samchain/econo-pairs-v1 huggingface dataset:
The concept of the "efficiency frontier", part of a nascent research field that is little used in France, may provide a partial answer to this question. viii It involves comparing the relationship between each type of public spending and one or more international performance indicators (for example, the PISA scores for education) between different countries. However, this remains a little-known, insufficiently operational concept with recurring methodological difficulties for comparing public spending between different countries. Page 10 of 19  How to interpret fiscal multipliers? Another area of economic research providing a greater body of work is the calculation of fiscal multipliers. The effect of a fiscal measure on the economy varies depending on the channel used (public expenditure or tax), how it is financed (whether debt is used or not), whether there is a short- or medium-term time horizon, and, obviously, according to the type of spending concerned. However, we are struck by the disparity and fragility of estimates of the same multiplier, which can double in size, depending on the method used. This means there is a risk that everyone uses these concepts in a way that serves their political preferences: certain people advocate tax cuts while others want to increase spending. In truth, few people possess the wisdom to put these multipliers into perspective and analyse them in greater detail, instead of betting time and time again on – supposedly self-financing – fiscal stimulus measures.

Unfortunately, the law of entropy gets in the way, with ever more complex legislation and administrative procedures. xix This complexity hurdle primarily hurts the most insecure and vulnerable groups. xx This situation is detrimental to inclusion and trust as well as to our country's competitiveness and attractiveness: an abundance of regulations reduces competition, discourages entrepreneurs and hampers productive investment. We need to learn to regularly "take a broom" to those constraints that are vestiges of the past or which are no longer useful. This requires a massive, structured and costed simplification drive. The recent announcement by the Minister of Transformation and Public Services xxi of a plan to simplify procedures for citizens at ten key moments in their lives is a step in the right direction. To be able to simplify processes, we also need to invest in the digitalisation of tasks and applications: these can represent a crucial source of innovation and time saved for employees. Alas, the most telling example of administrative complexity can be found in the territorial organisation of our public action, which now comprises a whole stack of departments and local levels, characterised by overlapping responsibilities. The least we can say is that this situation is "not conducive to improving the service provided to households and businesses, nor to making public action more efficient". xxii There is widespread dissatisfaction with the loss of responsibility - who gets to decide what? - the time lost and the additional costs.
The financial markets have been affected more noticeably The international markets where the banks obtain funding by taking out bond loans have been functioning poorly. Borrowing has become more expensive and more difficult. Normally the financial market participants trade with one another and thus contribute to the smooth functioning of the market. However, recently above all mutual distrust has meant that they are more wary of lending money to one another. One can say that this has “thrown sand in the wheels”. Many central banks and other government agencies are trying to counteract this, as I will discuss shortly. This has also affected the Swedish banks, although the problems have been less serious here than in many other parts of the world. We can observe that short-term interest rates have now risen substantially in Sweden, too. This applies, for instance, to the interbank market, which is the market where the banks borrow money from one another to cover their short-term liquidity needs. However, in this context it is worth pointing out that the overnight market has functioned as usual and that the overnight rate, the shortest interest rate in the economy, has remained stable around the repo rate. In this way the Riksbank’s system for steering the interest rate functions well, which is of course important not least for monetary policy. The market for mortgage bonds has also functioned less efficiently than normal.

For example, the number of company bankruptcies and loan losses in the banks is usually higher when economic activity is low and vice versa. There is also a fundamental relationship between our fields of activity. The Riksbank’s most important tool in conducting monetary policy is the repo rate. One can say that we try to influence economic activity and inflation by steering the price of credit, that is,  BIS Review 119/2008  1  interest rates. But to be able to do this, the payment system and our interest rate steering system must function. Financial stability is therefore actually a necessary condition for being able to conduct monetary policy efficiently. With regard to financial stability, the Riksbank makes regular updated assessments. I shall soon return to our views on current developments. But before I do so, I would like to say a few words about what the task of safeguarding financial stability actually entails. Most people are probably aware that we have an inflation target for monetary policy. But what do we mean by financial stability? What do we mean by financial stability? Financial stability is not so easy to define. In the Sveriges Riksbank Act the Riksbank’s task that we commonly refer to as safeguarding financial stability is formulated as “to promote a safe and efficient payment system”. Put simply, this concerns working in different ways to ensure that he financial system is stable and functions smoothly. This is important for many reasons.
In the past few months, a discussion has started about the need for a new risk reduction agenda. But, before discussing such further steps, it is worth recalling that we have already made significant progress – since the beginning of the crisis – in “de-risking” Europe’s financial system. We enhanced and implemented the single rulebook; defined a common resolution framework for banks to protect European taxpayers; established the Single Supervisory Mechanism and Single Resolution Mechanism, and conducted a Comprehensive Assessment of banks to deal with legacy issues before the start of Banking Union. The results are tangible. The Common Equity Tier 1 ratio has risen, on average, from around 9% to 13% since 2012 for significant institutions. Most European banks have managed to meet the fully-loaded capital requirements by now. While a lot has been achieved, there is no room for complacency: too many of our banks are still troubled by the ghosts of the past, legacy assets and NPLs. The ECB as supervisor is actively looking into this and has identified the issue as a priority. So, what is left to be done to mitigate the remaining risks and make the financial system more resilient? It is important to further improve and fine-tune what we have started. First, there is still room for improvement when it comes to establishing a truly level playing field, for example by creating a truly single rulebook.

It has benefited from economic reforms that have provided development opportunities for our business sector, have opened markets, have increased competition, have stimulated flexible labor markets and have increased social revenues. Both fiscal and monetary policies have been cautious in providing the necessary stimulus to the economic growth, by being consistent and disciplined in the pursuit of their objectives to achieve fiscal consolidation and ensure a low-inflation environment. The size of the annual budget deficit in relation to GDP has been between 3 %, leaping to 5.7 % for 2008, while the public debt has been stable, reaching up to around 55.6 % for 2008. The annual inflation growth rate has been for a long time within the corridor defined by the Bank of Albania of 2 4 percent (and close to the Bank of Albania target of 3 percent), indicating success in anchoring market participants expectations for price developments in the economy. This steady good economic performance has been supported by a flexible exchange rate that has been instrumental in supporting and maintaining a balanced growth, by maintaining the right incentives for interaction between domestic and foreign counterparties. Fundamental changes have occurred in the financial sector too, thanks to consistent and successful reforms in the last decade. Nowadays the banking sector in Albania counts 16 banks, all in private hands, where the foreign capital dominates.
The weakness of bank lending over the recent past has motivated much discussion on the reasons behind this and on the best policies to deal with the situation. In order to define these best policy measures, it is important first to fully understand the behaviour of this phenomenon and to identify possible frictions in the credit market that may be hampering its recovery. With this in mind, I will next provide an overview of the main factors explaining recent credit developments in Spain: first, in the context of the crisis period, and then in the current recovery phase. I will conclude with some reflections on possible policy considerations. 2. The determinants of bank credit in Spain during the crisis  When analysing the factors behind the contraction of bank lending during the crisis it is useful to distinguish between demand and supply elements, even after discounting the practical difficulties in separating both components. 2.1. Demand-side factors  Starting with the demand side, several factors contributed to the sharp reduction in the demand for credit during the crisis. First, loan demand fell sharply as a result of the deterioration in economic conditions, which limited current and planned spending levels and, hence, the need for new credit. Second, the need of households and non-financial corporations to deleverage and rebuild a sounder financial position is another factor behind the pronounced slowdown in credit demand.

Employment had developed roughly in line with our forecast, while the labour supply appeared to have increased slightly less than expected. Unemployment was therefore a little lower than we had predicted in the February report. Shortages in the business sector continued to increase. But my assessment was nevertheless that there was still plenty of spare capacity, if not yet to the same extent as we expected in February. A further reason why we foresaw higher inflationary pressures was that the Government’s Spring Budget Bill appeared likely to stimulate demand slightly more, at least next year, than we had previously estimated. As I said earlier, I drew the conclusion from this that the repo rate needed to be raised more during the forecast period than we believed in the February report. But my assessment was that the economic picture on the whole had not changed so much that the repo rate needed to be raised immediately. Inflation was low, and it appeared, as I saw it, reasonable to assume that it would rise fairly slowly. The reason for this was that there were still several factors holding back prices. I pointed out that the important thing was to balance the pace of the interest rate increases so that inflation does not  2  BIS Review 62/2007  accelerate more rapidly than expected, but so that growth in production and employment is not slowed down too soon.
Jaime Caruana: The future of banking supervision in Europe Address by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the conference “Supervision of International Banks: Is a Bank Crisis still Possible in Europe?” – European Banking Federation (FBE), Brussels, 28 October 2005. *  *  *  Introduction First of all, I would like to thank Michel Pébereau and the European Banking Federation for inviting me here today to participate in this conference on important issues relating to the future of banking supervision in Europe. Usually I speak from the perspective of the Basel Committee on Banking Supervision. Today, however, I will mainly take the viewpoint of one of the central banks of the Eurosystem with banking supervisory responsibilities. The subject of this debate is particularly timely, given the European Commission’s current initiative to define financial services policy for the EU over the next five years, to which I understand the FBE has been an active contributor. I would like to use my time this morning to suggest a number of principles that I believe could help in addressing the key challenges for European banking supervision structures in the coming years, and also to reflect on some concrete steps to build a European framework fit to meet these challenges. What is the main issue we face?

We undoubtedly need a  2  BIS Review 84/2005  greater degree of co-ordination between supervisors than hitherto, and we need greater consistency in supervisory practices. As I said, we need a framework that rationalises the compliance burden and streamlines the interaction between supervisory authorities. We need banks that manage risks, not unnecessary supervisory requirements. Thirdly, we need an approach that uses the full range of tools at our disposal. In other words, we should not just look for legislative solutions to the challenges that face us. What we need is effective and timely implementation of the laws and regulations that exist, and convergence in their application. This comes through co-operation and information-sharing between supervisors. And let me also mention here the potential offered by supervisory transparency. We have heard much about market discipline in the context of the disclosure requirements that will apply to banks under pillar 3 of the revised Basel capital framework. But I think that increased disclosure by supervisors, especially on a comparable basis, also has an important role to play, not only in helping us to monitor consistency of approaches across countries, but also in driving greater convergence through exerting a kind of market discipline for supervisors. Finally, allow me to put my Basel hat on for a moment. I think Basel II certainly offers its fair share of implementation challenges, but also provides us with by far the biggest opportunity to make progress in building a more consistent and efficient co-operative approach to supervision.
It may also be reasonable to include resource utilisation, as this affects future inflation. The Taylor rule functioned well in connection with the financial crisis 2008–2009. It showed then that we should cut the repo rate at roughly the same speed and by roughly as much as we cut it. If we had instead relied on the Ramses model, we would have cut the repo rate much more slowly. Ramses has an estimated monetary-policy rule that is based on how the Riksbank has reacted earlier, and this has normally involved changing the repo rate in small steps. The starting point for the repo rate therefore has a strong influence as to what level the model will produce for the repo rate in the short term. The model’s estimated rule was therefore far too sluggish in the exceptional situation that arose. It can also be mentioned that Norges Bank, because of the uncertainty of the models it uses, also gives some weight to simple monetary-policy rules such as the Taylor rule.23  21  Op.cit., p 109. 22  J.B. Taylor, “Discretion versus policy rules in practice”, Carnegie-Rochester Conference Series on Public Policy, North-Holland, 1993. 23  See the article “Criteria for an appropriate interest rate path” in Monetary Policy Report 2/2010, Norges Bank. BIS central bankers’ speeches  7  See longer-term forecasts than one year as potential scenarios We should regard the forecasts for longer than one year ahead as potential scenarios rather than unbiased forecasts.

Mean squared gap for inflation and resource utilisation forecasts Average values of squared deviations during the forecast period 10.0 9.0 Higher repo rate  8.0  Resource utilisation  Main scenario  7.0 6.0  Lower repo rate  5.0 4.0 3.0 2.0 1.0 0.0 0.0  0.1  0.2  0.3  0.4  0.5  0.6  0.7  0.8  Inflation  Note. Resource utilisation is measured as the deviation in GDP from the HP trend and the inflation deviation as the CPIF’s deviation from the inflation target. Source: The Riksbank  Figure 14. Yield curves Per cent 4  4 Yield curve for the repo-rate path Yield curve for government bonds  3  3  2  2  1  1  0  0 11  12  13  14  15  16  Note. The yield curve for the repo-rate path is calculated using the expectations hypothesis and the government bonds curve is a zero coupon curve Sources: Reuters and the Riksbank  BIS central bankers’ speeches  17
With its long history and impressive membership, ACI has developed very much into an icon of professionalism in finance, contributing to "market development through education, market practices, technical advice and networking events for the financial practitioners of the world". The Association therefore has a very important role to play and faces in the coming years much greater challenge than before in promoting and upholding professional and ethical standards in finance. One interesting, perhaps even perplexing, aspect of the current financial turmoil is that emerging markets, particularly those in Asia, have only been lightly affected, so far. One reason is that financial innovation, in the form of credit risk transfer through securitisation by the "originate and distribute" model, has not caught on in Asia to the same extent as in the United States. Indeed, economies in different stages of financial sector development face different issues, notwithstanding the clear trend of globalisation in finance. Correspondingly, in promoting and upholding professionalism in finance, there may be a need for different emphases and approaches, having regard to the different development stages that individual regions and economies are undergoing. But it is also important that these different emphases and approaches should be developed within the framework of global standards. I therefore wholeheartedly support regional outreach initiatives of international standard setting bodies such as the ACI. Asia, of course, is region of rising importance in the global context, particularly in terms of finance.

Much attention will also be required, in the fullness of time, to make sure that the financial systems through which financial intermediation takes place are robust so that the benefits of financial liberalization could be maximized and the associated risks could be minimized and prudently managed. 3. As a financial services centre which operates with a highly liberal regime, Hong Kong has important roles to play in all this. There is not enough time to go into details here on this occasion, so I shall just identify three general areas for your consideration. 4. The first area concerns financial intermediation within individual economies, in other words, the channelling of domestic savings into domestic investments. Here Hong Kong, at this stage at least, largely only plays an advisory role. The less liberalized financial systems in this region are very much dominated by domestic financial institutions, particularly in the banking market. Further, domestic politics and a desire to protect domestic financial institutions from undue competition are such that liberalization to admit foreign financial institutions to take part in domestic financial intermediation would only proceed at a pace dictated by these considerations. For example, it will, I think, take some time and patience for Hong Kong-based banks to gain a physical presence in the mainland of China, be allowed access to renminbi banking business and command a significant share of that business. 5.
From hot air to cold hard facts: how financial markets are finally getting a grip on how to price climate risk and return – and what needs to happen next Speech given by Andrew Hauser, Executive Director, Markets Investment Association, London 16 October 2020  I am grateful to Benjamin Bowry for his help in writing this speech, and to Andrew Bailey, Imane Bakkar, Bethany Blowers, Sarah Breeden, Mark Cornelius, Eleanor Eden, Amber Evans, Sarah Hall, Andrew Harley, Ronan Hodge, Sarah Kemmitt, Zane Jamal, Theresa Lober, Arjun Mahalingam, Tom McLaren, Jenny Owladi, Dave Ramsden, Andrea Rosen, Tom Silvester and Mathieu Vital for their comments and guidance. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction 2020 is not the likeliest of years for the green revolution to have started paying off in financial markets. With a global pandemic raging, and economic uncertainty at historic highs, issuers, investors and intermediaries might have been forgiven for having their minds elsewhere. But, in fact, after many years of rhetoric from market practitioners, the temperature has changed noticeably. Hot air is turning into cold hard fact: -  Climate oriented equity indices have outperformed the broader market by 2-5% in 2020, as economic activity has shifted away from travel and other fossil fuel-intensive sectors, and towards online commerce and technology (Chart 1);  -  Green bonds also outperformed their conventional counterparts over that same period (Chart 2), and made up a fifth of total European investment grade issuance in September alone.

Trends in small bank and small business lending As we evaluate the financial system and the broader economy, we regularly examine firms from a horizontal and aggregate perspective to gain insight on the trends in the provision of financial services in the Second District. Today, I’ll say a few words on trends in small business lending. Of course, looking at trends is not sufficient to identify causal relationships, but it does provide one perspective on these developments and identifies areas for future inquiry. The overall level of commercial and industrial (C&I) lending at Second District firms with under $ billion in total assets has grown steadily in recent years (Chart 1). Since the financial crisis, these loans have increased by just over 80 percent, which is somewhat faster than growth at the national level of 64 percent over the same period. 2/6  BIS central bankers' speeches  Within commercial and industrial (C&I) lending for these banks, small business lending is particularly important, given the traditional role of small businesses in job creation. While data are not immediately available on borrower size, we can look at a simple proxy for small business lending by isolating individual C&I loans to commercial borrowers that are each under $ million. These data show that while the dollar value of small C&I loans has grown since 2010, the pace of growth has not been as high as overall C&I lending growth.