samchain/econo-pairs-v1 huggingface dataset:
But it will require diligence, enterprise, increased investment and a healthier population. It took 20 years to go from being one of the richest countries to being a comparatively poor industrialised nation. Productivity will have to improve a few tenths of one per cent more than in other countries year in and year out for a couple of decades. So it will take an equivalent period of persistent effort to regain a leading position. Thank you. BIS Review 56/2003  9

We foresee a transition period that will last until the end of 2018. Are you still worried about the capacity of certain countries, such as Ireland and Greece, to reduce their public debt levels? What is certain is that it is very important for all countries, and not just Ireland and Greece, to take measures to ensure medium-term fiscal stability. This is necessary in advanced economies, in the European Union in general and, of course, in the euro area in particular. A feature that is shared by the industrialised countries after the very significant recession triggered by the financial crisis is that they find themselves in a vulnerable fiscal position. The European Central Bank has always defended the Stability and Growth Pact, even when large countries such as France and Germany wanted to relax its rules. BIS Review 154/2010  1  The Federal Reserve System decided last week to inject massive amounts of dollar liquidity into the economic system, a decision which has the effect of reducing the value of the US currency. Has the currency war started? That is, of course, a totally inappropriate expression to use. There are two main topics that need to be tackled seriously. On the one hand, there is the relationship between the major floating convertible currencies of the industrialised countries, such as the dollar, the euro, the yen and the pound sterling.
We think it is unlikely that the Treasury will lose money on this program, and it sits ahead of the Fed in terms of its loss exposure. The risk posed to the Federal Reserve therefore seems quite remote. Instead, we expect that the program will be profitable for the taxpayers and will be successful in pushing down yields and increasing credit availability. Turning from the issues of design and risk to issues concerning implementation and effectiveness, we have been rolling the TALF out in stages – first the consumer ABS market, with the first subscriptions for TALF loans in March; second, new CMBS securitizations that will start in early summer; and third, legacy CMBS and, possibly legacy RMBS, later this summer. By legacy assets, we mean highly-rated existing securitized assets that are already outstanding. The legacy TALF program will help support asset-backed-securities prices. This should help aid market liquidity and make financial firms that hold such assets less vulnerable to the risk of further losses. So far, the evidence indicates that the program is working as designed. First, the issuance of consumer ABS securities has been gradually reviving. In March, four deals came to market worth $ billion. In April, there were another 4 deals worth $ billion. In May, there were 8 deals worth $ billion and this week, there were 13 deals worth $ billion. We’re not back yet to the $ billion annual rate of issuance before the crisis and we don’t expect to get there, but we are making a good start.

Given what we have experienced in the last two years, it is my hope that the international community will see the wisdom of not waiting for the next crisis to learn how we can make the international financial system a more robust and safe one for all of us.” 3. Ladies and Gentlemen, I made the above remarks over 10 years ago, in June 1999. It was ten months after the Asian Financial Crisis hit Hong Kong, which was then followed by the turbulence of the global financial system as a result of the abrupt collapse of the LTCM. It was rather unfortunate that the fear I expressed in 1999 has come true ten years later. The international community has failed to learn the lessons from the Asian Financial Crisis and the LTCM debacle and to make the financial system more robust and safer. As a result, we have been punished, and punished very, very severely. The latest Financial Tsunami, dubbed as “Once in a Century”, has demonstrated that somehow all the key safety valves and gatekeepers have failed functioning properly to prevent excessive leverage and risktaking within the financial system, leading to very heavy fiscal and social costs in the subsequent bail-outs. 4. Now the international community, led by G20, is trying very hard to draw lessons from this latest financial crisis. I sense that there is a very strong resolve to do something this time round.
As households are unable to finance investment directly but most borrow the funds from a bank, the value of the stock of physical capital, qtKt, is equal to the level of bank loans, which, because banks are assumed to hold no other assets, is also equal to bank capital plus deposits 9)  . But bankers must exert (unobservable) effort (λt) per unit of loans each period to ensure that borrowers invest in productive physical capital rather than unproductive status symbols with private benefit and no recovery value for the bank. So in order for monitoring to be incentive compatible, the cost of monitoring must be less than or equal to the gross return on lending, 10) where Rkt and Rt are gross returns on loans and deposits, respectively. Putting these banking sector equations together and recalling that bankers do not consume but pass on their wealth when they die, we have two additional equilibrium conditions, a no-shirking condition for bankers : 11)  where  BIS Review 111/2010  and  ; and a law of motion for bank capital:  25  12)  ,  where τt is a bank levy/subsidy. Equation (11) shows that the leverage ratio is an increasing function of the spread between the return on capital but decreasing in the monitoring cost (λt). Equation (12) shows that bank capital accumulates according to the profits of surviving bankers.

During the current ZLB episode, the FOMC has again explicitly indicated that it expects monetary policy to warrant exceptionally low levels of the Federal Funds rate “for an extended period”. The Bank of Canada and the Riksbank have also made statements that imply they expect policy rates to remain low for a period, though given the nature and relatively short time horizon of those statements, it is a moot point whether these are best thought of as exercises in commitment or exercises in transparency. The second option at the ZLB involves the outright purchases of longer-dated assets, particularly government bonds, financed by the issuance of extra central bank reserves. Such purchases aim to raise the prices of the purchased assets, together with those of a whole range of assets that are imperfect substitutes as the sellers subsequently re-balance their portfolios. This imperfect asset substitutability may be both time-varying – in particular, the scope for asset substitution may be rather greater in the long run than in the short run – and state-contingent, as traders may be less able to arbitrage between assets in times of economic and financial distress. But as long as there is some period of imperfect asset  4  Taylor (2008) advocates the use of a “spread-adjusted” Taylor Rule to set the policy rate in such circumstances. Cúrdia and Woodford (2009) develop a simple model in which credit frictions generate a spread on the interest rate between savers and borrowers.
Its first order challenge would be to reach a judgment on whether the financial system was undermining its own resilience by getting carried away in extending credit in an environment of rising asset prices and optimism about future output levels. The FPC would need neither to obstruct an improvement in the underlying performance of the economy, nor let the party get out of control. But that is what Taking Away the Punchbowl is about. The same difficult judgments would face a combined monetary-and-macroprudential decision maker. And a separate monetary policymaker would have a shared interest in the downside risks to inflation not being exacerbated by the prospect of a credit bust following an unchecked boom. In those kind of circumstances, we should be helped by the tempo of the two endeavours differing. The FPC is less likely to make frequent course changes. That is reflected in its meeting routinely on a quarterly basis, contrasting with the MPC’s monthly meetings. So, as in the relationship between monetary policy and fiscal policy, the MPC will be able to take into account perturbations to aggregate demand from the FPCs interventions. Both committees are part of the Bank of England, so the executive of the Bank will ensure that there is a common information base. FPC members are invited to the monthly briefing for MPC members. And vice versa, consistent with MPC members already being free to attend the internal financial stability briefings established over the past year or so.

The international dimension I have discussed the interaction of the UK’s macroprudential regime with our domestic arrangements for microsupervision and for monetary policy. But the third set of interactions will be with our counterparts in other countries. This is especially important to the UK. London hosts what is probably the world’s most international financial centre. Crucially for us, it is not an entrepot. It is more than an important source of jobs and tax revenues. Many of the overseas firms active in the City are also active in providing services to parts of the UK’s real economy. We therefore have a double stake in their safety and soundness. If they get into distress, there are spillovers to UK financial firms through wholesale markets, but also at least a temporary reduction in the financial services available to UK firms and households. For all these reasons, the UK has a special stake in the adequacy of international standards for financial firms and markets. And, hosting many subsidiaries of major global firms, our supervisors need to play a special role in the collective consolidated supervision of internationally Systemically Important Financial Institutions (SIFIs). This extends into the macroprudential arena. At a global level, we are active participants in the Financial Stability Board. And, regionally, the UK authorities will be engaged in the European Supervisory Authorities. Our Governor is first Vice Chairman of the European Systemic Risk Board (on which I and Adair Turner, Chairman of the FSA, also sit).
Erdem Başçi: Latest economic outlook and macroeconomic developments in Turkey Speech by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the January 2012 Inflation Report press conference, Istanbul, 31 January 2012. *  *  *  Distinguished Guests, Welcome to the press conference held to convey the main messages of the January 2012 Inflation Report. As required by our new communications policy, we will hold two of the four inflation report press conferences in Istanbul, all of which used to be held in Ankara before. I will now present an overview of the first inflation report of 2012, which will be published on our web-site shortly. The Report summarizes the economic outlook underlying monetary policy decisions, shares our evaluations on macroeconomic developments and presents our medium-term inflation forecasts which have been revised in view of the developments in the last quarter, along with our monetary policy stance. Moreover, the Report includes eleven boxes which entail interesting and up-to-date analyses on various topics. For instance, there is an analysis on the functioning of our recent liquidity management policy and its effects on financial markets. There is also a box exploring the sources of changes in inflation forecasts in the previous year, which is a topic included in the first inflation report every year. Another box examines the base effects that will play a major role in the course of inflation in 2012.

The downward slope of the current yield curve signifies a tight monetary policy stance (Chart 6). Additionally, loan interest rates have recorded a notable increase since October (Chart 7). As a consequence, loan growth rate declined to more reasonable levels towards the yearend (Chart 3). 4  BIS central bankers’ speeches  Chart 6. Chart 7. Yield Curve*  Consumer and TL Business Loan Rates*(Percent)  Calculated by the return on bonds quoted on the ISE  *Flow data. **4-week moving average. Bonds and Bills Market using the Extended Nelson-Siegel (ENS) method. Source: CBRT. Source: ISE, CBRT. Overall, the last quarter of 2011 was marked by ongoing tightening in monetary and financial conditions and a pronounced deceleration in loans. 2. Macroeconomic Developments and Main Assumptions  Having climbed to 10.45 percent at end-2011, inflation was significantly above the target. As you all know, the Article 42 of the Central Bank Law stipulates that in the case of a significant breach of the inflation target, we are required to report to the Government and announce to the public the reasons behind the breach of the target and the necessary measures to be taken. I would like to announce that we will publish the Open Letter that will be sent to the Government today on our web-site at 12 a.m. Now, I will touch upon the macroeconomic outlook and our assumptions which constitute the basis for our forecasts.
Inflation has been higher in Sweden than in Germany for long periods of time. During the 1960s we more or less kept pace with Germany. However, during the second half of the 1970s and in the 1980s, inflation in Sweden was several percentage points higher than that in Germany each year. Since the beginning of the 1990s, inflation in Sweden has once again been roughly the same as that in Germany. Sweden has become a low inflation economy. What, on the whole, has happened since the 1960s? To illustrate this, I shall talk about some of the episodes of the past 30 years that have had great significance for economic developments and for my own view of the Swedish economy. I have been able to follow the economic policy decision-making process connected with these episodes at close quarters from my various posts in public administration. I would like to emphasise that this is my personal view of developments and not the Riksbank’s official view. The episode I will talk about include the cost crisis in the 1970s and overheating in the 1980s, the change in exchange rate and monetary policy, the wage formation reform and budget consolidation of the 1990s. The cost crisis of the 1970s During the 1960s, economic growth in Sweden wad good. GDP growth was at a high level, inflation was moderate, unemployment was low, foreign trade was largely in balance and public finances were strong.

When this system broke down in 1973, a currency collaboration was started up between a number of European countries, known as the currency snake, by which the krona was pegged to a currency basket dominated by the German D-mark. In 1977 Sweden left the currency snake and the krona was pegged to a currency basket where the dollar had a double weight in relation to the trade exchange. In 1991 the krona was instead pegged to the European currency unit, the ecu. During the 1970s, Sweden was still applying credit and foreign exchange regulations. The credit regulation limited the banks’ lending and foreign exchange regulation limited the opportunities to move currency, securities and capital across borders. Both types of regulation entailed limiting the opportunities for efficient allocation of capital and they became increasingly difficult to maintain as time went by. The credit market was deregulated in 1985 and the final parts of the foreign exchange regulation were abolished in 1989. The idea behind an exchange rate regime with a fixed exchange rate is that inflation in Sweden will adapt to inflation in other countries. Economists usually call this international inflation functioning as a nominal anchor. However, it did not succeed, as Sweden did not manage to stay even with other countries regarding inflation and cost developments. The economic policy conducted and the way the economy functioned during the 1970s were not compatible with a fixed exchange rate.
The dash-dotted green curve shows the inflation outlook published after the interest increase of September, which was based on a constant three-month Libor of 1.75%. The red line is clearly lower than the green one. This is partly due to falling oil prices and partly results from the dampening effect of today's interest rate increase. The level of inflation expected in 2007 is 0.4%. However, as is evident from the inflation dynamic, the effect of a 2.00% interest rate is still expansionary. Continuation of previous monetary policy With today’s decision to increase the three-month Libor by 25 basis points, we are adhering to our previous monetary policy course of gradual normalisation. In so doing, we are pursuing the goal of continuing to ensure long-term price stability. If the economy performs as expected, we will further pursue this strategy. Observed inflation December 2006  BIS Review 123/2006  3  Inflation forecast of September 2006 with Libor at 1.75% and of December 2006 with Libor at 2.00%  The National Bank’s 100-year anniversary Ladies and Gentlemen, before concluding, I would like to say a few words on a completely different topic: The Swiss National Bank will celebrate it's 100-year anniversary in 2007. We are happy that we can celebrate this anniversary at a time when Switzerland’s economy is in good shape. And it is also with a certain sense of pride that we can look back upon a long phase of price stability. We will celebrate our anniversary in a festive, yet modest way.

Almost all components of demand continue to grow, albeit at a more moderate pace. Private consumption will benefit from the healthy improvement in disposable income. Equipment investment is being stimulated by the high rate of utilisation of production capacity and the favourable business outlook in many industries. Residential construction is likely to see a measure of calm. Yet increased investment in commercial and industrial building may offset this development to some extent. The somewhat weaker global economic development – though still favourable overall - will probably continue to have a positive impact on exports. For 2007, we expect overall GDP growth of about 2%. Monetary developments Allow me to explain developments in the financial markets and the monetary aggregates. Two topics merit particular attention: the development of credit and money supply and the exchange rate. In addition to long-term interest rates and exchange rates, loans – among other things – play an important role when changes in key interest rates are transmitted to the economy. What information can we derive from the development of lending activity? Loans are registering constant growth. Mortgage loans, which account for the great majority of all bank loans, have grown at a rate of more than 5% since 2003. This is a reflection of the clearly expansionary monetary policy at that time. The growth rate of mortgage loans has gradually slowed, however, and is now slightly below 5%. This is nevertheless still a high growth rate. Other loans, however, are witnessing stronger growth and are currently expanding by 6%.
Any exposures to the rest of the group must be limited and on commercial terms. All large UK banking groups – defined as those with ‘core’ retail deposits greater than £ billion – are required to implement ring-fencing by 2019. Currently, seven banking groups cross this threshold. Between them, these groups have around £ trillion of assets, both in the UK and overseas. The ring-fencing regime is designed to be consistent with the other parts of the post-crisis regulatory framework. The most systemically-important ring-fenced banks will be held to higher capital requirements. The Systemic Risk Buffer will be applied to ring-fenced banks to ensure they are adequately capitalised and resilient to shocks. We expect ring-fenced banks to have, on average, around 1.5 percentage points more high-quality ‘Tier 1’ capital than non-systematically important banks.2 And a ring-fenced bank will not be able to be capitalised by debt raised externally by its group, which would give rise to so-called ‘double leverage’. Overall, the Bank estimates that ring-fenced banks’ total loss absorbency will be, on average, around 27% of their risk-weighted assets, higher than the 17% recommended by the ICB.3 Ring-fencing also helps improve the resolvability of the big UK banking groups. The resolution strategy for groups including ring-fenced banks will typically involve a bail-in at the level of the holding company. Bail-in would recapitalise the relevant entity by passing losses up to the holding company to be borne by shareholders and debt-holders. This should stabilise the group.

From Construction to Maintenance: Patrolling the ring-fence Speech given by James Proudman, Executive Director, UK Deposit Takers Supervision  Cass Business School, London 26 November 2018  I am grateful to Simon Debbage for preparing these remarks and to Michael Ainley, Sadia Arif, Charlotte Bull, David Eacott, Jeremy Leake, Duncan Mackinnon, Ben Martin, Alex Michie, Simon Morley, Rhys Phillips, Josh Sadler and Philip Sellar for their helpful contributions. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It is a great pleasure to be here again at the Cass Business School, and I am very grateful to the Associate Dean for inviting me. In fact, Andrew and I have quite a lot in common. We share a birthday, for a start, and a home county (Hampshire). For a while, we also used to share an office, back in the far off days before the financial crisis, when – as young(ish) economists – we used to debate the relevance of the ‘corporate veil’ for determining macroeconomic outcomes. Nowadays, we don’t discuss the corporate veil so much as the banking ring-fence, and that is the focus of my speech tonight. A decade on from the financial crisis, one of the largest ever reforms to the structure of the UK banking industry is coming into force. By 1 January 2019, the largest UK banking groups must have implemented the ‘ring-fencing’ – or separation – of their UK retail business from their international and investment banking operations.