samchain/econo-pairs-v1 huggingface dataset:
Thus, beyond any minor adjustments, which depend on the evolution of the business cycle, it is clear that both monetary and fiscal policies have already done their job and there is not much room for either one to do more. 6  BIS central bankers’ speeches  Thus, to resume growth, we need to create the environment that allows investment to recover, resource allocation to gain efficiency and productivity to improve. One key element of this task is for households and businesses to regain confidence in that the economy will provide the proper environment to carry out their projects. Sadly, and against our predictions, this is taking longer than we thought. For our part, we will continue to do our best efforts to smooth the business cycle, but always with price stability as the primary objective. This is why, as I mentioned earlier, inflation remains our primary concern, and although it has dropped as we projected, it is still high. In that context, as has been our assessment since late last year, we see no room for further cuts to the monetary policy rate. And while the current conditions make it more likely that the gradual withdrawal of the monetary stimulus will take place in the first months of 2016, I want to emphasize that it will depend on actual and inflation projected for the months ahead behaving in line with our estimates.

For an overview of environmental, social and governance investment principles, including negative screening practices, see Boffo, R. and Patalano, R. (2020), “ESG Investing: Practices, Progress and Challenges”, OECD, Paris. 39. See Schoenmaker, D. (2021), “Greening monetary policy”, Climate Policy, Vol. 21, No 4, January. 40. Although the ECB’s private sector asset portfolio is sizable relative to other central banks (the Bank of England’s CBPS portfolio currently totals approximately GBP 20 billion whereas the size of the ECB’s CSPP portfolio amounts to EUR 278 billion at amortised cost as at 4 June 2021), the ECB’s CSPP portfolio is far smaller than the PSPP portfolio, which stands at EUR 2.4 trillion at amortised cost as at 4 June 2021. 41. Evidence regarding the capacity of the market to correctly price green bonds is currently still mixed. Some papers point to the existence of a positive carbon premium whereby investors demand a compensation for holding securities issued by carbon-intensive companies. See, for example, Alessi, L., Ossola, E. and Panzica, R. (2019), “The Greenium matters: greenhouse gas emissions, environmental disclosures, and stock prices,” Working Papers in Economics and Finance, No 2019-12, Joint Research Centre, European Commission. However, when a premium exists, it seems to only reflect the transition policy risk. See Van der Ploeg, F. (2020). “Macro-financial implications of climate change and the carbon transition”. ECB. In addition, some other papers find either a negative premium or no or little premium. See, for example, Tang, D.Y. and Zhang, Y.
Case Study 6: Stabilization measures of 2012 Mr. Chairman, the next illustration I want to present to you is one of the clearest examples of policy co-ordination between fiscal and monetary policy. That was the stabilization package of 2012, which was introduced by the MoF and the CB from February to April 2012, in response to the pressure on the balance of payments, high imports, high credit growth and pressure on the exchange rate. As we all know, to deal with that growing tension, the Central Bank increased the policy interest rates, allowed the exchange rate to be more flexible and placed a 18% credit ceiling upon banks’ lending. In tandem, the Government imposed higher duties on the import of vehicles and a few other commodities, and increased the administratively determined prices of petroleum products. These measures were implemented in a carefully planned out and logical sequence. As a consequence, the desired stability within the economy was achieved quickly, with the Balance of Payments returning to positive territory, and the exchange rate stabilizing. In fact, this new situation enabled the Monetary Board to relax the monetary policy tightening cycle that commenced in February 2012, as early as in December 2012. This joint exercise therefore shows how quickly and effectively, a coordinated fiscal and monetary policy could deliver results, instead of the implementation of stand-alone monetary or fiscal policies, which usually take a long time to impact the economy, thus resulting in to the entire economy having to suffer from tight policies for longer periods of time.

We therefore consider risks to price stability broadly balanced and mainly relating to the outlook for economic activity, higher than expected oil prices, as well as higher than expected indirect taxation and administered prices. •  Since the beginning of the year, financial conditions have continued to improve gradually with corporate bond spreads, stock market volatility, money market term spreads and government bond spreads declining. Is this improvement genuine or is it due to policy measures by governments and central banks? If the latter was true this would be a classical case of moral hazard. These measures cannot be sustained for ever. In this sense, there is no room for complacency. There is rather the risk of a reemergence of moral hazard once temporary measures by governments and central banks are perceived by financial market participants as permanent. •  Where do we stand with financial sector adjustment? Several estimates have been made, both by private and public sector institutions, of the potential losses to be absorbed by the financial system as a consequence of the crisis. Let me illustrate the situation with some key figures: for euro area financial institutions, we estimate the total losses over the period 2007-2010 to be around USD 650 bn. Write-downs on securities have so far amounted to over USD 200 billion. Banks have provisioned and written off over USD 150 bn of their loan exposure. Therefore we estimate further potential losses to be a little below USD 300 bn.
15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  One key difference from the global financial crisis is the state of the banking system. A decade ago, its impairment led to slow growth in bank deposits and lending. With the financial system now repaired, bank intermediation has increased sharply during this time’s crisis. Supported by exceptional monetary and fiscal support, bank deposits and lending have grown rapidly. Annual growth of global M3 is currently running at almost 20% (Chart 13), its highest level since 1988. Chart 13: Growth in Global M3 (YoY)  per cent  20 18 16 14 12 10 8 6 4 2  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  0  Source: OECD. Notes: Based on total OECD aggregate. The same is true in the UK, where annual growth of commercial bank money (M4) currently stands at a little over 14%. Annual growth of M4 lending is more modest, at just over 4%, though this is still around 2 percentage points above its average over the past decade. It has been buoyed by the support packages extended to UK companies, with around 1.5 million business loans made totalling around £ billion. A decade ago, movements in broad money broadly tracked movements in money GDP – the velocity of circulation of broad money was roughly stable.

These include the rise of global trade and value chains which offer access to lower-cost inputs, lowering the price of final imported goods and services 8; demographic trends which have added to the economy’s labour supply, lowering wage costs 9; and increased automation and flexibility in the jobs market holding down wage growth and potentially flattening Phillips curves.10 Chart 7: UK GDP after the Great Depression and Great Recession  50 Cumulative percent change 40 30 20 10 0  Years 0  -10  t+1 t+2 t+3 t+4 t+5 t+6 t+7 t+8 t+9 t+10 t+11 t+12 The Great Depression  The Great Recession  Source: ONS and Bank calculations. These structural factors would, in theory, be expected to cause a downward shift in the price level rather than in the rate of inflation. But because these factors have played out over a lengthy period, they may have shown up in a persistent drag on measured inflation rates. For example, Faijgelbaum and Khandelwal (2016) estimate that global trade integration has lowered the price of the typical household consumption basket by between a quarter and two-thirds – a huge effect. This subdued pattern for global inflation, driven by demand and supply-side factors, has occurred against a backdrop of global monetary policies remaining highly accommodative, itself in part a response to these disinflationary forces. For example, in the aftermath of the global financial crisis, central banks lowered  8  Johnson (2018). Goodhart and Pradhan (2020). 10 Haldane (2018).
According to most estimates, it is expected to remain at a historically low level for the foreseeable future. Since it determines what policy rates the central banks can set in the longer term, this means that in a few years’ time, when we have overcome today’s high inflation, we may well be back in a situation where monetary policy once again has to deal with policy rates at the lower bound and inflation that is too low (Figure 3).5 One possible caveat here is linked to the fact that the West has for a long time been dependent on Russian energy and Chinese markets. Not least the pandemic and the war in Ukraine have shown that this dependence has made many companies and business operations vulnerable. It has therefore become increasingly common to think about how the dependence can be reduced and production made more robust. One way of doing this is through so-called reshoring, that is, moving businesses closer to home again. In that case, the globalisation that has contributed to dampening inflation over the last few decades would begin to roll back. This could mean that the ‘headwind’ that inflation has had for a long time is turned into a ‘tailwind’. Although the global real equilibrium rate would remain low in the future, it does not need to become as common as it has been so far that central banks’ policy rates are at the lower bound.

If the Monetary Union – now bolstered by the Banking Union – is to remain one of the great landmarks on the road to European union, the support for it needs to be renewed and strengthened. And this naturally cannot be achieved by monetary policy, or even, I would say, by economic policy, alone. Governments must press ahead with the reforms needed to make the economies of the European Monetary Union more flexible and productive, thereby spurring innovation and investment. Thank you very much. 4  BIS central bankers’ speeches
Nonetheless growing digitalization also entails the emergence of new competitors and value propositions that will likely erode their status quo in the industry. Technology certainly holds a significant transformational power enabling promising developments but, per se, technology is by no means the ultimate answer to existing risks in economics and finance, as my colleague Sir Jon Cunliffe recently pointed out 2. Against this light, it makes more sense for central banks to consider the need for a speedy action. This action need to be based on the exploration of a wide set of tools that help to ensure the safeguarding of financial stability as well as the preservation of the critical role of money in the economy. While many responses are indeed possible, there’s no denying that introducing a new form of public money appears to be gaining traction, at least from a more conceptual point of view. In fact, one of the reasons why we, at the Eurosystem, are looking into CBDCs in depth is to evaluate their potential to ensure easy access to central bank money in the digital age as a foundation of our currency. In other words, a digital euro is seen as the best way to secure that public money remains an anchor for the whole payment system and, in achieving this goal, that trust in both private and public money is strengthened while further protecting the currency’s function as a single unit of account. Deploying a digital euro can also be strategically important in order to preserve our monetary autonomy.

Up to now payments for over 14 thousand businesses and over 93 thousand households, totalling more than BGN 9 billion, have been suspended , which really and considerably eases the financial conditions during the hardest time of the crisis. The crisis has moved the external financing conditions issue to the top of the agenda. You know that the crisis triggered the accumulation of deficits which must be financed and the required financial buffers must be maintained. Therefore, we had to give an additional signal to markets and investors that Bulgaria stays stable in the crisis in terms of its financial position and its 1/2  BIS central bankers' speeches  monetary regime. This signal was given with the EUR 2 billion swap line set up between the European Central Bank and the Bulgarian National Bank, and it has been read unequivocally as a positive one by markets, rating agencies, and investors alike. I want to point out one very important thing – the conclusion about Bulgaria’s strong financial position remains valid now, despite the developments in the last months. A drastic change of this direction would be a mistake with serious repercussions. All measures so far pursued in relation to the banking sector, which I believe were successful and timely, do not, in any way, diminish our concern of what is happening and is going to happen in the coming months.
We are assured that monetary policy framework remains effective and the current policy stance remains appropriate. Monetary policy in Singapore has been tight for more than two years now. Since April 2010, MAS has put in place a modest and gradual appreciation path for the trade-weighted Singapore dollar policy band. In April this year, MAS tightened monetary policy by increasing the slope of the policy band further. This exchange rate policy stance has had a restraining effect on inflation through two channels: first, by filtering import prices; and second, by moderating economic activity. First, a stronger exchange rate has helped to filter import prices. Take, for instance, oil prices. Since April 2010, global oil prices have risen by an average of 15% year-on-year, but domestic petrol pump prices have only increased by 8%, reflecting the effects of the exchange rate. Second, the stronger Singapore dollar has had a restraining effect on activity in the economy, especially through the export-oriented sectors. This has helped to dampen business cost pressures. These two effects have been quite significant in helping to dampen inflation. Since April 2010, the trade-weighted Singapore Dollar has appreciated by 3.3% per annum, reflecting MAS’ tighter monetary policy stance. Our simulations show that if this appreciation had not taken place, CPI-All Items inflation this year would have been 6.5–7.0%, rather than the 4.0–4.5% we have projected. But there is a limit to how far we can use exchange rate policy to contain inflation.

These include: •  Stable macroeconomic environment as reflected in single digit inflation, reduction in lending interest rates and a stable exchange rates  •  Amendments/Harmonisation of financial sector legislation such as the Development Bank of Zambia (DBZ) Act, the National Savings and Credit Act (NSCA), the Pensions and Insurance Act, the Building Societies Act (BSA) and the Banking and Financial Services Act (BFSA) in 2005. •  Establishment of a credit reference bureau in 2006; and Promulgation of microfinance regulations in 2006. Honourable Minster – The production of market knowledge on the supply and demand for financial services in Zambia was identified as one of the priority areas under the FSDP. In this regard, FinMark Trust of South Africa was contracted by our cooperating partners the Swedish International Development Agency (Sida) and the United Kingdom’s Department for International Development (DFID) to undertake this important activity and subsequently, the FinScope Zambia 2005 Survey, a comprehensive demand-side survey of consumer interactions with financial markets in Zambia, was conducted in November 2005. The main objective of the survey was to measure access to and use of financial services, along with how people manage their finances and what drives their financial behaviour. Honourable Minister and Invited Guests - This morning we are here to share with you, the findings of the FinScope Zambia 2005 Survey. These findings are expected to play an important role in profiling demand for financial services in Zambia.
And under the related Certification Regime, firms must also annually assess and certify the fitness and propriety of a wide range of risk-taking employees. To help meet all of these expectations, Senior Managers can draw on market standards in order to explain and promote good practice, assess their risk-takers, and build a strong culture. 9  See the BIS Press Release on the FX Global Code , available at: https://www.bis.org/press/p170525.htm. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  There are encouraging signs that the SMR is already beginning to make a difference. For firms, it is clarifying and improving governance, accountability and decision-making processes. Senior Managers are increasingly focusing on building cultures of risk awareness, openness and ethical behaviour. In the words of one chair “responsibility for culture has moved to the top of my agenda.”  10  For supervisors, the regime is helping identify weaknesses in governance and accountability, and to assess the fitness and propriety of senior managers and others in positions of responsibility, and whether the firm has an appropriate culture, and is encouraging the necessary changes. In the first instance, consistent or widespread shortcomings would have consequences for compensation. More persistent failings could increase the capital that must be set aside for operational risks, and in the extreme, could influence our judgements regarding the fitness and propriety of senior managers. Over time, market codes may become more firmly embedded still, something on which the FCA is currently consulting.

This year, the government has been unable to make its debt payments on schedule and has lost access to the public debt markets. The pressures that culminated in these missed payments have been building for some time. This is an issue that we have been focused on for several years. We have published a number of reports in order to help highlight challenges and opportunities, to inform the discussion around solutions. I have visited Puerto Rico on several occasions, and had the opportunity to talk to residents and hear about the challenges they face. As an outgrowth of one of these trips – taken in 2011 – I commissioned my staff to produce a report on the competitiveness of the Island’s economy. We released this report in 2012, and it served, I believe, a useful purpose in providing technical analysis and identifying some important issues deserving of policy attention. Over the following two years, the Island’s fiscal problems worsened. Consequently, in 2014 we published an update to the initial report – this time focusing on the Island’s public finances – and again offering suggestions for consideration. In June, Congress and the Obama Administration took action providing a framework to help address the Commonwealth’s fiscal crisis. Part of that agreement re-emphasized that the Commonwealth’s fiscal sustainability depends crucially on an expanding economy.
Therefore it seems reasonable to  3  BIS Review 43/2000  argue that transition economies should pay special attention to formal education, and other forms of training and research. As the empirical evidence suggests (Flanagan, 1998), return to schooling began to rise rapidly during the transition. Relatively soon, they approximated those in many market economies. Under central planning, the main distortions in human capital formation were the overvaluation of vocational training and the undervaluing of university education. However, the transition process has quickly started to correct this shortcoming of socialism. Formal schooling need not be the main factor in developing human capital. Let me just mention that according to Lucas (1993), the most central feature of human capital accumulation for growth is learning on the job (learning by doing). For this to happen, we need both managers and workers to be constantly exposed to new challenges, to move up on the “quality ladder”. In the globalized world of today it seems that one of the best ways to be exposed to new challenges is by exporting. An old Latin saying could be paraphrased into: “Exportare necesse est, vivere non necesse est”.2 By opening up the economy, we are promoting human capital, which in turn is essential to growth. A similar approach can be used to argue for more foreign direct investments (FDI) in transition economies. FDIs bring not only physical capital, but: new organization, know-how, etc which then increase “domestic” human capital.

Even in the very difficult moments in Croatia’s history during periods of international political isolation, we managed to have a very honest and professional relationship, which today I respect even more than I did then. For me the highlight in our relationship happened last year when Mr de Larosière accepted the invitation to give the keynote speech at the traditional Vth Dubrovnik Conference on Transition Economies organised by the Croatian National Bank. Definitely, his knowledge, experience and insight into the transition process were invaluable to the Conference. The title of his lecture was non-pretentious (like the man himself): “Transition Economies”, but his messages were very strong and deep (again, like Mr de Larosière himself). In his concluding remarks Mr de Larosière, among other things, had the courage to point out some of the negative human facets of transition, for example: “… in some countries the human costs of transition have been high, for instance in terms of male life expectancy ..., growing inequalities of income and increased poverty.” (de Larosière, 1999, p.10). Of course, there are many positive human sides to transition. What I would like to do today is neither present to you a comprehensive survey of transition as there are numerous articles entitled: “Ten years of transition …”, nor give some new empirical evidence about causalities between the main variables in the transition process. I would simply like to share with you some of the experiences I have had as a policymaker in transition, experience of course gained in my own country - Croatia.