samchain/econo-pairs-v1 huggingface dataset:
Hence, it is not surprising that both factors played a major role in bank loan availability, not only according to the assessment of banks in the bank lending survey, but also according to the assessment of firms in the new survey. However, in addition to such demand-related factors, firms are of the view that factors related to the supply of credit also played some role in the deterioration of bank loan availability. In their view, banks’ willingness to lend decreased, which may suggest that lending restrictions were in place. The situation in the largest euro area countries Let me now touch on some of the main results for the largest euro area countries. While overall developments are most important for the ECB’s monetary policy, it is also worth examining the considerable heterogeneity across different countries in the access to finance of SMEs in the first half of 2009. Regarding turnover and profit, SMEs in Germany and France were above the euro area average, in the sense that fewer SMEs reported a net deterioration. SMEs in Italy were around the euro area average, but those in Spain were far below the average. The economic situation is clearly reflected in SMEs’ assessment regarding the deterioration in the availability of external financing. Again, SMEs in Germany and France reported a smaller deterioration in the availability of bank loans than the euro area average.

Indeed, the current crisis may be the most severe seen since the 1930s. However, caution is warranted when interpreting these developments. Not only are deviations from average historical regularities observed, but the full impact of the recent severe crisis is still uncertain. Third, it is clear that both supply and demand factors have driven credit developments in the euro area so far, as confirmed by the evidence provided by the bank lending survey. Overall, our assessment is that credit developments have thus far been affected more strongly by factors associated with weak macroeconomic conditions, such as lower credit demand and a decrease in the average level of creditworthiness of potential borrowers. However, supplyside factors have also played a role and should not be underestimated. SMEs’ access to finance I will now turn to some more direct evidence on SMEs’ access to finance in the euro area provided by a recent ECB survey. This survey, which was conducted for the first time in June-July 2009, asks firms across the European Union about their financing conditions over the previous six months, meaning broadly the first half of 2009 in this case. This survey should help over time to fill the gap regarding information on the financing conditions of SMEs in the euro area, since quantitative statistics provide very little evidence on the actual situation.
There is a view that the euro should in some sense ‘belong’ to the participating countries and to them alone. If that view were to prevail it would point in the direction of one form of bureaucratic regulation or another - no doubt with a nod in the direction of monetary policy considerations as justification - which would damage the euro at least as much as it would harm the financial markets of the City. At the same time some of these same people argue for a successful, strong and widely-used euro that will take its proper place alongside the dollar and the yen as an international BIS Review 23/1998  -4trading and portfolio currency, and in that context they positively welcome the active participation of London. In the end I do not think there is very much choice. In a world of increasingly integrated capital markets and liberalised capital movements it is inconceivable that the international use of the euro could be unnaturally constrained. There will be active euro markets in the major financial centres of the world, including in London, which will be ready to trade in the whole range of euro wholesale financial products from day one. And that will be in the interest of financial activity right across Europe. Like trade in goods, trade in financial services is a positive sum game, so that London’s success is not a threat to other European financial centres.

With the build up of household debt in many countries, and releveraging of parts of the corporate sector, that would not have been a happy prospect. That, taking the industrialised world as a whole, monetary credibility has been sustained without aggressive policy action may owe something to the reasons for the increases in energy and other commodity prices – namely, the rise of China, India and other Asian economies which, as well as boosting global demand, has also been putting downward pressure on internationally traded goods prices. But, as the Bank has argued before, the way these relative price changes play out in terms of headline consumer price inflation depends on the overall path of aggregate nominal demand. And that in turn owes something to the behaviour of central banks. The textbook response to a cost shock is supposedly to allow the price level to rise, with the associated temporary pick up in inflation being just that – temporary. In the jargon of central banking, the “first round effects should be accommodated” in order to contain output volatility; but any second-round effects on inflation, through wage bargaining and medium-term inflation expectations, should of course be prevented. What of practice? Well, notwithstanding the rise in inflation in the UK over the past eighteen months, it is moot whether any of the major central banks did in fact fully accommodate the first-round effects of the oil price rise.
But we also have to ensure the compatibility of our institutions with those in the euro area and this is the essence of institutional convergence, a process where the central bank and its independence are 1/4  BIS central bankers' speeches  particularly important. While structural convergence focuses on adapting the structure of our economy to that of the euro area, real convergence, measured by GDP per capita (at PPS) as a percentage of euro area/EU average, is the best proxy for the development level of a nation. Romania has certainly come a long way in terms of economic convergence, a process whose inception is tied to the prospects of EU membership, witnessing a significant increase in per capita GDP as a share of the euro area average (based on PPS), from 31.3 percent in 2005 to 60.4 percent in 2018. Peer countries recorded a similar trend: Bulgaria went from about 33 percent to 47 percent, while Czechia, Hungary and Poland, which started from a more advanced level, added 11 to 23 percentage points to the same indicator during 2005–2018. However, this process is still far from completion in these non-euro New Member States. Talking about real convergence, practical experience has showed us that the Eurozone is not a “convergence club”, as its members did not necessarily improve their real convergence after joining it. The euro area is not a cosy place for economies with lagging competitiveness or rigid markets.

Three short-term concrete measures Now, I would like to share three initiatives that the Banque de France is striving to encourage: 1) Promoting a homogeneous approach to conducting penetration tests among various players in the financial sector. From this perspective, the TIBER-EU framework that the ECB provided earlier this year is a tool that would be helpful to implement in order to test the resilience of the financial system and especially the capacity of cross-border companies. In this respect, TIBER-EU will have to be rolled out at the national level, especially for testing market infrastructures, while taking into account specific local aspects and respecting core requirements in terms of responsibilities, risk management and the conduct of the tests. Through “coordinated frameworks” it will therefore be possible to achieve the much-needed harmonisation of practices and a mutual recognition of tests across the European Union. 2) Carrying out simulation exercises in the particular context of extreme but plausible cyber-attack scenarios, possibly including cross-border exercises. Against the backdrop of the rising number of cyber-attacks in the financial sector, there is a need to supplement on-site and off-site supervision, beyond merely conducting response exercises at domestic level, and possibly even across many countries at the same time. The G-7 has given priority to the enhancement of cross-border coordination in the event of a significant cyber incident: the Banque de France chairs the sub-group in charge of preparing and performing this exercise in 2019.
While such action can be tremendously effective under certain conditions, its limitations should be frankly recognized. Thus, through its control of money the Central Bank can assist, but by no means ensure, the achievement of the above objects. A monetary system that is stable and at the same time responsive to the needs of a growing country is a necessary, but not a sufficient condition of orderly economic development.” Sixth: Exter reports on the vital importance of harmonizing between the Government policies and the Central Bank policies. Here, Exter’s comments are unambiguous and far reaching. I quote: “There are, however, many important problems of monetary policy, especially those relating to fiscal policy, on which a central bank must necessarily work in close harmony with the government. On such problems, experience in many countries has shown that a central bank, with a degree of independence of the government proper, can make economic analyses and hold views which are more detached and objective than those of a government department. Many governments have learned to value and to use the sort of independent and objective advice on monetary and other aspects of economic policy which central banks have been able to give. On matters of vital interest to the state, however, it must be recognized that… it would be impossible for the Central Bank to adopt a policy or pursue a course of action contrary to the policy of the Government of the day.

They wrote to the newspapers and gave TV interviews stating that the initial successes were flukes and were not sustainable. They warned that the economy would return to the vicious cycle once again. They continued to support their arguments with many high sounding theories and hair-splitting formulas, and Dr. Jayasundera and I were ridiculed, and often described as the villains responsible for the impending disaster. We were regularly featured in some unflattering, but nevertheless enjoyable cartoons as well! But, today, Mr. Chairman, those critics are finding it increasingly difficult to sustain their criticism, in the face of the gradually emerging new equilibrium of the “virtuous cycle” that our new harmonized policy framework had been able to generate. Presently, even though a minority stubbornly refuse to see what is unfolding before their very own eyes, this new cycle has taken shape: Low inflation leading to real interest rates; real interest rates leading to enhanced savings; enhanced savings leading to a regular pipeline of investment; regular investment leading to lower debt levels; lower debt levels leading to sustained growth; and sustained growth once again leading to low inflation. What that tells us is that we have been able to break free from the previous vicious cycle, and have now placed the country on a more virtuous cycle! The challenge therefore would be to carefully nurture and guard this new equilibrium, knowing fully well that the disturbance in even one of those components could change that situation with adverse results.
To that end, my colleagues Paul Fisher and Sarah Breeden will be developing criteria for the structure and disclosures around the  1  In the UK, support operations can be effected under the Tripartite Memorandum of Understanding between the UK’s Tripartite authorities (HMT, FSA and Bank). 2  BIS Review 144/2009  securitisations that will be acceptable to us in steady state. The ECB is conducting a similar exercise. Since that may have some read across to the development of the market itself, I hope we can count on active industry collaboration as we undertake that work. Before moving on, I should pause for a moment on the Bank’s principle that our routinely available liquidity insurance facilities should be available only to commercial banks. Now, we do of course realise that, especially in the US, a number of other kinds of financial firm or vehicle have been given access to special liquidity assistance during this crisis: finance companies, money funds, securities dealers. But in terms of the reform agenda, to our mind this underlines the importance of ensuring that a shadow banking system, running big maturity mismatches but offering capital certainty and instant liquidity to savers, does not grow just beyond the perimeter of bank regulation. This is not an issue just in the US. It was, after all, the suspension of redemptions by European enhanced-return money funds that triggered the money market crisis in August 2007.

The second issue concerning resolution I want to say something about is the allocation of losses to creditors and to the official sector from support operations. The formal position varies between support for insured deposits and for other creditors. Deposit insurance, and risk-based premia Insured deposits are, of course, insured. It is often assumed that governments stand behind such schemes. But governments do not have pick up the final tab. Such schemes are ultimately paid for by the banks themselves. Whether schemes are funded or not, governments have a legal right to make recoveries from the residual banking industry over the succeeding years. There is, still, a question of the basis of the levy. This arises most clearly in a system which guarantees 100% repayment up to some meaningful amount (now £ in the UK). While it has many merits, complete cover affects the dynamics of the market place in a potentially unhelpful way. It makes it easier for banks to pay up for deposits. The implied signal that a bank offering a high return would be taking greater risk than others, as it would have to, does not matter to the depositors. They are covered, and so are induced to place their money wherever they can achieve the best returns. That is a recipe for imprudent risk taking. One possible way of addressing it would be to make such risk-taking banks pay a higher levy into the insurance scheme.
12  December  Figure 5 Real annual contributions to gross fixed capital formation GFCF (*) (percentage points)  16  16  12  12  8  8  4  4  0  0  -4  -4  -8  -8  -12  -12  -16  -16 09  10 11 Housing  12  13 Other  14  15  16 Mining  17  18 19 20 Non-mining  (*) For 2017 mining investment is estimated using information available from companies' uniform coded statistical report FECU. Housing investment uses household investment figures in the National Accounts by institutional sector. The GFCF component "Other" is treated as a residue. To report forecasts for 2018, 2019 and 2020, Central Bank forecasting models and sectoral sources are used, including the Corporation of Capital Goods' investment plans and survey. Source: Central Bank of Chile.

Figure 6 Real loans (1) (2) (annual change, percent) 25  Interest rates by type of loan (3) (index, 2002-2018=100) 25 200  Consumer  20  Commercial  20 175  Housing Commercial  15  200  15 150  175 150  Consumer  10  10 125  125  5  5  100  100  0  0  75  75 Vivienda (4)  -5  -5 02  05  08  11  14  50  17  50  02  05  08  11  14  17  (1) Real data built with CPI splicing of 2013 annual base (2) (3) Weighted average rates of all operations performed each Dashed horizontal lines show each series' average for the last 10 month. (4) Loans denominated in UFs. years. Source: Central Bank of Chile using SBIF data.
This was compounded by unforeseen changes in the credit market when banks began offering mortgage loans in competition with the state-owned Housing Financing Fund [HFF], after the latter announced a substantial increase in its loan-to-value ratio and mortgage amounts. Another unexpected event was the issue of króna denominated Eurobonds [glacier bonds], one sideeffect of which was to delay the transmission of the Central Bank’s policy rate hikes across the domestic yield curve. The background to these transactions is a global glut of savings which has led to exceptionally low international interest rates, coinciding with unusually high interest rates in Iceland. One consequence was to divert much of the monetary policy impact into the exchange rate channel. 1  The press release is posted on the Central Bank’s website, www.sedlabank.is  BIS Review 16/2007  1  Another more positive consequence was a surge in turnover in the domestic financial markets, which deepened them by bolstering price formation and enabled them to handle much larger trading volume smoothly, without significant price volatility. Policy rate changes are only passed through in full to domestic demand with a sizeable lag. In a small, open economy like Iceland, the impact is initially reflected in the exchange rate. Other things being equal, a rise in the policy rate causes a temporary appreciation of the króna, which squeezes the export and traded goods sectors and also channels demand out of the economy. The banks’ surprise entrance into the domestic mortgage market made it difficult for the Central Bank to respond effectively.

Ingimundur Friðriksson: Monetary policy and its implementation Speech by Mr Ingimundur Friðriksson, a Governor of the Central Bank of Iceland, at a Roundtable meeting held at the Central Bank of Iceland, Reykjavik, 20 February 2007. *  *  *  The interest rate decision on February 8, 2007 On Thursday, February 8 this year the Central Bank of Iceland announced that the Board of Governors had decided to leave the policy interest rate unchanged at 14.25%. A press release announcing the decision stated that inflation had slowed down and the short-term inflation outlook had improved beyond what was expected in the Central Bank’s most recent forecast. 1 However, inflation was still significantly in excess of target. The current interest rate might suffice to bring inflation to target within an acceptable period of time, but significant macroeconomic imbalances were still present that posed a risk of rising inflation. If the inflation outlook took a turn for the worse, the Central Bank would respond. Monetary policy and macroeconomic developments In the joint declaration by the Government of Iceland and the Central Bank of Iceland on March 27, 2001, the Bank was assigned the main objective of promoting price stability. This was defined as a rate of inflation, measured as the twelve-month increase in the CPI, of as close to 2½% as possible. Broadly speaking, central banks have only a single instrument, i.e. their policy interest rate, and can therefore only attain one macroeconomic goal in the long run.
Therefore, in his discussion, Mr. Ibrahimi emphasized that the Bank of Albania is prudentially analyzing the risks that we may be faced with in the future on maintaining price stability. He came out with the proposal of adopting a new inflation targeting regime that may be better adjusted to the new reality that the Bank of Albania and the Albanian Economy will encounter. However, simply the mechanic implementation of this new regime is not a sufficient condition for price stability. A number of other criteria must be met to increase the chances of its success, without adding pressure at the Bank’s reputation. A lot of such challenges were treated in details in other presentations at the conference. Among the most important ones, I would mention: Issues on central bank independence, which were referred to by most presenters, but I would point out here those presented by Mr. S. Rossi and Mr. L. Papi. The significant role of independence, not only on monetary policy, but also, particularly on the second pillar, that of financial sector stability and development came out clearly in these presentations. The clarity of Monetary Policy channels and enhancement of the effectiveness of its instruments is another important issue that requires particular attention, notwithstanding the current regime applied. The presentations on this issue by Ms. M. Peeters yesterday and by the experiences of various countries during today’s panel of the conference were very useful.

Ardian Fullani: Central banking in the time of integration Conclusions by Mr Ardian Fullani, Governor of the Bank of Albania, at the Fifth Conference of the Bank of Albania on “Central Banking in the Time of Integration”, Tirana, 25 March 2005. *  *  *  Dear friends! During two days of the Fifth Conference of the Bank of Albania on “Central Banking in time of integration”, having guests from the country and international institutions, personalities of academic and banking area, too many important ideas and suggestions emerged. The tight agenda did not allow detailed discussion on them; however, I hope that they will serve as starting points for further debates and analyses to sort out central bank challenges in the time of integration. It is somewhat difficult to make a concise summary of numerous papers presented in this conference. I would categorize the main conclusion into two large groups according to the main pillars of the central bank, that is the price stability and the financial sector stability. Concerning the first pillar, that of price stability, the discussions were focused mainly on the monetary policy effectiveness and central bank independence. To maintain stability is more difficult than to achieve it. Prof. Bolle indicated in a very excellent way that current price stability should be considered as fragile, which requires constant efforts, either by the BoA or by other institutions.