samchain/econo-pairs-v1 huggingface dataset:
Structural features of the financial system, such as the role of ratings in financial regulation and investment mandates, create an embedded non-linearity in market reactions to news. What we witnessed in the euro area, therefore, was not a rigorous analysis of sovereign risks but rather an undershooting followed by a dramatic, and perhaps excessive, correction. Spreads converged for all euro area countries before 2008, despite high debt levels in some countries and clear evidence of emerging imbalances. Now we have moved to the opposite extreme: some euro area countries are confronting phenomena like sudden stops and buyers’ strikes that were in the past associated only with emerging markets. As we have seen in recent months, market discipline can be a strong and useful force in encouraging countries to make long-needed reforms. But it is also, clearly, an unstable way to ensure good policies. Reform decisions have to be made hastily in dramatic meetings. Politicians lack time to explain the need for reform to their constituencies and build consensus behind them. It may even be the case that countries have to go “too far, too fast” to restore market confidence. There is also a serious risk of uncontrollable contagion to other countries. In other words, we cannot completely delegate governance to financial markets. The euro area is the world’s second largest monetary area. It cannot depend solely on the opinions of  BIS central bankers’ speeches  3  ratings agencies and markets. It needs economic governance arrangements that are preventive and linear.

Eurobarometer surveys find cross-country majorities in favour of closer cooperation to end the crisis. And this is ultimately unavoidable, given the state of political union between countries that monetary union de facto creates. It is now a time for politicians to be bold and courageous, to recognise these trends, and to complete as soon as possible the great project begun 60 years ago towards “ever closer union”. Thank you for your attention. 8  BIS central bankers’ speeches
Why do I say this, when we have other resolution tools available? I say this because of the importance of protecting critical  1  http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.173.01.0190.01.ENG  BIS central bankers’ speeches  1  functions. It is simply not credible to think that a G-SIB could be dismantled over a resolution weekend without a destabilising disruption to critical functions. Finding a private sector purchaser capable of taking on the business – in whole or in parts – is likely to be even more difficult. Bail-in enables us to stabilise a firm. It buys the time that will allow for an orderly reorganisation or wind down of all or part of a failing firm, in order to address the underlying cause of the failure. There is more than one way to effect a bail-in: either through the use of write-down and conversion powers directly, or via a bridge institution. In a bridge, liabilities are exposed to loss by leaving them behind in an insolvency process with the activity that is to continue transferred to a new legal entity. In contrast, where the bail-in tool is applied directly, liabilities are written down or converted into equity within the existing legal entity. Applying the bail-in tool directly has a number of advantages over the bridge approach, at least in the context of a resolution at the level of an operating company.

None of these changes is obvious, to say the least, but none should be taboo. II. Supervision: lessons from an active euro area model Fair enough about implementing Basel III; but then comes the next suspicion: Credit Suisse failed despite being Basel III compliant. The answer is clear: good regulation is necessary; it's never sufficient. The risks generated by specific business models such as the asset-liability mismatch at SVB or the weak profitability and weak internal controls that dogged Credit Suisse should typically have led to higher supervisory requirements. Supervision should not be seen as a static business; it must be active and tailored to banks characteristics. This is precisely the spirit of the "Pillar 2" in the Basel framework, with the annual Supervisory Review Process. I sometimes hear doubts about supervision, which some believe should be treated as a legal dialogue, cautious in its form, and slow in its effects. No: supervision can and must be intrusive – including on-site –, exercised by highly skilled practitioners, quick in its reaction, strong in its powers. This is not wishful thinking: it has been our experience for decades in the French ACPR, and now for years in the European SSM. Active supervision is indeed one of the great successes of our European Banking Union. In light of the recent reality test, I believe there are two lessons to be learnt from our model.
The sharp reduction in the ratio of employment to population highlights our challenge – achieving a full recovery will require creating jobs for those currently unemployed and actively seeking work, those entering the labor force as the population grows, and those likely to return to the labor force once jobs become more available. Employing all these workers within a reasonable period of time will require very strong economic growth. The question is, how likely is that? Figure 4 shows the growth rate in each of the first three years of the last three recoveries, as well as the average rates for all three recoveries. The most recent two recoveries were quite slow to get started, but picked up steam over time. This is the pattern projected in most forecasts for this recovery. Over the past three quarters, GDP has increased 3.7 per cent. 3 However, some of the growth resulted from temporary rebalancing of inventories by businesses, as suggested by Figure 5, which shows that the per cent change in real final sales was quite a bit smaller than the per cent change in GDP. The gap between them would be inventory rebuilding. Most private forecasts expect growth in the next four quarters to be fast enough to begin to make more improvement in the labor market. My own expectation is consistent with this. As financial headwinds subside, and consumers and businesses gain more confidence in the recovery, expenditures that have been deferred will be made – and we should begin to see stronger economic growth.

“credere”) supports regaining the trust in the financial system and in the banks as institutions that 2/3  BIS central bankers' speeches  ensure the allocation of funds to the private and the public sector. Companies in Romania, as beneficiaries of European funds, need to respond to some pressing issues such as inadequate management and financial discipline. Only around 15% of small and medium companies are eligible for financing, with a management team capable to conduct a lucrative activity that reflects in a sound set of accounting documents, like the balance sheet and the P&L account. These companies too, can be affected by the contagion effect, for instance when their projections and cash flows are subject to repayment from other companies, with delays. To support these companies and to ease the access to finance, one needs to improve the policies and continue the financial reforms to create a more adequate and flexible frame for investments and the multiplier effect of co-financing. The European Investment Bank has been a strong pillar for this strategic economic development, channeling investments towards the crucial sectors of transport, digital infrastructure and the new technologies, education for skilled labour force, healthcare, or agriculture. The European Investment Bank contributes to creating the right mindset and responsible attitude of assuming calculated risks. It supports the communication of sound public policies and priorities for Romania’s economic and social development, to continue and expand the European integration and economic convergence.
After discontinuing its net asset purchases (as of the announcement in December 2021 for the PEPP), the ECB Governing Council decided to raise its key rates at an unprecedented rate, by a total of 250 basis points in five months, between July and December 2022. Some felt that we started these rises too late: we can argue over whether it should have come a few weeks earlier – which would not have changed much – but I would just like to remind you of the initial doubts voiced by many economists over the inflationary shock, which was still seen as temporary a year ago, and notably concentrated in the energy supply. We needed to analyse and form an opinion: as soon as inflation clearly became more widespread and more persistent, we acted quickly and with force. At the end of 2022, monetary policy reached what we call “the neutral rate” zone, which is the theoretical equilibrium rate at which there is neither monetary expansion nor contraction of inflation. The Banque de France estimates that, in real terms, this neutral rate is currently just above 0% in the euro area – it is higher in the United States – and hence around 2% in nominal terms. It was a sprint race as we had to get to at least this neutral rate as fast as possible. Clearly we have gone beyond that today, and as a result have entered “restrictive” territory in the technical sense.

13  Unlike methods based on the exclusion of individual items, the PCCI is constructed by filtering out the transient component of inflation using econometric techniques in order to retain the persistent component(s) that is(are) common to all items. 14 The PCCI is calculated using the monthly changes in each item. 16  Page 17 of 19  The inflation expectations of euro area households rose at the start of 2022; they have since stabilised but have not fallen to any significant extent: in December, the median three-year ahead expectation was 3% according to the ECB’s CES 15 survey. The survey also shows that households’ responses on future price changes continue to be more widely dispersed. Regarding businesses’ inflation expectations, the Banque de France – after Banca d’Italia – is a pioneer in this field, having launched its own dedicated survey two years ago. As in the case of households, this survey shows a rise in the median three to five-year ahead expectation, which reached 3% by mid-2022 and has merely stabilised since then. 15  Consumer Expectations Survey. 17  Page 18 of 19  We have thus avoided a significant “unanchoring” of households’ and businesses’ medium-term expectations; but we still need to ensure they become lastingly “reanchored” towards the 2% target. Conclusion Today I have given no dates or figures: doing so would be meaningless and would equate to coming back to unconditional and excessively binding guidance.
Krzysztof Rybiński: The role of the EURO for the future of Poland Speech by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the International Conference “The role of the EURO for the future of Poland”, Warsaw, 15 June 2007. *  *  *  Only a few months ago the eurozone was enlarged for the second time. Slovenia became the first of the twelve new member states of the EU and the thirteenth country to adopt the common European currency. Now two other countries, i.e. Malta and Cyprus, are knocking on the euro’s door, and others are lining up for the “monetary club membership”. This seems to be a good occasion to return to the, once lively, discussion about the advantages and disadvantages of joining the monetary union. Indeed, there are still more reasons to come back periodically to the euro cost & benefit debate, since we have more and more data, the world changes rapidly and even economic theory is subject to evolution. Let me illustrate this with one example. It has long been a widely accepted view that asymmetric shocks are the biggest threat to currency unions. Nowadays some respected economists think it may not be the case.

However, worse than expected outcomes regarding unprocessed food prices and ongoing supply-side structural problems led to an upward revision in the assumption for food inflation from 7 percent to 9 percent for 2010, which added 0.55 percentage points to end-2010 inflation forecast (Table 2). Similarly, assumptions for 2011 food inflation have been raised to 7 percent from 6.5 percent, and 7 percent from 6 percent for the following years (Table 2). At this point, I would like to highlight that the recent measures regarding meat prices posed a downside risk especially for our assumption on food prices in 2010. In the previous Report, the impact of the tax measures implemented in January on fuel, alcohol, and tobacco products on 2010 inflation were estimated to be around 1.5 percentage points. However, the realization was 1.9 percent, partly reflecting the change in the weighting  scheme of the CPI, and thus shifting the inflation forecast path by around 0.4 percentage points throughout 2010. Here I would like to particularly underline once more that the impact of the tax hikes would disappear at the beginning of 2011. Regarding fiscal policy, it is assumed that, in line with the Medium Term Program, the fiscal stance will remain expansionary – but less so than in 2009 – throughout 2010, and that fiscal consolidation would gradually ensue starting from 2011 as guided by the fiscal rule set out in the Medium Term Program.
In the European comparison, the main Spanish banks stood out for their strong net interest income (above the 75th percentile in the country distribution) and for fee and commission income and operating expenses in line with the European median. - Impairment losses rose considerably in 2022, driven by higher provisions in banks’ business abroad. In Spain, impairment loses continued along the downward path of recent years, decreasing by 20.7% in 2022. As a result, the ratio of impairment losses to operating income in Spain stood at one of its lowest levels in recent years. - Return on equity (ROE) excluding extraordinary items was 10.2% in 2022, 140 bp higher than in 2021 and up almost 300 bp on its 2019 level (and therefore higher than the cost of equity). - Ordinary profit from business abroad rose significantly, driven by the strength of the business in Latin America. Thus, the ordinary profit obtained by the Spanish institutions with the most international activity exceeded prepandemic levels. - Revenue from the windfall tax on banking sector profits in 2023 is expected to amount to 5% of the 2022 net consolidated profit. - Dividend payments exceeded € billion in 2022, with a payout ratio of 40%, similar to before the pandemic. The rise in the profit ratio per share and the sharp increase in share buy-backs made by some banks also stand out, the aim being to subsequently cancel the repurchased shares and reduce share capital, thus providing additional remuneration for shareholders.

José De Gregorio: Monetary policy and pass-through to interest rates Speech by Mr José De Gregorio, Governor of the Central Bank of Chile, before the Honorable Chamber of Representative’s Economic, Promotion and Development Commission, Santiago, 16 March 2009. The Spanish original prevails. *  *  *  Mr. President. I wish to thank you and the Economic, Promotion and Development Commission of the Honorable Chamber of Representatives for inviting me to speak about how our monetary policy decisions affect the country’s financial and lending conditions. The global economy is enduring terribly uncertain times, which have implications on our country’s prospects for growth and inflation. Thus, we share your preoccupation for evaluating how monetary policy actions – one of the main stabilizing tools we have available as a country – ultimately affect the cost of borrowing faced by households and firms. Monetary policy, in the context of an inflation target and a floating exchange rate like the one operating in Chile since 1999, is an important mechanism for smoothing out the business cycle. Periods of weak output and demand performance, which reduce the medium-term inflation outlook, lend themselves to countercyclical monetary policy actions that cushion the negative effects on consumption, investment and employment. This is what the Central Bank of Chile is presently doing, acting resolutely to moderate the effects that the global crisis – the worst we have seen in decades – is having in Chile.
From this point of view, as you know Banque de France has paid particular attention to the continuation of the BACH database, since we were chosen to run it, two years ago, for the common interest of the ECCBSO members and beyond. We are committed to keeping it functioning properly, and encourage all initiatives to exploit all those interesting series of aggregated ratios. Among the numerous researches that have been made with these data, I would like to refer to the paper published by two economists from the ECB, Andra Buca and Philip Vermeulen, last February, concerning “corporate investment and bankdependant borrowers during the recent financial crisis”. Here also at the Banque de France, we publish several articles in our Bulletin extracting valuable piece of information in the BACH data base. Concerning your so-called WG 3, which focuses on IASB methodology and more generally monitoring of listed groups, Banque de France is interested in the new cooperation started last year with Eurostat. It will help to identify more precisely European groups’ structure and especially cross-border groups. But I understand that this TF is involved in many other topics, of which works on a dedicated data base (ERICA) which can deliver interesting results. There is a lot of work behind this and we can only hope to see those valuable contributions to be well promoted.

The same is true for your Study group: you are about to release a seemingly very attractive study on “net worth at risk” which aims at describing the ability of companies to face an external financial shock, with a focus on recent years: it will certainly attract a lot of attention when you publish this work. As it is time to conclude, I would like first to confirm that BDF, a founding member of the ECCSBO, is still very dedicated in all that is related with corporate analysis. Your presence here today is certainly the expression of a commitment similar to our own one; it is a good augur for your future works and an encouragement for our joint efforts to be pursued. Finally, I would like to thank personally President Manuel Ortega because I know all what you do to keep the dynamics of this Committee. Many thanks also to all of you for being here today, for your support and your participation in this meeting, because I have  2  BIS central bankers’ speeches  no doubt that you will have fruitful debates. If I may, I would add a special thanks for my colleagues from the Companies Directorate and for the protocol office, who deployed a lot of efforts in organising this event for the better: without their help we wouldn’t have been able to meet at this venue. Thank you for your attention. BIS central bankers’ speeches  3
This vehicle is strictly supervised by the French  2  BIS Review 9/2009  Government and the Banque de France. The guarantee is granted for a fee, so that the beneficiaries pay costs corresponding to normal market conditions and also with a view to protect taxpayers’ interests. Second, the law also creates a state-owned company empowered with EUR 21 billion and entitled to subscribe to banks’ subordinated debt issues or preferred shares. As you know, six banks have issued subordinated debt and the Government subscribed to these issues for EUR 10.5 billion. Such support boosted their capital position and as a result ensure these banks to keep up their lending to the economy. Did the French banks really need such a boost to their solvency and capital? Setting aside the Belgo-French bank DEXIA, the answer is “not really”. DEXIA was very specific: because of its large exposure to US monoline risks, public recapitalisation was absolutely necessary. By contrast, all the other French banks have sufficient own funds, be it in terms of prudential requirements or in comparison with their peers from other developed countries. Public recapitalisation is not aimed at making up for faults or weaknesses. Rather, it is to anticipate potential problems. Circumstances are indeed exceptional; even the soundest and most profitable banks cannot take it for granted that they will be able to tap markets to meet their funding and capital needs.

Enhanced international coordination between monetary authorities is ensuring that their actions are part of a consistent overall strategy. These measures are highly exceptional with indeed unprecedented monetary easing leading key policy rates to historically low levels and the adoption, in certain cases, of unorthodox monetary policy actions. As such, they should greatly contribute to restoring confidence and a smooth functioning of money markets. Governments have moved aggressively to support banks' solvency and resilience. Since the Paris Declaration by euro area member-countries, Europe, under the leadership of France until year end, has been acting according to what I consider a sound and consistent action plan. I won’t enter into the details. Just bear in mind the three following elements. First, authorities are extending guarantees to banks’ refinancing so that they can, in turn, properly finance the economy. Second, significant reforms of accounting rules are now being implemented. Basically, these reforms allow banks to transfer instruments previously marked to market to portfolios where that will no longer be the case. They also provide for greater flexibility in methods used to value assets whose market has shut down. Third, and lastly, governments have confirmed their willingness, when warranted, to step in and support banks’ capital. What about France’s actions? Government and Parliament very quickly put meat on the bones of the European principles. A new bill has been passed, which provides for two things. First, it sets up a EUR 320 billion funding vehicle to guarantee banks’ medium-term refinancing (i.e. up to five years).