samchain/econo-pairs-v1 huggingface dataset:
Right now, the FPC is playing its part in trying to cushion the effects of the credit squeeze I mentioned, by freeing up banks’ capital and liquidity reserves to enable loans to be made to companies and households. If these sound like small steps for mankind, then they are giant ones for regulators. This is the first time in the Bank’s 318-year history that it has attempted such “macro-prudential” regulation. Of course, it is impossible for the FPC or anyone else to eliminate mini-booms and mini-busts in credit. But the FPC can legitimately aim to head-off the maxi-booms, such as the pre-crisis one, and the maxi-busts, the like of which we are currently experiencing. That should be good for medium-term growth, by preventing a build-up of excessive leverage. And because financial booms and busts are inherently inequitable, it ought also to be good for the distribution of this growth across society. Fifth, we really must do a much better job of promoting competition in financial services. The most shocking statistic is that, up until 2010, no new bank had been set up in this country for a century. We need to raise our levels of ambition when breaking down barriers to entry into banking, to ensure bank customers get a fair and efficient deal. Although there is no silver bullet solution to the competition problem, I am attracted to recent proposals which would place some core banking services in the hands of a shared utility, storing customer account details.

Their business model is fascinating, Quaker-even, in its orientation. They offer only basic banking services, mortgages and small business loans, to people in a tight, locally-defined catchment area. All credit decisions are taken locally by people, not centrally by a computer. No bonuses are paid and no one has a sales-target. When the whole firm out-performs, a contribution is made to a pooled fund which is invested on employees’ behalf. The fruits of success are distributed equally and gratification is deferred. 6  BIS central bankers’ speeches  For banking, this is back to the future. If that sounds attractive, then it is down to us – not regulators, not politicians, you and I – to deliver it. If as bank customers we want to change the culture of banking, then we should start by supporting those banks who are delivering that change. Putting your money where your mouth is would deliver far greater and more durable change than any amount of banker-bashing. Already there are some encouraging signs of the winds of change blowing through the system, not just from the new entrants but among the UK’s oldest banks too. The new heads of the UK’s biggest banks have committed to restoring trust in their institutions and improving their social usefulness. And those words are beginning to turn into actions. Barclays and today Lloyds are seeking to change their sales-oriented culture, returning to their Quaker roots. There is the quiet, but unmistakable, sound of a leaf being turned.
We could in fact attach more importance to the current as opposed to the forecast future rate of inflation but that would probably call for rather large repo rate adjustments in order to keep inflation stable around the target. Such an approach would result in sharp fluctuations in real economic activity, which would naturally not be desirable. Are there any developments which suggest that the time lag for effects of interest rate adjustments may be becoming shorter? More and more home owners are switching from fixed to variable mortgage rates, which may indeed tend to speed up the impact of monetary measures. But there are other factors which may be working in the opposite direction, towards a longer time lag. One example is the costs involved in altering prices. One of the benefits of low and stable inflation is precisely that it facilitates contracts with a longer duration. Insofar as the establishment of a low-inflation regime has led to price movements being more restrained for this reason, it follows that it will take longer for monetary policy measures to impinge on prices. For monetary policy’s time horizon, there are therefore arguments in both directions. The problem of faulty forecasts is limited, however, in that monetary policy is implemented continuously. Moreover, current information about economic tendencies can be accorded more weight than events that lie further ahead and the forecasts can be revised as time passes.

not defining a binding convergence path to the target, rather than a price for being too rigid. On the other hand, I also agree with many of the critiques and proposed adjustments to the Pact. Defining a convergence path, looking at structural rather than headline budgets, taking into account public debt levels and sustainability of public finance, etc., are certainly steps towards achieving the “constrained discretion” in fiscal policy I am talking about. The adverse period should thus be taken as an opportunity to modify the rule in a favourable way, rather than as a reason to scrap it completely. I believe that pursuing this opportunity will secure a future for the S&G Pact. I am convinced that some rule of this kind will always have to be in place in the eurozone, and not only because of its multinational nature, but also due to the general advantages of rules. Let me also mention briefly the importance of the S&G Pact for the Czech Republic and other EU accession countries. The Czech Republic, like many other CECs, is facing the problem of rising budget deficits. This is partly a reflection of the previous transition costs, but these are gradually fading away. The root of the problem is structural, similar to the challenges faced by advanced EU countries as well - population ageing, an overgenerous social system, etc. At present, most countries are preparing consolidation programmes aimed at reversing the negative trends.
At the same time, indications of a possible slowdown in momentum became visible during the course of 2013.8 Taken together, these developments make it difficult to judge precisely where we are in the credit cycle or the direction in which we are heading. This situation is an example of the fundamental identification difficulty  8  Nominal growth rates for mortgage claims have slowed to about 4.5% from around 5% in the two preceding years. At the same time, apartment price growth has slowed from 6.8% (average growth rate in 2012) to 5.2% in Q2 2013 (annual growth rates of nominal transactions prices based on quarterly data provided by Wüest&Partner). 4  BIS central bankers’ speeches  pertaining to the analysis of the financial cycle. Further academic advances in the development of new tools to help identify cyclical risks would be highly welcome. The lessons are clear, however. In the current environment of significant uncertainty and persistent risk, prudent behaviour on the part of all actors is called for. For banks, this means applying conservative lending criteria in terms of both loan-to-value ratios and affordability. For borrowers, it means bearing in mind that real estate prices are already at elevated levels and ensuring that, even if interest rates were to rise sharply, they could afford to service a loan. And finally, for regulators, it means continuing to monitor the situation very closely and being ready to take further regulatory measures, if the hopes of a soft landing are not fulfilled. References Bank for International Settlements (2011).

A stable financial system cannot be based on questionable and opaque risk assessments. To regain confidence in these calculations, banks should make sure that their RWA calculations are transparent and traceable. In particular, they have to ensure that changes in RWAs over time, and differences in published RWAs between institutions, can be explained and economically accounted for. Third, the ongoing work on recovery and resolution plans should be pursued with total determination. If required for the guaranteed maintenance of systemically important functions, changes in the current organisational structure should be explored and initiated without delay. Fourth, on the regulatory side, further progress in defining the key elements of a viable resolution and recovery strategy for globally active banks is needed. In the absence of global bank insolvency legislation, this necessitates close coordination among regulators across borders. Specifically, further steps are necessary to guarantee that resolution measures – such as a bail-in – ordered by the home regulator are mutually recognised by foreign authorities. In this regard, it is encouraging that the resolution and recovery plans for our big banks are being developed in close collaboration with the foreign regulatory authorities concerned. Let me finish with some words regarding the cyclical risks. Mortgage volumes and real estate prices continue to grow at rates significantly above those justified by fundamental factors such as income and population growth. This means that the imbalances, which are already large, are increasing further.
Dimitar Radev: Eurozone slowdown likely temporary Publication in the MNI based on an interview with Mr Dimitar Radev, Governor of the Bulgarian National Bank, conducted by Mr Luke Heighton and published on 17 May 2019. * * * The eurozone slowdown may prove temporary, the governor of the Bulgarian National Bank told MNI, but whether Europe emerges from the current soft patch by the second half of 2019 is uncertain. "The euro area’s economy beat many economists’ expectations in the first quarter. But the pace and direction of the economy over the coming months and quarters are yet to be seen,” said Dimitar Radev, a member of the European Central Bank’s General Council since his 2015 appointment, noting the persistence of global trade tensions and “political developments” in Europe. "Recent data may be interpreted as signs that the region’s slowdown may be temporary,” he said in an emailed response this week to questions. Asked whether slow eurozone growth pointed to ‘Japanification', he replied: “comparisons with previous historical episodes and other economies do come to mind when we observe prolonged periods of slow growth, very low interest rates and aging population in Europe." "Policy responses may be effective only as long as they target structural areas, such as education, labour market and pension reforms. The focus needs to remain clear: to stimulate productivity and competitiveness,” he said, calling for more growth-oriented fiscal policies. "This does not necessarily mean higher spending. Moreover, higher spending would be counterproductive in countries with no fiscal space."

Offsetting the negative effects of sub-zero interest rates has been a key topic for discussion since March, when remarks made by ECB President Mario Draghi in Frankfurt led to speculation he was considering the introduction of a tiered central bank deposit rate. —NEGATIVE RATE CONCERN 1/2  BIS central bankers' speeches  "There are good reasons to be concerned about the very low or negative rates, particularly if they persist. Banks may be less motivated to improve efficiency, given their low funding costs. At the same time, the asset side of their balance sheets may erode and is exposed to a future turn of the cycle, and this risk needs to be adequately priced." Bulgaria, which joined the European Union in 2007, already meets key criteria for adopting the euro, and its national currency is expected to enter the EU’s Exchange Rate Mechanism II later this year. Nevertheless, the country is unlikely to enter the currency union until at least mid-2022, Valdis Dombrovskis, EU Commission Vice-President for the euro said in January, with Radev agreeing that obstacles to accession remain. "We need to speed up the process of real convergence,” he said. “The challenges we face are structural, rather than fiscal or monetary ones. More needs to be done also on the institutional front. While the institution of public financial management is exemplary, as evidenced by results, some other institutions need major improvement."
This will safeguard our independence and credibility as monetary policy maker and will ensure that monetary policy is not affected by considerations outside of the realm of monetary policy, for example the state of the banking sector. This is particularly important in the context of our emergency liquidity assistance (ELA), the provision of which is based on a sound and reliable solvency assessment. In the future, we will have these assessments at hand “in house”. Moreover, a strong resolution framework, with effective tools for orderly resolution, will in turn help to remove the pressure on the central bank to unduly prolong the life of banks through liquidity provision. Second, the banking union will help to unwind the reliance of the euro area banking sector on central bank intermediation. As mentioned, during this crisis we have activated a set of nonstandard monetary policy tools that – by nature – were intended to alleviate impaired monetary policy transmission and ultimately serve our primary objective to maintain price stability in the euro area. By alleviating funding pressures and undue risks in securities markets, our measures have provided temporary relief for the banking sector and complemented policy efforts on the financial stability front. However, our measures cannot and should not solve the underlying structural problems. This is a task for governments and the banking industry.

Various actors in the economy may be relieved from pressures to take up their own responsibilities, thereby lowering the incentives to correct imbalances, unwind past excesses and redress the course of unsustainable economic and financial policies. BIS central bankers’ speeches  3  Second – and more fundamentally – non-standard monetary policy cannot solve the underlying structural economic and financial problems. The banking union – restoring financial stability and reintegrating financial markets The banking union aims at building an integrated financial framework to safeguard financial stability. To this end, it is absolutely imperative to have both an EU framework for single supervision, the SSM, as well as an integrated resolution framework, the SRM. Stability comes from having two pillars. The Single Supervisory Mechanism One particular institutional shortcoming of Economic and Monetary Union (EMU) derives from the inconsistency between a single monetary policy and national supervisory competences. A step up of supervisory powers to the supranational level was therefore needed to reverse financial fragmentation, with a view to breaking the link between sovereigns and banks, restoring the principle of self-responsibility and avoid objectionable transfers. By centralising supervision, the SSM should ensure uniform practices across Europe and overcome the home-host cross-border supervisory discussions and the associated national bias. The establishment of a single supervisor marks a new epoch in the EU financial framework, which may be comparable to the creation of monetary union at the end of the last century.
This include RMB outflows through official aid, international loans by banks in China, foreign issuance of debt in Chinese markets, direct investment abroad, inter-company loans, repatriation of corporate profits, resident spending abroad and so on. Some of these are already happening. Offshore RMB balances in Hong Kong, Chinese Taipei and Singapore for example rose almost 40% between late 2013 and early 2014 to RMB1.4 trillion. These numbers are indeed encouraging, except for one thing. When the RMB is abroad, it gets homesick, terribly homesick. It yearns to return home to the land of its birth. When the legal avenues for it to do so are limited, it desperately seeks other ways to do so. And as the size of overseas RMB pool increases, the pressure of the homeward bound flows will also increase. Will the Qualified Investor Schemes, RMB clearing banks and the eventual introduction of the China International Payment System alleviate this situation of the offshore RMB? Yes, it would, but not entirely. In the current situation, despite the sharp increase in RMB related trade and investment transactions, the data I have seen suggests that the use of RMB remains rather lopsided and favours the flow of RMB into China rather than out of China. A significantly greater proportion of China’s exports were paid for in RMB, then its imports. Similarly, while 63% of the FDI into China was in RMB, only 16% of the direct investment out of China was in RMB.

And how far, in any case, would we be able to avoid importing US monetary policy even in the absence of the Link? The experience elsewhere in the region does not give ground for much optimism. The third question is how far the Link is fuelling deflation, and how far this is detrimental to our economy. Internal price deflation is indeed a part - and a necessary part - of the process of adjustment imposed on the economy under the Link when there is a fall off in external demand. It is also, incidentally, a feature of our longer-term economic integration with the Mainland of China. It is the counterpart of currency depreciation under a floating regime, except that the adjustments that it forces to take place tend to involve less overshooting, less instability, and more lasting restructuring. Price deflation brings pain to those who see the value of their assets shrink dramatically, and, as we know, there are many in Hong Kong who are, sadly, in this position. But there are many more who have seen their purchasing power increase, as prices for the whole range of goods and services steadily decline. And the effect, equivalent to that of devaluation, on adding to the attraction of Hong Kong as a regional centre, and as a destination for tourists, can only be positive. The concern comes when price deflation, as part of the adjustment process under the Link, turns into the kind of spiralling deflation that inhibits investment and fuels recession.
On a daily basis, moreover, the Central Bank of Malta liaises closely with the NECC, the Malta Bankers’ Association and other entities which for years now have been participating in joint technical meetings covering key operational areas, including the functioning of money and capital markets, payment systems and the gathering of statistical data. The Bank also has an internal plan, encompassing some 200 different tasks as well as time frames within which they need to be completed, for an orderly transition to the euro. This plan was drawn up using a bottom-up approach, with each department developing its own programme for adapting structures and procedures to the policy and operational requirements of EMU. Plan implementation is on track. Steps have already been taken to align the monetary operations, accounting and financial reporting frameworks with those of the Eurosystem. The Bank has also completed most of the necessary upgrades to its IT hardware and operating systems to ensure that it can exchange information and settle transactions with the Eurosystem in a seamless fashion. As far as the Cash Changeover Plan is concerned, this too is on schedule. The physical facilities for the storage and distribution of cash have been completed, the test run for the minting of Malta’s euro coins has commenced and arrangements for the procurement of euro notes are about to be finalised.

The benefits of the euro for individuals and businesses, its contribution to a more effective participation of Maltese enterprises in the Single Market and the possibility of using the euro as a means of competing on international markets were also important considerations. But while there were many compelling reasons for an early adoption of the euro, there was also an understanding of the need to avoid the economic costs of a premature entry. Consequently, there was some hesitation in adopting an ambitious reform programme. These concerns were well-founded. At the time Malta was preparing to join the EU, the economy was emerging from a period of stagnation, a widening output gap and a slow pace of productivity growth. In addition, while the Government planned to reduce the budget deficit from almost 10% of GDP in 2003 to below 3% by 2006, an adjustment of that magnitude clearly presented considerable political risks, not least because some fiscal tightening was already underway. The unemployment rate, meanwhile, was edging upwards in response to the ongoing restructuring process and the further liberalisation of markets as a result of EU accession, making any further retrenchment painful for most households. 1  For a fuller treatment of Malta’s case for adopting the euro, see Malta’s Strategy for Participating in Economic and Monetary Union and Adopting the Euro, Government of Malta, Central Bank of Malta, April 2005. BIS Review 77/2007  1  At the same time, many indicators suggested that Malta was well suited to participate in the EU single currency area.
Svein Gjedrem: Norwegian experiences in balancing economic development with macroeconomic stability - a historical perspective Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the Norwegian Embassy, New Dehli, 21 March 2006. The  Charts in pdf-format can be found on the Norges Bank’s website. The speech does not contain assessments of the economic situation or the monetary stance. Please note that the text below may differ slightly from the actual presentation. *  *  *  Excellencies, Ladies and Gentlemen, It is a great honour to address you today on behalf of Norges Bank. The ties between Norway and India seem to be growing stronger, in spite of the geographical distance and vast differences between our two countries. Over the last few years, a number of Norwegian companies have entered the Indian market or strengthened their involvement in India. For example, the Norwegian oil and gas company Norsk Hydro reports that almost 300 000 hours of engineering services for the natural gas field Ormen Lange were supplied by Indian engineers, located in India. Last year, the Government Pension Fund made its first investments in the Indian stock market. By the end of 2005, the Fund had holdings in more than 70 Indian companies. There are also numerous cultural ties. This year, Norway is commemorating our most famous playwright Henrik Ibsen. A wide range of events is being arranged both in Norway and abroad.

Of particular interest is that Indian actors are providing fresh interpretations of Ibsen’s work, both in India and in Norway. The topic of my speech today is Norwegian experiences in balancing economic development with macroeconomic stability from a historical perspective. As a background for the subject, let me start with a brief characteristic of Norway today from an economic perspective. First, Norway is a small, mountainous country with a population of only 4½ million people scattered across a land area that is one tenth of the size of India. Second, Norway’s economic growth has been favourable for many years, and the per capita income is among the highest in the world. An abundance of natural resources, not least oil and gas, and openness to trade and capital movements are important reasons for this. The petroleum sector’s share of GDP was approximately 24 per cent in 2005. Over the last 10 years, the government has earned higher petroleum revenues than it has spent. Today we have a sizeable Government Pension Fund, which invests all its funds globally. Globalisation and cyclical developments have been kind to the Norwegian economy. Prices for our imported goods are falling in relation to prices for goods we export. Norway’s terms of trade are improving. The impact of the rise in oil and gas prices is particularly strong, but the terms-of-trade gains for the mainland economy have also been high. One aspect of this is that trade in services with India is increasing.