samchain/econo-pairs-v1 huggingface dataset:
The real exchange rate of the króna is somewhat below its likely long-term average, although it has risen in the past year. 6  BIS Review 138/2010  As economic recovery gains pace, the outlook for capital account liberalisation improves. Recovery tends to be accompanied by increased inflow of foreign capital in the form of credit or direct investment. Significant inward foreign direct investment could set the stage for removal of the controls. Although suggestions that recovery began late in 2009 or in the first half of 2010 have proven to be a mirage, a number of indicators imply that Iceland has hit bottom or is close to it, and that growth will resume in the latter half of this year. But the pace of the recovery will depend greatly on our success in attracting foreign capital for exportgenerating investment. The main objective of the IMF programme is to build confidence in Iceland’s economy and economic policy. If that confidence existed now, it would be possible to lift the controls today. Considerable discussion has been devoted to the instability of foreign capital that could flee as soon as the controls that hold it in place are reduced or eliminated. Although the magnitude of foreigners’ frozen ISK assets is broadly known, information on non-resident retail owners of ISK assets is largely hidden.

In short, restrictions were placed on movement of capital because confidence in Iceland’s banking system, currency, and Treasury – actually, in Iceland’s entire economy and institutional framework – was in tatters after all of the country’s major banks failed in one of the largest financial collapses in history. It was clear that the collapse of the banking sector would deal the Treasury a heavy blow, although the exact scope of the shock was unknown. It was also clear that the Treasury would require substantial funding to address temporary deficit operations. The collapse cut a wide swath in the foreign exchange reserves, and it proved necessary to use some reserves to stabilise the foreign exchange market while the reconstruction of the banking system was underway and solutions to private sector debt problems were being sought. Without enhanced reserves, refinancing of Treasury foreign debt could have proven elusive or even unavailable in coming years if efforts to restore confidence in the global markets in due time should prove unsuccessful. There were numerous indications that the global financial crisis could be protracted, as has proven to be the case. Thus it was far from assured that the global financial markets would become accessible to Iceland in time to refinance foreign loans maturing in 2011 and 2012. The problem was exacerbated by the large króna positions accumulated by non-residents from 2005 onwards. It could be assumed that these investors would sell and, in some cases, would be forced to sell at distressed prices at the first opportunity.
And if you define the “tradable” part of the economy as those sectors with above-average trade shares, “non-tradables” the rest, they behaved broadly as you might expect. Aggregate profits recovered strongly in the early 1990s, as they tend to in the early stage of economic recoveries. But, thanks to a jump in the sterling price of their output, the rise was most marked for firms exposed to international trade (Chart 9). There was plenty of slack in the economy (Chart 10 uses the balances on capacity use from the BCC surveys). Within the tradable sector in particular this allowed for a marked rise in net export volumes. In the three years after ERM exit the UK’s trade balance improved by close to 2% of GDP. Furthermore, despite that spare capacity, business investment too began to accelerate – and again it was the tradable sector whose spending grew fastest (Chart 11).

Though there are plenty of other variables to consider, the negative effects of the depreciation on consumption (via import prices and household income) are expected marginally to outweigh its more positive effects on other parts of demand. If only implicitly the consensus forecast seems to attach more weight to this Brexit-related caution. My guess is that financial markets do so as well. Despite higher profitability, business investment is projected to stagnate or fall this year even as it accelerates significantly further in other developed economies. The more negative effects on consumption clearly predominate and growth of aggregate demand is projected to slow reasonably sharply, to 1.2% by the end of this year. 15  This is the Prime Minister’s phrasing in her speech on 17 January. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  Yet there are clearly risks to both. If businesses share the view of financial markets, and in particular the foreign exchange market, the risks around EU exit could persuade them to cut investment further this year. If they side more with consumers – who, as we’ve noted before, appear to have taken such uncertainties very much in their stride – they will respond more to today’s favourable conditions than to any caution about the longer-term future and instead raise investment spending.
All these effects – lower risk perception and better rating together with ample excess liquidity have dampened the transmission of ECB's monetary policy tightening into local financing conditions. These effects have taken place against fragmented banking and money markets within the euro area, creating preconditions for substantial divergence in financing conditions between Member States. For example, the interest rates for corporate loans in Croatia reached 3.6% in 2023Q1, an increase of about 2 p.p. over the same period last year, while they reached 3.9% in the euro area (YoY increase of 2.6 p.p.) and 4% in Germany (also YoY increase of 2.6 p.p.). In the Czech Republic, Hungary, Poland and Romania, these interest rates reached levels between 9%-13% as a response to a much tighter monetary policy. Czech R.  Hungary  Poland  Romania  2022Q1  5.8  6.3  4.8  5.6  2023Q1  8.7  13.3  8.8  9.5  Likewise, interest rates on housing loans reached 2.9% in 2023Q1 (YoY increase of 0.4 p.p. ), while the same interest rates in the euro area reached 3.3% (YoY increase of 1.9 p.p.) and 3.8% in Germany (YoY increase of 2.3% p.p.). In the Czech Republic, Hungary, Poland and Romania, these interest rates reached levels between 6%-11%. Czech R.  Hungary  Poland  Romania  2022Q1  3.9  4.6  5.8  3.8  2023Q1  6.2  10.7  8.8  7.8  Also, national regulations, consumer protection, national benchmark rates...

Where there is uncertainty about the level of R-star, the scenario shows the advantages of setting policy rates on the one-step-at-a-time basis embodied in difference rules. Policies that attempt to move quickly back to preconceived neutral levels without reference to the real time evolution of the data run the risk of adding noise and volatility through a mis-calibration of the policy response.25  Monetary policy outlook Coming back to last week’s monetary policy announcement, the MPC agreed to continue with a further modest tightening of monetary policy. Placing the specifics of that decision in a longer context, since I joined the MPC in September we have: (1) retired the forward guidance that signalled unchanged policy rates; (2) brought asset purchases to an end; (3) started to raise Bank Rate and continued that process last week; and (4) announced a start to the reduction of asset portfolios accumulated as a result of QE. From a starting point of substantial policy accommodation, this is a consistent, measured and resolute set of actions intended to rebalance the stance of monetary policy and address the inflationary pressures that have emerged. 12  All speeches are available online at www.bankofengland.co.uk/news/speeches  12  We have signalled that more is to come in the coming months if the path sketched out in our February forecast plays out. But equally we have flagged that the outlook for Bank Rate beyond the coming months is uncertain, reflecting the two-sided risks to inflation at the policy-relevant two to three year horizon.
Speech  Embargo 5 April 2018, 6.00 pm  The financial markets in changing times Changes today and tomorrow: the digital future Money Market Event  Andréa M. Maechler Member of the Governing Board * Swiss National Bank Zurich, 5 April 2018 © Swiss National Bank, Zurich, 2018 (speech given in German)  *  The speaker would like to thank Nino Landerer, Andreas Wehrli, Carolin Reiss and Claudia Aebersold Szalay for their support in drafting this speech, and her thanks also go to Giuseppe D’Alelio, Rita Fleer, Adriel Jost, Sébastien Kraenzlin, Susanne Mühlemann, Nicolas Stoffels and SNB Language Services. Page 1/8  Ladies and Gentlemen In his speech, my colleague Dewet Moser has demonstrated how being open to innovations can pay off. However, he also underscores the point that it is entirely appropriate to carefully examine their purpose and the benefits they offer. I would now like to apply this scrutiny to the fintech innovations that are currently attracting a great deal of attention among the general public and in the financial industry. Bitcoin is one of the most talked-about topics at present, and the hype that has built up around cryptocurrencies in general is considerable. It is estimated that well over 1,000 of these currencies are in circulation today. If you search the internet for the word ‘bitcoin’ you will find more than 300 million entries. By contrast, the term ‘Swiss franc’ generates just over 30 million hits.

There are several potential measures which could dampen overall indebtedness in the economy, and prevent certain household groups from getting further into debt, for example in the form of changes to mortgage tax relief and loan-limiting measures. I have described several of them today. But also allow me to point out once again that it is vitally important that the mandate for macroprudential policy be clarified. This is a precondition for being able to introduce to the loan-limiting measures. 22  See Guibourg, G. and Lagerwall, B., “How is the economy affected by macroprudential policy measures?”, Economic Commentary no. 9, 2015, Sveriges Riksbank. 23  See http://www.riksbank.se/en/Press-and-published/Notices/2015/The-Riksbank-publishes-the-IMFsstatement-on-Swedens-economy/. 18  BIS central bankers’ speeches  It is essential for the Riksbank to reduce these risks in order to fulfil its main tasks in terms of price stability and financial stability. However, avoiding problems on the housing market and a future economic crisis is something which concerns us all. BIS central bankers’ speeches  19
8  12  14  16  18(f) 20(f)  Figure 5 Total, trend, and potential GDP (1) (annual change, percent)  6  6 Total GDP (2)  5 4  4  Trend GDP  3  5  3  Potential GDP  2  2  1  1  0  0  -1  -1 12  13  14  15  16  17  18  19  20  (1) For more details on trend and potential GDP, see "Trend growth: Medium-term Forecasts and Analysis of its Fundamentals", published in Spanish together with the September 2017 Monetary Policy Report. (2) Total GDP uses actual data up to 2017 and for subsequent dates the forecasts contained in the March 2018 Report. Source: Central Bank of Chile. Figure 6  Parities with respect to the US dollar (index, 2017-2018=100)  110  110  106  106  Latin America  Chile  102  102  98  98 Commodity exporters  94  94  90 1717  90 17 Mar. 17 May  17 Jul. 17 Sep.  Sources: Central Bank of Chile and Bloomberg. 9  17 Nov.  18 18  Mar.18  Figure 7  Nominal exchange rate (*) (pesos per dollar)  680 660  680 JAN-MAR 2018 Avg. DXY=90.2 670 Avg. copper=316 2018 growth (EES)=3.3 660  650  650  640  640  630  630  670  620  620  JAN-JUN 2017 Avg.

Importantly, behind the growth of sectors other than natural resources—Other GDP—was the fact that improvements in human capital, the incorporation of women into the labor force, and immigration, would help to offset the negative effects of the aging of the Chilean population and the tendency to reduce the actual number of hours worked that comes with development. This projection assumed a relatively neutral role for capital, in the sense that it expanded at the same rate as Other GDP. This assumption is consistent with the capital/product ratio remaining near its historical average, a stylized fact observed in other countries as well. For this to occur, however, it is necessary for investment to grow in consistency with potential GDP growth again. Our projection also assumed that total factor productivity of the sectors unrelated to natural resources would go back to grow at rates around its average of the last twenty years, a major challenge, but clearly possible. The recovery of the growth trend of productivity of these sectors will be especially important, given the declining trend of natural resources, mainly associated with mining ore downgrade. Finally, we show that the Chilean evidence suggests that there are significant inefficiencies in the allocation of resources among firms and that there would be first-order gains from measures to improve them, which, unlike the case of human capital, could generate  5  profits sooner. Although these policies fall outside the scope of the Central Bank, we believe it is important to reiterate their relevance to this Committee.
Also, the greater degree of risk-pooling in the euro area would contribute to aligning financial responsibility with the pan-European decision-making process, which has already been set in place in the areas of banking supervision and resolution. The current situation is such that the ultimate backing for ensuring deposits in a failed institution depends on national institutions, while the responsibility for supervision and resolution falls on other pan-European institutions. Shortly after the financial crisis broke, Mervin King ironically pointed out that international banks tended to be global in life, but national in death. This quote would appear to still be applicable in the euro area. In a genuine banking union banks should be European, both in life and in death. As you know, the debate on the EDIS was rekindled in November last year owing to an article5 by the German finance minister, Olaf Scholz, in which he advocated its implementation. This was something which, in his own words, “was no small step for a German finance minister”. The German proposal actually referred to the introduction of a European reinsurance scheme rather than a fully pooled EDIS, and it was moreover subject to various conditions. In any event, the debate clearly remains open and differences persist among the European partners. But I hope and wish that, as on previous occasions, we can forge a consensus allowing us to complete this basic third pillar, introducing a truly common and, therefore, fully pooled EDIS. European banking consolidation and integration.

On the basis of the discussions at this conference, I draw the conclusion that there is no disagreement in the economics profession on this central tenet, but a  BIS Review 110/2006  1  lot of different views on how to organise the monetary analysis so that it has an appropriate influence on interest rate decisions. And this is the second issue mentioned at the opening of the conference. As was pointed out by Prof. Christiano and his co-authors Rostagno and Motto, including informational asymmetries, transactions costs and financial frictions in “state-of-the-art” macroeconomic models allows to better reflect the role of money and credit aggregates within such frameworks. I found compelling the argument that monetary analysis be used to monitor (and possibly offset) macroeconomic risks which are not related to price stability at shorter horizons, but which may nevertheless have important consequences for maintaining price stability over the medium and long run, like risks to financial stability. On this point in particular Lucas Papademos’ remarks yesterday evening were particularly stimulating. Although the use of such models for policy purposes is in its infancy, their further development is a promising way forward and should, therefore, remain an important field of ongoing research. However, at present the practical challenge of conducting the monetary analysis requires the adoption and employment of practical and fully operational tools. Conducting such an analysis has not always proven to be an easy task.
Finally, in the spring of 2009, we agreed to ask the Swedish National Debt Office to temporarily borrow a further SEK 100 billion in foreign currency, thereby reinforcing the foreign currency reserve to about SEK 300 billion. Including the agreements with the Fed and the ECB, the foreign currency reserve thus amounted to about SEK 600 billion in the autumn of 2009. Now it has decreased to about SEK 300 billion again and, according to an earlier decision, part of this is temporary.14 I was one of those who considered that the Riksbank’s own foreign currency reserve should be greater than SEK 300 billion, and this is an opinion that I still hold. My reason is that the Swedish banking system is still highly dependent on market funding in foreign currency. If the fiscal problems in Greece lead to the writing off of the Greek national debt, this may lead to renewed difficulties for the Swedish banks in obtaining funding in foreign currency. One alternative to retaining a good-sized currency reserve in the Riksbank would be for the banks to reduce their dependence on market funding in foreign currency. As I mentioned earlier, greater demands will be made on the banks’ liquidity through the Basel regulations. But they say nothing about requirements for preparedness regarding liquidity in foreign currency, something which is particularly important for us in Sweden. Imposing charges on  13  The agreement with the ECB is conditional to approval from the ECB in every single case.

All of the agents stand back and assume that someone else will do the work, which means that many of them use the same sources of information for strategies and investments. The theory that market prices are based on all available information is thus overthrown. Prices are based more on recommendations from rating agencies and other external analysts who thereby assume great responsibility. To some extent, it must be the case that for each individual agent to research the information would be too costly and time-consuming. However, it is important to make use of the market that is there, with different analysts. A large number of agents closely linked to one another can lead to the liquidity in the market becoming more important - in short, that there is someone there when you want to sell at a reasonable price. There are greater risks that liquidity problems will arise when there are more links in the chain and if all of the market agents risk running in the same direction. Then there may be several agents trying to sell the same asset at the same time. Although many market agents have become much better at managing risk, many models are based on historical data which provides little information on risks in new, untried products. If one of these very improbable events were to occur, it could lead to increased uncertainty and willingness to rapidly change holdings, which would perhaps be difficult if everyone else had become more cautious.
The scale of the global recession called for the implementation of demand-side expansionary fiscal and monetary policies. And it is in this context that the substantial cuts in central bank intervention rates seen over the past year should be understood, cuts that have been conducive to a significant decline in the cost of financing and to a sharp expansionary stimulus. In Spain, the potential effects of this pass-through are particularly powerful as a result of the prevalence of floating interest rate loans. Spain, too, has moved to adopt demand-stimulating discretionary fiscal measures in order to bolster the expansionary impact of the substantial transfers of income to the private sector, especially to households, arising from the operation of the automatic stabilisers. The fiscal drive by the Spanish authorities is of a considerable scale and generally exceeds that of other developed countries. Its budgetary impact has been accentuated, moreover, by the sharp fall in tax revenue as a consequence of the economic recession and of the magnitude of the real estate adjustment; accordingly, the fiscal situation has deteriorated rapidly. It should be recalled that the Spanish economy started from a healthy budgetary position, with a surplus of somewhat over 2 pp of GDP and a very low public debt ratio compared with our European counterparts.

Economic recovery in Spain requires structural changes that will encourage technologically dynamic productive sectors with high growth potential to take up the baton from construction. For this to occur, the labour market must function so as reallocate resources, increase and adapt workers’ skills to new demands, and make productive processes within companies more efficient. Reform should focus on ensuring that labour conditions adjust to the economy’s different cyclical junctures and, in particular, to the specific circumstances companies or productive sectors face. That should prevent the adjustment coming about through pushing large numbers of workers out of the market. Changes are also needed in hiring arrangements. These must allow workers who have lost their jobs to return promptly to active working life, so they do not spend long periods unemployed, the consequences of which were so adverse in the past. Improvements in labour market intermediation systems and in mobility and training for the unemployed are also very important. Resolute action here would help check business closures and lessen the risk of decapitalisation, which is admittedly very high at present. If, moreover, significant progress were made in eliminating administrative formalities, the Spanish economy would be better placed to resume a high growth rate once the world recovery began. To bring about a new productive pattern enabling high rates of potential growth to be regained, structural measures must span a wide range of fields. Improving the level of educational attainment of the labour force is vital for raising the quality and productivity of human capital.