samchain/econo-pairs-v1 huggingface dataset:
This is particularly true in the euro area, where the gap between savings and investment is huge: the current account surplus reached EUR 350 billion on a yearly basis in August 2016,  2 which is more than 3% of GDP.i I believe that the solution to closing the gap is not to diminish savings, but to increase productive investment – and savings can be instrumental in doing so. Let me delve further into this issue by answering three questions: what is the evidence? What are the causes? What is the remedy? ** First, what evidence do we have? The total investment to GDP ratio offers a first glimpse of the current investment dearth (slide 4). The 2007-08 crisis caused the total investment ratio to fall sharply. In many countries, it has not yet returned to its pre-crisis level. This is particularly the case in the euro area, where the total investment ratio has dropped by around 3 points since the 2007 peak and has only slightly recovered since. By comparison, the pace of the recovery is significantly faster in the United States. Now, (slide 5) let’s dig deeper into the composition of this investment dearth: real estate and public investment have contributed to the post-crisis decline in total investment, but what matters the most for our economy is the contraction in business investment.

In net terms, these changes have contributed positively to the Bank’s net worth (dotted line in Figure 16), which had remained negative for many years due to the historical weight of Subordinated Debt, the effect of the exchange rate mismatch between assets and liabilities, and a negative rate differential (between local debt and international reserves). Not only does the higher profitability of domestic assets contribute to close this gap, but the reduction of the Bank’s long-term debt stock (through repurchases) will reduce the financial burden for the next years. In practice, while greater returns are being received on local assets, on liabilities the Bank is paying ever lower rates, a situation that will continue for a long period of time. In addition, the peso has depreciated due to the mismatch between a high proportion of foreign currency assets (reserves) and local currency liabilities (bonds and monetary base). These factors combined have generated a positive value of the net worth for the first time in many years 7, which in previous projections was only foreseen in 2028. With the ups and downs of the currency in the short term, net worth will fluctuate around its current values during the next few years, to settle in positive numbers towards the end of 2025. These long-term projections are of a dynamic nature and are constantly reassessed, including the desired level of reserves.
Semantic data and semantic search techniques have a rich pedigree in other social sciences, such as sociology and psychology. But, so far, their application in 43  economics and finance has been relatively limited. Like other social sciences, economics and finance involves human choice. And we know humans often rely on heuristics or stories, rather than statistics, when making sense of the world and when making decisions. Capturing these stories, semantically, is thus important for understanding human behaviour and decisions. As an example, the Bank has recently begun looking at the language it uses when communicating externally, whether to financial firms or the public at large. For example, Michael McMahon at the University of Oxford and I have recently assessed how the simplification of the Monetary Policy Committee’s (MPC) language in 44  the Inflation Report at the end of last year boosted public understanding of monetary policy messages. A second example considers a far less well-explored aspect of the Bank’s decision-making – its supervision 45  of financial firms. This draws on a text-based analysis of the Bank’s confidential Periodic Summary  Meeting (PSM) letters to financial firms. These are arguably the single most important letters the Prudential Regulation Authority (PRA) regularly sends to firms, setting out supervisors’ assessment of firms’ risks and requested actions to mitigate these risks. Using a machine learning technique called random forests, the research analyses these letters and extracts data on their tone and content. This type of analysis has a number of policy applications.

The PSD has provided the Bank with a new, higher resolution lens on household and housing market behaviour. For example, in 2014 the PSD was used by the Bank’s Financial Policy Committee (FPC) to help inform and calibrate its decisions on setting macro-prudential restrictions on high loan-to-income mortgages to UK households. 30  Since then, we have used these data to track the characteristics of existing mortgagors with 31  high loan-to-income and high loan-to-value mortgages over time. 32  PSD data have been used to understand  And they have also been used to calibrate a multi-sector,  pricing decisions in the UK housing market. 33  agent-based model of the UK housing market. The Bank and the ONS have over recent years been developing a more comprehensive set of data on flows of funds between institutions. The hope is that these data help in tracking not only portfolio shifts but also how these might affect financial markets and the wider economy. For example, do portfolio reallocations by 34  institutional investors affect asset markets and have knock-on effects for spending? Answering questions  35  like this helps, for example, when assessing the efficacy of quantitative easing. 29  https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/vatturnoverinitialresearchanalysisuk/december June 2014 Financial Stability Report. 31 Chakraborty, Gimpelewicz and Uluc (2017). 32 Bracke and Tenreyro (2016) and Benetton, Bracke and Garbarino (2018). 33 Baptista et al (2016). 34 Bank of England and Procyclicality Working Group (2014).
The Basel countercyclical capital buffer is the primary supervisory tool to implement regulatory capital requirements that vary over the credit cycle, but stress testing has cyclical elements as well. Both stress scenario design and the starting condition of banks’ balance sheets – the credit characteristics of the loan and securities portfolios, the extent of currently non-performing loans, exposures from trading and counterparty positions – can result in differences in stress test severity over the cycle. What is the optimal degree of cyclicality for the stress testing regime? How does cyclicality of stress testing interact with other cyclical elements, such as the countercyclical capital buffer and the incoming current expected credit loss (CECL) approach to loan loss provisioning? How should the piece fit together? Finally, one concern that has been raised about the Federal Reserve’s approach to stress testing and integration into the CCAR program is that of “model monoculture” – the idea that banks will be incented to develop models that mimic the Fed’s models rather than developing their own independent approaches.17 Significant commonality in modeling approaches in the banking system could result in banks adopting similar risk exposures and hedging techniques, exposing the sector to additional systemic risk and potential future instability. How do we measure this risk? What should we think about differences (and similarities) between bank-generated and supervisory stress test results, both for a particular stress test cycle and over time?

The ECB is obliged and can be trusted to always fulfil its role and deliver on its Treaty mandate, and this is above all to secure price stability in the euro area as a whole, which consists of 17 countries. And there are clear limits to what the central bank is entitled or even able to do. It is impossible for the ECB to provide guarantees or assurances concerning future funding amounts or interest rates over the medium term. Certain tasks should and can in Europe only be dealt with by the Member States, and not by the ECB or the Central Bank of Ireland. Our common objective therefore must be to reduce over time the reliance of Irish banks on central bank funding and in particular on the emergency liquidity assistance. The Irish government has the capacity to further consolidate and implement the necessary reforms, so that there will be no lingering doubts about the sustainability of government debt. I am thus confident that Ireland will continue to fully implement the necessary adjustment and reforms, and that on this basis, Member States will continue to show solidarity towards Ireland. I understand that Minister Noonan has said that champagne corks will be popped on the night the Troika leaves Dublin. As long as Ireland continues to implement fully its programme and preserves its credibility as a State that honours all its obligations, I think that day will come in the not too long future, at the end of this programme in 2013.
Krzysztof Rybiński: Outlook for Poland’s economic and financial situation Speech by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the Annual General Meeting of the Association of Chartered Certified Accountants (ACCA), Warsaw, 18 May 2006. *  *  *  Ladies and Gentlemen, Thank you for your invitation to address the Annual General Meeting of the ACCA. Today I am going to speak about prospects of the Polish economy with a special emphasis on the financial situation. In short, I can say that economic prospects of the Polish economy are good. Let me justify this conclusion by presenting four dimensions of future prospects of the Polish economy: global outlook, financial markets, domestic outlook and public finances prospects. Global outlook According to recent IMF and European Commission forecasts 1 , 2 , the global economy, after recording a growth of above 5 percent in 2004, slowed to an estimated 4.6-4.8 percent in 2005 and is expected to grow at a similar or marginally higher rate this year. Forecasts for 2007 call for a global growth moderation by 0.2-0.3%. If the forecasts come true, the global conditions will remain favorable and conducive to robust growth of the Polish economy.

The NBP projection released in April - which assumes unchanged interest rates at 4 percent - points to economic growth within the range of 4.5 to 5.5 percent in the years 2006-2008 and inflation gradually returning to 2.5 percent target sometime in 2008. The statement issued after the April Monetary Policy meeting stated, and I quote 14 : “The Council maintains its assessment that with large probability inflation will in 2006 Q2 and maybe Q3 remain below the inflation target mainly due to short-term factors. If the developments in the economy were consistent with the April NBP inflation projection, then the current level of the reference rate of the central bank would support a gradual return of inflation to the target over the projection horizon and would also be conducive to keeping economic growth at a pace, which is consistent with the potential output growth, determined by the structural features of the Polish economy. The fact that inflation and core inflation has stayed below the previous forecasts for a relatively long period may be an indication that the impact of the factors which may slow down the returning of inflation to the target in relation to that accounted for in the projection is stronger than previously assumed.
Basel II’s success in promoting improvements in risk management, and thereby in promoting financial stability, depends on the support of a broad range of other mechanisms and measures in the banking and supervisory structure. I’d like to turn now to the second part of my remarks and offer some views on the elements that comprise a strong foundation, not just for Basel II, but also for safety and soundness more broadly. Basel II draws heavily on the well-known and well-tested structure of the 1988 Accord. It retains its definition of capital and its notion that capital requirements should reflect the risk of an asset. The Standardised Approach to credit risk in Basel II represents a modest revision of the existing Accord. And in some jurisdictions and for some banking organisations - especially smaller banks that engage in more traditional, lower-risk businesses - the 1988 Accord may remain a relevant standard. So supervisors need not abandon the 1988 Accord in the near future. However, we have found that as banks engage in more advanced activities, the simplicity of the 1988 Accord quickly becomes a liability. Because it is a static rule, it is falling behind the pace of innovation and advances in technology, telecommunications, and risk measurement and management practices. Basel II provides banks and supervisors with a remedy, one that represents a more flexible and forward-looking approach to capital supervision. In that light, the question I hear from many supervisors is what else can they do to prepare for a future move toward Basel II?

It is important that SIAS continues and builds upon the good work it has done to-date. As they grow in financial sophistication, more Singaporeans are taking to investing. At the same time, the investment landscape is becoming increasingly complex and challenging. The theme for today’s conference is timely – the future of investing. I will not try to predict that future or, worse still, offer tips on what to invest in. There are many experts that SIAS has gathered, who can do that better than I. Instead, I want to talk about how we might achieve wellness in investment, taking into account some broad trends and how MAS is working with the financial industry to create the investment ecosystem to make possible this wellness. As with achieving physical and mental well-being, may I suggest that achieving wellness in investment comprises three things: eating well; sleeping well; and feeling well. Eating well is about investing for good financial returns. 1/7  BIS central bankers' speeches  While public markets will continue to be the mainstay of investing, the search for yield will inevitably take us to private markets. The rise of private markets has been a structural trend for about two decades now. Identifying opportunities in private markets while minimising risk will be a key theme in the future of investing. Sleeping well is about securing adequacy in retirement. Demographics is one of the few trends we can predict with a degree of certainty.
To-date, we have not seen an increase in retrenchments in the financial services or FinTech sectors. Going into the second half, there could potentially be some net job loss, but this is not likely to be large. It is encouraging that some major financial institutions have committed not to shed any workers due to the COVID-19 crisis. For the year as a whole, MAS expects the financial services sector to still be a net creator of jobs, albeit much lower than in previous years. We are particularly pleased that the financial services sector is on track to meeting both the value-added and employment targets set by the 5-year Industry Transformation Map (ITM) for 2016–2020. If the financial sector stays above 0% growth in the second half of this year, it will achieve the ITM target of 4.3% annual growth in value-added [6] over 2016–2020. The four-year average growth rate of value-added in financial services for 2016–2019 is already 4.8% per annum. Likewise, unless there are large-scale job losses in the second half, the financial services and FinTech sectors will comfortably meet the ITM target of 4,000 jobs per annum. The four-year average net job growth in financial services and FinTech for 2016–2019 is already 4,900 per year. 10 / 15  BIS central bankers' speeches  Let me now talk about MAS’ three priorities for developing Singapore as a leading global financial centre amid the COVID-19 crisis: skills, technology, sustainability.

I am sure that this dialogue that we have initiated today will result in a fruitful exchange of views on this important subject and will help to consolidate our implementation plans on this long journey that we have all commenced. I therefore wish you all a very stimulating and useful discussion and a very successful seminar. Thank you. 2  BIS Review 84/2005
These currently total 14½% of GDP, after having been more than halved through auctions, bilateral deals and nominal GDP growth since capital controls were introduced. 4  BIS central bankers’ speeches  Therefore, potential capital outflows amounting to almost 40% of GDP might have sought a speedy exit if capital controls had been lifted overnight. This would have had serious consequences for economic and financial stability in Iceland. This was not going to be allowed to happen and, as a matter of fact, the population has been promised solutions entailing no negative effect on the exchange rate. A co-operative solution vis-à-vis the failed bank’s estates that allows them to go into composition and pay out to creditors by fulfilling so-called stability criteria has been decided and is being implemented. Had that not been forthcoming, we would have had to impose a one-off stability tax of around 31% to deal with the externality, as we could no longer hold the Icelandic nation hostage to the situation. The stability criteria are these: the estates pay stability contributions by transferring a significant part of their króna assets to the government, lengthen the maturity of current FX financing of domestic banks, repay government and central bank support and debt. Taken together, these measures fully mitigate the potential negative balance of payments effect from unwinding the estates.

2 Gerald P. Dwyer Jr., Wildcat Banking, Banking Panics, and Free Banking in the  United States, Economic Review 6 (FRB Atlanta Dec. 1996) (hereinafter “Dwyer”). 3 Dwyer 4. 4 Dwyer 6. 5 Dwyer fn. 13. 6 Dwyer 6. 7 Dwyer 6. 8 Dwyer 2. 9 Arthur A. Rolnick & Warren E. Weber, Free Banking, Wildcat Banking, and  Shinplasters, Quarterly Review 13 (FRB Minn. Fall 1982) (hereinafter “Rolnick”). 10 Dwyer 7. 11 Dwyer 5. 12 Rolnick 16. Specifically, the states varied on whether security for the notes would  be measured in par or market value. 13 Rosa Lastra, Central Bank and Bank Regulation, 204 (Sept. 1991) (Ph.D. thesis  London School of Economics) (on file with author DM # 172574). 14 John Sherman, Recollections of Forty Years 237 (Werner Co. 1896) available  at https://archive.org/details/johnshermansreco00sher/page/236. 15 Milton Friedman & Anna Jacobson Schwartz, A Monetary History of the United  States, 1867-1960 17, 21 (1963) (hereinafter “Friedman”). 16 See e.g., 12 USC §26 (Comptroller to determine if institution is engaged in the  business of banking). 17 See Dwyer 16. 18 In 1935, the Treasury redeemed all debt that backed national bank notes. The  Glass-Steagall Act, passed in 1933 in the midst of the Great Depression, also shifted the calculus for holders of national bank notes. The act introduced deposit insurance and divided commercial and investment banking, each of which served to remove disincentives against holding deposits with banks.
I will turn to the question of three of the new expectations on central banks, that we at the ECB are currently discussing as part of the Strategic Review rightly initiated by Christine Lagarde. I. Inflation remains the principal edifice of the Central Bank's Construct I.A. The past: had inflation disappeared? When it comes to inflation, the last decade left economists and central bankers confronting a number of puzzles. The Great recession of 2008-09 exhibited a “missing deflation”, when the important contraction of output was not associated with a consequent fall of prices. The recent years, on the contrary, were characterised as a period of “missing inflation”. The vanishing level of inflation has been a pervasive and global phenomenon. It can be grasped with a simple comparison of the inflation rates in the first and the second decades of the 21st century. Page 2 sur 9  The inflation rate of the Euro area was 2.1% on average from 1999 − when the euro was created − to 2007 − when the financial crisis started. It dropped to 1.0% over the period 2013−19 following the double dip recession and until the current pandemic. At more than one percentage point, this is a substantial decline between the two periods. Headline inflation in the US experienced a similar decline, having dropped from 2.7% to 1.6% between the two periods. In the early 2000s, the euro area’s inflation rate was in line with the ECB’s price stability mandate, defined as a target of “below but close to 2%”.

Jean Monnet already recognised this in 1976, when he wrote in his memoirs: “Europe will be forged in crises and it will be the sum of the solutions adopted for those crises.” 19 As far as Switzerland is concerned, I am optimistic that it, too, will overcome the formidable challenges it faces. As with most countries, Switzerland benefited greatly from globalisation and from opening up its economy. Thanks to its flexibility and creativity, the Swiss economy is well placed to remain internationally competitive. But the Swiss people must recognise that the world does not stand still. In order to preserve and enhance our high standard of living, we must remain extremely flexible in every respect. This is where the real economy, in particular, faces a challenge: ongoing innovation and qualified human capital are of the utmost importance in a high-wage country such as Switzerland. Both of these factors will enable our companies to continue to bring successful new products onto the world market, many of which we aren’t even able to imagine today. Monetary policy can generate neither innovation nor growth. Nonetheless, the Swiss National Bank’s conduct of monetary policy is relevant for Switzerland as a business location. After all, the innovative capabilities of a country also rely on a favourable and stable business environment. The SNB remains firmly focused on maintaining price stability; a task, which is consistent neither with deflation nor with inflation.