samchain/econo-pairs-v1 huggingface dataset:
And the fall-off in the tourist market is a similar development. Although there are specific factors that might explain some aspects of this behaviour, the strength of growing import penetration in the domestic market tends to confirm the diagnosis of diminished competitiveness of Spanish products on domestic and foreign markets alike. The concurrence of the incipient slide in export shares and the ongoing increase in import penetration primarily reflects the higher relative prices of Spanish products as a result of persistent inflation differentials and of the more recent appreciation of the euro. Testifying to this is the negative trend of the traditional price competitiveness indicators, even when these are calculated with export deflators that capture how the sector more exposed to foreign trade has narrowed margins to face growing competitive pressure. Behind the ongoing deterioration in price competitiveness lie a relative increase in unit labour costs, reflecting continuing higher wage increases in Spain despite the moderation compared with previous periods, and very low labour productivity gains. The existence of wage-setting and indexing mechanisms that set a higher floor for nominal wage growth than in other countries hinders the rapid absorption of external price shocks. And it also tends to hamper full convergence with the arrangements required in an area of macroeconomic stability. The problems posed by wage inertia are exacerbated by the lacklustre behaviour of productivity.

However, the available instruments are limited in their effect on aggregate demand, which means that a major role must be played by microeconomic and structural reform policies that can influence the behaviour of supply and create a basis for more efficient markets and institutions and for increased productivity. In 2004 fiscal policy achieved the expected results, since the budget on general government account was almost in balance (or in modest surplus if the effect of assuming RENFE’s debt is stripped out) and the public debt/GDP ratio showed a fresh decrease. Despite this, there was a certain drift in primary current expenditure, offset yet another year by highly buoyant government revenue. From a more general standpoint, the momentum of improvements in the structural balance must not be allowed to slacken, since this would indicate a fall-off in the fiscal drive of recent years. In the circumstances described, it is highly recommendable to make a fiscal effort which goes beyond that programmed in the fiscal plans in force, for at least two reasons. First, because a more ambitious fiscal policy would strengthen its role of stabilising and containing domestic demand in the short term, counterbalancing monetary and financial conditions. Second, because firmer improvements in the structural balance would leave public finances better placed to face the increased expenditure deriving from population ageing, even in a scenario of high immigration flows.
This is because there is always room for improvement and governance should not be seen as a static element. On the contrary, as new challenges arise (climate risks, ESG, digitalisation, etc. ), governance needs to be updated to properly address them. How can we keep encouraging our institutions to improve their governance framework? I believe that we need to continue our supervisory activities, placing greater emphasis on a structured escalation of our supervisory interventions (escalation ladder), and insist that a strong board of directors is key to the smooth functioning of banks. We should therefore continue to strengthen governance regulations to make them clearer, in particular as regards fit and proper processes and diversity, to build strong boards for sound decisionmaking. Non-executive directors In this decision-making process, non-executive directors (NEDs) play a crucial role. They should oversee management and focus on the key issues that are of concern to all stakeholders. These of course include the usual financial activities, but also emerging risks that could severely impact banks that are not properly prepared for them. In today’s complex business environment, new technologies and digital transformation are a key focus for all institutions, specifically for NEDs. We are in a situation of continuous and very fast change on the digital front, so it is crucial for organisations to be prepared and simultaneously adapt to new applications. I would like to highlight two key elements in this regard: First of all, the importance of defining the digitalisation strategy for the institution.

Conclusion In conclusion, when times are good, we rarely feel an urgency to make changes. And these are certainly good times. But numbers can have a funny way of not revealing the whole truth. A sound spreadsheet may mask unethical behavior, a well-capitalized bank may be on the road to ruin, and a neglected corporate culture can turn toxic. We must stay vigilant around the “softer” side of supervision. Strong culture and robust corporate governance are our first lines of defense. They’re a critical part of the tool kit when it comes to protecting people, banks, and the economy from risk, scandal, and harm. 3/3  BIS central bankers' speeches
Interest rates were kept at a low level for a long period, but are now on the rise. The world economy is again expanding at a brisk pace. Over the past three years, global production has increased by about 14 per cent, which is the strongest upturn since the beginning of the 1970s. In the UK and US, interest rates have already moved up to a more normal level. In Sweden and the euro area, the central banks have started to raise interest rates. Over the next year, further interest rate increases are expected in the euro area, the UK, Sweden, Switzerland, the US, Canada, Japan and Australia. Norway has also experienced a fairly long period of falling and thereafter stable, low interest rates. Price inflation was subdued, and there was idle capacity in the economy. Real interest rates have been very low and markedly lower than a neutral level. In line with the prospects I presented to the Committee last year, we have started raising interest rates. To date, Norges Bank’s key rate has been increased by 0.75 percentage point. Consumer price inflation has edged up, but is still very low even close to three years after the start of the cyclical upturn. Consumer prices adjusted for tax changes and excluding energy products have risen by 1 per cent over the past twelve months1. Prices for imported consumer goods have fallen almost every year since the mid-1990s, reflecting freer trade and the shift towards imports from lowcost countries.

The challenges of managing liquidity in Islamic finance banks As well as supporting the safe development of new types of Islamic finance, we also recognise some of the challenges facing more established parts of the sector. Islamic banks, for instance, have long faced profound challenges in efficiently managing their liquidity, and it’s here that the Bank of England’s new non-interest based central bank deposit facility is designed to help level the playing field. All banks need to manage expected and unexpected outflows, eg as depositors make payments and withdrawals. Conventional banks hold a range of high-quality liquid assets to meet those obligations, including cash and central bank reserves; government and corporate debt; and asset backed securities and commercial paper. They can also borrow in secured and unsecured money markets and, as a backstop, from central banks. 17  http://documents1.worldbank.org/mwg-internal/de5fs23hu73ds/progress?id=wYC7RO1Zn_OMlVWKvBTqqxD6WoVnUClPU3g5WCRi6Y,&dl. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  But Islamic banks’ prohibition on the payment or receipt of interest means they can’t access many of these tools. To avoid being caught short, they have historically had to structure their business in inherently narrow or inefficient ways, for example by holding large stocks of non-interest bearing cash, or limiting their offerings of short-term deposits. Ironically this left them relatively well placed to weather the Global Financial Crisis of 2008-09: in aggregate UK Islamic banks remained liquid, in a market where liquidity was otherwise very scarce.
Indeed, this crisis has brought us to a juncture where a better understanding of capital account liberalisation – through learning from in-depth analysis and open debates – is required in order to formulate better policies in the area. The potentially destabilising effects that capital flows could inflict on the domestic economy are widely recognised. When it rains, it pours: as noted by an NBER research, capital flows tend to be pro-cyclical. 1 Large influxes of capital could push up the value of currencies, drive up inflation and fuel asset bubbles, while affecting the competitiveness of the export sector, posing challenges to the authorities of the host country in managing domestic monetary conditions and maintaining financial stability. Capital flows can also quickly reverse, often driven by changes in market sentiment or external environment. The “sudden stops” of capital flows have, in recent decades, brought severe financial stress to emerging markets, with substantial costs to the real economy. Such volatility is perhaps one main reason why the cross-country studies on growth benefits of a more open capital account have remained largely inconclusive. The current financial crisis brings home the message that integration with the global financial market could expose a country to global financial turbulence even when its own financial sector and real economy are fundamentally sound. Despite the recent turbulence and the spillover effects of capital flows, we should not, in my view, lose sight of the many benefits of an open capital account.

Even though it is fashionable at present to badmouth our local currency – even among those who ought to see it as their duty to refrain from indulging in such calumny – most currencies, large and small alike, have fluctuated wildly in the recent market turbulence; and it can easily happen that as soon as the króna depreciates, the yen and the Swiss franc, for example, appreciate even more, and borrowers who have been following the Pied Piper of Hamelin along the path of foreign loans end up trapped by their own gullibility. Despite the headwinds that face us now, not least in connection with the international financial markets and the profound impact that they could have on business here in Iceland, it is not necessarily a given that the Icelandic nation is careening headlong into a recession. It is much more likely that we will experience a slowdown and, at worst, a sharp economic dip that need not be long-lasting. We have experienced the like before and have been quick to shake off the effects of it with the adaptability that the Icelandic nation has so often demonstrated. It is reasonably clear, however, that the national economy will not achieve any real equilibrium unless there is a contraction in demand.
The risks he discusses are mainly linked to central banks that buy assets other than government bonds. The more the central bank involves itself in risk and capital allocation in the economy, the greater the risk of it being exposed to political pressure with respect to how it should conduct its policy. And more generally, the larger the central bank’s balance sheet, the greater the risk of politicians wishing to utilise the resources in a specific way. Plosser’s arguments are important, but they are not particularly applicable to the Riksbank’s current situation. The Riksbank has only purchased government bonds, and we have spread our purchases fairly evenly on the outstanding bond stock in order to affect the general level of interest rates rather than specific bond prices. And despite the Riksbank’s balance sheet having grown rapidly in recent years, it is significantly smaller in relation to GDP than in many other countries. As far as the Riksbank is concerned, I consider the financial risks to be more problematic. The large bond portfolio means that the interest rate risk on the balance sheet has increased. The bonds we have purchased have an average maturity of 5 years, but are funded with Riksbank certificates with a maturity of one week. If the interest rate rises, the funding costs will therefore increase while the return on the bonds already purchases remains unchanged. In addition, the expected return on the Riksbank’s bond portfolio is low.

Using today’s definition, one could say that we in a sense had a negative monetary base in Sweden. This illustrates that the currently used definition of “monetary base” is actually rather strange. The liquidity deficit has thereafter shifted to a surplus. The Riksbank is now draining the surplus liquidity by issuing certificates (and sometimes via finetuning transactions) with one-week maturity at an interest rate which we still call the repo rate. A better term would be the “certificate rate”. 8  See Yu (2016) and Chapter 1 in Walsh (2017) for summaries of studies based on US data. These studies usually investigate the immediate impact on asset prices when news of asset purchases is made public. It is more difficult to study whether the price effects are permanent and here the empirical support is therefore weaker. Altavilla et al. (2015) find that the ECB’s purchasing programme has pushed down interest rates across quite a broad spectrum of European assets, and particularly as regards government bonds in countries with high interest rates (such as Italy and Spain). De Rezende et al. (2015) find that the initial stages of the Riksbank’s purchasing programme contributed to rate falls in about the same way as purchasing programmes in other countries. 9  In a survey of central bank governors and leading researchers, a high percentage in both groups say that the purchasing of government bonds and/or other assets is a tool that should continue to be part of the central bank toolbox even after the crisis (Blinder et al., 2017).
High indebtedness is making household finances more sensitive to interest rate adjustments When monetary policy gradually starts to normalise and interest rates rise, it will happen against this backdrop of high indebtedness among households and high housing market valuation. In addition, many have taken out variable-rate mortgages with short interest-rate fixation periods. Taken together, this means that household finances are now more sensitive to adjustments in interest rates than before. Disposable income, that is income minus borrowing costs, is affected to a greater extent by interest rate adjustments when debt is high, all other factors being equal. Calculations show that an interest-rate rise of about 1 percentage point now has a significantly greater direct effect on household disposable income than in the mid1990s. In this sense, households’ interest-rate sensitivity is now greater. 6 The interesting question is whether households adapt their consumption to a corresponding degree so that consumption also changes to a greater extent. It need not necessarily be so. For example, interest income can offset the effect of higher interest expenditure. If households also plan in advance for a scenario where interest expenditure takes a greater share of their income, consumption may not necessarily be affected to any great extent. But research findings point to this potentially playing a major role at least for certain groups of households. 7 More specifically, it is shown that highly indebted households with variable-rate mortgages adapt their consumption to a greater extent than other households when interest rates change.

The changes came into force on 1 January 1999. 1 [13]  In a moment I will look more closely at the new environment and discuss a few properties that characterise it and that monetary policy will need to relate to going forward. Lastly, I also intend to provide an overall picture of what might characterise the way forward. But before doing that, allow me to say something about what has brought us here. Where we are coming from I spoke earlier about 2018 being a year of celebration. Another anniversary, but one which does not give cause for any kind of celebration, is that it is also ten years since the collapse of the investment bank Lehman Brothers. The problems on international financial markets, which had been escalating for a long time, came to a head. Confidence in the financial system evaporated and the financial crisis was upon us. Much has happened during the ten years since then. The actions of central banks during this period have not just been about managing the direct crisis of 2008, even though many of the problems stem from there. It is more accurate to describe the actions as reactions to an interconnected series of crises, or, if you like, a crisis that consists of several phases. These have, in turn, formed the backdrop to the different phases of monetary policy that Sweden has gone through.
In addition, the historic debt relief under the Heavily Indebted Poor Countries (HIPC) initiative and Multilateral Debt Relief Initiative (MDRI), as well as the increased budget support from our cooperating partners, further strengthened the external position. Preliminary information indicates that the country’s external debt position of US $ billion as at end-2004 fell to US $ million at endDecember 2006. The foreign exchange market, in 2006, was characterised by a general depreciation of the Kwacha against major currencies. In order to moderate exchange rate volatility, the Bank implemented a number of measures, including purchasing and selling foreign exchange. What is your assessment of the financial sector? In the banking sector, there have been no bank failures in the recent past, reflecting stability in the financial system. To consolidate this stability, in 2006, Bank of Zambia undertook a number of measures, which included increasing the minimum primary paid-up capital for banks and non-bank financial institutions. What is the economic outlook for the year 2007 and the long-term vision of the Government? The Government, on its part, has shown commitment to continuing the economic reform programme. To this end, measures are being taken to ensure that the macroeconomic gains attained so far will be consolidated in 2007. Accordingly the Government is targeting real GDP growth of 7.0% and inflation of 5.0%. Pursuit of these objectives is within the context of the long-term development objectives, well articulated in the national long term Vision, 2030.

The ESRB also has a formal role in the CRR/CRD, among other things through opining on some national macroprudential measures. A macroprudential framework extending beyond the banking sector But the ESRB’s macroprudential mandate extends beyond the banking sector, and not every spot on the map over the financial system is as well-known and covered from a macroprudential viewpoint as the EU banks in the remit of the CRR/CRD. The financial landscape is constantly evolving and subsequently the potential sources of systemic risks. One aspect reflecting this is that the share of credit provided by other financial institutions than banks has grown over the past few years. Hence, after making the macroprudential framework for the EU banking sector operational, targeting the parts of the map where we find the non-bank financial institutions, and working on how to provide a holistic view regarding all parts of the financial system, is a natural and important next step. The ESRB recently published a strategy paper on macroprudential policy “beyond banking”, which complements the guidance already provided on the policy framework for the banking sector. That strategy paper is meant to provide a point of reference as we now move on to further enhance the macroprudential policy strategy, regulatory data and instruments for addressing risks in non-bank financial sectors. I should mention that other work related to non-bank financial institutions has also been conducted, where the recently published annual ESRB Shadow Banking Monitor will hopefully provide important insights.
The assessment of our near future and our current situation may change as time passes and as more accurate statistics become available. The functioning of the economy could also change. Monetary policy is oriented towards stabilising inflation and output growth. If unexpected disturbances arise and new information concerning the functioning of the economy emerges, the Executive Board must assess whether a different interest rate path may be more appropriate in order to achieve our  BIS Review 79/2005  5  objectives. The interest rate outlook may therefore change over time. The fan charts illustrate the uncertainty that can be expected based on recent history. The Executive Board discussed the main content of Inflation Report 3/05 before the report was published. On the basis of the analysis and the Executive Board’s discussion, the Board assessed the consequences for the future interest rate path and approved the monetary policy strategy for the period to the next Inflation Report in March. The interest rate path presented in the Inflation Report will, in the assessment of the Executive Board, provide a reasonable balance between the objective of bringing inflation up to target and the objective of stabilising developments in output and employment, conditional on the information Norges Bank had at the time the Report was published. The interest rate may gradually – in small, not too frequent steps – be brought back towards a more normal level. The objective of bringing inflation back to target and anchoring inflation expectations nevertheless implies that monetary policy remains expansionary.

FPS operates 24 x 7, which means that users can initiate or receive a payment or fund transfer any time throughout the year. It will be very user-friendly as mobile phone numbers or email addresses can be used for receiving HKD or RMB funds. Settlement between banks is real-time, and Hong Kong is one of the few jurisdictions achieving real-time settlement in a retail payment infrastructure. Both banks and SVFs can participate in FPS. This creates a retail payment ecosystem that facilitates money transfers among users of banks and SVFs. The full interconnectivity of all payment participants is, again, likely to be one of first in the world. In addition to FPS, the HKMA is leading a working group to work on a common QR code standard for retail payments. A common QR code standard will facilitate merchants, especially SMEs, in using one single QR code to accept different payment schemes. This would certainly help promote the wider use of mobile retail payments in Hong Kong. 3/6  BIS central bankers' speeches  (B)  Supervisory Sandbox 2.0  The HKMA will upgrade the existing Fintech Supervisory Sandbox to Sandbox 2.0. There will be three new features in this enhanced version. First, we will set up a Fintech Supervisory Chatroom that would engage the stakeholders at a much earlier stage of project development. The Chatroom will be manned by experts from our Fintech Facilitation Office and Banking Supervision Department.