase in demand for labour was fairly slow during the year. The unemployment rate came down more slowly than had widely been expected given the surge in vacancies registered with employment agencies. Seasonally adjusted unemployment began to decline slowly from the autumn onwards.

The Central Bank does not consider that there are grounds for raising the policy rate yet, but all things being equal the inflation forecast calls for a higher policy rate in the coming months, even though the inflation outlook is favourable until some time next year. Because monetary policy needs to be forward-looking, this could well mean that the Central Bank will raise its interest rate even though inflation is still below the target. Largescale investments over the next few years mean that monetary decisions need to take into account a longer horizon than usual. Considerations of financial stability call for the same approach. Ladies and Gentlemen: Inflation forecasts play a key role in the Central Bank’s monetary policy decisions. Looking into the future is always difficult, but I think that the Central Bank can feel satisfied with how accurate its inflation forecasts have turned out to be. I would like to conclude by thanking the Office of the Prime Minister and other government authorities for their pleasant cooperation. I also thank the financial institutions for their good collaboration. Last but not least, I would like to thank the employees of the Central Bank for their fine work, without which the Bank could not have achieved such impressive results. 6  BIS Review 18/2004
First, because even though the current economic cycle is in a very robust phase today, it will come to an end at some point. If we have not armed ourselves with stronger economic instruments by that time, there is a risk that monetary policy will be overburdened. This is a well-founded German worry that as a central banker I share entirely; but it is for that very reason that I say to our German friends that they must aspire to an enhanced economic union. Second, because the absence of a genuine economic union is holding the euro area back, at a time when we must stimulate growth to catch up our past lag, particularly vis-àvis the United States, and address the radical technological transformation. The theme of this evening is “new ideas for Europe". But to have new ideas, we must begin by putting the old clichés that are paralysing the debate behind us. That is what I will begin by doing, before setting out my three new ideas for Europe. ** 1. Three old clichés that we must put behind us The first old cliché that emerges when we speak about reforming the euro area, is the idea – and a lazy idea at that – that economic union would be a substitute for national reforms. I would like to repeat right away that on the contrary, national reforms are a prerequisite for any enhancement of the Economic Union, and today, France is well aware of this.

In 1978, Helmut Schmidt said that “the citizens of Europe just want solutions to concrete issues".2 Nonetheless, we need a political ambition if we are to act – call it a “vision", if you wish. We need this because we have to make progress – it’s now or never: thanks to the economic recovery, and thanks to President Macron’s initial proposals at the Sorbonne, and the European chapter of the German coalition agreement – it is obviously not my place to comment on the rest of the agreement – we are enjoying historically favourable conditions. If we don’t act in 2018 – first the French and Germans, and then all 19 member countries of the euro area – we will never make headway. 2. How to strengthen the euro area: three new ideas I will now turn to my three new ideas to strengthen the euro area. In order to make genuine progress in Europe, we must first start with the real needs for corporate investment, and the resources at our disposal. In terms of needs, the key to growth in the euro area today is, without doubt, innovation. Chancellor Merkel spoke about it in Davos three weeks ago, while companies in Bavaria are well placed to recognise its importance: over the past 50 years, Bavaria has radically transformed its economy by rising to the challenge of innovation.
15%  2% 29%  1%  Denmark Germany Spain  7%  France  1%  Austria Sweden Norway 45% Source: The European Mortgage Federation  BIS Review 99/2000  2  The European market for housing bonds is currently dominated by three countries - Germany, Denmark and Sweden. Together, these countries account for around 89% of this market (Figure 4). Switzerland  0,7  Germany  Spain  Italy  Belgium  Netherlands  France  30 23,84 25 20 15 11,44 10 6,8 5 1,54 0,9 0,65 0,03 0 UK  Billion $  ABS/MBS securitisation transactions by country, 1997. Source: OECD  Competition for customers Although mortgages are a relatively straightforward and standardised financial product that should be well suited to sell abroad, international mortgage sales have been limited to date. One probable reason is that the mortgage market mainly targets private clients, which are hard to reach without using a local distribution network. In this respect, the Internet should be able to lead to greater transparency and competition, both by the credit issuers themselves supplying information and credit services over the Internet and by Internet-based brokerage sites finding the cheapest mortgages for borrowers. While Internet-based mortgage services are still a relatively new phenomenon, they are likely to increase competition on the mortgage market.

For a context specifically related to supervision,  see “Supervision of Behaviour and Culture: Foundations, practices & future developments,” DeNederlandscheBank, 2015 3 Mirea Raaijmakers, “INTERVIEW: ING’s behavioural risk team seeks to uncover ‘invisible drivers’ of risky  behavior”, Reuters Financial Regulatory Forum, Henry Engler, January 10, 2020. 4 Kevin J. Stiroh, “The Complexity of Culture Reform in Finance,” Remarks at 4th Annual Culture and Conduct  Forum for the Financial Services Industry, October 4 2018. 5 New York Fed Workshop on Culture Measurement and Assessment, June 2017. 6 Conduct, culture and Covid-19” Cara Bloomfield, Peter Ewing, Olivia Fahy, Nafa Ben Haddej and Ted  MacDonald, FCA, June 2020. “Citi investment bank boss predicts resurgence of offices,” Financial Times, May 2020. 7 How to Prepare Your Virtual Teams for the Long Haul,” Mark Mortensen and Constance Noonan Hadley, Harvard  Business Review, May 2020. 8 Supervision of Behaviour and Culture: Foundations, practices & future developments,” DeNederlandscheBank,  2015. 9 Why IBM Brought Remote Workers Back To The Office — And Why Your Company Might Be Next ” Forbes,  October 2017. 10 Don’t Let Uncertainty Paralyze You”, Nathan Furr, Harvard Business Review, April 2020 11 "Lockdown and crisis: why now is THE time to look at behavioural risks” Samhoud, March 2020  5/5  BIS central bankers' speeches