samchain/econo-pairs-v1 huggingface dataset:
I hope to be up to the task of the legacy you are leaving us. My thanks, too, to the members of the Bank’s Executive Commission and Governing Council and, most particularly, to the Deputy Governor, Javier Alonso. Javier, your help and far-reaching knowledge of the Bank are making these first weeks in the job easier for me. But, above all, I should like to thank my colleagues over the course of the years. It would be impossible to list them all; many are here today. The career of a Banco España employee can only fully be understood through the prism of the numerous interactions and discussions between us, which are the bedrock on which we build our knowledge and our particular human capital. It is a privilege to be part of this environment and to participate in such an enriching process. Finally, the most singular thanks are for my family. Without them none of this would have been possible. Let me seize this opportunity to refer briefly to what should, in my view, be the two main objectives of the Banco de España at this juncture and which are related to our relevance and reputation. The first has to do with our insertion into the Eurosystem and into the Single Supervisory Mechanism. Some think this means that the Banco de España has an increasingly diminished role, given that the main functions linked to monetary policy and supervision of the financial system are decided in that framework.

What might this development then imply? Consider the following three areas: supervision, deposit guarantee systems and crisis management. Supervision. There are good reasons for banks to expand through branches and so be able to slim down their own internal bureaucracy, and have a single point of contact with supervisors and a substantially reduced reporting burden. But would this be accepted by national authorities? Home supervisors would become responsible for banks with in some cases a systemic presence in foreign markets. Host supervisors would find themselves legally limited in supervising even systemically important institutions in their own domestic market. The traditional home-host principle simply does not work for systemically important branches. The fact that we have not yet seen much of cross-border branching indicates there are some “invisible” barriers. One of these barriers probably is scepticism from national supervisors. With a few exceptions banks still expand through subsidiaries, which is costly and makes synergies hard to realise, and thus hampers integration. Can we find a way to secure financial stability without limiting the positive drive for further integration? Deposit Insurance Guarantees. Minimum standards are set by the EU, but in practice the national guarantee systems differ widely. Notwithstanding the existence of limited deposit guarantee systems, for larger banks the government will probably have to pay up the main part in the case of problems, due to lack of funds. This might be politically acceptable as long as depositors are domestic residents. However, cross-border branching extends the government guarantee to deposits of foreign residents.
For institutions that are legally or contractually obliged to attain specific returns it is difficult to comply with these requirements at the moment. The current low interest rate environment is a temporary phenomenon attributable to the severe economic turmoil resulting from the financial crisis. We expect that the economy will continue to recover, and that interest rates worldwide will increase again. The first signs of this are evident in the US. However, looking at the international situation, it is also clear that the interest rate in Switzerland cannot be higher than in the rest of the world, because otherwise we would be threatened with major inflows into the Swiss franc. Some claim that negative interest goes against human nature and deprives the economy of an important yardstick. However, that is not the case. The interest rate is the reward for forgoing consumption. The resources saved in this manner are basically available for investment. Investment, in turn, must generate a return that allows the interest to be paid. When uncertainty is high, savings increase, on the one hand. On the other hand, however, the increased uncertainty or the lower potential for returns causes businesses to postpone investment. Under these conditions, therefore, the interest rate falls; in extreme circumstances, it may even move into negative territory. Low or negative interest rates are an expression of the fact that, in the current situation, there is a very high supply of savings capital worldwide and a relatively low demand for investment.

Dear guests, I wish you a successful work and a pleasant stay! Thank you. 2  BIS Review 165/2010
Challenges for policy Turning now to macroeconomic issues, we in the Hong Kong Monetary Authority have had a particular interest in the arrival of the euro, since it was the final step in the transition of the eleven participating countries from closely aligned rates to irrevocably fixed rates, and has therefore consolidated the number of economies where, like Hong Kong, some form of fixed exchange rate arrangement is regarded as both desirable and workable. Of course, I accept that technically the eleven currencies have not been fixed or pegged to one another, but have gone a stage further and been replaced by a single successor. But the critical point is that the euro countries individually have to a large extent, as Hong Kong did to an even larger extent over fifteen years ago, surrendered scope for exchange rate adjustment as an instrument of policy. In the euro case the surrender is not total since, although no member can any longer move relative to the ten other participants, the European Central Bank can of course still pursue an independent monetary policy relative to the rest of the world. Hong Kong is more tightly bound, since we are linked to the US dollar over whose wider value we have no influence. When we pegged the Hong Kong dollar to the US dollar in 1983 we did so at a time of crisis and partly because there was, for institutional reasons, effectively no viable alternative available to us at the time.

Durmuş Yilmaz: Financial security and stability Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the forum “Measuring and Fostering the Progress of Societies: The OECD World Forum on Statistics, Knowledge and Policy”, Istanbul, 28 June 2007. *  *  *  Dear guests, I would first like to welcome you all to Istanbul, the city where the two continents meet. And today it is so delightful to see that it is a meeting point for high level delegates from all the continents. In that regard, it is a great pleasure for me to be given the opportunity to share my views on financial stability and security with such a distinguished audience. Today, I would like to begin my speech by underlining the importance of financial stability, why and how we should keep an eye on the stability of the financial system, including the Turkish perspective. Finally, I will try to emphasize the interrelatedness between financial security and stability. Importance of financial stability… As a result of the liberalization and deregulation processes, financial markets became more integrated and underwent radical transformation, starting, in fact, with developed countries in the late 70’s and spreading to developing countries in the 80’s and 90’s. At the same period, capital movements were seen to have accelerated and reached to high levels. This, in turn, led to financial innovation and heavy use of sophisticated instruments.
Ensuring that everyone understands the nature and level of risks facing a bank will depend on the timely delivery of the right information. We expect many banks will need to make greater investments in their reporting systems with the aim of facilitating the flow of information about a bank’s ratings practices to senior management and directors. (c)  Challenges for supervisors  I've focused on the challenges banks may confront in implementing the new Accord. Let me now spend a few moments discussing how our supervisory approach is also likely to evolve over time. The New Accord will present supervisors with an opportunity to re-evaluate and further develop their current approaches to looking at banks. Going forward, supervisors, like banks, will have to take a more dynamic view of risk management. Change will occur in response to the new Basel framework. I must add that change would also occur as part of the natural evolution of banking supervision. Basel II’s emphasis on risk management strongly supports our current effort to make evaluations of banks’ internal processes the heart of a more forward-looking supervisory approach. 4  BIS Review 7/2003  In terms of credit risk, we will focus less on point-in-time assessments of financial condition, and much more on internal processes and control structures that are intended to help safeguard the health of banks.

For example, many organizations either already have, or are in the process of developing, a ratings system that captures both the risk of borrower default, as well as transaction-specific factors that shed light on the amount that could be collected if things were to go poorly. In other words, these banks’ systems are generally oriented to capturing the essential components in estimating credit risk. As the methods for measuring credit risk improve, we expect that banks will incorporate these new insights in their ratings practices. For example, banks may look to expand the number of ratings categories to more finely distinguish between exposures of different credit quality. However, the challenge is for banks to clearly and objectively define the criteria for these ratings categories in order to provide more meaningful assessments of both individual credit exposures and, ultimately, their  overall risk profile. The clarity and transparency of the ratings criteria will be critical to ensuring that ratings are assigned in a disciplined and reliable manner. It is also important to note that it is not enough to have a well-designed internal risk rating system - it must also be an integral part of a bank's day-to-day credit risk management processes. The expectation is for banks to rely on their internal risk rating systems not just when making decisions about whether to extend credit. We also encourage banks to incorporate ratings information into other key processes, such as pricing and reserving determinations and when allocating economic capital internally.
It is not to say that the banking sector response was all that we wanted because there were still some elements and gaps in the market response that we felt were inadequate. While overall credit grew well and continues to do so, some sectors, particularly SMEs, did not receive the credits we wanted them to get. The credit did not extend or reach out to the sectors hit particularly hard by Covid-19. Our response is to design policy measures to supplement the market response, for example, what we initially called a soft loan program. The program then started to have some obstacles because of the pricing of the loan structure. Therefore, we came up with another emergency degree on Financial Rehabilitation Measures, which in part established a loan facility for SMEs with a credit guarantee component from the government. The measures were to encourage the banks to lend to those sectors which had not received adequate credit by addressing the high credit risk that banks might experience from lending to SMEs. As a result of the package that we put together on the SME front, we managed to see loan growth in SME sectors. These measures are examples of the proactive response that policy authorities, both on the fiscal side at the Ministry of Finance and us on the monetary side at the Bank of Thailand, try to get the economy through this crisis, as well as it could be reasonably expected.

2  BIS central bankers’ speeches  Important to follow the international debate One aspect which has been debated a great deal both in Sweden and internationally, and which I do not intend to highlight here, is the level of the inflation target. That issue has recently been discussed quite thoroughly by some of my colleagues, and I do not have much more to add.5 I would just like to say briefly that if we are going to discuss a change in the target level, then I, like my colleagues, have greater sympathy for the argument in the international debate that central banks should raise their inflation targets than for the argument in the Swedish debate that the inflation target should be lowered. The main reason for this is the motive usually stated as the main justification for a rise – that if the target is too low, or if inflation expectations are permanently too low for some other reason, then the policy rate will hit its lower limit more often and for longer periods.6 This means that monetary policy in the future would find it harder to counteract a recession. However, it is too early today to draw the conclusion that 2 per cent is too low a level for the inflation target, and the discussion needs to continue.7 Nor do I intend to say anything about the issue debated both in Sweden and internationally as to whether monetary policy should be used to actively attempt to counteract the accumulation of financial imbalances.
The only thing that I'm trying to say here is that we have to avoid what I have called the tit-for-tat where, in response to inflation, both corporates and labour want to receive full compensation – which obviously would possibly lead to that second-round effect that I was alluding to. Obviously, the sooner the better in terms of when do we bring inflation back to 2%? We have to be also realistic, and we have to be measured in the response that we give, but very determined in the delivery of those measures, and persistent. You said that wages are having a huge impact on inflation on one side, and on the other side you say that there is no wage price spiral. So, it's not really clear to understand. Can you maybe give us an explanation on how you can come to this conclusion? We just all wish that everything was clear and simple, wouldn't we? What I said – and thank you very much for your question – is that unit labour cost, which is slightly different from wages, negotiated wages, however you want to measure it– is having an impact, or it is rather causing the revision of core inflation projection. That's what I'm saying. You can certainly have that projection and at the same time acknowledge that today we are not seeing any spiralling of wages and prices that would cause this second-round effect that we would be very concerned about.

On the first one, our revision to core inflation – I've started answering already in the previous question–, a lot of it is attributable to the unit labour cost. That's a large chunk of the revision. The rest is what you have in the monetary policy statement, which is past upward surprises. So, it's a different starting point, which is informed by data that came in after the last projection that we made in March. The latest data that we had in terms of inflation was from January. Now, things obviously changed between those January data and the May data that we have incorporated because we cut off on the 23 May1. I think that's a small part of it. The large part of it is the unit labour cost. You asked me about the decision and the atmosphere. I have to tell you that it was quite a harmonious discussion and a very good and thorough economic discussion. As I said, we went really deep into the analysis of the labour market and tried to really understand the forces behind inflation to better fight it. It was a very, very broad consensus. By the way, I just want to remind that it was a twofold decision. It was, number one, the 25 basis points but it was also the decision, or the confirmation, that we would stop any reinvestment under the APP. What does the ECB know about lag effects? What takes longer to transmit into the economy? What are you looking at more closely?
According to the World Bank data 5 , between 1960 and 2004, the share of the services sector in some selected countries was as follows:  The share of the services sector Percent of GDP 1960  1980  1995  2004  UK  53  54  66  72  Australia  51  58  70  71  France  52  62  71  73  Japan  42  54  60  68  USA  58  64  72  75  Singapore  78  61  64  65  Hong Kong  62  67  83  88  China  20  21  31  35  India  30  36  41  52  Sri Lanka  48  43  52  58  The statistics show that the current level of services in Sri Lanka is more or less equivalent to the status which the services enjoyed in developed countries in 1960s. While Sri Lanka is far ahead of the two giant growth machines in the region, viz., China and India, it would not be too long for these two countries to overtake it, given their current services promoting policies. It is also observed that the services sector has been growing in importance in all the countries during the past five decades or so. Some countries have now attained the optimal level of services above 70 percent.

Second, the legislative amendments must strike an appropriate balance between the rights of creditors and those of debtors, especially the socially excluded, and I should like to highlight the advisability of concentrating efforts in the field of social policies: a country as economically, socially and institutionally developed as Spain has sufficient resources to face up to and resolve the most dramatic and unacceptable situations of exclusion and need without affecting financial stability in the process. All these issues have been duly discussed in this Congress, which is why I shall focus on the situation of our banking system and on our economic outlook. BIS central bankers’ speeches  1  Role and situation of Spanish banks I should first like to highlight the crucial importance of banks in resource allocation and their role of intermediation between those supplying and demanding financing. Mass access to owner-occupied housing would be almost inconceivable without their intermediation. Mortgage lending is a very important segment of the financial intermediation in which credit institutions engage. As at December 2014, mortgage loans for house purchase extended by credit institutions to households amounted to slightly over € billion, more than 40% of total bank lending. The number of outstanding mortgage loans for house purchase is at present 5.8 million, a large percentage of which (82%) are at floating rates, which has allowed for the transmission of the Eurosystem’s more accommodative monetary policy to household financing conditions.
The methodology of this review will be based on the highest standards already developed and applied by the ECB in the recently completed asset quality review in the euro area largest banks prior to their transition to the SSM. This review will be carried out with the help of an independent external consultant. It should start not later than the end of next year, depending on how the implementation of the new Bank Recovery and Resolution Directive advances, including the creation of the respective resolution fund. I assure you that  BIS central bankers’ speeches  3  the BNB is going to get commercial banks familiar, at an early enough stage, with the main elements of the methodology of the forthcoming asset quality review, so that each bank could budget the relevant costs (by analogy with the euro area where banks have borne the costs of their asset quality review). Dear friends, The passing 2014 will regrettably be remembered for the vicious public pressure on the BNB. The central bank was under systematic and orchestrated attacks behind which one could see narrow corporate interests and political dependencies. Such focused, fierce and continuous attacks against the central bank are unheard of in today’s advanced societies, and are certainly far from the European norms. Information about who paid for these attacks and whose money was spent on them is already becoming public knowledge. Even more interesting details may continue to come out in the months ahead.

However, it should be noted that in all those cases no central bank was pressurised to take the full responsibility and to be scapegoated, unlike the continual public attacks here against the BNB. In other countries the responsible institutions and politicians have always held the understanding that the central bank’s authority is of paramount importance for the calm of depositors and the stability of the banking system as a whole. All across the world that authority, and the independence of the central bank, are considered to be a long-term asset of the country. Consequently, central banks’ actions have not been compromised under the pressure of temporary economic or political emotions. All said so far does not mean that the BNB has no intention to draw conclusions for improving the efficiency of the banking supervision. Quite the opposite, the BNB has already undertaken serious steps in this direction. Back in the summer we publicly announced a number of measures and actions for reviewing the supervisory framework and practices. I wish to remind you that as early as in July we sent an official letter to the EBA inviting them to carry out an independent review of the quality, capacity, practices and procedures of the BNB’s Banking Supervision Department. In August we sent another letter to the International Monetary Fund (IMF) requesting them to organise a mission of the IMF and World Bank in Bulgaria under the Financial Sector Assessment Program (FSAP).