samchain/econo-pairs-v1 huggingface dataset:
The reason for this is quite simply that it is more costly in terms of reduced production and employment to force down inflation expectations once they have become established at a higher level rather than to prevent them rising. Parallels between the current situation and 2001 plus 2002 Let us take a look at the current situation and begin with the price rises. Now, as in spring 2001, inflation has risen as a result of temporary factors pulling up the general level of prices. During 2001 mad-cow disease and foot-and-mouth disease pushed up meat prices and poor harvests led to soaring prices on fruit and vegetables. Then as now there was also a water shortage in the hydroelectric power companies’ reservoirs, which pushed up electricity prices. At the moment, it is electricity and oil prices that are soaring and have pushed up inflation figures above the target level in January. This becomes particularly clear if one separates energy prices from the inflation figures for January (Diagram 1). The Riksbank’s assessment is that the upturn in inflation is temporary, as it was in 2001, and we can expect to see lower inflation as early as the late spring and summer. However, our assessment is based on the assumption that those setting prices will not try to compensate themselves for the temporary price increase. If this occurs, there is a risk of inducing tendencies towards an inflation spiral, which the Riksbank could not stand by and witness in silence.

For instance, a central bank cannot prevent oil prices rising in the wake of the concern over a possible war in the Middle East. On the other hand, a central bank could of course try to quickly tighten demand in the country to push down prices in other areas and thus ensure the average rate of price increase remains in line with the target level. The focus on inflation 1-2 years ahead, entails monetary policy being conducted gradually, little by little, rather than a constant acceleration and braking, which would risk creating unnecessary variations in demand and which could in turn have a negative effect on production and employment. The focus on the coming 1-2 year period thus means that temporary rises or falls in the inflation rate can be tolerated. However, it is important that the Riksbank is clear in its communication of whether it considers the rise to be temporary and when it expects it to subside. One-off shifts in price levels can have a more lasting effect on future inflation if, for instance, those involved do not believe that the rise is temporary, assessing that it will be lasting and thus wishing to compensate for the upturn. If this occurs, monetary policy must be used to intervene, even if the economic situation in itself does not provide cause for concern with regard to inflation, to prevent inflation taking a hold through expectations.
Of course, determined efforts are required on the part of EU governments to reach a consensus on improvements in governance – particularly on the rules governing budgetary policy in the monetary union – and on the provision of bail-out funds. While the discussion and decision process surrounding these matters are often regarded as a weakness in the governance structure, it must also be recognised that the changes involved represent significant levels of assistance to programme countries and also touch directly on issues related to sovereignty. It is perhaps ironic that current problems are in part a side effect of the success of the monetary union, and the benefits it brought about. More precisely the crisis has also been triggered by the misuse of the benefits of monetary integration. The new currency reduced the cost of borrowing in several countries, as credit spreads narrowed and exchange rate risk on intra-euro area borrowing was eliminated.1 The reduced cost of financing public as well as private debt was reflected in higher government debt and private sector leverage. In the wake of risk repricing by the financial markets, there is now the strong tendency for market operators to unwind their holdings of public and private sector debt. This can be seen in Chart 1, which shows as an example the ensuing reduction in the leverage of monetary and financial institutions. The deleveraging process could set the stage for a deterioration in economic conditions. However it also serves to correct past excesses.

It is therefore essential that, while staying abreast of innovations in the financial world and taking on the changes that are required to stay competitive and improve efficiency, the domestic banking sector must also continue to build upon the strengths of the traditional model. By contrast, the financial turmoil of recent years has had a negative effect across many countries, particularly on financial institutions that rely on wholesale funding sources. In response to the rapid drying up of the interbank markets and with liquidity abruptly disappearing in many key financial markets in the euro area, the Eurosystem has for the past three years been implementing a broad programme of enhanced credit support. In particular, the Eurosystem has been providing liquidity on a fixed rate and full allotment basis and has also extended the maturity of its re-financing operations. These non-standard measures have been instrumental in avoiding a credit crunch and supporting financial stability. These measures are designed to ensure an effective transmission of monetary policy – to maintain the flow of credit to the real economy, avoiding liquidity problems and supporting growth in productive activity. However, there may be instances where the availability of these funding sources may induce some credit institutions to embark on alternative business models where access to central bank funding becomes the primary source of funding. I would like to make it very clear that the Central Bank of Malta is not prepared to support such ventures. When the conditions are favourable a higher leverage ratio increases the return on capital.
Area-wide equity indices have been made available by various market participants, thus providing investors with opportunities to monitor area-wide equity positions as well as, in some instances, positions in area-wide industrial sectors. The fact that the euro area (and EU) equity markets are becoming more integrated, more liquid and deeper is good for market efficiency, and a more efficient allocation of capital should mean that equity financing becomes more readily available for companies. I should also like to mention that a prudent, harmonised regulatory framework, on the one hand, and harmonised market practices, on the other, are key factors guaranteeing a favourable outcome for these structural changes. In these areas a lot of work is under way, and much has still to be achieved in order to pave the way for truly integrated financial markets. Harmonisation in, for example, repurchase agreements, national company laws including bankruptcy laws, and other aspects of the legal and regulatory framework, would enhance legal clarity and certainty and thereby improve the efficiency and stability of the financial markets. Indeed, the European Commission recently published an Action Plan containing priorities and timetables for measures aimed at improving the single market for financial services. In the Action Plan, measures are proposed to advance the harmonisation of the legal framework and market information, as well as to facilitate investors’ operations throughout the single market. In this respect, I should also like to pay tribute to the International Organization of Securities Commissions (IOSCO) for its efforts.

But, above all, I feel a great responsibility at having inherited the enormous legacy of an institution with the history, functions and position in the Spanish economy of the Banco de España. I wish to begin this new stage thanking those people who have steered my career over the years. I have learnt from all of them and their teachings have been a source of wealth for me. My sincere thanks to all of them. Thanks, of course, to José Luis Malo de Molina, under whose leadership of the Research Department I have pursued most of my career, and, among others, Eloísa Ortega and José María Bonilla. They were most forthcoming with their trust and have, at different times, been a major source of guidance and support for me. Thanks also to Fernando Restoy, above all for being a point of reference in terms of competence and dedication to public service. Thanks especially to José Manuel González Páramo, who oversaw my Ph.D. and took me to Frankfurt. That experience gave me, early on, a first-hand view of the work of the European Central Bank and of the Banco España’s potential as a member of the Eurosystem. Naturally, my greatest gratitude is to Governor Luis María Linde for naming me Director General for Economics, Statistics and Research almost two and a half years ago. That was, unquestionably, the necessary step for taking me to where I am today. 3/5  Thank you, Governor, for your constant support over this period.
In the process, I think we have learned to appreciate the complexity of this enormous undertaking. One conclusion I have drawn from my observations over the years is that many of the reforms Europe is pursuing on its path to monetary unification -- including fiscal stabilization, tax harmonization, welfare and labor market reform, trade liberalization, and capital market integration -are goals that are worth pursuing in their own right and for which EMU provides a consistent frame of reference. Continued progress toward furthering these broad-based goals is in the interest not only of Europe but also of the United States. There can be no question that the United States has benefited greatly in the past two decades from Europe’s deepening integration. Europe has provided a steady opening of markets for American products and served as a source of an increasingly efficient supply of goods to U.S. households and firms. Europe’s growing participation in international capital markets, which a successful EMU and a strong euro are intended to further, has also encouraged an increasing flow of savings between Europe and the United States in response to changing macroeconomic conditions in our two regions. We in the United States have much at stake in Europe’s and EMU’s future and we stand ready to work with you and support you in the furtherance of your historic efforts. BIS Review 109/1997

They should lead by example, notably by supplying the new European payment instruments to their clients and by ensuring that the retail payment system they operate complies with the interoperability principle enshrined in the SEPA project. 2.2. Acting as a facilitator of market and regulatory evolutions  Turning to the involvement of the Eurosystem in payment systems issues as a facilitator of market and regulatory evolutions, it is fair to say that this mode of action has been mainly used in the field of retail payments to support the SEPA project. The SEPA project was launched in 2002 by the European banking community under the aegis of the Eurosystem and the European Commission. The banking industry has taken on the responsibility of delivering the SEPA products, in particular the specifications of the new European instruments. The European Commission, which grants a great importance to the SEPA project in so far as the latter contributes to the achievement of the common market and the completion of the Lisbon agenda, has elaborated a legal framework for payment services in the European Union. It made public, in December 2005, a directive proposal that should be adopted at the European level before being transposed in national laws by 2008. Since 1999, the Eurosystem’s central banks have been actively promoting, at European and national levels, the establishment of a SEPA.
•  The People’s Bank of China announced in February a widening of the access to the China Interbank Bond Market to a broad range of foreign financial institutions without any quota restrictions. •  And, earlier this month, the Bank announced that it would extend nationwide the pilot measure for cross-border financing by Mainland corporates and financial institutions, with the result that case-by-case pre-approval is no longer required. 12. These initiatives demonstrate the central government’s commitment to liberalising the Mainland’s capital accounts. They also present CFOs and treasurers with new opportunities to meet their business and investment needs. And, there will be more to come. Premier Li Keqiang has said the Shenzhen-Hong Kong Stock Connect will be launched later this year. 13. Secondly, the “China connection” is growing rapidly. Let me briefly explain what I mean by this: in 2014, China’s ODI amounted to $ billion, 10 times the amount in 2005. This number will be even bigger in the years to come as Chinese corporates go global, and as the implementation of the “Belt and Road” strategy helps more Chinese corporates to invest in these countries. At the same time, multinational corporates are paying more and more business attention to China. In 2015, FDI into China reached $ billion, compared to $ billion in 2005. The point here is that with more business opportunities, either because Chinese corporates are “going out” or multinational corporates are expanding into China, comes the need for more sophisticated treasury management. 14.

In-principle support has been received from the Asian Infrastructure Investment Bank, the Asian Development Bank, and the International Finance Corporation under the World Bank Group. And others have also indicated an interest. IFFO will be launched in July and we look forward to sharing with you more information about its work. Corporate Treasury Management 10. I would now like to turn to issues of more immediate concern to you in your treasury management roles, and to share a few factors which I believe are shaping your business:  11. First, the continuing liberalisation of the Mainland’s capital account. As I mentioned earlier, the Mainland authorities have continued to implement measures to liberalise cross-border fund flows. I am sure many of you are familiar with the progress, but let me just quickly name a few key measures introduced in recent years:  2  BIS central bankers’ speeches  •  The Shanghai-Hong Kong Stock Connect has been in place and operating smoothly since November 2014, allowing international investors access to the A-shares listed in Shanghai through the stock exchange in Hong Kong, and vice versa. •  The Mainland-Hong Kong Mutual Recognition of Funds scheme was implemented in July 2015, allowing Mainland and Hong Kong funds to be distributed in each other’s markets through a streamlined approval process. •  The QFII arrangement was refined in February this year by relaxing individual quotas and shortening the investment lock-up period, among other improvements.
The key to progress was the joint recognition by market regulators and supervisors that earlier identification of credit losses is consistent both with financial statement users’ needs for transparency regarding changes in credit trends and with the prudential objective of safety and soundness.19 In the other direction, bank supervisors have typically insisted on the vital confidentiality of the information they receive, while securities regulators emphasise transparency. One could argue that, in many countries, the bank supervisors have done too well in this debate. That was brought home to me some years ago when, in a previous existence at the Bank of England, my then team realised that we could analyse large and complex firms most easily using disclosures made under SEC rules. As announced last week in the joint Bank of England/FSA document on how the future Prudential Regulation Authority will approach banking supervision, we plan in the future to publish prudential returns to the extent possible. Shadow banking and the prudential perimeter My second point about firms concerns shadow banking, defined to mean non-bank firms or structures that replicate the monetary and/or credit services of banks in some way, involving maturity transformation and/or leverage20. 18  See Recommendation 19, FSB Report on Implementing OTC Derivatives Reforms (2010); and the recommendations of the FSB’s Data Gaps and Systemic Linkages Group.

In some jurisdictions, such as the UK, the securities regulator is the listing authority. In others, such as the US, listing documentation is approved by exchanges, with minimum disclosure requirements set by the securities regulator. This is tied up with whether regimes retain an element of Self-Regulatory Organisations. 9  In the UK, although the FSA was given a “financial stability” objective in 2010, it did not apply to its functions as UK Listing Authority. The proposed objectives of the planned new securities and conduct regulator, the FCA, are intended to apply to the UKLA. 10  IOSCO Objectives and Principles of Securities Regulation (2010). 4  BIS central bankers’ speeches  whole in ways that are opaque to everyone. For example, in the USA, as the SEC has commented, a lot of structured-finance products, including pretty well all CDOs and AssetBacked CP, were issued privately and so were exempt from a panoply of disclosure requirements that apply to “registered” offerings.11 Reducing that opacity, and ensuring the integrity of these market mechanisms, could well be in the interests of investors in private placements themselves. This issue is not easy. On the one hand, it is reasonable for the regulatory regime to make allowance for private transactions amongst “consenting adults”. And the issuance of small amounts of any type of security cannot possibly jeopardise stability.
Based on the latest microeconomic information available,17 it is estimated that the increase in interest rates since the start of this year (of 1.6 pp for the 12-month EURIBOR,18 the main interest rate to which the stock of mortgages in Spain is linked) will lead to a rise of almost 2 pp in the proportion of households with a high net interest burden.19 This effect would be most pronounced among indebted households between the 20th and 40th percentiles of the income distribution.20  17  This exercise was conducted drawing on information from the 2017 Spanish Survey of Household Finances (EFF by its Spanish abbreviation). The latest Financial Stability Report includes the results of the exercise for various interest rate hike scenarios. It was found that the proportion of households with a high net interest burden would rise by 1.2 pp, 2.3 pp and 3.9 pp, respectively, if interest rates were raised by 100 bp, 200 bp and 300 bp. 18  The 12-month EURIBOR has risen from -0.501% at 31 December 2021 to 1.091% at 20 June 2022. 19  The net interest burden is considered to be high when the ratio of (debt service expenses - interest income from deposits) to household income is over 40%.

2  The General Council of the Riksbank's comments 1997-02-06  BIS Review 9/2002  3  With regard to the labour market, it should be clear that the functioning of the labour market and the high level of unemployment no longer comprise as strong a restriction as they did in the mid-1990s. Unemployment in Sweden has fallen. Several factors have played a role in the decline. One of these is probably the fact that the wage formation system has been changed in a way that contributes to better concordance between productivity and wage growth. Nevertheless, there are clear signs that the labour market still comprises a problem area. A clear majority of the EU member states has now joined the monetary union, which was not evident when the Calmfors Commission made its assessment. The political cost of remaining outside of EMU has thus become greater, and public opinion has become more positive towards membership. I personally think that there are also new arguments that should be considered with regard to the costs of remaining outside the union. For instance, the economists Andrew Rose and Torsten Persson have made in-depth analyses of the effects on trade of a monetary union. There could be reason to believe that the positive effects are slightly greater than was assumed in connection with the Calmfors Commission's report.
16 It is a tool of both access authorization and control. Taking a closer look at the development of public services in various parts of the world, one can get an impression that e-administration is well-present in everyday life, has been wellorganized, thoroughly analyzed, and in a conscious and consistent way improves the quality of public services in highly  10  IVR – Interactive Voice Response – a phone technology that provides the user with an ability to contact a database over the phone with tone dialing function. Thus, the user can obtain requested information from the database or enter relevant data to the database. 11  “Leasership In Customer Service: New Expectations, New Experiences”, op. cit., Ain Järv presentation entitled “e-Economy and e-Government in Estonia” held on January 5, 2006 at the National Bank of Poland. 12  The system was launched in mid 2005 for the customers of the second biggest mobile telephony operator in Finland – Elis. More information can be found at www.pstm.net/article/index.php?articleid=707  13  http://My.eCitizen.gov.sg. 14  “eGovernment In the Member States of the European Union”, IDABC, November 2005. 15  “RFID tracks fever cases in Singapore hospital”, www.pstm.net/article/index.php?articleid=788. 16  “You will not enter without Chip. ID under the Skin,” Gazeta Wyborcza, February 16, 2006. 4  BIS Review 23/2006  developed countries in Europe and North America, whereas in the developing countries of Asia, a higher growth momentum and courage in implementing innovative solutions can be observed.

The progress in the ICT is also one of the main factors explaining why the American economy has developed at a far faster rate than the economy of the euro area in the past ten years. The research results available 3 show that labour efficiency in retail and wholesale trade in the United States has grown many times faster than in Europe, inter alia due to the use of the ICT in those sectors. The American Wal-Mart, the biggest global supermarket network, has implemented the new radiofrequency identification technology (RFID) for the purpose of further enhancement of the network performance and reduction in the logistics-related costs. So will have to do most of Wal-Mart’s suppliers. The above examples demonstrate the way that the progress in the e–economy facilitates global optimization of the manufacturing process, this contributing to a rapid growth in efficiency, improved quality, and reduced prices, and thus offering far-reaching benefits to consumers. It has turned out that although Poland is at the bitter end when it comes to readiness to implement the e-economy, the position of the Polish economy is high in most of the rankings concerning the investment or offshoring 4 attractiveness, whereas our chief advantages include a favourable location, a large market, and well-qualified and relatively cheap workforce. Therefore, owing to the process of globalization of manufacturing and services, Poland may stand a chance of rapid growth, provided that our chief shortcomings, including the poor advancement in e-economy and e-administration, are remedied.