samchain/econo-pairs-v1 huggingface dataset:
It is with the Bundesbank that we have developed most of the projects for the euro area, with which we organise conferences, and with which we cooperate in the international field. This cooperation is beneficial for both of us. Is it sad to leave at a time when central banks have become such important players? C.N. It is not good that we are seen as the only game in town. We cannot replace governments, simply because they are not seen to be acting quickly enough. We have created in the euro area many new institutions and new rules. They must now be used. It is up to the parliaments and governments to decide the reforms to be made, but they have to take their responsibilities. Mr Noyer, thank you for this interview. 4  BIS central bankers’ speeches

With regard to inflation, one may ask “how much is too much?”. I  believe that the answer does not lie in pinning down certain numbers, but in the commitment to maintain a relatively low and stable inflation in the medium and long run. Experience has taught me that inflation is an insidious disease that should not be treated carelessly. With respect to real convergence, a question raised by many is “how fast is  fast enough?”. Again, I would not look for a certain figure; I would tackle this issue by approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner (a marathoner rather than a sprinter) the opportunity to reap most of the potential benefits, while avoiding excessive risks. Much like the fable about the turtle and the rabbit, which we all know how it ends... Beyond targets and levels, and irrespective of the convergence gap an economy faces or the monetary policy regime a central bank opts for, what matters for both real convergence and price stability (as part of nominal convergence) is the consistency and the sustainability of the effort. In other words, being and staying on the right track. Thank you. 3/3  BIS central bankers' speeches
This resulted in a series of devaluations, a smaller one of 3 per cent in 1976, two of them, 6 per cent and 10 per cent, in 1977, one of 10 per cent in 1981 and a large devaluation of 16 per cent in 1982. Overheating in the 1980s The 1980s thus began with two devaluations in 1981 and 1982. The background to these was that the end of the 1970s and beginning of the 1980s had been very problematic. GDP growth had been poor, and production actually fell a couple of years. Unemployment had risen to 3-4 per cent, which was then regarded as a very high level. Inflation had soared to levels of 15 per cent. The current account and public finances showed a substantial deficit. Sweden found itself in a situation with weak real growth and twin financial deficits. I took part in the preparations for the devaluation in 1982, in connection with the change of government that year. The preparations were led by Kjell-Olof Feldt, Erik Åsbrink and Michael Sohlman. I had the task of making calculations of economic developments over the coming years, based on different economic policy alternatives. Two of the alternatives concerned expansionary fiscal policy to bring down unemployment and a strongly contractionary fiscal and monetary policy to eliminate the twin deficits. In both cases, substantial problems remained in the Swedish economy. The third alternative concerned a devaluation of 20 per cent in autumn 1982, combined with a price stoppage and pegging the krona to the D-mark.

Studies made by the OECD indicate that powerful budget consolidation processes have only been carried out in connection with serious crises, and the 1990s began with the most serious recession in Sweden since the Depression of the 1930s. GDP fell three years in a row, 1991-1993, and employment fell by more than 500,000 persons during these three years. At the same time, letting the krona float free in 1992 had led to a depreciation of the krona of around 20-25 per cent and a large increase in exports. There was thus a strong growth in demand from abroad that made it easier to constrict domestic demand. The budget consolidation succeeded beyond expectation. Public finances were improved from a deficit of around 11 per cent of GDP in 1993 to a surplus of around 2 per cent of GDP in 1998. The target had been aimed at achieving a balance in public finances in 1998. The major part of the budget consolidation was achieved by reducing the public expenditure as a percentage of GDP. There are considerable similarities between the problems at the beginning of the 1980s and the 1990s. In both cases, Sweden’s international competitiveness had deteriorated and we had large deficits in both the current account and public finances. However, the major difference between developments in the 1980s and developments in the 1990s was that fiscal policy was much stricter in the 1990s and inflation was brought down to a level comparable with other countries.
International financial assistance must surely be provided with conditionality; and the medicine may be strong and painful in order to minimise the moral hazard of bailing out reckless investors and imprudent lenders. A second kind of immediate response is the kind of tactical counter-measure that we took in Hong Kong in August last year. We have devoted a great deal of time and energy to explaining the necessity of this measure, and you have already heard the reasoning behind it. We stand by what we did, and we do not think that we could have reasonably predicted, and therefore prevented, such an unprecedented, sophisticated, and concerted manipulative attack. But we do not pretend that we enjoyed taking the decision to enter the markets: it was an unconventional, highly controversial measure, which carried many risks. The success of the operation showed that we could defend ourselves, and that our system was basically sound. We have also taken measures to reduce the likelihood that such attacks will recur. But it would have been far preferable to have had a world environment in which such defensive manoeuvres were unnecessary. A third immediate response has taken the form of exchange controls, most notably in Malaysia, and it is interesting that academics, including Professor Bhagwati and Professor Krugman, are increasingly attracted to them. These measures may well suit the needs of some economies, and a less extreme form of prudential regulation of capital flows has worked well in some places - in Chile, for example.

Part of the initiative must begin at home, since without effective domestic management international initiatives will lack a sound foundation. The Asian crisis has demonstrated that the approach towards capital account liberalization in some Asian economies was clearly inappropriate, given the weaknesses in domestic financial sectors. Poor supervision, lax accounting standards, close relationships between lenders and borrowers, and inadequate prudential safeguards all conspired with “hot” capital inflows to fuel the crisis. Again, it is worth pointing out that this is not purely an Asian problem, as the LTCM episode revealed. Prudential regulation begins at home, but it must also be extended into a global prudential and regulatory framework, which would be an aid, not a hindrance, in the general trend towards a more liberal financial environment. A third part of the reform must address cross-border manipulative practices in financial markets. Rules exist against the cornering of domestic financial markets. The blatant collusion and coordination in the various recent attacks on Hong Kong’s markets, and the phenomenal financial resources the manipulators have been able to muster, underscore the need for domestic anti-trust principles to be applied to cross-border financial speculation. These are matters of some urgency, and there is already a clear international consensus that they are necessary. Measures of the kind that I have just outlined are under active discussion in various international forums, including, at the latest count, the IMF, BIS, APEC, EMEAP, G7, G10 and G22 or G26.
The second pillar is related to the regulatory framework of the activity of the banking system, therefore, related to the day to day activity of the Bank of Albania and the banking system. 2  BIS central bankers’ speeches  We have identified the regulations that will be subject to amendments. In addition to the objective for creating higher flexibility in relation to certain aspects of the activity in the treatment of the credit portfolio, we will aim at adopting a new concept: the “background check (biografi)” of the client in relation to bank borrowing. We believe that this new element will help banks assess the borrowing potential of each client. In spite of what I said above, it is a fact that, recently, lending in the national currency has seen positive growth over the months. This phenomenon, among others, has been accompanied with a positive side effect at a higher speed and intensity in the pass through mechanism of the monetary policy in the economy. Dear guests, As I pointed out, at the beginning, economic activity at home remains in a positive trajectory, but it has not yet reached the level we wish it were. Research at the Bank continues to confirm that the Albanian economy has unutilised potential and that the closing of the gap remains the main challenge for policymakers. Interventions through both the monetary policy and macro-prudential elements insofar have not succeeded to definitively close the gap.

Durmuş Yılmaz: Turkey’s economy and the financial crisis Opening speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at The Society for Economic Dynamics Annual Meeting, Istanbul, 1 July 2009. *  *  *  Distinguished Members of the World Economic Society, Esteemed Guests, I would like to welcome all the participants of the annual meeting of the Society for Economic Dynamics to Istanbul, the oldest metropolis of the world, which has been elected as European capital of culture for 2010. The global financial crisis, which has deeply depressed global economic activity and rendered the effectiveness of decision-making and supervision mechanisms questionable, still persists with its direct and indirect effects. Although recent weeks have accommodated signals of the diminishing effect of the crisis and the start of recovery; these signals still remain weak. While recent data on economic activity indicate that the worst is over, problems in credit markets linger, and unemployment figures are still on the rise, suggesting that the recovery will be slow and gradual. Therefore, I believe that the expectation of “cautious optimism” should prevail not only for the Turkish economy, but also for the world economies as a whole. If you ask what is the most significant factor that requires us to be cautious, it is possible to answer in a single word: uncertainty. Due to growing uncertainty, error margins in forecasts may get wider in the near future.
Such a model based on the Lamfalussy standards (1990) has already been put in place among central bankers and has proven to be effective in the context of the Continuous Linked Settlement system (CLS). A second challenge that the authorities face lies in the risk of cross-border financial transactions. Indeed, whereas the nature of the risks remains basically the same, both the probability of occurrence of an adverse event and the risk exposures themselves have clearly increased. The added dimension of cross-border activities lies in potential spillover effects due to the interlinking of systems. Credit, liquidity and operational risk events occurring in one jurisdiction may indeed trigger a systemic crisis by spilling over to foreign financial markets. Not only systems of the same nature, i.e. payment systems, but also different systems such as payment, clearing and settlement systems have been linked at an international level. A promising outcome would be a cross-border delivery-versus-payment mechanism that relies on central bank money. All in all, the current and, if feasible, future linkages explain why regulatory and oversight authorities have to widen the focus of their responsibilities further. A third challenge relates to in-house clearing, payment and settlement mechanisms at large custodians. This commercial function has undergone a remarkable process of concentration in the last few years. Some of these service providers have become very significant for the stability of the financial system as witnessed by the events of September 11, 2001.

However, thus the procyclical nature of the banking operations and the banks' tendency for larger relaxation of the credit activity standards in periods of growth are proven, which in time of economic activity deceleration, through risks reassessment, results in higher loss volume due to impairment and restraint from crediting non-financial entities. And the last, however key question: What are the challenges for the forthcoming period? It is definitely clear that there is a need of a comprehensive response to the world financial (banking) crisis. In his new book "The Return of Depression Economics and Crisis of 2008"), Paul Krugman says: "How did this second colossal muddle arise? In the aftermath of the Great Depression we redesigned the machine so that we did understand it, well enough at any rate to avoid big disasters. Banks, the piece of the system that malfunctioned so badly in the 1930s, were placed under tight regulation and supported by a strong safety net. Meanwhile, international movements of capital, which played a disruptive role in the 1930s were also limited [due to the regulations]. The financial system became a little boring but much safer. Then things got interesting and dangerous again. Growing international capital flows set the stage for devastating currency crises in the 1990 of the 20th century, and for a globalized financial crisis in 2008. The growth of the shadow banking system, without any corresponding extension of regulation, set the stage for latter-day bank runs on a massive scale.
Swiss Re reported that in Asia3: (a) more than half of non-buyers dropped out of insurance purchase after conducting initial research or after making their first enquiry; and (b) another one-third dropped out after receiving specific pricing and product details. (4) There is also the view that insurance processes and services, say medical underwriting and claims processing, are non-transparent, onerous and time-consuming. FinTech and InsurTech This brings me to the potential for FinTech, or more specifically InsurTech, to help reduce the protection gap. Technology solutions offer exciting possibilities to alleviate many pain-points associated with the understanding, buying and servicing of life insurance products. To be sure, the insurance sector has always employed technology tools and is a large user of data. This is also part of the problem. A recent McKinsey report stated that 90% of insurers identified complex legacy systems as the key barrier to digitisation. It is only in the more recent one to two years that InsurTech has been recognised as a change driver. Let me cite a few examples of transformations. The move to automation can potentially replace a number of repetitive human processes in the insurance sector. Robotic process automation (or RPA) will enable quick, automatic and 24/7 gathering and processing of data. There will be other technologies that both collude and collide with how things are currently done. Consider the pricing of life insurance premiums.

Unlike its peers, the leverage ratios in Turkey stayed at moderate levels  BIS central bankers’ speeches  3  during the period of excess global liquidity, thanks to prudent policies of the Banking Regulatory and Supervision Agency and the Central Bank of Turkey. In fact most of those policies implemented in Turkey since 2002 are incorporated into the Basel III principles, such as countercyclical buffers (banks in Turkey are not permitted to expand unless their ratio is at least four percentage points above the legal minimum) and liquidity ratios (both in local and foreign currency). Debt level of the public sector was also reduced significantly thanks to a quite ambitious fiscal discipline. The real strength of the economy, however, came from the management of foreign exchange risks, which is the most critical aspect of a small, open economy. Thanks to prudent regulations and oversight, the overall FX position of the Turkish banking sector was balanced. Households carried a long position in FX, limiting their exposure to curreny shocks. Although the corporate sector carried a significant FX position, their debt was mainly in long term. All these factors contributed to the resilience of the Turkish economy to the global crisis, which in turn provided ample space to the Central Bank of Turkey to implement front-loaded and aggressive monetary easing without compromising price stability objective. No rescue package was needed to support the banking system. Thus, the government was able to enact modest but still quite effective counter-cyclical fiscal policies in the midst of global turmoil.
We have a representative democracy. The people elected by the people – the Government – of course have sovereignty reposed in them. However, the Monetary Law Act sets about some very specific responsibilities for the Central Bank. And it is up to us to fulfill those responsibilities in a very technocratic, objective and free way. That is not to say that we should be criticizing the Government of the day. That is not our business. But there are channels through which we can give independent advice to the Government discretely. I am very keen and I have spoken to our leaders too about this, that the Central Bank does its work independently and in a technical way and discretely advices the Government about what we think is the best way forward for those segments of policy and practice for which the Central Bank has responsibility. So, I need your cooperation. Thank you, thank you very much. 2  BIS central bankers’ speeches

The sectoral structure of the Spanish economy, skewed more towards services such as wholesale and retail trade and the hospitality sector, only partially explains our country’s poor level of productivity, as measured in terms of output per hour worked. This output stands 14% below that of the euro area. If Spain had the sectoral structure of the euro area, this negative gap would still be 10%.2 1  Endogenous growth models show that knowledge is the only factor of production that generates positive externalities and economies of scale. Romer (1986), Lucas (1988) and Aghion and Howitt (1992). 2  This figure is a 2020 update on the figures set out in Cuadrado, Moral-Benito and Solera (2020). 2  Nor can lower productivity be attributed simply to the smaller size of Spain's business sector. When the registry data on firms from Spain, Germany, France and Italy are grouped together by size, Spanish firms are between 10% and 20% less productive than their European peers, regardless of size.3 In reality, this lacklustre productivity is symptomatic of an array of interconnected shortcomings. Today I will focus on five factors behind these shortcomings. The first factor concerns the very minor role played by innovation in our economy. To give one example: between 2020 and 2021 the ratio of research and development and innovation (R&D&I) expenditure to GDP stood on average at 1.2% in Spain, 0.8 pp below the euro area average.4 The private sector’s failings in this area are particularly striking.
What we need is not necessarily more Europe, but rather a “better” Europe: less words, more action. Europe must be more focused on a few projects, and more efficient. To put it briefly: “let’s do little, but well, and until the end”. There are naturally some non-economic priority areas such as defence, border security, climate change as well as youth education and training – for example an Erasmus-pro programme for apprenticeship for the unqualified and unemployed youth. But I will focus today on the economic field. This is obviously my area of expertise as a central banker. More importantly, there is a strong relationship between economic prosperity and citizens’ attachment to Europe. The policy orientations that I will propose today build and elaborate further on some ideas that I presented here in Brussels just over a year ago. I am very pleased that the 1/8  BIS central bankers' speeches  European Commission’s future of the Eurozone paper published yesterday goes in the same direction, although with some understandable caution... In my view, this is an additional sign that we now have a unique momentum in Europe, that we should not let wane. I would like today to elaborate on what I like to see as three economic triangles. First, we resolved a first incompatibility triangle 18 years ago by achieving our monetary union. Now, we are confronted with a second incompatibility triangle, due to the weaknesses of our economic union.

Europe is once again standing at a crossroads. The 2007–2008 global financial crisis and the 2011 sovereign debt crisis in the euro area have left a legacy of foregone growth, high unemployment, and massive public debts. On top of that, Europe’s security has been directly affected by the scourge of terrorism that targets our population and our values, and moreover we have not yet found lasting solutions to the refugee crisis. And yet, despite all these challenges, support for the euro and the European Union is still high: according to the Eurobarometer survey, 72% of euro area citizens support the euro, the highest level since 20042, and more than half of EU citizens feel attached to the European Union3. The clearest signs of this continued support for the European project – despite Brexit, beyond Brexit – are the recent defeats of the nationalist parties and their euroscepticism in a number of European countries. Whenever the temptation of reverting to nationalism arises, we should remember Tommaso Padoa-Schioppa: he liked to remind us that the founding fathers of the European Union – among whom Robert Schuman, Konrad Adenauer and Alcide de Gasperi – shared the same motto: “never again a war among us.” In the very uncertain world of 2017, and with the dangerous hesitations of the new American administration, this is sadly very relevant: peace remains the first European promise. This is the reason why our common responsibility is to persevere along the path of European integration. But we cannot continue as before. People expect concrete results.