samchain/econo-pairs-v1 huggingface dataset:
Other priorities include the diversification of economic activity and maintenance and expansion of existing infrastructures. The government has recognized that private sector should be the engine for rapid growth. In this regard, the government has already privatized companies like the Saudi Telecommunications Company and the National Cooperative Insurance Company, and has announced schemes to privatize the Saudi Electricity Corporation, Saudi Arabian Airlines ,Ma'aden Company, etc. In the past few years, the government has also taken important initiatives including the Investment Law, the reduction of corporate taxes on foreign investments and liberalization of tourism and real estate. The government also sees significant growth opportunities for job creation in the retail trade, small enterprise, tourism and financial services. In the past year, the government has announced the creation of size economic cities in various parts of the Kingdom. These will provide significant opportunities to the private and public sector as well as to the foreign companies to invest in many industrial and infrastructure mega projects. Besides, the investment opportunities in the petrochemical sector, these economic cities would accommodate industries in steal, plastics, glass and ceramics. Another area of potential investment is the transportation sector where the government has announced several projects affecting the Railways network, air transport and land routes. There are also projects in the pipeline in electric power generation, water desalination, natural gas as well as in knowledge based industries such as health, education and tourism. The financing needs of these initiatives are immense and are becoming increasingly apparent.

The second, again rather obvious, point is that the bond market is one of three broad channels of financial intermediation, along with the better developed, at least in this region, banking and equity markets. Less obvious, perhaps, is the importance of ensuring that the bond market commands a degree of robustness and efficiency capable of channelling suddenly enlarged flows of savings to investment that may be diverted from one or both of the other two channels as a result of crises there. These channels should reinforce each other in order that financial intermediation and therefore economic growth can continue in times of financial stress. We have witnessed how the US bond market helped substitute for bank intermediation in the credit crunch of the late eighties. We have also witnessed how the US banking system in turn played the back-up role when the bond market failed to intermediate funds as a result of the LTCM crisis, thus minimising the disruption to economic growth. In contrast, the less developed bond market in this region failed to provide the necessary backup when banks in a number of jurisdictions faced difficulties. Funds simply dried up and there were debilitating economic and financial consequences. Bond market development in this region is thus an urgent task. This task is, however, hindered by a third point, which is that the three channels of financial intermediation are in competition with each other.
If the banking community itself turns out to be unable to resist the temptation of descending into practices that are abusive for consumers, we will be responding adequately. As I have already said, the first issue of our concern is misselling and hard selling. We believed the banking community to be interested in retaining people in the financial market and keeping their funds inside the financial system. We were hoping that banks would be able to agree upon selling rules and would not offer such a product to a client that would be disappointing, striving to sign one contract, would not be misleading about product prices or conceal additional services. The associations of financial market participants jointly developed selling standards two years ago already. Eventually, as little as 20 banks have joined these standards, and even these banks fail to comply with them. As you remember, we have held several discussions on this topic, emphasising that if the banking community does not comply with the standards itself, we will have to request legislative authorities to adopt adequate regulation. Disappointingly, that negative episode we have also discussed when investment life insurance policies were being sold through banks was followed by the sales of complex structured products. This implies that even such a dramatic episode as investment life insurance has had no influence on abusive practices in banks’ sales under agency agreements. Therefore, we were forced to request legislative authorities to grant us the powers to stipulate selling rules through our regulation.

This topic is studied not by a few banks or countries — this is a global trend. Approximately 50 regulators worldwide are dealing with this topic. Some countries have already launched their pilot projects. We believe that we will be inevitably moving in this direction. Over the period of the discussion of our consultation paper, we have received very detailed feedback from the banking community, and not only in writing — we are discussing various aspects of this topic at multiple sites, including the Association, the State Duma, and the Federation Council. We will continue to study this topic further since it definitely requires diving into the particulars and extensive detailed discussions. Our preliminary findings 6/7  BIS central bankers' speeches  as are follows: the majority of banks support a two-tiered retail digital ruble model where banks service clients opening wallets on the central bank’s platform and processing transactions. We will sum up the complete results of the public consultations in the near future. Then, we will elaborate a detailed concept of a digital ruble and will be discussing it with general public, market participants, and banks at the beginning of summer. The next stage is the creation of a prototype platform, testing, limited-scale experiments, and, of course, changes to be introduced into laws. The second priority, which, just as digital currencies, has become a global trend as well, is ESG. The world is paying increasingly more attention to climate and generally environmental risks.
Let us try to remain serious, lucid, serene and balanced in our analysis, in our judgements, in our decisions. Let us all beware of the herd instinct which is always a very bad counsellor. Let us beware of fashion. As regards the present situation, we must remain prudent and cautious, but we have some signs indicating a bottoming out in the US and in Europe, including in my own country. And I see absolutely no reason why the European economy pick up would not be as early as in the US, taking account of the strong European fundamentals. §  Third, confidence is of the essence in the present situation. Confidence in our currency, confidence in its capacity to be a good store of value, confidence in its medium and long-term solidity, confidence in the capacity of the European Central Bank and the Eurosystem as a whole to deliver price stability. This confidence – which is warranted by the central bank – is a very precious asset for the Europeans. It is a very important ingredient for fostering growth through consumer confidence and therefore consumer demand which is presently the main driving force behind the European economy. I thank you for your attention. 9

With China now a member of the WTO, the global labour force expanded considerably. Low wages and cheap goods from China exerted downward pressure on goods prices. As China’s substantial savings surplus continued to grow, large amounts of savings were exported to the West. Inflation slowed in the decade following the turn of the millennium, in spite of high growth and falling unemployment. Combined with China’s savings surplus, this resulted in persistently low interest rates. Low interest rates coincided with weaker regulation of the banking and financial sectors, particularly in the US, but also in Europe. That proved to be a dangerous cocktail. Banks took more risk and levels of equity capital were too low. Household debt rose substantially. In many European countries, government debt ballooned in the shadow of low interest rates. When the crisis erupted in 2008, many were ill-prepared. 1  Chap. 8 and 9 in Lie, Einar and Christian Venneslan (2010), Over Evne: Finansdepartementet 1965 – 1992, Pax, Oslo (Norwegian only). 2  The expression “counterstructural policy” was used by Hermod Skånland in autumn 1977 when he wrote “The countercyclical policy conducted in Norway has to some extent also become a counterstructural policy”. Skånland (1977): “Konjunkturperspektiver og norsk næringsliv” in Sosialøkonomen 10/1977, p.10 (Norwegian only). 2  BIS central bankers’ speeches  Two aftershocks – China and Europe The global economy is still struggling with the repercussions of the crisis, with record-low interest rates and overcapacity. Growth is low.
Specifically, compared with the forecasts published at end-2021, our latest macroeconomic projections published in June expect real GDP growth of 4.1% in 2022 and 2.8% in 2023 (1.3 percentage points (pp) and 1.1 pp, respectively, below the December 2021 projections), while inflation is expected to stand at 7.2% on average in 2022 and at 2.6% on average in 2023 (3.5 pp and 1.4 pp, respectively, above the estimates published in December 2021). The risks to our baseline scenario are tilted to the downside in the case of activity and to the upside in the case of inflation. All against a backdrop of extraordinary uncertainty, linked in particular to the duration and intensity of the war in Ukraine. A greater degree of passthrough of the recent increases in prices and costs to other prices in the economy and to wages is an additional and very significant source of risk. Other sources of risk include the uncertainties surrounding the pace of the effective roll-out of the NGEU programme in Spain and the possible consequences of monetary policy normalisation in terms of the degree of tightening of financial conditions. 2  In any event, in the absence of any fresh shocks or an escalation of the war in Ukraine, these projections would still be consistent with the Spanish economy holding on a gradual recovery path – that could see it reach pre-pandemic GDP levels in the second half of 2023 – and with inflation rates remaining high in the coming months and subsequently moderating gradually thereafter.

24.06.2022  The Spanish banking industry and the economic challenges ahead* Meeting with the Spanish Financial Press Association / Universidad Internacional Menéndez Pelayo Pablo Hernández de Cos Governor *lEnglish translation from the original in Spanish. Good morning: I wish to begin by thanking the Spanish Financial Press Association (APIE) and the Universidad Internacional Menéndez Pelayo for once again inviting me to take part in this meeting, providing me with the opportunity, on this occasion, to address the latest developments in the Spanish banking industry and the challenges ahead. The Russian invasion of Ukraine is a new shock for the world economy, just two years after the shock triggered by the pandemic. The political and economic consequences of the war are difficult to predict, but they are already changing the macro-financial environment, characterised by a sharp increase in uncertainty and a persistent surge in inflation. All this, when the Spanish economy was experiencing a recovery – albeit incomplete and uneven across economic sectors – from the economic effects of the health crisis. The deterioration in the macro-financial environment has come at a time when the Spanish banking industry’s resilience remains generally high and it had returned to prepandemic profitability levels. But the war in Ukraine and, more generally, the economic costs of a high inflationary setting, pose fresh risks for financial stability. Spanish banks have very little direct financial exposure to Russia and Ukraine, but the indirect effects of the war may be significant.
If that happens, this summer’s crisis will influence the economy – and potentially the interest rates set by the MPC – for some time to come. Energy prices Let me now turn to the second of the global developments I mentioned earlier: higher energy prices. During the past month , the oil price has threatened to breach the $ a barrel. Just last January a barrel of oil cost $ four years ago, it cost less than $ Some of this is due to the weakness of the dollar. But the rise in sterling terms has been pretty spectacular too – from £ a barrel four years ago, to £ last January, to around £ now. At these levels, oil is almost back to its 1979 high, after correcting for inflation 3 . What’s going on? It’s always hard to disentangle underlying demand and supply factors from the speculative froth. It’s possible to point to some short run factors behind the recent surge. Stocks of oil across the OECD economies have been falling, at a time of year when they should be rising. This reflects temporary supply disruptions such as weather-related problems in Mexico and in the North Sea. As production comes back on stream, the market should ease. But short-run influences can only have this kind of leverage over the price because underlying market conditions are so tight. World demand for oil has been boosted by a strong world economy, led by booming emerging markets.

These include the reports from our own Agents around the country, drawing businesses such as your own. If you are one of our regular contacts, let me take this opportunity to thank you warmly on behalf of the MPC for your help. We may be making additional demands on you over the coming months. I hope my remarks tonight have helped to explain why your co operation is so necessary – and so valuable. BIS Review 136/2007  5
For example, Barbara Rossi and co-authors find that while risk fell sharply after the great financial crisis, Knightian uncertainty – situations in which people might be unable to assign correct probabilities to future outcomes – remained persistently high even after the end of the crisis.11 In these cases, investors still have to make a decision, and judgement – often based on current observables – is usually the only basis they have. Whatever the ultimate reasons, does it matter if the inflation risk premium is low? There are two sides to the discussion. From a monetary policy perspective, what matters most is that inflation expectations remain at levels consistent with price stability. At the margin, a low inflation risk premium is positive as it signals increased confidence in the central bank’s ability to achieve its inflation aim. But from a financial stability perspective, and here I again refer to previous work presented in the ECB’s Financial Stability Review, a low inflation risk premium may be a matter of concern if it indicates complacency about future adjustments.12 In this case, a reappraisal of investors’ view about future risks to global inflation may cause a correction of global risk premia, in particular in an environment of historically low volatility, as you can see on my next slide. Oil prices may be a potential catalyst. ECB internal research finds that energy price shocks have become considerably more persistent lately, which could fool investors into believing that they are bound to stay at current moderate levels in the foreseeable future.

At face value, this would suggest that the repricing of interest rate expectations at the short end of the US curve has not been passed through to long-term rates. This interpretation is incorrect, however. Indeed, and this is my second point, the broad stability of the ten-year yield masks two sharply diverging developments: a marked fall in the term premium – the yellow area – and an appreciable repricing by markets of the expected future path of short-term interest rates – the dark orange area. You can see this clearly on the slide. Put simply, if it weren’t for the parallel fall in the term premium, ten-year Treasuries would trade some 50 basis points above their January 2017 levels and we wouldn’t be having a discussion about flattening. US long-term yields have resisted upward pressure only because of a considerable re-compression of the term premium. Only shortly after the UK’s referendum on EU membership in summer 2016 was the US ten-year term premium more negative than it is today. This allows for one preliminary conclusion but begs one question. The conclusion is that markets seem sanguine about the prospects for the US, and probably also for the global, economy. Judging from the average expected short-term rate over the next ten years, the markets appear to have shaken off some of the pessimism that caused them to tread very carefully over the past few years. Past and currently expected policy rate changes are predicted to last.
But despite the benefits of a safe and orderly exit process for firms before they get to the point of resolution or insolvency, this strategy has not been set out as a prominent feature of our approach for firms. For instance, the team running our recent check-up of the PRA found that supervisors of smaller mid-sized firms generally spend a small fraction (3%) of their time on orderly exit planning in normal times. Perhaps partly as a result of this, the business of managing these exits often proves extraordinarily challenging and time-consuming when it comes to the crunch. The exception to this is credit unions, which can nearly always be exited without great difficulties by our team together with FSCS and FCA colleagues. We therefore intend to do more in the coming years to increase our confidence that firms can exit the market without disturbing it, in an orderly way and without having to rely on the backstop of an insolvency or resolution process.

Its main elements now include: The Financial Stability Advisory Council (FSAC): a consultative body comprising the minister of finance, the governor of the Central Bank, and the chairman of the Financial Supervision Commission; The Central Bank as the designated resolution authority for banks; the resolution function of the BNB is outlined in the Law on Recovery and Resolution of Credit Institutions and Investment Firms, adopted in mid-2015, which transposed the BRRD in the Bulgarian legislation; A mechanism to fund resolution measures by the newly established Bank Resolution Fund (BRF) which is funded by contributions from the banks; the target level of the resources collected in the BRF is 2% of the amount of covered deposits of all banks licensed in Bulgaria and must be achieved by end-2024; A comprehensive resolution toolkit directly transposed from the BRRD comprising: (1) the resolution tools (sale of business; bridge institution, asset separation, and bail-in), and (2) the government stabilization tools (public equity support and temporary public ownership). Progress has been already made in operationalizing the crisis management framework in Bulgaria.
Heightening collaboration is no longer a choice but a necessity to achieve the industry’s common goal in a more competitive market environment. One way in which the industry can collaborate, is in the area of digitalization. Digitalization is a costly exercise and global survey findings forecasted an average growth in annualized spending on Big Data Analytics of approximately 25%. Therefore, it makes sense for the industry to collaborate and share resources in this endeavour. Drawing from the industry’s effort to develop the Fraud Intelligence System is a very good step. I envisage seeing more collaborative digital propositions from the industry in the near future. The industry must be committed to the expectation set by the Government for the nation to achieve a penetration rate of 75% by 2020. The current penetration rate of 56% indicates concerted and urgent actions are required. We have less than 5 years and every member of the industry must do its part. In meeting up to this challenge, there must be collaboration with synergistic partners, even with the non-traditional partners. But the overwhelming requirement for all of us in the industry today is TRUST. On behalf of the Bank, it gives me great pleasure to congratulate the distinguished partners and individuals of today’s awards. Thank you and have a pleasant evening. BIS central bankers’ speeches  5

On top of these, there are the restrictions in the mobility of factors of production, notably labour and capital, with the asymmetry in capital mobility between the Mainland and Hong Kong presenting the most obvious obstacle. These restrictions may well be there for good reasons, but they do not mean that the development of a working relationship that is beneficial to both financial systems and to the country as a whole can just be left to market forces. There is a clear case for the involvement of the authorities responsible for these policy areas. To be sure, there have been notable co-operative efforts between the two financial systems, both between the authorities and between the private sectors of the two financial systems, and these have been quite obvious since the resumption of the exercise of sovereignty. These efforts have arisen simply out of need, particularly where the free play of market forces has been possible, and through the initiatives of the authorities concerned, where a common understanding can be arrived at concerning the common benefits that could flow from the removal of restrictions. But I think it is fair to say that the process has not always been a smooth one. Neither has the outcome been as productive as it could be, at least when assessed, narrowly some say, against the fundamental objective of making the two financial systems work together for their mutual benefits and in the best interests of the one country.