samchain/econo-pairs-v1 huggingface dataset:
Yves Mersch: Medium to long-term priorities of Capital Markets Union (CMU) for the ECB/Eurosystem Panel remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Eurofi conference, Luxembourg, 10 September 2015. *  *  *  While the Green Paper has set the right overall objectives of CMU and identified priorities for early action and the measures for the medium- to long-term, CMU needs to be pursued through a higher level of ambition to achieve greater capital markets development and deeper financial integration. 1. To bring about its expected benefits, the CMU should foster and result in a high level of financial integration in capital markets across the EU based on an adequate legal and regulatory framework. This would imply more steps towards greater harmonization of 1.  bankruptcy law,  2.  company law and  3.  taxation of financial products  that pose great political challenges. The aim is to ensure that investors have the same costs and equal access to finance irrespective of where they are located in the EU. Ultimately, the supervisory architecture will also warrant revision. The final destination in the path towards CMU will need to include the development of a single rulebook. These elements are key if we are to attain what has been ambitiously coined as CMU. 2. A schedule with clear milestones and deadlines in the upcoming action plan would facilitate implementation. 3. Market-led initiatives to promote capital markets are important but insufficient.

Steps taken as part of the liraization policy, including deposits converted from foreign currency and gold that constitute one of our reserve build-up tools, have not produced a net cost for the Bank's balance sheet. Deposit accounts converted from foreign currency and gold, Turkish lira securities maintained in line with the changes made in the collateral policy, the varying interest cost in Turkish lira reserve requirements, changes in commissions for foreign currency reserve requirements, and the increase in Turkish lira rediscount bills due to the liraization in rediscount credits had a balanced total effect on the balance sheet. Distinguished Shareholders, Esteemed Guests, Before concluding my speech, I would also like to mention the major activities we carried out throughout the year to contribute to the financial development of Türkiye. In line with our vision in the field of information technologies, we maintained our studies to develop the technological solutions and systems needed, as well as to ensure the security and continuity of these systems. Accordingly, we supported our payments infrastructure with innovative business models. We developed and introduced the Security Overlay Service (SIPER), to enhance the security of FAST, our Instant and Continuous Transfer of Funds system that we put into implementation in 2021. To expand the use of TR QR Code, another important application in the field of payments, we continued our work on regulation, infrastructure and promotion.
The level of prices rose more than twentyfold in the period from 1806 to 18132, and in 1813 the currency was devalued by almost 90 percent. The first national assembly at Eidsvoll was attended by representatives of a nation in deprivation. For the 112 sworn representatives, popularly known as the men of Eidsvoll, who took their places as the Constituent Assembly in spring 1814, the atmosphere was nonetheless full of hope for freedom and a better future. Several of them had spent time abroad and had been influenced by the Enlightenment philosophers and by the American and French revolutions. The Norwegian Constitution was inspired by the thoughts and ideas they brought home with them. Absolute monarchy under the Danish king was to be replaced by the sovereignty of the people and the separation of powers. Institutions with clearly distinguished roles would prevent the arbitrary use of power and foster confidence. This evening we are gathered in one such institution. In the discussion at Eidsvoll, Christian Magnus Falsen, a key member of the Constituent Assembly, said that no state can exist without a well functioning monetary system. Another prominent member of the Assembly, Count Wedel Jarlsberg, insisted that the nation must have its own bank. The people’s elected representatives took responsibility for the monetary system, as stated in Article 75 of the Constitution: «It devolves upon the Storting to supervise the monetary affairs of the Realm».

One of their papers published in the Journal of Economic Literature in March, 1996 under the title “The Standard Error of Regressions” has made the following eyeopening comment: “Such misuses of statistical significance appear to depend in part on a vintage effect, measured by date of Ph.D. conferral. The papers authored by Ph.D.s conferred between 1975 and 1979, when inexpensively generated t-tests first reached the masses, were considerably worse than the papers of others at making a distinction between economic and statistical significance. They used the word “significance” in ambiguous ways more often than did early or later Ph.D.s and they were less likely to separate statistical significance from other types of significance in the sections on scientific and policy implications” (p 111). The other findings of McCloskey and Ziliak are also startling. Of the 182 articles in the American Economic Review they have surveyed, 70 percent had not distinguished statistical significance from economic, policy or scientific significance. While they had referred to largeness of the estimators, 72 percent had not asked “how large was large?” At the same time, 59 percent had used the word “significance” in ambiguous ways. A more pronounced failure has been the non-reporting of descriptive statistics such as the means of the regression variables by 69 percent of the authors. (p 106). The problem with econometric studies is that the computations made by authors remain as a “black box” to ordinary readers.
It is up to policy-makers to draft policy measures during such an episode in order to influence both the level where a U-turn occurs and the slopes following the end of an episode of sizeable capital inflows. I will show in the following section that the policies envisaged by the arrangement Romania signed with the EU and the IMF are aimed at smoothing out the slope of the trends of the abovementioned indicators so that the necessary adjustments unwind at a reasonable pace, without destabilising the economy. BIS Review 5/2010  5  3. Case study – Romania  3.1. The period of massive capital inflows  Foreign capital inflows in Romania have picked up since 2004. The current account deficit widened from 8.4 percent of GDP in 2004 to 13.5 percent of GDP in 2007 and to 12.3 percent of GDP in 2008. The medium- and long-term external debt of the private sector posted an almost twofold increase (Chart 1), from 12.9 percent of GDP in 2004 to 25.6 percent of GDP in 2008.

Bekaert, Geert, Harvey, Campbell R. and Lundblad, Christian: “Does Financial Liberalization Spur Growth?”, NBER Working Papers, No. 8245, 2001. Calvo, Guillermo A., Leonardo, Leiderman, and Carmen, M. Reinhart: “Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors”, IMF Staff Papers, Vol. 40, No. 1, March 1993, pp. 108–151. Calvo, Guillermo A., Alejandro, Izquierdo, and Meija, L.F.: “On the Empirics of Sudden Stops: The Relevance of Balance Sheet Effects”, NBER Working Papers, No. 10520, 2004. Calvo, Guillermo A., Alejandro, Izquierdo, and Rudy, Loo-Kung: “Relative Price Volatility Under Sudden Stops: The Relevance of Balance Sheet Effects”, Journal of International Economics 69(1), June 2006, pp. 231–254. Dooley, Michael, Eduardo Fernandez-Arias, and Kenneth, Kletzer: “Recent Private Capital Inflows to Developing Countries: Is the Debt Crisis History?”, The World Bank Economic Review 10(1), January 1996, pp. 27–49. Edwards, Sebastian: “Thirty Years of Current Account Imbalances, Current Account Reversals, and Sudden Stops”, IMF Staff Papers 51(2004): pp. 1–50. Edwards, Sebastian: “Capital Flows and Economic Performance: Are Emerging Economies Different?”, NBER Working Papers, No. 8076, 2004. Eichengreen, Barry: “Capital Account Liberalization: What Do the Cross-Country Studies Tell Us?”, World Bank Economic Review, Vol. 15, No. 3, 2001. Eichengreen, Barry, and Muge, Adalet: “Current Account Reversals: Always a Problem?”, NBER Working Papers, No. 11634, September 2005. Fernandez-Arias, Eduardo, and Peter, J. Montiel: “The Surge in Capital Inflows to Developing Countries: An Analytical Overview”, The World Bank Economic Review 10, No.1(1996): pp. 51–77. Frankel, Jeffrey: “The Effect of Monetary Policy on Real Commodity Prices”, in John Campbell (ed.)
That would have been a mistake as the problems were different. Spain’s task was fortunately not to urgently recapitalise its large banks, which were indeed collapsing in other countries owing to deficient regulation and supervision. The unavoidable issue here was to oblige certain small and medium-sized institutions removed from market discipline – the savings banks – to restructure, after they had lent in excess to the real estate sector. In Spain, rather than recapitalising, it was vital to restructure these banks and clean up their balance sheets. To have recapitalised banks before cleaning up their balance sheets would have been to waste public funds, without having achieved changes in management or capacity reductions, which are essential for the soundness of the income statements of the surviving banks. 4  BIS central bankers’ speeches  What is clear now is that the reform of the governance of savings banks and their subjection to market transparency and discipline should have been carried out sooner, in the boom rather than in the crisis. The banking crisis management legislation then in place, which was of no use for addressing non-commercial institutions and was not adapted to the requirements of the European legal framework, which prohibits monetary financing, should also have been amended at that time.

A large number of Spanish firms have remained in operation and in profit as a result of having undertaken rapid adjustment, although unfortunately this has almost always been achieved through the only channel permitted by our obsolete and inefficient labour market: staff layoffs. Households, whose saving rate had fallen to 11%, reacted by swiftly raising it, which is enabling them to lower the rate in the present phase of the adjustment. At the same time we saw how non-energy inflation, which had been continuously far above that of our euro area partners since the creation of the single currency in 1999, fell substantially, to the extent that, in 2009 and 2010, its annual rate was under 1%, holding below that of the euro area. Finally,  BIS central bankers’ speeches  1  with regard to the banking sector, the rapid expansion of credit, which had reached a rate of 25% per annum and had been the most important source of excessive household and corporate indebtedness during the years of expansion, fell rapidly to stabilise at slightly negative levels over the past few years. Some might say that all this was inevitable, that ten years of imbalances required a correction, and that is partly true. But if we compare with the adjustment observed in other countries in a similar situation, the reaction of the Spanish private sector has been notably swift.
I’ll start with retail lending. It is important that we see balanced growth in retail lending. I said at the beginning of my speech that it is important not to reach dangerous levels of household debt burden. We are now being forced to pay attention to unsecured lending again. Here 2/5  BIS central bankers' speeches  are some figures: in March of this year, debt on unsecured lending increased by 1.9% in just one month. According to preliminary data, it grew by another 1.6% in April. If such rates persist, then the annual growth will be about 20%, which is much higher than the growth of household incomes. We are already seeing an increase in debt burden. Now households are directing almost 12% of disposable income (11.9%) to servicing loans. This is 1 percentage point more than it was pre-pandemic, when we were already rather concerned about unsecured lending. We do not want this trend to grow, so we have returned to the macroprudential policy we pursued before the pandemic. This involves the following requirement: more capital on loans granted to borrowers that already have loans. But we understand that such macroprudential measures ‘eat away’ at banks’ capital, which could be used to expand lending in other segments and cover losses on restructured loans. What’s more, these measures affect different banks in different ways, that is to say, they almost don’t have a discouraging effect on banks with a large capital reserve, while they seriously impact those banks that have a small capital reserve.

The reward of an excellent work in an unknown domain is the 6900 students who have chosen to attend as an elective subject “Personal finance in your hands” published by the Bank of Albania. In cooperation with the Ministry of  BIS central bankers’ speeches  1  Education and Science, we are endeavouring to make this book available in every school and to each student with the ultimate goal for them to be educated financially and empowered to manage personal finance. Only in this academic year, high-school students in 36 districts of Albania chose this book as an elective subject, making us optimistic and forward-looking. We strongly believe that the today’s young generation will be the protagonists of tomorrow’s economic life. For this purpose, we need to make our utmost investment for their formation, in order to ensure not only their future, but also the country’s future. The youth are eager and capable to assimilate, process and convey information, habits, or new products in any field of life. They are the transmitters of innovation, the most energetic and progressive segment of the society. It is our moral, professional and institutional responsibility to invest for a qualitative education of the young generation. To us, enhancing financial literacy is crucial. A well-educated nation guarantees its country’s welfare and progress. Therefore, we have decided to choose the young generation as our strategic partner to realize this challenge. We believe in their idealism, positive energy and pure spirit.
59  As discussed by Morton (2011), this quote is widely attributed to Gandhi but is likely a case of paraphrasing his actual words. Specifically, the PSHE component of the curriculum. https://www.speakers4schools.org 62 These and other initiatives were discussed at the Future Forum hosted by the Bank in Liverpool a couple of weeks ago. 60 61  15  All speeches are available online at www.bankofengland.co.uk/speeches  15  The Bank has for a long time run a schools competition, Target 2.0. This had many virtues, but diversity was not one of them. In the 16 years the competition ran, independent schools accounted for 43% of the total participants and 56% of the national champions – large multiples of their population share. The Bank’s new film competition, “Bank, Camera, Action” hopes to level that playing field. In its first year, this attracted 106 entries, with 80% of participating schools from the state sector. Conclusion A few months ago, I was giving a talk at a school in one of the poorest towns in the UK – indeed, one of the poorest in the EU. The school had a “Needs Improvement” rating from Ofsted. It had had 50% - that’s five, zero – teacher turnover the previous year. The children attending were from poor backgrounds and had very low academic and career aspirations. I knew this was going to be a tough gig.

When it comes to practice, the number of decision-makers, decision-making protocol, and principals in attendance diverge markedly among the leading central banks, suggesting for committee dynamics to be appropriately adjusted conditional on the institutional set-up and specifics of the central bank. BIS central bankers’ speeches  3
Model of international policy reciprocity  Extending Aikman et al (forthcoming), the results in Chart 3 are from a new model that builds on their paper by adding a second country to their model and by examining international policy leakages and coordination. For simplicity, the model assumes that there is no market-based finance sector (𝑏 = 1). In its place, the model allows for an additional determinants of the crisis probability. Domestic credit growth (𝐵1 ) still predicts domestic crises (𝛾1 ), but the credit measure is split between credit borrowed from home banks (𝐵1𝐻 ) and credit borrowed from foreign ones (𝐵1𝐹 ). And to capture the empirical finding that global credit growth can help predict crises over and above domestic credit, the crisis probability also depends on credit growth in the foreign country (𝐵1∗ ). In addition, the CCyB setting (𝑘1 ) also still reduces the crisis probability by enhancing resilience. But the effective CCyB setting depends on whether there is a reciprocity arrangement, since it is a 20  Other than credit growth, all variables are measured as annual averages, such that σ = 0.6 implies that an increase in annual interest rates of 1pp for 1 period of 3 years, reduces output by an average of 0.6% in each of the 3 years. 12  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  12  weighted average of the CCyB settings applied to domestic banks’ domestic lending (𝑘1𝐻 ) and applied to foreign banks’ lending in the home country (𝑘1𝐹 ).

Higher interest rates can also reduce the probability of a banking sector crisis through the same leaning channel (𝜙𝑖 < 0), but do not increase resilience directly. The banking sector only provides a proportion (𝑏) of credit to the economy, the remaining (1 − 𝑏) share is provided by the market based finance sector (𝐵1𝑀 ). While higher interest rates have the same effect in reducing credit and the crisis probability in both sectors, increasing the CCyB leads to a leakage of credit from the banking sector to the market based sector, so the marginal effect of a higher CCyB on marketbased finance is to increase its growth rate (𝜙𝑠𝑀 > 0). This increases the probability of a crisis originating in the market based finance sector (𝛾1𝑀 ). In addition, there is no resilience benefit from a higher CCyB working to reduce the probability of crises originating in the market-based finance sector. The overall probability of a financial crisis is equal to the sum of the probabilities in each sector, weighted by their market-share. Both sectors are subject to shocks (𝜉1𝐵 , 𝜉1𝑀 ). A single policymaker sets both instruments, the CCyB and the interest rate, to minimise the joint loss function given below under discretion.
In the economic area, we must create the human and material conditions to promote appropriate growth, while keeping unemployment and inflation low. With regard to the human factor, the necessary qualification must be coupled with an adequate motivation. This motivation can be enhanced by an appropriate macroeconomic environment. A gradual development of economic and social activities seems appropriate, since this is the only way to ensure the necessary identification of individuals with the community. 1  BIS Review 106/1999  Economic situation In the course of this year, prospects for economic recovery in Switzerland have been improving, bringing to an end an unusually long period of stagnation. The human and material costs of this stagnation are of course regrettable. The causes for this period of stagnation are manifold. First, one has to bear in mind that it followed years of marked expansion. Other, more general reasons are the consequences of our past labour market policy, which helped to maintain existing structures, as well as of insufficient competition in the domestic economy. Last but not least, an already high level of achievement made it increasingly difficult to provide the necessary punch for change. The need for structural changes as well as the necessity to tackle remaining problems from the past – notably in the construction sector, in agriculture and tourism – along with the repercussions of a weak global economy, have led to a temporary decline in growth. A sustained process of adjustment, but also favourable monetary conditions have subsequently contributed to improve prospects.

But this certainly requires strong supervision, effective cooperative oversight arrangements, and setting up the right incentive structure so that CCPs don’t lose sight of public interest, starting with the interest of their indirect members. Let me conclude. Central clearing will make the global financial system safer. However, it also has the potential to redistribute risk. Its overall systemic effect will thus depend on the incentives for risk-taking and central clearing that accompany risk redistribution. Hence the need for the official sector to provide the right incentive framework ex-ante, produce data that can help understand the distribution of risk, and tightly supervise CCPs in a spirit of cooperation across jurisdictions. Thank you for your attention. BIS central bankers’ speeches  5
The slower recovery abroad, with lower policy rates, indicates that interest rates in Sweden will not need to be so high. Household debts still cause concern One factor that I personally have taken into consideration when raising the repo rate this time and supporting the forecast for continued increases, is the development of household debt. If this does not slow down, I believe that there is a risk of financial imbalances arising, if not within, then beyond the forecast horizon. I believe that a gradual increase in the repo rate will contribute to reducing this risk. Finansinspektionen’s recently introduced loan restrictions are also one step in the right direction. A future challenge will be to find an appropriate balance between supervisory regulation and interest rate-setting. Of course, this overall picture may have to be revised if developments do not turn out as we are expecting. I have already pointed out that the global economy is facing fairly major challenges. A new economic downturn abroad could lead to lower resource utilisation and inflation in Sweden, too. Monetary policy would then need to be more expansionary than in the forecast. But there is also a possibility that the economic upturn in Sweden turns out to be faster and stronger than we have assumed. In this case we might need to raise the repo rate slightly faster. But none of these alternatives is our main scenario at present.

...and a high level of household saving gives scope for growth But Swedish households have also acted in a way that has increased resilience during the economic downturn. Unlike in many other countries, savings in Sweden have shown a rising trend over the past decade (Figure 3). 6  BIS Review 149/2010  During the crisis, saving increased both in Sweden and in most other countries. This is largely due to what is known as precautionary saving as a result of increased uncertainty. In many countries this uncertainty concerns the large deficits in public finances and what consequences these may have for household incomes in the future. As this uncertainty can be expected to remain over the coming years, private consumption will probably be held back. But we do not have this situation in Sweden. Although one can note that consumer confidence has strengthened in many areas in recent years, it is primarily in Sweden that it has reached historically high levels (Figure 4). The combination of sound public finances and high household savings means there is scope to reduce saving over the coming years. Together with relatively large increases in disposable incomes, this means that private consumption is likely to increase at a good pace. Sweden is one of few countries in the OECD area where the labour market has clearly begun a recovery. Moreover, the upturn in employment is on a broad front. The manufacturing industry has once again begun recruiting and is expected to continue to do so over the coming period.