samchain/econo-pairs-v1 huggingface dataset:
See Gordon, R.J., (2016), “The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War”, Princeton U.P. and Goodhart C., P. Pardeshi and M. Pradhan, (2015), “Workers vs pensioners: the battle of our time”, Prospect Magazine, December. 3 Adam, K and J. Zhu, (2014), “Price level changes and the redistribution of nominal wealth across the euro  area”, Journal of the European Economic Association, 14 : 871–906. 4 Deutsche Bank Research, Focus Germany – Difficult times for German savers, 4 October 2016. 5 Bundesbank monthly report October 2015. 6 Rostagno M., Bindseil, U., Kamps, A., Lemke, W., Sugo, T. and T. Vlassopoulos, Breaking through the zero line –  The ECB’s Negative Interest Rate Policy, Brookings Institution, Washington DC, 6 June 2016. 7 For a more detailed discussion of the challenges for euro area banks and the interlinkages with monetary policy  see Praet, P. (2016), “Monetary policy and the euro area banking system”, Speech at ECMI Annual Conference, Brussels, 9 November 2016. 5/5  BIS central bankers' speeches

This level of growth is expected to exceed the growth potential output, giving rise to a positive output gap, particularly in 2015. Other things being equal, this will contribute to higher inflation. GDP growth in 2014–2016 will be driven by domestic demand, both private consumption and investment, and the contribution from net trade will be negative for the entire period. As a consequence, the sizeable current account surplus we have seen in 2013 and 2014 will shrink rapidly next year and give way to a small deficit by 2016. This is cause for concern in and of itself, and we hope that this forecast will not materialise, as Iceland needs to maintain a current account surplus in the next several years as it focuses on putting its external debt onto a more solid footing and building up FX-reserves that are not financed with foreign loans. Economic policy and economic incentives would then have to centre on improving the outlook for the current account balance. According to the forecast, which extends until end-2017, inflation will be at target for the entire forecast horizon, apart for the last quarter of 2015 and the first quarter of 2016. It will average 2.6% for the three-year period from 2014 through 2017, which is well in line with the 2½% inflation target. But the current equilibrium is fragile, the future is highly uncertain, and there are important known risks ranging from the global economy to the liberalisation of Iceland’s capital controls. We will doubtless discuss some of these at this meeting.
Capital buffers, introduced in line with EU Capital Requirements Directive and Basel 3 capital requirements, allows for better linking banks’ capital base with the level of systemic and macro-financial risks. This assures for maintenance of adequate capital adequacy ratio of about 16% and strong resilience to shocks. Changes in regulation to strengthen banks’ corporate governance were also introduced, recognizing the crucial importance of the corporate governance culture and values for a proper functioning of banks. Several aspects are tackled, related to the perimeter of the role of the 1/2  BIS central bankers' speeches  Supervisory Board, mechanisms for regular internal review of capacity of Supervisory and Management Board members and other key function holders, enhancement of the remuneration requirements, as well as enhancement of the role of control functions. A number of measures were also undertaken to further improve the quality of banking system assets, including a Strategy for NPL resolution that has led to tangible results- NPls to about 5%, one of the lowest in the region. The euroization, although declining to around 40% of total loans and deposits, and being among the lowest in the region, is being tackled through many measures, with more systematic approach employed as well, through the “Denarisation Strategy”. This also adds to reduction of possible risks from financial stability perspective.

Anita Angelovska Bezhoska: Speech at the Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries, Brussels, 17 May 2019. * * * Dear Ministers, Dear representatives of the European Commission, European Central Bank and Eurostat, It is always a great pleasure to be part of the regular Ministerial Dialogue, having the opportunity to reflect on important issues that are in the spotlight of the economic agenda. At the same time it as an excellent occasion to express our appreciation on the provided assessments of the Economic Reform Programme. The main takeaways from these assessments have been important guidelines, mapping our policy actions, enhancing our capacity, and providing for faster closure of the existent gaps. Now, let me briefly reflect on the topic of Structural reforms for attracting foreign direct investment and increase resilience. There is no doubt that investments are one of the key ingredients for increasing the long-term potential of an economy. When it comes to emerging economies, commonly there is a need for additional cross – border capital, which can complement the insufficient domestic saving. The more these flows are comprised of FDIs, the higher the positive impact on productivity and competiveness. In the regional context, pre-crisis investments were an important growth driver, reaching close to 30% of GDP, while in the postcrisis period investment ratios has plunged.
Rather the let down has been on the import side, where there has been less substitution of domestically supplied goods and services for imports than past experience would have led one to expect. It is possible that increased specialisation means that demand is less responsive to price than it used to be. Alternatively, heightened uncertainty and the absence of UK suppliers for some sorts of goods and services may mean that it takes longer for import penetration to respond to the enhanced profit opportunities. In any case, the MPC still expects net exports to contribute substantially to the overall growth in demand over the next few years as the necessary rebalancing gradually takes place. The most recent trade figures indicate that net exports of goods boosted GDP by around 1¼ percentage points in the first quarter2, and suggest that we may at last be starting to see a more significant contribution to growth. Chart 4 shows the MPC’s current assessment of the outlook for four-quarter GDP growth, as published last week in the Bank’s latest Inflation Report and assuming that Bank Rate follows the gently rising path implied by market interest rates. The single most likely path lies within the deepest green band. The near-term path is somewhat choppy, reflecting the impact of factors such as the extra bank holiday associated with the royal wedding.

Figure 4 displays the volume of private credit, as a percentage of GDP, for South Africa, other sub-Saharan countries and for Northern Africa. With credit exceeding GDP, the financial sector in South Africa boasts a similar size to that of many North American and European countries. By contrast, the financial sector is very shallow in the rest of subSaharan Africa, with credit volumes at less than 20% of GDP. Even more worrying is that the financial sector has hardly deepened over the past 15 years. 4  BIS Review 110/2007  Figure 4: Private Credit / GDP in Africa (in%) 160% 140% 120% 100% 80% 60% 40% 20% 0% 1993  1994  1995 1996  South Africa  1997  1998  1999  2000  Northern Africa (median)  2001  2002 2003  2004  2005  Sub-Saharan w/o SA (median)  Continuing this undoubtedly bleak picture, we see that the financial sector in sub-Saharan Africa has become neither more efficient, nor more competitive in recent years. Figure 5 displays the nominal rates at which banks lend money, as well as the rate they pay for deposits. Lending rates have stayed more or less constant from 1993 to 2005. Since inflation has decreased substantially over this time, the real interest rate that banks charge has actually increased. By contrast, the nominal deposit rate has decreased, so that the real deposit rate has been constant.
Such events might mean that the bank would have to suffer a loss although it thought it had protected itself. The conclusion is that the authorities must force the banks to assess whether the risk buyers have adequate financial and organisational capabilities and whether the legal arrangements are robust. As in many other countries, there is a strong tendency in the Swedish financial sector to move from “bricks and mortar”, such as having many branch offices, to providing their services through the Internet and telephone. About half of all payments of companies and physical persons in Sweden are made through the Internet and by phone. This has made it possible to increase bank efficiency in  6  BIS Review 111/2006  terms of staff numbers and branches. Each Swedish bank branch now services an average of 4,700 persons in the population compared to, for instance, only 1,900 being serviced by the German banks’ branches in Germany. Of course, each country is free to choose its own service level and may prefer a higher level, although it brings higher costs. Modern regulation In my view, Sweden abolished its old-fashioned regulations for good reasons. Using the banks for directed lending and for other non-commercial purposes may seem handy for the government, but entails large risks and costs.

Is bank consolidation a good or a bad development? The answer is not clear-cut. Sometimes the large resources in manpower and funds that are available in large banks are needed to develop and manage the complex activities which are part of modern banking. Large institutions have a better chance of diversifying their risks by entering into different activities and geographical areas; hence they become more stable. But on the other hand – if there is a problem in a large bank rather than in a  BIS Review 111/2006  3  small bank, this may threaten the overall financial stability and become a problem also for society at large. In my view, there is room for large as well as small institutions, which could be specialised in certain activities and services. Anyway, the composition of the banking sector is generally not for the authorities to decide by regulation as long as the institutions are safe and sound. An issue in geographically vast countries with remote villages such as India but also Sweden is how to ensure that people in remote and small villages also have access to basic financial services. We have tried to solve this in different ways. Internet and telephone banking improve access for some people and services. Payment orders may be sent through the ordinary mail. Another method might be to allow “authorised retail shops” to act as intermediaries for taking deposits and receiving simple loan applications on behalf of a bank.
Well the summit, or summits that are the cessation dates for Libor are now clearly on the horizon with the FCA announcing earlier in the year that Friday 31 December 2021 will be the final publication date for panel bank sterling, Japanese yen, Swiss franc and euro Libor rates along with a number of lesser used US dollar tenors. The remaining US dollar tenors will cease in mid-2023. These summits have been on the horizon for over a decade and have been well signposted but they are now clearly visible, but as any climber will tell you the hardest part of mountaineering is often the descent. It can often be more treacherous than the climb. So with the market having definitive dates for the end of Libor – I am going to focus my comments today on descending safely – remembering the important role benchmarks play in the financial system and why financial firms and borrowers would be well served in choosing the most robust alternative reference rates that meet their use case. Transition from Libor was always going to be challenging given its widespread use, but to those looking for an easy descent by substituting Libor for credit sensitive rates that do not address all of its fundamental weaknesses, they risk much of the good progress that has been made. While these rates may offer convenience as a short-term substitution, they present a range of complex longer term risks.

Let me focus on each of these three building blocks in turn, starting with banking. BIS central bankers’ speeches  1  I. Banking regulation and Basel III  Basel III, which constitutes the cornerstone of regulatory reform for the banking sector, provides for higher minimum capital requirements, better risk capture, a stricter definition of eligible capital elements with a particular focus on common shares and more transparency. The revised regulatory framework allows appropriate transition periods for financial institutions to adjust to the new standards, thereby ensuring a smooth phasing-in of the new regulatory requirements without compromising the nascent economic recovery. By 1 January 2015, the minimum capital requirements for common equity Tier 1 and total Tier 1 capital will gradually be raised up to a level of 4.5% and 6.0%, respectively. This gradual phasing-in of minimum requirements will be complemented by an appropriate observation period for the non-risk-based leverage ratio and the liquidity standards. The ESRB, together with the EBA, will play an important role in policy setting and implementation, with the former contributing to ensuring consistent implementation of the policy framework throughout the EU. We are just beginning that process. In addition to the necessary transposition into national or European law of the Basel III rules, there are two issues that still need to be addressed: systemically important financial institutions; and capturing the so-called shadow banking system within the regulatory framework. Work is in progress on systemically important financial institutions, in particular in the Financial Stability Board.
All of these changes have been designed to achieve a stronger, and more stable, financial system. I think it’s fair to say that the financial crisis made it very clear to all of us that stability was about more than just banks. It is also about the safety and soundness of a variety of interconnected – and oftentimes large – financial firms, regardless of charter or organizational type. Post-crisis, we have a much keener appreciation of how financial stability is dependent on both strong financial institutions and on the soundness of the connections and linkages between and across firms, whether those connections are other firms, financial utilities, or even the phone company. Recognizing these connections, the Dodd-Frank Act expanded the Federal Reserve’s authority for supervision. We now supervise a broader range of financial institutions than we did pre-crisis, like insurance companies, savings and loan holding companies and some market utilities. In the remainder of my remarks, I will discuss both the progress made and the remaining challenges for the firms we supervise in the context of three key overarching principles of our supervisory framework: •  First, resiliency. Financial institutions must be resilient to shocks. Significant efforts have been undertaken internationally and domestically to reduce the likelihood that a large, global bank ever reaches the point where it is at risk of failure. Resiliency is also critical for financial market utilities. Those organizations must have failsafes in place to ensure the smooth functioning of the critical operations they provide. •  Second, management.

Ensuring the safety and stability of banks and securities firms requires different regulations and skills from monitoring market conduct and taking enforcement actions. Ireland, France, Finland and others have retained bank supervision in an organisation closely related to the central bank but not in the central bank itself. In this way they benefit from the resources of the NCB and can make some cost savings, but avoid some of the arguments against locating supervision in the NCB itself. Other countries, among them Germany, have a stand-alone authority for financial regulation but the central bank maintains a role in the conduct of supervision by conducting most of the on-site inspections of banks. In this way the Bundesbank benefits from its vast network of regional branch offices and its knowledge of the local economy. Criteria for evaluating the organisation of supervision The choice of structure for supervision is not an end in itself but a means to achieve certain objectives. We should therefore analyse the conditions that must be in place to ensure good supervision. The first one is operational independence. There must be laws to prevent policy makers or financial market participants from trying to influence the operational decisions of the supervisor. Independence also implies sufficient and stable resources to attract skilled staff, to build good IT-systems, and to inspect supervised entities. The head of supervision should be independently appointed and should not be dismissed for other reasons than those provided in the law.
Combining these two facts, central bankers in emerging economies face the challenge of modeling the economy properly and react accordingly. In addition, I believe it is not an exaggeration to say that subsequent crises and reform processes have largely defined the economic landscape of emerging market economies in the last twenty years. Thus, uncertainty, which naturally exists in every economy, constitutes a real challenge for central bankers in many emerging economies because of their volatile and unpredictable structure. Dear guests, What we have been experiencing in the Turkish economy in the last five years can be classified as one of the clear examples of the impact of structural changes on an economy. First of all, after a thirty-year period of high and chronic inflation, inflation declined from 68.5 percent in 2001 to 10.26 percent in August 2006. This decline in inflation also made it possible to perform the currency reform at the beginning of 2005 and we dropped six zeros from our currency. Second, we experienced high growth rates while inflation was falling. I can say that the Turkish economy has left behind the boom-bust cycle of growth and has been growing for the last eighteen quarters consecutively. Additionally, the sources of growth have changed, as well. Third, the declining trend of the ratio of public debt to national income has contributed both to the fight against inflation and the relative stability in financial markets.

2  Donald L. Kohn, Vice Chairman, Board of Governors of the Federal Reserve System, Risk Management and Its Implications for Systemic Risk, before the Subcommittee on Securities, Insurance, and Investment, Committee on Banking, Housing, and Urban Affairs, United States Senate, June 19, 2008. 2  BIS Review 112/2010  supervising Lehman. The SEC continued to be the supervisor of the broker-dealers and their parents, including Lehman’s broker-dealer and its parent, Lehman Holdings. Lehman showed some signs of recovery during this period. It raised capital in June of 2008. But liquidity continued to be a significant disability. As part of its monitoring, the New York Fed, in conjunction with the SEC, conducted liquidity stress analyses of the investment banks, in part to evaluate their creditworthiness. Those analyses suggested that Lehman needed to improve its liquidity should the credit crisis intensify. Again, to Lehman’s credit, and in response to our analyses, Lehman took steps to, and did, improve its liquidity. At no time, however, did anyone at the New York Fed believe that Lehman had sufficient liquidity to withstand what was to come in September, events that Richard Fuld, Lehman’s former chief executive officer, has described as the “perfect storm.” 3 Accordingly, as has been well-documented in the press and in the comprehensive report by Anton Valukas, the Lehman Brothers’ bankruptcy examiner (the Valukas Report), senior Federal officials, including President Geithner, continually pressed Lehman to find workable solutions for its capital and liquidity problems from March to September 2008. Lehman executives pursued potential merger partners.
The capital adequacy ratio is high due to the facts that the government securities portfolio of the sector is high and the mentioned portfolio is evaluated in the zero percent risk weight category. The high capital adequacy ratio improves the resistance of the financial structure of the banking sector against shocks. The Financial Strength Index, which provides information about the soundness of the banking sector and which has been enhanced by the sub-index of interest rate risk compared to the previous Report, reached its highest level at the end of 2005. Despite the declines in profitability, capital adequacy and interest rate risk indices, the recovery in the asset quality and liquidity indices were effective on this development. The Financial Strength Index is observed to maintain almost the same level in the first quarter of 2006 as well. In order to measure the resistance of the banking sector against shocks, the development of credit and market risks were analyzed via stress tests and scenario analyses. It was found that a sufficient amount of capital was maintained for the assumed risks and the sector’s resistance against probable shocks was strong. Thus, in May 2006, significant market movements were experienced, which can also be perceived as tests of the resistance of the sector. It was observed that due to their strong capital structures, our banks were less affected by these activities compared to the past.

Moreover, some definitions are also derived from the concept of instability. In recent years, globalization of financial markets, increased richness in financial instruments, financial deepening and structural changes have caused the system to become much more complicated, thus enhancing the significance of financial stability. Any fluctuation that may occur in foreign markets may rapidly spread to other countries. As a matter of fact, recent developments in international financial markets were also reflected on Turkey. I can say with great pleasure that the strengthened financial structure of Turkey has minimized the unfavorable effects of recent fluctuations. This case, once again, has proven the significance of a sound financial system with risk sensitive policies, which is reinforced by effective monitoring and supervision. It is a widely known and accepted fact that the primary objective of central banks is to achieve price stability. Monetary policy is conducted via operations carried out in financial markets and its success depends on the flawless operation of financial institutions and markets. Therefore, financial stability is a sine qua non for effective monetary policy. Besides, the responsibility of central banks for the operation and supervision of payment systems oblige them to monitor financial stability. The fact that financial instability may pose serious risks to macroeconomic targets such as sustainable growth and price stability enhances the significance of financial stability for central banks.