samchain/econo-pairs-v1 huggingface dataset:
Market financing costs have fallen, while bank lending rates for both firms and households have dropped by more than 110 basis points and are now at historical lows. This has been accompanied by rising lending volumes and improved access to finance, especially for small- and medium-sized enterprises. And crucially, our policy has not only eased financing conditions on average, but triggered a remarkable convergence in borrowing costs across different euro area countries. Granular data show that in June 2014 the median lending rate for firms in vulnerable economies was 120 basis points higher than for those in stronger ones – despite overnight rates being close to zero. Today the difference is only 20 basis points. Without this, it is likely that large parts of the euro area would have been remained stuck in a self-sustained credit crunch. The recovery is progressing and gaining momentum As this policy stimulus has worked its way through the economy, the atypical makeup of the recovery – relying mostly on monetary policy and oil prices – has been gradually shifting towards a stronger contribution from underlying growth forces. This is evident from the fact that, as the impetus coming from oil prices wanes, the economy is accelerating rather than slowing. There are indeed three features of the recovery which give us confidence that it may be gaining its own momentum, although – given the severity of the slump we are emerging from – monetary policy still remains critical to facilitate the transition.

This implies that our various policy instruments are deliberately chained together in such a way that the forward guidance applied to our asset purchase programme – which is time- and statedependent – extends also to our interest rate policy. So our forward guidance is de facto on the entire package, not on any specific component of it. And this guidance relates not just to the conditions under which we would withdraw stimulus – i.e. the sustained adjustment in the path of inflation – but also to the sequence of measures we would use to do so. The logical basis for this sequence stems from the same reason why we exploited the margin provided by conventional interest rate policy before resorting around the same time to negative interest rates and large-scale net asset purchases. In a multi-country monetary union such as the euro area made up of segmented national financial markets, asset purchases are inevitably more difficult to calibrate, more complex to implement, and more likely to produce side-effects than other instruments. So it is natural that we turned to them only after other, more conventional options were becoming exhausted. Similarly, lowering interest rates into negative territory in a largely bank-intermediated financial system was a step into uncharted waters. From today’s perspective, however, the negative rates, in conjunction with the other elements of our easing package, have turned out to be powerful in terms of easing financial conditions. And the potential negative side effects have so far been limited.
As the economy continues to adjust to these changes, the situation is still uneven across different sectors. In addition to the above-mentioned oil industry, passenger transportation and international travel still remain below pre-pandemic levels as well. When restrictions were toughened, public catering and entertainment companies faced a decline in the demand for their services. Nonetheless, a lot of industries are demonstrating steadily higher output and sales than before the outbreak of the pandemic. Specifically, there has been a surge in the demand for durable goods (computers, telecommunication devices, and household appliances) and online trade and delivery services. The lockdown period boosted the demand for countryside housing and better housing conditions in general. These uneven trends across both industries and regions are also described in the Regional Economy report released by our regional branches before the quiet period. The situation in the labour market also evidences that the economy has not only recovered, but is generally returning to its pre-pandemic growth path. The number of vacant jobs is at its peaks. High demand for labour resources is demonstrated by companies in construction and transport, a whole range of manufacturing enterprises, and in trade. These are the industries that started to bounce back earlier and were recovering faster and where demand exceeds prepandemic levels. A further expansion of output is possible through a restoration of the inflow of labour migrants, but — first of all — through an increase in labour productivity.

We hold open the prospect of further key rate rises at the upcoming meetings. We will assess whether it is reasonable to increase the key rate, as well as how long the key rate should be maintained at the level achieved taking into account economic developments, inflation trends, and largely the balance of risks to future inflation, including those associated with persistently elevated inflation expectations. In addition to the baseline scenario, we also consider various other scenarios of potential developments in the Russian and global economies. The three scenarios describing the key possible circumstances in the external environment were released last week in the Monetary Policy Guidelines for the next three years. Monetary policy will be able to bring inflation back to the target regardless of whether the baseline or an alternative scenario materialises. Thank you all for your attention. 3/3  BIS central bankers' speeches
But then, when you analyse that credit to the private sector and its development, it is also very clear that those high rates of growth are particularly present in the smaller countries of Europe and not too much in the larger countries, although there is quite a difference between the various countries. So, in itself, that rate of growth of credit, which is already moderating somewhat, is not a cause of inflationary concern for us, and neither is the move today any inducement to the banks to be more forthcoming in giving credit. They are already quite forthcoming. Question (translation): Mr. Duisenberg, the situation in Europe at the moment, especially this latest interest rate move by the ECB, now reminds me somewhat of Japan. You reduce interest rates time and again, yet on the other hand, no progress is being made in the areas of politics and restructuring in BIS Review 39/1999  4  Europe. In December, although I cannot quote you directly, you stated, much in the same way as today, that following the cut in interest rates the situation with regard to interest rates in Europe would be settled. It is now the beginning of April and we see obviously a further cut in interest rates.

First, and most obviously, the need to pay for constant military protection for the Normandy estates created what modern-day macroeconomists would think of as an enormous structural deficit. If John had let his expulsion from the continent be the end of the matter this financial burden would have extinguished itself. But he did not. His folly was a series of vain attempts to re-conquer Normandy, efforts which finally ended on the eve of Magna Carta. 2 Second, the monarchic finances had taken a colossal hit in 1193 because of the need to fund a gigantic public sector bailout. Richard I had managed to get himself caught in Germany on his way back from the Holy Land and was held to ransom for £ in silver. Being “Too Big To Jail”, the equivalent of two to three times annual crown income was needed to bail him out. In comparison, the government’s peak cash support to UK banks in 2007–2010 amounted to a trifling one-quarter of annual UK government revenues. 3 Third, the need to raise additional cash for the public finances was made much more problematic by the strain of inflation, which accelerated in the early years of the 13th century. 4 The problem was that a large proportion of regular crown income came in the form of “farms”, which were fixed rental payments for leases to use the King’s land for agriculture. These farms were fixed by custom in nominal terms, whereas the King’s expenditures were not. The King’s finances were unhedged.
One such is naturally that it is not possible to build special purpose companies in Sweden without their being subject to the Act on Financing Operations and thus being affected by the same capital adequacy rules as the housing loan institutions. In a ministerial memorandum from 1998 dealing with better prerequisites for securitisation, a change is proposed inter alia in this respect. Such a change is also proposed in the 5  BIS Review 113/1999  banking legislation committee’s report from last spring. The Ministry of Finance is at present considering these proposals as well as gilt-edged bonds. It is planned to introduce proposed legislation early next year. Now there are also other objections to securitisation. It has to date been relatively complicated and therefore expensive to create special purpose vehicles and it has not been possible to invest their bonds with such good interest rates as their rating should occasion. One reason for this may be that the market is undeveloped, and that issues have been few and small in this context and that liquidity in the bonds has consequently been low. Another cause may be found in the regulatory framework, since securitised bonds in banks and other financial institutions, which are expected to create a market for bonds, are affected by higher capital adequacy requirements than ordinary housing bonds. In the USA, as we know, securitisation of housing loans is a common occurrence, which is partly due to institutional reasons. In Europe, housing finance has mainly taken other forms.

Hence, regulation and supervision in order to minimize systemic risk should concentrate on the leading global investment banks to make sure that adequate counterparty and liquidity risk management systems and processes are implemented. Against the backdrop of scarce resources, we should refrain from opening new regulatory fields which are not relevant for systemic risks. 1/1
4  For example, see Chung et al (2011), “Have We Underestimated the Likelihood and Severity of Zero Lower Bound Events” and Vice Chairman Janet Yellen (2011), “The Federal Reserve’s Asset Purchase Program”, remarks at the Allied Social Science Associations Annual Meeting, Denver, Colorado, January 8. 5  TIPS are designed with a floor of zero on the cumulative inflation adjustment that they can realize over the life of the security. Thus, the prices of securities that are similar to each other in most ways but have different amounts of accrued inflation can be used to derive a measure of the value of this floor, which can then be translated into the probability of deflation. 2  BIS central bankers’ speeches  time, though, breakeven inflation rates have risen back to levels more consistent with the FOMC’s mandate, and the perceived risk of deflation has diminished notably. One criticism that has been directed at the LSAP2 program is that it was unable to restore vigorous growth to the economy. I think this is a reasonable observation but not a strong criticism. It is true that the support to growth provided by the asset purchases appears to have been countered by other factors that have continued to weigh on growth. However, the LSAP2 program was never described as such a potent policy tool that it could ensure a return to robust growth and rapid progress toward full employment in all circumstances.

The minutes also described asset sales as part of the strategy, indicating that this step would likely occur relatively late in the normalization process. From the perspective of the balance sheet and the stance of monetary policy, sales accomplish the same thing as redemptions, as they also shrink the balance sheet over time. The minutes indicated that such sales are likely to be gradual and predictable, which makes them even more similar in nature to redemptions. Together, the combination of asset redemptions and asset sales, once underway, should put the size of the portfolio on a path to a more normal level over several years. Thus, they represent an important part of the normalization of the policy stance. However, if the approach follows the gradual and predictable path described by the minutes, one can think of this adjustment as a relatively passive part of the policy tightening. In these circumstances, adjustments to the federal funds rate would generally be the active policy instrument, responding as needed to economic developments. 10 The sequence of policy steps described in the minutes indicates how the size of the SOMA portfolio is likely to be normalized. However, simply reducing the size of the portfolio would still leave its duration at historically elevated levels. The FOMC might decide it was happy with this outcome, or it could decide at some stage to renormalize the duration of the portfolio as well.
There are also many doubts about the structural damage wreaked by the crisis on the productive system, particularly in those sectors and countries most affected and where it is proving most persistent. In these circumstances, international cooperation is, in my view, all the more important. Healthwise, the crisis will clearly not be resolved until immunity against the virus has been achieved in all countries. On the economic front, divergences in the rate of recovery may be particularly harmful for economies that are in a more vulnerable situation. A premature 1  tightening of international financial conditions could pose a serious obstacle to the efforts of recovery of those economies with limited space for their national policies. And that could delay their recovery and, ultimately, also adversely affect the global economy. Thus, in accordance with the communication approved by the International Monetary and Financial Committee last week, international cooperation is crucial both for accelerating vaccine production and for making distribution affordable and fair for everybody. In the economic arena we must also maintain the stimulus measures for as long as necessary, adapting them to countries’ changing circumstances, until the recovery has taken root. Only then may these stimuli be cautiously withdrawn. The current juncture is, in fact, a particularly timely one to give fresh impetus to multilateralism, where the multilateral institutions have a crucial role to play.

The aim is not only to cement global economic recovery, but also to counter the backtracking seen in inequality and poverty as a result of this pandemic and to jointly tackle the common structural challenges derived from digitalisation and the fight against climate change. And this without forgetting the need to strengthen pre-emptive and common response mechanisms to systemic crises like the present one. In this respect, the G20 resolutions reached to respond to the impact of the crisis on lowincome economies via debt-relief measures are praiseworthy; but consensus must now be forged to address the situation which middle-income countries are also facing (a category in which a good number of the Ibero-American community countries fit), with limited room for manoeuvre in their national policies. With these same objectives, international institutions must complement and improve coordination with regional institutions and mechanisms, which may be more effective in providing solutions for countries that share a common institutional framework or similar economic structures. Following this introduction, allow me to move on to the first panel of the Conference, which will focus on analysing the role of monetary policy in the context of the pandemic.
In fact, the European Central Bank took the first major step in this regard by raising the policy rate to 1.25 percent in April by 25 basis points. 15. However, as I mentioned previously, it is impossible to claim that downside risks on the global economy have completely faded away. As a matter of fact, recently mounting concerns over debt sustainability in peripheral euro area countries indicate that these risks still remain, albeit to a lower degree. Furthermore, the ongoing surge of commodity prices, especially of oil, stands out as another risk factor that may slow down the global economic recovery. Distinguished Guests, 16. In this part of my speech, I would like to evaluate key macroeconomic developments in Turkey in line with the global economic developments in 2010. Developments in the Turkish economy 17. Adoption of additional easing measures in emerging economies led to growing expectations that low interest rate and ample liquidity conditions in advanced economies would be maintained for an extended period, which in turn increased the global risk appetite in 2010. Consequently, capital inflows to emerging economies accelerated and risk premiums of these countries declined. Meanwhile, risks regarding the debt sustainability of peripheral euro area countries remained vigorous and continued to dominate the financial markets. In fact, renewed concerns over sovereign debt since November increased risk aversion and raised risk premiums across emerging economies. 18.

Also, as an industry, there must be a willingness to listen to the critics when developing solutions. So the industry clearly has a way to go on this front. •  Employee base: There was much discussion around the population that makes up the majority of the workforce in the industry. As I said earlier when I spoke about resources, there needs to be a better understanding of this demographic. The current environment of high turnover can lead to a lack of loyalty to a firm, less concern about how behaviors will be perceived and a disproportionate focus on financial compensation. •  Measuring success: Clear metrics are needed to measure behavior if culture is to be included in performance assessments and discretionary compensation. All firms measure risk, but culture is a very different type of risk. Even if measured to a higher confidence interval than other risks (99+ %) it still means you have some bad apples. This problem doesn’t go away with fewer people, so, regardless of your size, you can’t ignore the importance of culture. So, as we move forward and the industry ramps up its efforts to address this issue, I see a number of considerations that must be incorporated into the solutions. They are in three main categories: management, operations and employees. Regarding management, we need leadership from top. Firms must have a clearly articulated statement of purpose that aligns with the firm’s business strategy and risk appetite.
The financial institutions are committed to engage in social responsibility related work as well, or to reach out to vulnerable and disadvantaged groups, of which women occupy an important place. Despite the advancement of the financial sector and the resilience of the system as a whole, we are still unable to appreciate or criticize its commitment towards financial inclusion of and access to finance by women, due to lack of disaggregated data from banks and financial institutions. This, I believe, is the biggest drawback in initiating policy responses to remedy the deficiencies in financial inclusion of women. The absence of balanced regional or provincial growth is another important drawback in enhancing financial inclusion of women. GDP growth has been uneven throughout the post independent period. Growth in the Western Province has been around 50%, while all other provinces accounted for the balance. This uneven growth has resulted in a skewed income distribution, varying degree of poverty, marginalization and unemployment issues, as well as financial exclusion in the other regions of the country. However, the significant growth in the Western Province has resulted in notable enhancement in access to finance and financial inclusion. 2  BIS Review 40/2008  Table 1 Banking Density as at 31.12.2007 (Provisional)  District  No.

Their focus should be comprehensive, meaning further adaptation of legislation, improvement of infrastructure, full privatization of public assets, improvement of the business climate, deepening and broadening of the financial market, comprehensive reform in pensions, as well as a number of other actions which I can not mention here because of objective reasons. I think that the inflow of foreign direct investments remains our major target. Without them the region would remain small, fragmented, with a low development, social and economic potential, with sporadic exports, with premature markets and high costs, or in other words, with a low productivity. Personally, I am of the opinion that each foreign investment means faster convergence to Europe. Third, the financial market should develop to create other alternatives for savings, financing and risk management of economic entities, as well as for improving the conditions of these activities. Besides the banking sector, the share of non-bank financial institutions should also be rapidly developed, to enable a greater involvement and access to financial services for entities that can not benefit enough from banking services. Furthermore, I think that it is important to pay more attention to development of capital markets, particularly those issuing and trading debt securities and equities by private entities. Fourth, the regulatory framework and supervisory practices should be completed with some important elements in terms of prudential measures and emergency financial situation management. The prudential measures framework should cautiously treat capital and liquidity requests from banks, especially in the case of foreign currency.