samchain/econo-pairs-v1 huggingface dataset:
Assuming, then, that one of our countries were to go back to pre-euro times – a scenario I see as very unlikely – there would be a heavy price to pay in terms of the financing of public debt, as well as household and corporate debt. For Italy, it would ultimately mean an increase of more than EUR 70 billion a year in the government’s debt servicing cost, which is more than the country’s total education budget. Our citizens are therefore strongly attached to the single currency: today, 61% of Italians and 70% of French people support the euro.2 And it is this broad-spread, popular support that is one of the euro’s greatest achievements. 2/5  BIS central bankers' speeches  3/ The last two reasons relate to the very nature of the unique system that unites the 19 euro area countries: monetary policy is shared; all other economic policies are decentralised. Let’s start with our monetary policy: the Eurosystem’s commitment since the 2011 crisis has been decisive in reducing fragmentation between euro area countries. [slide] Interest rates have fallen further in Italy than anywhere else – for firms, households and the government – and Italian banks have received more liquidity than those in other countries. This has led some to argue that our monetary policy is now being conducted for the benefit of Italy: they’re wrong. Monetary policy is not conducted for any one country, be it Germany, France or Italy.

In total, nearly a quarter of 18 to 24 yearolds in Italy and 19% in France are NEETS (Not in Employment, Education or Training) – well above the OECD average of 14%. Therefore, we have no greater priority today than developing skills, apprenticeships and professional training. As well as this need for the right reforms in our two countries, the decentralisation of the euro area has another consequence: we need a more symmetrical adjustment, with wage increases and fiscal stimulus in those countries that have the room to manoeuvre, such as Germany and the Netherlands. Fortunately, this process has already begun, with the fiscal plans set out by the coalition governments elected in 2017, and the pick-up in wage growth as these countries get nearer to full employment. The excessive external surpluses in the euro area are also a sign of poor resource allocation. The Macroeconomic Imbalance Procedure carried out by the European Commission must therefore be symmetrical. 3/5  BIS central bankers' speeches  II. To construct a more solidarity-based euro area, we need an Italy that is committed. At the same time, the euro area also needs to be improved: although Monetary Union is a success, the weaknesses of the Economic Union continue to pose a problem. We need to find a “tightrope” that combines responsibility and solidarity. Since Meseberg last June, France and Germany have put forward some initial proposals.
Although for basic banking services little personal contact may be necessary, deals in such fields as corporate finance and investment banking appear to require interaction between a number of parties  BIS Review 59/2001  3  face-to-face. Indeed, in recent years the world's major financial centres may, if anything, have become more rather than less dominant as a result of the demonstrable benefits of co-location and critical mass particularly in the context of the higher value-added activities. How does the internet fit into this picture. The new dimension which the internet brings is to revolutionise the access of customers to banks – and banks to their customers. Already we know that huge numbers of customers have moved over to using the internet to carry out their basic banking business. This may in turn have enabled banks to realise cost savings, although it is as yet not easy to find hard evidence to this effect. The implications for the structure of banking are unclear. One may envisage two extreme outcomes. One would be where banks, both established ones and new ones created as internet-only providers, compete fiercely in all areas of banking where human contact is not required. Consumers flit around from one to another in response to the best deals, splitting their banking relationships across a number of banks if that appears cost-effective. The prices of these services are driven down to "commodity" levels. None of the banks makes much of a profit from it.

The essential raison d'être of banking is that an economically advancing society needs effective intermediation between savers and borrowers, and mechanisms for making payments efficiently. As already noted, the initial basic intermediary function of providing deposits and loans expanded subsequently into the organisation of alternative channels of intermediation such as bonds and equities (these activities may be conducted in some jurisdictions outside the narrowly defined banking sector, but the distinction is not material in the present context). Although it is human nature for savers to complain that the returns are inadequate, and borrowers that costs are extortionate, in the marketoriented economies competition in financial intermediation has mostly been quite intense, and most of us would probably agree that this has worked to the increasing benefit of customers on both sides of the balance sheet. Meanwhile, the provision of payment services has developed markedly at both the wholesale and retail levels. Banks are at the centre of this activity, typically supported by the central bank as ultimate provider of liquidity. In fact, whereas many other types of institution may nowadays be involved in lending money or providing avenues for savings, banks themselves remain firmly at the core of the payments system. A sound and efficient payments system is acknowledged to be a prerequisite if an economy is to realise fully its potential.
A credible inflation target with a flexible exchange rate regime should help to avoid the problems we faced during the 1990s. Indeed, during the period of large capital inflows, no monetary policy in Latin America operated under a full-fledge inflation targeting regime, and most countries had some form of exchange rate rigidity. Despite having a flexible exchange rate and an inflation target in place, the effects on the exchange rate could reflect that domestic asset prices could be forming a bubble. In this case, sterilized intervention, without an explicit objective on the level of exchange rate, can also help. I already discussed some principles to guide sterilized intervention within an inflation targeting framework. A much debated proposal is the use of capital controls. The  5  In addition, a traditional concern is that with the same speed as capital flows in, capital may flow out, generating costly adjustment processes. See Cowan et al. (2007) for a review of sudden starts and sudden stops around the world. Sudden stops of inflows are as common in developed as in emerging countries, but in the former, the sudden stop tends to be offset by a return of domestic capital invested abroad, while in the latter it results in a severe squeeze in the capital account. Accumulation of reserves or another form of insurance should help to avoid large swings. BIS Review 113/2009  5  evidence on their effectiveness is elusive.

Figure 1 Monetary policy and housing prices Monetary policy  Housing prices  (percentage)  (nominal index, first quarter 2001=100)  15  15  250  250  12  12  200  200  9  9  150  150  6  6  100  100  3  3  50  50  0  0  0 90  93  96  U.S. Chile (*)  99  02  05  Canada  08  01  02  04  05  Australia Chile Canada  07  08  0  U.S. Spain  (*) Starting August 2001, the MPR is set in nominal terms. Previously, it was set in inflation-indexed terms. Sources: Central Bank of Chile, Bank of Canada, Bloomberg and U.S. Federal Reserve. 10  BIS Review 113/2009  Figure 2  Nominal exchange rate  (CLP/ USD) 700  700  650  650  600  600  550  550  500  500  450  450  400  400  Jan.08  Apr.08  Jul.08  Oct.08  Jan.09  Apr.09  Jul.09  Source: Central Bank of Chile.
Perhaps a sharper analysis and discussion could also be a help with the political problems. In this context, an economic council along the lines put forward in the public debate might possibly play a part. 6  BIS Review 6/2002

Private investment activity is also beginning to pick up after a period of over capacity due to the excesses prior to the Asian financial crisis. There are also plans for massive investment in infrastructure development to sustain the economic competitiveness of the region. The Asian Development Bank estimates that Asia will require about USD 8 trillion of infrastructure investment in the next decade. Most important is that Asia has the internal capacity from its high savings to finance these infrastructure requirements. The stronger domestic demand in Asia is also well supported by the strengthened financial systems following the restructuring of the banking sector, the development of the capital markets and the strengthening of the regulatory and supervisory systems in the post-Asian financial crisis period. The reforms implemented also included the progressive deregulation and the move to greater market orientation and increased liberalisation. Today, Asia’s capital markets are significantly deeper and more liquid. The bond market in emerging East Asia has increased by more than seven-fold since 1996, with a current value of USD 4.2 trillion dollars. Emerging East Asia accounts for 7.2% of the total worldwide bond market at end-2009 compared to 2.5% in 1996. Asian banks have stronger fundamentals with improved risk management and governance practices, with capitalisation well above the regulatory requirements and with non-performing loans maintained at historical lows. Riskbased approaches to supervision have also been widely adopted across Asia.
At the same time, an increase in life expectancy for each cohort will reduce the annual pension. This motivates the individual to remain in employment and to ensure that the system is sustainable. The National Insurance Scheme’s expenditure is financed directly over the central government budget. Decisions about national insurance benefits have a substantial influence on future taxpayers. These costs are not transparent when the budget is decided. Developments since 1967 show that such a pay-as-you-go system is not robust. Benefits change over time and costs can easily be pushed into the future. The alternative is a system where pension expenditure is covered by accumulated capital, i.e. a funded system. In a funded system, a decision to increase pensions or reduce the age of retirement will require the allocation of capital today to cover future expenditure. Such a fund provides a measure of the cost of increasing pension expenditure. Our pension system is complicated. In addition to the National Insurance Scheme, many other operators, including the central government, have established additional pension schemes. There are different rules for coordination and entitlement. Any shift to a fund-based system for the National Insurance Scheme will probably require transitional rules for many years ahead. However, I believe that it will be possible to find solutions to these practical problems. Distributional and practical considerations imply that minimum benefits in the pension scheme cannot depend on earlier employment, but should apply to everyone.

Your thoughts and comments will reflect the unique valueadded of the ESRB: to bring policymakers together to exchange expertise and coordinate policy action, with the common aim of reducing the risk of financial crisis. On that note, I am pleased to open this first annual conference of the European Systemic Risk Board. 1 Pagano, M., S. Langfield, V. Acharya, A. Boot, M. Brunnermeier, C. Buch, M. Hellwig, A. Sapir, I. van den Burg  (2014), “Is Europe overbanked?” ESRB Advisory Scientific Committee Report no.4. 2 Becker, B. and V. Ivashina (2014), “Cyclicality of credit supply: firm level evidence”, Journal of Monetary  Economics, 62: 76–93. 3 Langfield, S. and M. Pagano (2016), “Bank bias in Europe: Effects on systemic risk and growth”, Economic  Policy, 31(85): 51–106. 4 Levine, R., C. Lin and W. Xie (2016), “Spare tire? Stock markets, banking crises, and economic recoveries”,  Journal of Financial Economics, 120(1): 81–101. 5 European Central Bank (2015), “Report on financial structures”, October. 6 Summers, L., “US economic prospects: Secular stagnation, hysteresis, and the zero lower bound”, Business 3/4  BIS Central Banker's Speeches  Economics, 49(2). 7 For an analysis of the sensitivity of US banks’ pre-provision income over one year to changes in short-term  interest rates, see M. Gomez, A. Landier, D. Sraer and D. Thesmar (2016), “Banks’ exposure to interest rate risk and the transmission of monetary policy”, ESRB Working Paper no.13. 8 Cœuré, B.
Michael C Bonello: The banking environment in Malta Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the Raiffeisen Economic Forum, St Julians, 21 May 2004. *  *  *  The history of banking in Malta goes back at least to the earliest decades of the nineteenth century, when the island’s strategic importance as a centre for entrepot trade encouraged the establishment of banking institutions. Among the better known foreign names before World War II was that of Barclays Bank DCO. This was a time when Malta was a British colony and part of the sterling area. Barclays remained in Malta after independence and the subsequent break with sterling in 1972, and contributed to the development of a cadre of bankers trained in the British banking tradition. It left only when the larger banks were nationalised during the 1970s. This coincided with the adoption of a policy of economic autarchy. The major banks were publicly owned and lending rates were set by the Minister of Finance, while the Central Bank controlled deposit rates. Nominal interest rates were kept artificially low, often resulting in negative real rates. Strict exchange controls were imposed to sustain the value of the Maltese lira. In the absence of money and capital markets, the banking sector dominated the financial system. In the circumstances, however, the sector did not operate efficiently.

By the end of 2003 for example, the domestic banks’ assets amounted to over 277% of GDP, compared with a euro area average of 273%, while the ratio of domestic bank credit to GDP stood at 155%, as against 143% in the euro area. More significantly, spreads between short-term lending and deposit rates in Malta, at 2.41 percentage points in 2003, were even narrower than the euro area average of 3.48 points. This suggests that the local banks compare favourably in terms of efficiency with banks elsewhere in the European Union. Furthermore, despite the global economic slowdown and the recent weak performance of the Maltese economy, the profitability of banks in Malta, as evidenced by the return on assets, has been fairly stable at around 0.8%. This compares with an average return of 0.6% recorded by European banks in 2001. At the same time, bank liquidity remains very high, with the domestic banks’ holdings of liquid assets as a share of short-term liabilities, just under 50% at the end of 2003, consistently exceeding the 30% prudential requirement. Maltese banks are also strongly capitalized. Their aggregate capital adequacy ratio, defined as the ratio of own funds to risk-weighted assets, stood at 16.7%. On the other hand, the banks’ loan portfolio still tends to be concentrated on a few sectors, reflecting the structure and small size of the Maltese economy. Furthermore, they still rely too heavily on property as collateral.
According to our projections, real GDP is expected to remain below its pre-pandemic path over the projection horizon, whereas the labour market is expected to remain resilient. [11] However, the relative contributions of supply and demand conditions are likely to change over time. In particular, the release of pent-up demand largely explains the recent contribution of demand to inflation. This is different from a cyclical upswing that “feeds on itself”[12], or a sustained increase in consumption as seen in the United States as a result of a highly expansionary fiscal policy and rapidly rising wages (Chart 4, panel a). That is why, in the euro area, the demand-driven contribution to core inflation has emerged more slowly over time (Chart 4, panel b). But forward-looking indicators point to a significant weakening in demand, which suggests that its contribution is likely to fade out (Chart 5). Chart 4 Evolution of private consumption and demand-driven contributions to core inflation in the euro area and the United States (percentage points contributions)  Sources: Panel a): Eurostat, FRED and ECB staff calculations. Panel b): FRSF/Adam Shapiro, Eurostat and ECB staff calculations. Notes: Panel a): the latest observation is for the third quarter of 2022, except for euro area household and non-profit institutions serving households (NPISH) final consumption expenditure for which the latest observation is for the second quarter of 2022.

During most of the 1970s, there was a darkening cloud over the perceived will and ability of the Fed to take action to reverse the rise in inflation, in the face of substantial political aversion to the perceived costs of disinflation. Memoirs of executive branch officials for the decades following the Treasury Accord are replete with references to attempts to influence the decisions of the FOMC. In 1978, Congress passed The Humphrey Hawkins Act which gave the Fed its present mandate of “maximum employment, stable prices, and moderate long-term interest rates,” and this legislation established a more systematic schedule of reporting and testifying to the Congress. This is the mandate that governs the Fed today. Over this period of broad continuity in the legal framework of the Fed, U.S. monetary policy had its good moments and its less distinguished moments. The degree of legal independence we enjoyed at the beginning of the 1970s was not materially different from what existed at the end of the decade. The institutional framework for formal decision making was the same. The formal mandate was modified in 1978 with the addition of the explicit reference to price stability, but this change cannot explain the substantial difference in monetary policy outcomes over the last two and a half decades. An institutional framework that was not sufficient by itself to produce a consistent record of good  monetary policy decisions over the decade of the 1970s can’t be credited fully for the substantial improvements in monetary policy and economic outcomes that followed.
Lending to the resident private sector in Spain continued to shrink in 2014, in line with the need for the deleveraging of the Spanish economy; that said, the rate of decline of lending eased (from 8.3% in 2013 to 6.4% in 2014). At firms not engaging in construction and real estate activities, credit fell much less, shifting from a negative rate of 9% in 2013 to a still-negative rate of 1.5% in 2014. The figures available for 2015 suggest that the year will conclude with credit running at a rate of change very close to zero or in positive territory for the first time since 2009. One key aspect in 2014 was the fact that non-performing loans (NPLs) to the resident private sector fell both in absolute terms (by more than € billion) and in terms of the NPL ratio, which declined by almost 1 pp to 12.9%. In 2015 to date, this trend is holding, as NPLs have fallen to 12.3%. Resident private-sector refinanced exposures have fallen by 4.5% and account for 14% of the total, a proportion still highly influenced by forborne exposures to real estate development and construction companies. It is also worth pointing out that households and non-financial corporations are changing the composition of their savings in response to the very low interest rate environment, meaning that bank deposits have declined while units in investment funds have increased significantly.

8/9  As this is my last appearance before the Senate as Governor of the Banco de España, and to conclude, I should like to express my gratitude for the consideration that has always been extended to the Bank and to me in this chamber, and for the quality of the interventions and questions raised on which I have had to comment. I have always thought, and have said so on different occasions, that the lower and upper houses are the “natural fora” in which an institution such as the Banco de España should preferentially express itself, cooperating and contributing, as best it can, to parliamentary functions. Thank you for your attention. 9/9
These observations confirm that the relationship between economic activity and inflation, as postulated by the Phillips curve, has continued to play a role at the euro area level.3 The link between inflation and economic slack is complicated by several factors. On the one hand, the degree to which prices respond to slack may depend on the state of the business cycle and could change, in particular, in severe and protracted recessions. The empirical evidence on such non-linearities, however, is not conclusive. On the other hand, secular shifts in the economy may have altered the relationship between inflation and economic slack. For instance, the trend towards a deeper integration of the global economy over the last decades is likely to have increased the importance of global relative to local conditions in shaping domestic cost and price pressures. A further often-cited factor is demographics – and especially the trend towards greater longevity – which may have interacted with cyclical conditions by inducing households to save more and, ultimately, put downward pressure on inflation.4 Empirical evidence on this issue is inconclusive and demographics would 2/5  BIS central bankers' speeches  only have lasting effects on the economy if left unattended by monetary policy. Overall, these observations have three important implications for monetary policy. First, the evidence confirms that the core Phillips curve connection linking inflation formation to resource utilisation remains a key ingredient in explaining the prevailing disinflationary pressures.

In the summer of 2014, the persistence of disinflationary forces could be clearly identified: first, measures of underlying inflation had been drifting down in synch with headline inflation for more than a year, and had reached historical lows.7 Second, for the first time since the inception of Monetary Union, longerterm inflation expectations had started to fall as well. Such fundamental risks to price stability required a forceful monetary policy response. Accordingly, the ECB deployed a series of unconventional monetary policy measures to ensure price stability. The comprehensive package of June 2014 comprised targeted long-term refinancing operations (TLTROs) and a cut of the deposit facility rate, moving it into negative territory. This package was combined with a, to start with, small asset purchase programme initially involving only private sector securities, which was later expanded to include public sector securities (becoming known as the public sector purchase programme – PSPP) and then scaled up over time. These measures were accompanied by further cuts in the deposit facility rate and further TLTROs; moreover, they have been complemented by our forward guidance.