samchain/econo-pairs-v1 huggingface dataset:
Partly as a result, in 2012 the UK economy created firms at more than three times the rate of the US.7 Taken together, these measures promote competition and spur innovation which ultimately benefits us all. And the UK has managed to combine some of the most flexible labour markets in the G7 with some of the most cooperative labour relations (Charts 9–10). This relative labour market flexibility helps the economy to absorb shocks, illustrated by the experience of the Great Recession. UK unemployment rose by less than in the US, and has fallen faster than in the euro area. Since the start of the Global Financial Crisis, UK jobs have grown 3 percentage points more than the US. Moreover, people’s attachment to the workplace has remained broadly intact. Compare that with the case of some euro members, where youth unemployment in particular has been devastatingly high, and with the US, where there was an unexpected rise in worker discouragement, with many working age adults exiting from the labour market altogether.8 This out-performance is positive for the UK’s dynamism in the medium run. More to the point, that means more people in work, building not losing skills, with real prospects for higher wages and better living standards. That is important because the UK still has work to do to close the gap between its productivity performance and the world frontier, defined by the United States (Chart 11). However, over the broad sweep of its EU membership, the UK’s productivity growth performance compares favourably.

They are wonderfully talented and represent the diversity in interests and perspectives of the team that we have here at the Bank. Celebrating the beauty and diversity of nature is as good a reason as any for an art exhibition. This is the first time that I have had the distinct pleasure of launching an exhibition here at the Gallery, and I am thrilled and honoured for it to be on this particular theme. 2/3  BIS central bankers' speeches  I am grateful to all who have taken the time to be here today – to share an appreciation of not just the artistic works exhibited, but also their message. I would like to thank in particular all the artists, Dato’ Dino of the WWF and the team from the Bank Negara Malaysia Museum and Art Gallery who worked to put this exhibition together. 3/3  BIS central bankers' speeches
Jaime Caruana: Reflections on financial information from the standpoint of a banking supervisor Speech by Mr Jaime Caruana, Governor of the Bank of Spain, at the 13th XBRL International Conference, Madrid, 16 May 2006. *  *  *  Introduction Good afternoon. I would like to begin by thanking the organisers of this 13th XBRL International Conference for their kind invitation to participate. I am delighted to have this opportunity to close today’s session by sharing with you some reflections on financial information from the standpoint of a banking supervisor. And it is, of course, a special pleasure for me to be able to address this audience in my home country. I guess that, looking from the outside, it might seem somewhat strange that banking supervisors and other regulators are taking such an active interest in a computer language. But I think that all of us here are very well aware of the role that tools such as XBRL can play in promoting the effective and efficient flow of financial information, and it is on this wider objective that I want to focus my intervention today. I will begin with a brief introduction to recall the important role that information plays in financial markets from a macroeconomic perspective.

BIS Review 78/2000  8  This raises the question of whether to separate production and distribution. Many institutions, particularly smaller ones, may find it beneficial to distribute other companies’ products. Different cooperation agreements make it possible for small players to offer a broader product range than they would have been able to on their own. We have seen several examples of this in Norway, particularly among savings banks. At the same time, some larger institutions may benefit from offering their products for distribution through other institutions. This may contribute to keeping Nordic banks - both large and small - competitive in the retail market. In the segment of large enterprises, however, production and distribution are perhaps more difficult to separate. This may imply that many Nordic banks are too small to compete for the business of large and advanced customers. Competition in this segment is perhaps more international than Nordic. How does cross-border integration change the risk outlook for the financial system? If it improves the long-term profitability, and thus the robustness of institutions, it is clearly advantageous. Spreading production costs over a larger customer base may improve profits. In addition, cross-border competition might lead to efficiency gains and a spillover of best practices. However, there are also counter-arguments. For example, increasing the size of operations may reduce management focus. In general, more integrated financial markets can spread financial unrest between countries more easily. This could have a negative effect on financial stability.
They must be able to set a strategy and risk appetite and oversee implementation, but they do not substitute for the role of the Executive. Likewise, supervisors challenge hard and can ask for changes, but they do not substitute for the Board or the Executive. The recent past has not been an easy story in this area. It is very understandable that in the wake of the financial crisis, there was hard questioning of the role of Senior Executives and of Boards. Change in the approach of supervision to approving senior managers was needed. It is perhaps natural given the scale of the shock, that some change went too far or not in the best direction. I think there was a rebound in the direction of wanting all Non-Executive Board members to have technical skills of a similar sort, and thus deeper technical knowledge of the business. But that is the job of an Executive. When I came back into supervision in 2011, a senior insurer told me that in the supervisory interview process at appointment all his prospective NEDs were being tested on whether they understood the mathematical underpinnings of a “Gaussian Copula”. I could not verify this story, but it would be a mistake to stock a Board full of people chosen for their expertise in probability theory and nor would that Board be diverse.

There are three answers that I would rule out: the answer is not to go back to the good old days, because viewed with hindsight they don’t look that good; the answer is not to wish that finance should be simpler, something that is too idealistic to have relevance to today’s challenge; and the answer is not to repeal the duty of responsibility as it will apply to the Chairs of Boards and Board committees because as quite a few have said to me, “what’s all the fuss, this is just a description of what we are here to do.” So, what might the answer be? In the work that we are doing at the PRA to overhaul our approach to supervision of governance in firms as it relates to our statutory objectives, we want to help to get this issue on the table and make real progress. My hunch, as I have explained today, is that one answer lies in the approach by which Non-Executives are informed by Executives about firms and thus for Executives to enable rigorous challenge and to be given credit for doing so even where the consequences will be sometimes uncomfortable. We will always be cautious of Executives who seem to see Non-Executives as some form of threat; the really effective Executives are those who see their Non-Executive colleagues’ experience  BIS central bankers’ speeches  3  and knowledge as a means of improving the effectiveness of the Board’s judgement through constructive support and challenge.
The reward of an excellent work in an unknown domain is the 6900 students who have chosen to attend as an elective subject “Personal finance in your hands” published by the Bank of Albania. In cooperation with the Ministry of  BIS central bankers’ speeches  1  Education and Science, we are endeavouring to make this book available in every school and to each student with the ultimate goal for them to be educated financially and empowered to manage personal finance. Only in this academic year, high-school students in 36 districts of Albania chose this book as an elective subject, making us optimistic and forward-looking. We strongly believe that the today’s young generation will be the protagonists of tomorrow’s economic life. For this purpose, we need to make our utmost investment for their formation, in order to ensure not only their future, but also the country’s future. The youth are eager and capable to assimilate, process and convey information, habits, or new products in any field of life. They are the transmitters of innovation, the most energetic and progressive segment of the society. It is our moral, professional and institutional responsibility to invest for a qualitative education of the young generation. To us, enhancing financial literacy is crucial. A well-educated nation guarantees its country’s welfare and progress. Therefore, we have decided to choose the young generation as our strategic partner to realize this challenge. We believe in their idealism, positive energy and pure spirit.

In June, it was announced that the swap arrangement would be phased out by gradually adjusting the minimum price to the bond rates prevailing in this market at that time. And finally, in October, Norges Bank tightened the collateral requirements for loans. Our interest rate forecasts were revised up and indicated that the key policy rate would be raised when the impact of the financial crisis began to wane. Since October 2009, the key policy rate has been increased by a total of 0.75 percentage point to 2 per cent. Our March forecast indicates that the key policy rate should be increased gradually towards a more normal level, but at a slower pace than expected last autumn. The events in Europe and in financial markets in recent weeks have increased the uncertainty surrounding the outlook for the European and the Norwegian economy and for the interest rate. 4. Some lessons from the financial crisis  Norges Bank’s implementation of monetary policy shall be oriented towards low and stable inflation. The operational target of monetary policy shall be annual consumer price inflation of approximately 2.5 per cent over time. In addition, interest rate changes can contribute to smoothing swings in output and employment. In assessing the outlook for prices and output, we also take account of house prices, overall credit and the krone exchange rate. These variables are thereby also given weight in interest rate setting.
In this regard, supporting the development of a vibrant small and medium enterprises (SMEs) sector will be of particular importance. SMEs play a vital role in the economic growth of developing countries, typically accounting for over 90% of business establishments and about half or more of output and export shares. Their entrepreneurship, flexibility and responsiveness to change are essential driving force of economic development. The employment opportunities they create improve the livelihood of thousands of millions of poor people. In many developing countries, and in fact in developed economies as well, SMEs account for as much as 70% of the labor force. Despite the important role of SMEs in the economy, their growth is often constrained by the lack of capital, among other impediments such as regulatory red tape. Their small size, lack of credit ratings and the generally underdeveloped capital markets in the region deny SMEs access to bond and equity financing. Banks are also reluctant to lend to SMEs or charge them a high interest rate, since SMEs usually do not have strong credit history and cannot provide substantial collateral. Making available SME financing at reasonable cost is therefore crucial to the growth of this important sector. Providing policy loans directly to SMEs helps, but the assistance is limited relative to the enormous financing needs and there are always concerns about economic distortions and the efficient use of public resources.

To achieve greater and more sustainable SME financing, it is necessary to develop market-based approaches which are commercially viable to mobilise private sector investment into the SME sector. I encourage the ADB to further work on this front, including exploring possible mechanisms such as credit enhancement and securitisation. Scaling up private sector lending would require a change in the skill mix of the ADB, in particular in strengthening its market expertise and risk management. Partnering with domestic agencies and private sector financial institutions, other international financial institutions and developed members in the region that have relevant experience would be useful in utilising their expertise, building the capacity of the Bank, and sharing credit risk. There are, of course, other important areas concerning the development of the region where the ADB could play a meaningful role as identified in the new Long-Term Strategic  BIS Review 55/2008  1  Framework. As a member of the Bank and the region, we stand ready to provide support and look forward to strengthening our cooperation with the ADB in furthering the development agenda of the region. And lastly, to successfully implement Strategy 2020, further enhancing the organisational effectiveness of the ADB will be of critical importance. We welcome the Bank’s commitment to develop a more robust results framework and to continue its institutional reforms, and we look forward to ongoing efforts by the Bank in this regard. Thank you. 2  BIS Review 55/2008
On the fiscal front, emergency stimulus  1/3  BIS - Central bankers' speeches  measures have already pushed high public debt to unprecedented levels - 67% on average, exceeding Maastricht criteria, and in some countries reaching up to 100% of GDP. In this context, credible medium-term fiscal consolidation is necessary to rebuild buffers and maintain credibility of public finances which is very important as investors are expected to start more vigorously differentiating countries based on their vulnerabilities. On the monetary front, apart from the conventional side effects of "too loose for too long" stance, as credit conditions remain highly accommodative, the risk of the so called "zombification" emerges. It is argued that this process reduces the overall productivity in the economy by trapping the available resources and hindering the emergence of new, more productive companies. In a nutshell, the general economic conducive policies need to be smoothly substituted with more specific sectoral polices that will facilitate optimal reallocation of resources and thus underpin post-crisis transformation of economies. Notwithstanding all these policy measures, the Western Balkan economy is projected to rebound by 5.1 percent in 2021, which implies that pre-crisis GDP level will not be reached this year; it will be lower by around 5% in comparison with pre-pandemic forecasts, and the overall loss will not be recouped even over the medium term.

Yet, according to IMF estimates, the shock intensity would have been three times higher without unprecedented monetary and fiscal policy support, both in terms of speed and scale, preventing a more devastating outcome and long-term scarring to the economies. Given the lessons learned from the global financial crisis, that is recognizing the risk of self-fulfilling cycles, central banks this time responded quickly, providing ultra-accommodative support such as policy rate cuts from already historically low levels, regulatory flexibility to prevent credit crunch and some of them even experimented with non-conventional tools. In this crisis episode, monetary policy was not perceived as "the only game in town" and since the very beginning, it was coupled with unprecedented fiscal stimulus. Average fiscal stimulus in the region amounted around 6% of GDP, which was twice as low as the global fiscal stimulus, but still on a comparable level with middle-income economies. Consequently, the pre-pandemic fiscal consolidation was ceased and the fiscal deficit hit a record high of 7.7% of GDP. Overall, during this crisis episode, policy response in the region was swifter, bolder and better balanced. Looking forward to the policy front, one of the lessons learned from the global financial crisis is that the policy support should not be rollbacked prematurely. Thus, the main challenge is how to provide further support for the recovery stage, but without further creation of vulnerabilities on the other fronts.
Within a few weeks, Spain will be holding general elections, which should be cause for a far-reaching debate on these challenges. A minimum consensus should ultimately emerge on the policies best suited to tackling them, thus ensuring that such policies are durable (a key factor if they are to be successful). Our ability to secure lasting improvements to the well-being of the general public and real convergence with our European partners will largely depend on this. 26  Stuhler, Grébol and Machelet are the joint authors of the forthcoming paper Educational Mobility in Spain. 27  Grébol, Machelett, Stuhler and Villanueva (2023). 28  This statistical relationship has been called “The Great Gatsby Curve”. Corak (2013). 9

According to assessments made by the Bank of Albania, there exist some long-term factors whose operation has influenced on appreciating the Lek’s value: •  Constant consolidation of the country’s economic stability. •  Interest rate spread between the Lek and the foreign currencies. •  Consolidation of public finances and budget deficit, dictating a low government demand for monetary assets. •  Stable remittances by Albanian emigrants working abroad. In the meantime, during 2004 the exchange rate performance was also impacted by specific factors of the year. Specific factors relate to starting of tourism earlier than in the previous years, rise of agricultural produce and decline of demand for agricultural merchandise imports, impacting on the supply and demand for foreign currency in terms of the Lek appreciation. Also, the international foreign exchange market developments are reflected in our foreign exchange market. The euro appreciation versus the dollar over more than a year is reflected in the reduction of the dollar’s value even in our country, though no strengthening of the euro is observed. During 2004, the dollar was depreciated by 7.5 percent against the euro in the international market. During 2004, the Bank of Albania intervened in the foreign exchange market in terms of purchasing foreign currency, in an effort to prevent large exchange rate fluctuations reflected mainly during the summer and end-year period. Financial markets Growth of deposits in Lek, in the presence of a low government demand for monetary assets, created premises for increasing banks’ liquidity and extending interbank market activity.
Conversely, if increased competition and deregulation increase reputational concerns, this increases the propensity of the system to periodic credit booms and subsequent busts. 2.3  Dynamics  This model can generate credit cycles which amplify cycles in the real economy relative to a world without credit cycle frictions. 9 Without frictions, bad loans are liquidated immediately, allowing new assets to be originated next period to unencumbered borrowers. By contrast,  8  These expectation effects are necessarily intra-temporal in our model. The actual operation of macroprudential policy may well have effects through inter-temporal expectations as well. See Section 5 below. 9  The property that global games generate endogenous cycles in dynamic settings has been analysed in, inter alia, Steiner (2006) and Giannitsarou and Toxvaerd (2007). 6  BIS Review 168/2010  extending credit to bad risks eventually results in balance sheet impairment for both borrowers and lenders. We perform a simple simulation to illustrate these dynamics. Suppose the macro state moves stochastically around its trend as a result of a sequence of iid productivity shocks. The macro state is mean-reverting as long as banks set tight policies when they realise low asset returns. This occurs when reputational effects are switched off  . Next suppose reputational concerns are introduced, leading banks to risk up to signal high ability. Because of strategic complementarities, banks do this whenever . This leads to subsequent impairment of the borrowing sector.

There is also evidence of them arising from coordination failures, which generate spillover effects across banks and countries. 1  See IMF (2010). BIS Review 168/2010  1  Drawing on this evidence, Section 5 identifies some implications for the design of public policy. It suggests that neither monetary nor micro-prudential policy may be well-equipped to tackle the credit cycle. Instead, some new policy apparatus may be needed which (unlike monetary policy) targets bank balance sheets directly but which (unlike micro-prudential policy) does so systematically. This is one key dimension of so-called macro-prudential policy. 2 Various international macro-prudential policy committees are, or are about to be, put in place – in the US the Financial Stability Oversight Committee, in the euro-area the European Systemic Risk Board and in the UK the Financial Policy Committee. These provide one element of a macroprudential policy framework. Other elements remain to be put in place. Knowledge of the sources and dynamics of the credit cycle will be important in assembling those missing pieces. This paper is intended to be a contribution towards that goal. 2. A model of the credit cycle  We begin by sketching a model which captures some key features of past and in particular the present, credit cycle. There are a number of existing models of the credit, or leverage, cycle. In all of these models, cyclicality in financial variables is aggravated by various microeconomic frictions. These frictions typically then amplify fluctuations in the real economy.