samchain/econo-pairs-v1 huggingface dataset:
The banks’ provision expenses are at their highest in several years, which could suggest expectations of a deterioration in repayment rates. This contrasts with the drop in the system’s delinquency rate, explained by increased write-offs and restructurings, and a portion of the withdrawn pension savings used for debt payment. As for the cost of bank financing, it remains low in historical perspective for the different users of credit, supported by the expansionary nature of the measures implemented by the CBC. To put it briefly, the economy has improved after the sharp contraction of the second quarter, and measures to support households and credit have succeeded in mitigating the threat posed by the pandemic to the welfare of the population and the solvency of businesses. However, the prolonged sanitary restrictions, the lingering recovery of the most affected areas and the scars left by the crisis have held back the dynamism of the recovery, affecting not only aggregate demand but also the response capacity of supply. Consequently, the fall in activity this year will be sharper than we expected in September. Even so, the economy will continue on a gradual path to recovery in the coming quarters and is still projected to return to September 2019 levels only by 2022. This considers that the pandemic situation will permit maintaining higher levels of mobility than those of mid-2020, and that during 2021 progress will be made in the immunization process, as stated by the government.

Its adoption by over 100 countries has helped to strengthen the safety and soundness of the international banking system and has contributed to the achievement of competitive equality. However, the financial world has changed dramatically over the past dozen years, to the point that the Accord’s efficacy has eroded considerably. Its broad brush approach to differentiating credit risk encouraged banks to undertake regulatory arbitrage transactions. Furthermore, as banks have developed innovative techniques for managing and mitigating risk, credit risk now exists in more complicated, less conventional forms than is recognized by the 1988 Accord, thus rendering capital ratios, as presently calculated, less useful to banking supervisors. Today’s marketplace also provides an imperative for revising the 1988 Accord. The rapid pace of technological change places information that was once largely the domain of analysts and institutional investors into the hands of millions of individual investors and consumers. Market participants, armed with timely and meaningful information, reward sound risk management practices and penalize those banks that are found deficient in this area. A bank’s regulatory capital position can be a strong indicator of how it supports its risk, and if markets are to impose an optimal level of discipline on banks, we must ensure that regulatory capital measures reflect risk as precisely as possible. I believe that reform of the Basel Accord is thus clearly in the markets’ best interests. As the Committee continues to develop a more risk-sensitive capital adequacy framework, we cannot lose sight of the need to keep the Accord up to date.
Christian Noyer: The G20 and the role of emerging markets in the new financial architecture Opening speech by Mr Christian Noyer, Governor of the Bank of France, of the Session “The G20 and the role of emerging markets in the new financial architecture”, at the Money and banking conference 2009, Central Bank of Argentina, Buenos Aires, 31 August-1 September 2009. *  *  *  I am delighted to introduce this final session devoted to the lessons learned from the crisis regarding the international financial architecture and the role of emerging markets in this new configuration. The strong and rapid transmission of the crisis from the United States to other industrialised countries, and subsequently to emerging countries, has clearly highlighted the contrast between: -  on the one hand, the heightened exposure of the international economic and financial system to the risk of systemic crisis, due to the increased interdependence between players of developed and emerging economies and financial systems. -  and, on the other hand, our crisis prevention and management instruments, which have proved to be largely inappropriate or insufficient. Therefore, in order to prevent a similar crisis from occurring in the future, these instruments must be strengthened. This entails a reform of the international financial architecture. The mechanisms and content of international cooperation must be reviewed with the aim of devising crisis prevention and management tools that better take account of the greater interdependencies between the economic and financial systems of advanced and emerging countries.

I am rather doubtful myself, for several reasons. First, in the absence of single accounting standards, a comparison between banks belonging to different accounting universes will mean absolutely nothing. Second, that sort of ratio did exist in the United States and proved of no help, precisely in the country where the crisis emerged. Finally, in the present circumstances, it could add to the reluctance of banks to be active lenders in the interbank money market, therefore reducing market liquidity and still increasing the over-reliance of the banking sector on the central bank counterparty. That said, it is essential to enhance the counter-cyclical nature of capital requirements. For instance, implementing a forward-looking provisioning system and an additional capital requirement at the cycle peak would be effective measures to make capital requirements more contra-cyclical. In this regard and especially in the light of the profits announced by the major banking groups and the large payouts to traders, CEOs or shareholders in the form of dividends, I would like to stress that these profits should primarily be used to bolster capital ratios and allow banks to focus on their core task of financing the economy. All in all, I praise international standards in the field of prudential rules.
BIS central bankers’ speeches  5  This gone-concern LAC could be senior unsecured bonds or subordinated bonds.7 Bonds issued outside the issuing firm’s home jurisdiction are going to need to include legally robust clauses under which holders unequivocally accept that the home Resolution Authority can apply the bailin tool (and other resolution tools) to their investment. If that cannot be achieved, gone concern LAC is going to have to be issued from each firm’s country of domicile. There should not be cross-default clauses in other liabilities, including elsewhere in the group that could be triggered by bailing in these bonds.8 Beyond the terms of bond issues, the authorities are going to need to decide how much loss-absorbing capacity SIFIs need to have in issue. In Europe, the draft resolution directive provides a framework for that. But a global discussion is needed. My own provisional view is that the minimum for bonded debt might need to be equivalent to the sum of the firm’s regulatory equity requirement plus a margin (X) less any surplus equity. That would mean that bailin could be used to cover losses beyond a firm’s required equity base up to an amount X and then to recapitalise back to the ab initio equity standard.

As with other areas of economic policy, research in this field can help drive the action which I want to speak about next. III. And yet, it is still possible to transform public services The key issue with operating expenditure Neither our strategic review of the past few decades nor economic research offers much hope for progress. This leaves one way forward, namely practitioners and their commitment on the ground. I will therefore now focus on government operating expenditure, which is used in particular to produce major public services. It is sometimes argued that the deterioration in the public finances is primarily due to high amounts of social protection expenditure and transfers, which amounted to approximately EUR 900 billion ix in 2022, or 34% of GDP. Operating expenditure is far from being negligible: it accounts for almost a third of public spending (EUR 475 billion, or 18% of GDP) and is therefore a significant potential source for improving public sector efficiency. Central government and national agencies account for EUR 200 billion of this amount, but local authorities with EUR 155 billion account for an increasing proportion. When measured in terms of number of public employees, resources have steadily increased over time. According to the Cour des Comptes, x the number of public sector employees grew by more than one million between 1996 and 2020, i.e. an increase of 23% driven largely by local government (+58%, and  Page 13 of 19 still 47% even after adjusting for skills transfers).
Such capacity may be a concern given the risk that a more normal portfolio size and composition may not be reached before an adverse shock brings short-term rates back to their effective lower bound, perhaps warranting renewed balance sheet expansion.41 This risk may be particularly pronounced in a low neutral rate environment. In principle, asset sales could accelerate normalization of the size and composition of the balance sheet, but the market effects of longduration asset sales could be uncertain, and sales could affect the path of short-term rates.42 Moreover, a central bank that does not hold the assets it has purchased as long as market participants anticipate could lose credibility, making future asset purchases less effective. The central bank must therefore consider the effects of its balance sheet actions in the context of the overall monetary policy setting, including the interplay between changes in the balance sheet and changes in interest rates. Uncertainties related to this relationship help to explain the FOMC’s choice to make changes in overnight rates its main tool for adjusting the stance of monetary policy in the normalization process while balance sheet normalization runs in the background. Still, having both instruments in the central bank’s toolkit raises the importance of clear and cohesive communications about their respective use. Lesson 7: Operational flexibility is important As I noted earlier, the Fed successfully adapted its operating regime to be able to control interest rates even with a large balance sheet.

12 / 13  BIS central bankers' speeches  Following each meeting, the FOMC announced a monthly pace at which it would buy Treasury securities and agency MBS, and provided guidance that it would continue its purchases until the “outlook for the labor market had improved substantially in a context of price stability.” The Committee also advised that it was prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changed. 38 The FOMC adopted such guidance throughout its third asset purchase program. Similarly, on October 12, 2017,  ECB President Draghi pledged to maintain interest rates at their current, low level “well past” the end of the ECB’s bond-buying program. 39 Governor Brainard recently suggested that in a low neutral rate environment, delaying balance sheet  normalization is a means to provide “makeup support” for the economy while enabling the policy rate to escape the lower bound earlier than otherwise. See Lael Brainard, “Rethinking Monetary Policy in a New Normal,” remarks for the panel on monetary policy at the Peterson Institute for International Economics conference, Rethinking Macroeconomic Policy, Washington, D.C., October 12, 2017. 40 This sequencing also allowed the FOMC to meaningfully assess the efficacy of its tools to control short-term  interest rates with a large balance sheet, and thereby judge how patient it could afford to be in reducing the balance sheet to its longer-run level.
These include prudent regulation, more intensive supervision than that of other countries, a business model geared essentially to retail banking and sound management at most banks. But let me also stress – as it seems to me an example of what could be done now with the labour reform – that the government and the opposition, which has supported it in Parliament, have expeditiously agreed on a series of high-quality financial system reform measures that have proven most effective in preventing credit institutions’ problems from bringing the country’s economy to its knees. We should not forget that if, for instance, the legislation on the funds for the acquisition of financial assets and on guarantees for bank and savings-bank bond issues had not been approved, we would no doubt have witnessed a shut-down of wholesale funding on global markets and an abrupt contraction in credit that would have led to a deep recessionary spiral. Fortunately, this did not occur. That does not mean that credit standards are the same now as before the crisis. One of the most notable consequences has been the increase in risk aversion, which stood in the previous upturn at very low levels. This increased risk aversion translates into much stricter lending policies. As a result many companies, particularly small and medium-sized ones (for various reasons, such as the fact that they are not audited and are generally less capitalised than large companies), have seen their ability to obtain funding restricted, occasionally beyond what may be considered reasonable.

For this purpose, they will have to undertake the downsizing of the sector and, at the same time, push through measures to raise efficiency through cost containment and through the introduction of improvements in their risk control and management mechanisms and of ongoing innovation in product marketing and in the implementation of technological and organisational improvements. And  4  BIS Review 27/2010  the government could crown the significant financial reforms made so far with one directed at savings banks. I am thinking of the reform needed so they can raise high-quality equity funds that enable them to grow and continue serving Spanish society while complying with the requirements to which they will be subject in the new international regulatory environment in the coming years. The financial system reforms adopted to date might suffice for the Spanish banking system to get through the crisis and be in a position to extend credit to those needing it in the recovery phase. But this will only happen if the reactivation of the Spanish economy comes in a form that substantially reduces the number of unemployed, improves its competitiveness and increases productivity. If this does not happen, obviously the restructuring task that we would have would be much greater than that facing us at present. Thanks to the reforms adopted, the Spanish banking system has not been an additional problem during the crisis.
Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the more short-term objective of stability in the real economy. Monetary policy influences the economy with long and variable lags. This means we must look ahead when setting interest rates. I would therefore like to comment briefly on some international developments that are important to the Norwegian economy and the assumptions concerning developments in Norway on which Norges Bank’s assessments are based. The developments I will be  BIS Review 79/2005  3  describing are based on the analysis in Inflation Report 3/05 and the Executive Board’s assessments following the monetary policy meeting at the beginning of November. Prospects for global growth are still favourable. Among many of our trading partners, economic policy is oriented towards increasing activity. This will to some extent counteract the dampening effect of high oil prices. Domestic demand among main trading partners such as the euro area and Sweden is expected to edge up somewhat next year. For our trading partners as a whole, economic growth is expected to increase somewhat from 2005 to 2006. In the years ahead GDP for an average of our trading partners is expected to grow by around 2½ per cent. Very high growth in demand for oil contributed to rising oil prices in 2004 and the first half of 2005.

The output gap is a measure that expresses our assessment of total capacity utilisation in the economy. The output gap is defined as the percentage difference between actual output and potential output. Potential output indicates the level of output that is consistent with price and cost stability. The estimate for the output gap is uncertain, partly because the level of potential output is unobservable and must be estimated. Since official statistics on overall activity in the economy are not available immediately and are subsequently revised, the level of actual output will be uncertain. Our overall assessment is that capacity utilisation has picked up over the past two years and is now slightly higher than normal. In our estimation of the output gap, the result of technical calculations is compared with other sources of information about capacity utilisation in the economy. Information from Norges Bank’s regional network may indicate that overall mainland capacity utilisation is close to a normal level. However, there are signs of bottlenecks in production in some sectors of the economy. For example, capacity utilisation in the construction sector is very high, particularly in the southwest  BIS Review 79/2005  1  region of the country. There are signs of some skills shortages in the construction industry, in manufacturing and in some service industries. Even though growth in the Norwegian economy has been high for a long period, substantial labour shortages have not yet emerged in the economy as a whole.
Bureau  of  Labor  Statistics,  March  28,  2011,  BIS central bankers’ speeches  further boosting the share of minimum wage earners in the state. For example, the leisure and hospitality sector employs a disproportionate number of young people, and the average weekly wage in that sector is a very low $ So those are the facts. The Dallas Fed will henceforth be providing monthly updates on employment in Texas through our website at www.dallasfed.org. We hope it will be a useful tool for everyone ranging from columnists who write for the New York Times to the pundits who provide commentary for Fox News, as well as serious economists. FOMC decision Now to the second matter I wish to discuss with you today: my decision to dissent from the commitment of the majority of my colleagues on the FOMC in their decision to hold the base interest rate for interbank lending – the fed funds rate, the anchor of the yield curve – at its current level well into 2013. I have posited both within the FOMC and publicly for some time that there is abundant liquidity available to finance economic expansion and job creation in America. The banking system is awash with liquidity. It is a rare day when the discount windows – the lending facilities of the 12 Federal Reserve banks – experience significant activity.

Higher competition, in its turn, improves the efficiency, which ultimately leads to higher quality and lower prices for consumers. Indeed, this is one of the main ideas underpinning the European single market. This idea is undoubtedly true also for the banking industry. There is increasing evidence of the positive link between the efficiency of the financial system, of which banking is the most important part, and the wealth and growth of the real economy. Thus the potential benefits of a more efficient financial system are substantial. Considering that most financial services bought by consumers (private individuals and SMEs) are bought from their bank, the low integration (and in many cases low efficiency) of European banking is a significant hindrance to creating an overall efficient market in financial services. Barriers to integration Why then is integration of European retail banking not happening or only happening very slowly? The first and second bank harmonisation directives and more recently the many initiatives within the Financial Services Sector Plan, FSAP, have set the legal framework for cross-border expansion. In principle, any European bank can easily set up or acquire a subsidiary in another member state. More importantly, a bank only needs one single banking licence in one member state to be able to offer banking services in all EU member states. So why are we not seeing serious integration of European banking? A number of possible reasons have been cited. These could roughly be divided into three kinds: economic, regulatory, and political.
This occurred because the fiscal policy during the pre-crisis boom had been strongly procyclical, so that the economic advance of over 9 percent in 2008 was followed by sharp falls in the next two years: –5.5 percent in 2009 and –3.9 percent in 2010. The lesson learned here  is that there is no viable alternative to a predictable and coherent mix of economic policies and structural reforms. Let me stress that this mix should remain in place even when facing the challenges of election years, and there are several election rounds in Romania in 2019 and 2020. The fourth lesson could deal with the issue of whether joining the euro area ensures faster growth or not. I attended the celebrations marking the 10th anniversary of euro adoption in Slovenia and Slovakia. While in the latter country euro area membership is considered a success story, in Slovenia it is viewed as a necessary, yet painful, step. During my conversation with a Slovenian expert, I argued that the difficulties faced after euro adoption were the consequence of not cleaning up banks’ balance sheets before euro area entry. He replied that the people were not interested in these details, as what they cared about most was the standard of living, which declined after the euro changeover.

Overall, the conditions for recovery look favorable enough and there is general optimism that the Thai economy looks set on a continuous growth path. That said, a key weak pocket in the current recovery process appears to be the domestic investment climate but even that should get better as the external environment is improving. BIS Review 94/2010  1  Unfortunately, the political unrest during April–May had somewhat set back the recovery process. Most activities slowed down during May on a month on month basis. The tourism sector, in particular, was hit hard. In May, the number of foreign tourist arrivals in Thailand declined by 11.8 percent year-on-year. Correspondingly, hotel occupancy rate fell to 34.9 percent, mainly from a significant drop in Bangkok and the central region. Nevertheless, the impact was rather confined. The occupancy rate in the southern region remained intact at 45.5 percent, higher than the last 5-year average of 42.9 percent. On the whole, we expect that the second quarter GDP growth would be less buoyant than that of the first quarter. Nevertheless, economic data during April–May came out better than expected, reflecting the ongoing momentum of the Thai economic recovery led by exports. In fact, the export value in May continued to expand by 42.5 percent year-on-year in line with favorable expansions in all export categories and markets. Ladies and Gentlemen, Despite headwind from both external and domestic factors, it is now important to embark on policy normalization, both fiscal and monetary policies.