samchain/econo-pairs-v1 huggingface dataset:
Debt as a share of household income has increased by 12 percentage points since Norges Bank last raised the key policy rate. Measured as a share of household income, debt is approaching double its level in 2000. Bank deposits have risen considerably less than loan debt. The negative effect of an interest rate increase on household income thereby carries relatively greater weight than previously. Chart: Greater impact of interest rate increase on disposable income In other words, an interest rate increase will curtail household purchasing power more than previously. In 2000, a one percentage point rise in the key policy rate would have resulted in an increase in net interest expenses equivalent to less than ½ percent of household disposable income. In 2017, this share increased to one percent of disposable income. An interest rate increase therefore probably has a stronger effect on private consumption than previously. How much stronger the impact of the interest rate is depends on how debt is distributed across household groups. Changes in the distribution of debt can thereby have consequences for the effect of monetary policy. Analyses based on microdata for the household sector can provide useful insight. International studies have shown that households with limited financial buffers tend to allow temporary income changes, for example as a result of changes in interest expenses, to impact fully on consumption. This is supported by a study recently conducted on Norwegian data (Fagereng et al (2018)).

Here, the role of central banks as liquidity provider is essential to ensure the proper functioning of the financial system, and this is one of the main lessons we learned from the mistakes made during the Great Depression that wrecked havoc in the real sector, which could have been substantially reduced. We have also learned that sound regulations designed for normal times and as crisis preventing mechanisms are not necessarily the best for moments of great stress or turmoil, including mark-to-market practices in some segments of the financial industry. It would be premature to draw definitive lessons from the present crisis that is still in the making and going through the damage-control phase. A new wave of discussions on the international financial architecture will come. And although this happens every time there is a world crisis, progress to date has been rather timid. Nonetheless, the potential liquidity constraints that economies outside the epicenter of the crises may suffer, may add an unnecessary burden to countries that had little or nothing to do with today’s events and at the same time are the basis to sustain growth in the world. In synchrony with this, the new liquidity swap facility that is being offered by the IMF is very appropriate. It should be disbursed quickly as current conditions require. In the present circumstances, countries that have saved their terms-of-trade windfalls and enjoy a solid international liquidity position, as is the case of our country, should not have the need to apply for these facilities.
These measures should contribute to supporting the positive trend in private domestic and foreign investment in France. [Slide 12] All these reforms should be enhanced by further progresses made by the French government to improve the sustainability of public finances; I would also hope for an acceleration in this respect. Nevertheless, the present package is already impressive, and reinforces the attractiveness of France. As you know, France has many assets: it has many fast-growing techfirms. It offers high-quality infrastructures and a high-standard quality of life. But more importantly, its capital, Paris, besides being one of the most attractive cities in Europe, is in a strong position to become the main euro area centre for market activities, especially in the Brexit context. 3. Paris’ attractiveness as an integrated financial centre in a post-Brexit world Brexit was and remains bad news mostly for the United Kingdom but also for Europe. As for now, there is one principle which in our view is the corner stone of the future agreement between the European Union and the United Kingdom – preserving the integrity of our common good, the EU single market. In practice, it means that we cannot separate access and rules and that UK based entities cannot get a European passport and access the EU single market if they do not fully comply with the single market’s rules and do not recognise the authority of the European Court of Justice.

Joseph Yam: A broad-brush economic picture of the Asia-Pacific region Opening remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the 2003 Australasian Macroeconomics Workshop, Hong Kong, 22 September 2003. *  *  *  Good Morning, It is a great pleasure for me to open the 2003 Australasian Macroeconomics Workshop and to welcome all of you to Hong Kong. I understand that this is the eighth time the workshop is being held, and that it is the first time you are meeting outside of Australia and New Zealand. I am delighted that you have chosen Hong Kong. We are now, I hope, entering a period of optimism for our city after a very tough few months, and there are continuing structural adjustments in Hong Kong arising from the economic integration with the Mainland, which is growing rapidly, bringing challenges as well as opportunities: it is a very interesting time to see Hong Kong. It may surprise you that the HKIMR decided to follow the splendid precedent set by the Reserve Bank of New Zealand in 2002 and host this year’s workshop. But it should not be too much of a surprise. Rather than giving a traditional lecture this morning, let me explain to you why, as Chairman of the Board of the HKIMR, I feel that conferences such as this are so important.
Analysing the interaction between real variables and financial variables has been assigned high priority. In Financial Sector Outlook we evaluate how an array of factors affect the robustness of the financial sector. The Report includes an assessment of the outlook for the financial sector. If Norges Bank is of the view that the situation requires the use of instruments others than those available to Norges Bank, this should be clearly indicated. Financial Sector Outlook is thus submitted to and discussed with the Ministry of Finance and the Banking, Insurance and Securities Commission. The report is made public and published in our quarterly report Economic Bulletin. The analysis of financial institutions concentrates on the situation in the banking sector and main groups of institutions as it is Norges Bank’s responsibility to ensure the stability of the system, and not individual institutions. From a macroeconomic perspective, however, it may be appropriate to monitor  3  BIS Review 124/1999  developments in the largest institutions as this could deepen our understanding of macroeconomic developments and the main trends in the financial sector. Norges Bank’s surveillance work is carried out in close cooperation with the Banking, Insurance and Securities Commission, which supervises individual institutions. The Banking, Insurance and Securities Commission also produces reports on a regular basis with assessments of the outlook for the financial industry. I would like to highlight three structural features that have contributed to changing the risk outlook for the Norwegian financial system.

Eurofi – Prague, 9 September 2022 Mobilization of the Eurosystem against inflation Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 sur 3 Ladies and Gentlemen, I am delighted to be talking to you today at this Eurofi edition, although I very much regret that I cannot be in Prague in person today. I extend my warmest thanks to David Wright and Didier Cahen for organising this event. Let me first express my heartfelt sympathy to our British friends: the Queen brought a sense of duty and a sense of stability which will hopefully remain a powerful lesson in this very volatile period. These are indeed times of extremely high uncertainty and difficulty. The European and French economies will face next year a significant slowdown, and we cannot exclude a limited recession. Let me quote, as I did some days ago in Jackson Hole,i two compatriots to give us some light: first, a philosopher – Voltaire – who said that “uncertainty is not a pleasant condition, but certainty is absurd”ii; second, an economist – Olivier Blanchard – with the following words “monetary policy must be closer to art when it is frequently confronted to new, poorly anticipated and poorly understood, contingencies”iii Well, between art and science, how did we deal yesterday with the present uncertainty? We decided to frontload on our monetary policy normalisation.
For example, higher oil prices cut into household purchasing power, and the tragedy in Japan is leading to supply disruptions that may dampen growth somewhat in the near-term. Also, conditions in  BIS central bankers’ speeches  3  Japan, the Middle East and North Africa remain uncertain and could worsen, with negative implications for global economic growth. Furthermore, we cannot ignore the risks stemming from the longer-term fiscal challenges that we face in the United States. But in the near-term, the most immediate domestic problems may recede rather than become more prevalent. On the housing side, stronger job growth should lead to more household formation. For example, more young people will be able to move out of their parents’ homes when they get jobs. This trend should provide more support to housing demand. On the state and local side, a rising economy would boost sales and income tax revenue, and help narrow near-term fiscal shortfalls. We also need to remain watchful to ensure that low interest rates do not foster a buildup of financial excesses or bubbles that might pose a medium-term risk to both full employment and price stability. In this regard we monitor interest rates on risky and safer assets. An unusual narrowing of these differences could signal that risk is not being appropriately assessed. These differentials for risk on U.S. assets in general do not seem obviously compressed today. On the inflation side of the ledger, the risk of deflation is greatly diminished.

The mainland is Puerto Rico’s primary trading partner, accounting for half of the island’s imports and three-quarters of its exports. There are many reasons for this. While Puerto Rico interacts with many other economies, for generations the mainland United States and Puerto Rico have had a special multifaceted economic relationship. One of the most obvious of these ties is the free flow of goods between the mainland and the island. Another link is our common use of the dollar. This means that tourists from the mainland can visit without worrying about changing currencies. In addition, businesses can make long-term investments in Puerto Rico without worrying that currency fluctuations against the dollar will undermine their competitiveness. The island runs a surplus with the mainland that accounts for much of the island’s overall surplus. So the signs of a further pickup in economic growth on the mainland bode well for the island. Puerto Rico’s export markets also extend overseas. Aside from the U.S. mainland, the top export markets for the Island are Germany, Netherlands, Belgium and Spain. Exports to  BIS central bankers’ speeches  5  these four countries combined exceeded $ billion in 2009 and have grown by more than 30 percent since 2007. The success that Puerto Rico has in selling its goods and services to industrialized countries bodes well for the island’s future. As more emerging economies narrow the gap between themselves and the more developed countries, the market for Puerto Rico’s goods could well expand accordingly.
Central banks have borne much of the burden of supporting the global economy as it has recovered from the global financial crisis. In some advanced economies, such as the UK and US where the output gap has largely been closed, that extraordinary monetary support is now being gradually withdrawn. In others, such as the euro area, a gradual withdrawal has been clearly signposted. The gradual withdrawal of exceptional monetary stimulus is unlikely by itself, however, to remove entirely the weight from central banks’ shoulders. Many have acquired new powers and new responsibilities since the crisis, particularly in the regulatory sphere. At the same time, the crisis has dented trust in the financial sector, including in central banks. In combination that has raised expectations, but also some doubts, about the role of central banks in serving society. 1  Central banks have, over the course of the recent past, undergone a revolution in their degree of transparency and accountability. This has delivered huge gains. By improving public understanding, it has helped stabilise the economy and the financial system. And by improving public accountability, it has allayed concerns about central banks being over-powerful and under-accountable to the societies they serve. But time has moved thing on and, as in the past, central banks will need to move with the times. In response to greater levels of responsibility, but more fragile trust, I will argue a second revolution in central bank practices may be needed.

José De Gregorio: Adjustment in the global economy Keynote address by Mr José De Gregorio, Governor of the Central Bank of Chile, at the 2011 Institute of International Finance (IIF) Latin American Economic Forum, Calgary, 27 March 2011. *  *  *  I am grateful to Luis Oscar Herrera, Enrique Orellana and Tatiana Vargas for valuable comments. Thank you very much for the invitation to speak at this 2011 IIF Latin American Economic Forum. The last few years have been the most challenging for economic policy around the world in many decades. From an unprecedented inflationary shock in 2007–08, the global economy went through a financial crisis and a recession in 2008–09, of a scale not seen since the Great Depression. Now, we are experiencing a process of recovery with strong inflationary pressures and tensions in the world economy as a result of asymmetries in this process. The purpose of my talk today will be the global adjustment, how it has been proceeding and what the current challenges for policymaking are, with special focus on the asymmetries and their implications for economic policy. The uneven recovery The world economy is growing unevenly and subject to many tensions. Most advanced economies are recovering from the crisis, but they still have high rates of unemployment and excess capacity, and this is expected to last for some time.
News conference  Berne, 16 June 2022 Thomas Jordan  Introductory remarks by Thomas Jordan Ladies and gentlemen It is my pleasure to welcome you to the Swiss National Bank’s news conference. In my remarks, I will begin by explaining our monetary policy decision and our assessment of the economic situation. After that, Fritz Zurbrügg will present the key messages from this year’s Financial Stability Report. Andréa Maechler will then comment on the situation on the financial markets and the implementation of monetary policy. We will – as ever – be pleased to take your questions afterwards. Monetary policy decision I will begin with our monetary policy decision. We have decided to tighten our monetary policy and to raise the SNB policy rate and the interest rate on sight deposits at the SNB by half a percentage point to −0.25%. In doing so, we are seeking to counter increased inflationary pressure. The tighter monetary policy is aimed at preventing inflation from spreading more broadly to goods and services in Switzerland. It cannot be ruled out that further increases in the SNB policy rate will be necessary in the foreseeable future to stabilise inflation in the range consistent with price stability over the medium term. To ensure appropriate monetary conditions, we are also willing to be active in the foreign exchange market as necessary. The SNB policy rate change applies from tomorrow, 17 June 2022.

The global economic recovery might also be delayed reaching the region, increasing the likelihood that the crisis may cause more persistent economic effects. Despite this difficult situation, remittances have proven pandemic-proof1 and have behaved countercyclically in most of the region’s countries, assuming a more important role as a source of external financing. This subject is crucial to Spain, since it is the second-ranked issuer country of remittances to Latin America. Some of the topics we will address today (such as the growing importance of digital money remittances, the role of fiscal stimulus measures in the resilience of remittances and the function of the informal economy) are key to understanding the behaviour of the flow of remittances in this crisis. Undoubtedly, today’s event will allow us to better understand these developments and – I hope – 1/2  BIS central bankers' speeches  to draw some useful conclusions on how to tackle them from the central bank standpoint. Thank you for your attention. Remittances barely fell by 1.6% in 2020, compared with their 4.8% decline during the 2008 financial crisis. 2/2  BIS central bankers' speeches
That goal now seems to be within reach, thanks in no small way to the Government’s steadfast commitment to fiscal consolidation. The achievement of a political consensus on the euro is also a welcome development. The main remaining challenge is to meet the inflation criterion. Tonight I shall argue that the euro is a necessary, but not a sufficient condition for faster growth. More specifically, unless we establish limits on how much we consume and, within limits set by the economy’s earning capacity, allocate a greater proportion of the national income to investment, the advantages of euro area membership cannot be fully realized. It is time for the country to disown an unfortunate legacy of its colonial past that is best reflected in the notion that it is possible to spend more without first producing more. To this day, political discourse contains frequent references to tax reductions and subsidies, when it should be rallying popular support for the need to strengthen the country’s capacity to generate wealth on a sustainable basis. The benefits of euro area membership As I have said, the adoption of the euro should enhance the economy’s potential to grow faster. The elimination of exchange rate risk and currency conversion costs should result in increased trade, while the lower interest rate and inflation environment of the euro area should make for reduced business costs and greater macroeconomic stability. Combined with the fiscal discipline associated with monetary union, this is expected to translate into higher credit ratings and better investment prospects.

Many critiques had pointed out, and the technical staff in the Bank had experienced, that the Bank could not succeed in its main task of taming inflation and bringing about price stability, if it was saddled with other tasks that would go against its main objective. Hence, there emerged a general consensus that the central bank should do only what it can do effectively and not otherwise. That consensus required the Central Bank to pursue a single objective, viz., the attainment of price stability. Following this consensus that emerged through the consultative process involved in the modernization, the technical staff of the Bank proposed an amendment to the Monetary Law by mandating the Bank with the task of attaining two core objectives. They were the attainment of both “price stability” and “financial system stability”. When the draft law was submitted to the then Governor, Mr. A. S Jayawardena, for clearance, he had changed the “price stability” to “economic and price stability”. The puzzled and bewildered technical staff flocked into his room seeking a clarification, since it was not in line with the accepted international trend. The writer recalls that even the Resident Representative of the IMF too was puzzled by this seemingly inappropriate mandate being added to the Bank’s objectives. But, Mr. Jayawardena, assuming his usual erudite and serious posture, offered a different explanation which had never occur red to the technical staff.
Marginal costs are usually difficult to compute, but can be approximated by estimates of variable costs. Data on variable costs and prices would in that case have been sufficient for the purpose of our study. There are, however, economies of scale in the production of payment services. Under these circumstances, it is consistent with efficient pricing to use a two-part tariff structure - transaction fees that cover variable costs and fixed fees that cover fixed costs. Thus we collected data on both fixed and variable fees and costs. However, in the comparison between prices and costs, we focused on the variable part. After having paid a certain annual fee for the provision of a bank account, Internet services, or a payment card, transaction fees are the fees most likely to affect the users’ day-to-day choice of payment instrument. We also collected data on transaction volumes for the different payment instruments. We used the banks’ transaction volumes as weights to compute costs and prices of a hypothetical average bank. As regards the relative cost efficiency of the different payment instruments, our cost estimates gave the expected results. Variable costs appear to decline as the degree of payment automation increases. Variable costs for electronic credit transfers are lower than for paper-based credit transfers. Transfers initiated at the bank branch-office are the most expensive to produce. A comparison of the relative cost efficiency of payment instruments used in transactions at the point of sale shows that debit card transactions have the lowest costs for the issuing bank.

If you plot the share of electronic payments for a number of countries against the share of cash to GDP you get a broad measure of the cost efficiency of the different payment systems. The further to the northwest corner of such a diagram, the more automated the payment system is. According to these measures, the Swedish payment market seems to be performing very well, as are the payment markets in the other Nordic countries. Swedes, however, seem to be using more cash than other Nordic countries. The Swedish M0/GDP ratio lies 1-2 per centage points higher than the other Nordic countries. As cash and card payments are close substitutes - in fact the only alternatives available for transactions at the point of sale2 - we would expect that the more widespread use of cash in Sweden would be reflected in a lower use of card payments. Payments data support this. Swedes use more cash and make fewer card payments per capita than other Nordic citizens. Why do we observe these differences in the use of cash and the use of card payments in countries that otherwise have very similar payment systems? What variables influence the users’ choice of payment instruments? Given that users’ choice is sensitive to prices, the price that consumers face for the use of different payment instruments is one such important variable. Indeed, there is a growing body of evidence that the choice of payment instrument is influenced by pricing.