samchain/econo-pairs-v1 huggingface dataset:
It is also vital to hold long-term unemployment at low levels, and to do this the move from unemployment to employment status must be made easier, improving the workings of employment services and the effectiveness of active policies. In the housing market, the regulations governing renting must be improved to make it more flexible and profitable so as to promote the acquisition of houses for investment purposes, and thus help reduce excess supply. Further, putting these houses on the rental market would make it easier to meet the population's demand for residential services. In services activities and, in particular, in the distributive sector there is also much scope to set in place a more competitive environment and achieve sizeable gains in efficiency. I consider that the transposition of the services directive offers a unique opportunity for headway in achieving the objective of reducing our rate of inflation and increasing the economy's competitiveness and household purchasing power in a setting in which incomes have been dented by dearer oil and the slowdown in employment. With the same objectives, improvements in the regulation of the network industries and, in particular, of the energy sector should be made to promote competition and increase energy efficiency. The same applies for port, airport and railway freight transport services, sectors which are essential for strengthening the competitiveness of Spanish industry and exporters.

For instance, the Riksbank monitors and analyses the financial system, identifies potential risks and influences participants that are important to financial stability. We shall work to prevent financial crises from arising, but if they should nevertheless arise, it is our task to manage the situation. What does this mean? For instance, we must be prepared to act in situations where our assessment is that financial stability is threatened. Let us assume, for example, that a Swedish bank which is under the supervision of Finansinspektionen, the Swedish Financial Supervisory Authority, is solvent and has assets that are greater than its liabilities, but experiences serious problems with its liquidity and thereby difficulty in meeting its payments. If the Riksbank’s assessment in such a situation is that the stability of the financial system is at stake if the bank collapses, then we can intervene with measures to aid liquidity. The United States is currently in the midst of a financial crisis, the backwash of which is sweeping through the global financial system. Although financial turbulence has been included in our analyses ever since last summer, the way it has manifested itself and the intensity of the events has varied along the way. And in recent weeks the problems have escalated. The most recent wave of financial turbulence is the worst so far since the original US mortgage crisis broke out. So what has happened recently? For one thing, large agents in the US financial market have suffered acute problems.
The banking system remains sound, a fact that also attributes to the effective carrying out of the regulatory and supervisory function of the Bank of Albania. In what follows I would like to elaborate more on these aspects. 2.1  Banking system performance  The Albanian banking system’s total assets increased in 2009, but at a rate about twice lower than in 2008. This decrease reflects fully the lower expansion of lending. Our banking system continues to be mainly financed by public deposits and be concentrated on business lending. The banking system’s deposits and loans grew but at a lower rate than in the previous years. Loans to total deposits increased by nearly 3 percentage points, from 62 to 65 percent. On the other hand, the increase of deposits as a result of the restored public confidence has improved the liquidity situation in the banking system. Non-performing loans increased in 2009 owing to the economic slowdown and the exchange rate depreciation. Loan portfolio quality index expressed as “non-performing loans to total outstanding loans” rose to 10.48 percent as at end 2009 from 6.64 percent at the end of 2008. On net basis, that is deducting total provision fund, the same figure is only 6.3 percent. The Bank of Albania has monitored the situation closely being aware of the pro-cyclical effects that these developments may have on the loan portfolio. Despite the loan portfolio deterioration, capital adequacy and quality, to carry out the banking operations, to extend and expand lending, have remained almost intact.

Despite the slight correction during the year, current account deficit remains high and one of the weaknesses of the Albanian economy. The Bank of Albania considers that the prioritized handling of the current account deficit requires the formulation of policies supportive to the long-term growth of savings in Albania, as well as measures to encourage production in those branches or industries that result competitive in the international markets. Trade balance narrowing was affected by the concurrent annual decline of exports and imports by 18 and 9 percent, respectively. The difficult situation in our neighbouring countries has been also reflected in the decline of remittances, which contracted 6.5 percent in annual terms, while their share to GDP was 9 percent. Capital and financial account surplus reduced substantially over the course of 2009, dropping by 35.6 percent compared to 2008. This performance owes to a large extent to the low increase in foreign direct investment and the reduction of private foreign borrowing. Unlike the previous two years when capital and financial account covered over 100 percent of the current deficit, in 2009 it financed only 77 percent. Total foreign inflows, albeit downward, were almost sufficient to cover this deficit in 2009. The country’s foreign reserve remained at similar levels as in 2008, sufficient to cover 4.2 months of imports of goods and services. 4  BIS Review 78/2010  The contraction of foreign inflows exerted depreciating pressure on the exchange rate, particularly in the first half of 2009.
It is because the main objective of the monetary policy is to maintain price stability in the economy, which is considered to be the main prerequisite for acceleration of the economic activity and for accomplishing sustainable economic growth. Hence, the adequate measurement of inflation, which is an issue that has been interesting for the central banks for years, and which is even more important when inflation rates are low, is so challenging and crucial for the central banks, i.e. for the monetary policy decisions. Non-expert public listens to the information about the inflation indicators. It neither wants nor it is able to go into the numerous statistical problems when measuring inflation. However, it senses the possible discrepancies between the officially announced indicators and the real ones since that public confronts its nominal and real purchasing power on a daily basis. On the basis of that confrontation and daily market-based check-up of the official statistical information, confidence or lack of confidence in the authorized institutions is created, influencing positively or negatively the behavior of all market participants. The authorized institutions are responsible for making precise the differences between the nominal and the real aggregates, for selection of more precise statistical methods and techniques for measuring inflation, simultaneously as transparent and as understandable as possible for all market participants.

For some years before the turmoil erupted, we have been puzzled by how low risk was priced in most credit markets. Again, with slight exaggeration, the case can be made that mispricing of risk occurred because extreme events – i.e. tail risks – were systematically ignored. At a general level, complexity and opacity in the originate and distribute model made it difficult to understand the "true " nature of risk i.e. the probability distribution attached to specific instruments. More subtly, I wonder whether the slicing and tranching process – which gave rise to structured products – has, intentionally or not, both created additional tail risk and contributed to conceal it. Most managers, for instance, have been caught by surprise by the fast downgrading of AAA CDO tranches, which triggered massive write downs. With hindsight, we know that those tranches had lower average probability of default than the underlying loans – which provided the rationale for the AAA rating – but also possessed a much higher exposure to tail risk. That latest characteristic was not apparent from the rating. As a consequence, tail risk was clearly not priced in, which made those securities both very attractive and absolutely lethal. Tail risk was not only deeply concealed in the complex structure of the instrument. It was also, to some extent, "created" by the instrument itself. As a result of the tranching process, an underlying portfolio with normal risk distribution was transformed into a different set of instruments. Some (equity tranches) had a with very high average default probability.
Under new  4  See Wapshott, Nicholas (2011): Keynes Hayek: The ClashThat Defined Modern Economics, New York, London: W.W. Norton & Company, Inc., pp. 72–78. 5  For the past few decades, Charles Goodhart has been a leading researcher at the London School of Economics (LSE) within both monetary policy and financial stability. Another well-known researcher in these areas at the LSE is former Governor of the Bank of England Mervyn King. BIS central bankers’ speeches  5  rules, investors are required to take losses if large global banks encounter difficulties. 6 A system for joint supervision and resolution of systemically important banks was put into operation by the euro area countries in 2014 and 2015. 7 This is great progress. A credible global system for crisis management and bank regulation will in itself contribute to crisis prevention. Bank’s capital requirements have increased, in Norway as elsewhere. This is a good thing. We are going to need solid banks. Reforms and economic restructuring The Norwegian economy is not in a crisis, but we are facing a period of restructuring. We have been in a similar situation before – when oil prices fell in 1986. The crisis that ensued eventually also led to positive changes. In the wake of the crisis, the authorities implemented reforms through the first half of the 1990s that laid the basis for renewed economic growth. The Act establishing the Government Petroleum Fund was adopted in 1990. Banks were instructed to increase efficiency.

First, for the first time, taxpayer funded bailouts were extended to the uninsured creditors of nondeposit-taking entities (the names of Bears Stearns and AIG naturally come to mind) for fears that their failures would have severe negative externalities. Second, the list of globally systemically important banks is now set up and published by an official international body, the Financial Stability Board, on the basis of a mandate given by the G20. In itself, this simple fact could be interpreted by markets as a signal that public authorities will never allow the thirty firms belonging to the list of G-SIBs to fail. On the other hand, expectations of public support for too-systemic-to-fail institution are likely to have been reinforced by the market turmoil that followed the failure of Lehman Brothers. Let me now flag some of the questions/challenges that could be addressed today. The first question that naturally comes to mind is the measure of the phenomenon, i.e. : “How big is the implicit subsidy?” A quick look at the literature shows that measuring the subsidy is difficult, since it is implicit and tied to market perceptions. In addition, differences in funding prices between large or systemic banks and small or non-systemic banks can be due to factors unrelated to potential government support, such as differences in economies of scale and scope, or differences in the size and liquidity of bonds issuance. Overlooking these alternative factors could lead to overestimate the size of the implicit public subsidy.
Since then, we have made significant progress in moving the unemployment rate back to a more normal number. Yet, at 6.1 percent, it remains too high. And, as we have heard all morning, other measures of labor market activity remain suppressed. We have underperformed on the inflation front as well. Since 2008, year-over-year total inflation as measured by the Personal Consumption Expenditures Price Index (PCE) has averaged just 1.4 percent, well below its 2 percent target. Today, PCE inflation stands at 1–1/2 percent and is expected to move up only slowly toward the FOMC’s target. Nonetheless, we have come a long way in healing the injuries the financial crisis inflicted. Certainly monetary policy has been doing some heavy lifting. The Federal Reserve responded quickly to the unfolding recession by cutting the fed funds rate to near zero by December 2008. At the zero lower bound (ZLB), we then turned to unconventional measures, such as large-scale asset purchases and forward guidance about the federal funds rate to provide further accommodation. In the fall of 2012, with the unemployment rate hovering stubbornly at around 8 percent and core inflation steadily drifting lower than our 2 percent target, the Fed introduced open-ended asset purchases and, later, forward guidance that related federal funds rate actions to thresholds explicitly expressed in terms of our policy goals. Together, these efforts have helped the economy make impressive progress toward our employment mandate and appear to be moving us closer to our 2 percent inflation target as well.

The growth momentum is expected to pick up further after China’ s announcement to formalise the use of RMB in foreign direct investment (FDI) in 2011. The upside is very significant as China’ s total FDI amounted to USD 116 billion in 2011, or RMB 750 billion equivalent. Besides facilitating the rapid development of the sukuk and dim sum bond markets, more importantly, the Pilot Platform will contribute significantly to financial stability in the Asian region. With the advanced economies undergoing structural adjustment and fiscal consolidation, the two-speed recovery will continue to entice portfolio flows into Asia. The key challenges for Asia are to channel such flows to productive use, reduce concentration in short-term positions of the more volatile asset classes, and to avoid such flows spiking up a  BIS central bankers’ speeches  1  property price bubble. Channelling the inflows into the bond market will serve these useful purposes as the investors are typically institutional investors who take long-term positions in strategic economic sectors. The global financial crisis has reminded us of the destructive powers of a liquidity crunch and the need for quick access to local currency liquidity in times of stress. In particular, the increased risk aversion arising from the recent financial crises and heightened alertness to the counterparty exposure have raised the demand for secured lending. As an illustration, the average tripartite collateral management deals outstanding administered by Euroclear Bank increased substantially from EUR 76 billion in 2001 to EUR 325 billion in 2011.
Many crises, not least the most recent one, have been preceded by a lack of transparency in the financial system. During the latest crisis, the lack of transparency made it almost impossible to know which participants were exposed to the most serious risks. This impenetrable uncertainty was one of the main factors that contributed to the paralysis of the world’s financial markets in the autumn of 2008. It is often uncertainty about the true state of things that in itself makes people nervous and that sometimes leads to bank runs and panic selling, which in turn can lead to devastating chain reactions in the financial system. Of course, the need to increase transparency primarily falls  BIS central bankers’ speeches  7  on the participants in the financial system. But the Riksbank can also contribute by being open about its assessments and analyses of the state of the financial system, for example by publishing stress tests. How open the Riksbank should be about its assessments, its preparedness and its own measures is determined by how this can be expected to affect confidence. In a crisis situation, we may of course be forced to carefully consider what can or cannot be said. However, the fundamental rule is that it is better to be open and clear than to be uncommunicative and ambiguous. A “negative” but reliable announcement can therefore be better for confidence than a “positive” but uncertain announcement. Openness about the problems that underlie a crisis may therefore be the key to regaining confidence.

On the other hand, a tighter hold on the reins during the good years preceding the crisis would have increased resilience and provided more room for manoeuvre to manage the crisis when it did occur. It would then have been possible to manage the crisis within a couple of years and we wouldn’t still have to be dealing with it today. My conclusion is that well-balanced monetary and fiscal policies offer the best possible chances of preventing financial crises, but essentially other measures are needed. We need tools that are specially designed for working with the stability of the financial system. Macroprudential policy – a new policy area Traditionally, financial supervision has had a rather one-sided focus on the health of individual financial institutions. In practice this has also been the case in Sweden, although formally Finansinspektionen has the task of working for a stable and efficient financial system alongside its consumer-protection tasks. However, the fact that individual parts of the financial system appear to be healthy does not mean that they are immune to contagion from other parts of the system. The institutions have exposures to one another and it is sometimes unclear who is exposed to what risks. When an individual institution experiences problems, this may then have serious repercussions for the financial system and, ultimately, the real economy. However, traditional supervision has not sufficiently taken into account the risk of financial problems becoming contagious. Monitoring those risks is also a rather different process to monitoring the risks in an individual institution.
Figure 7 CPI inflation (*) (annual change, percent)  CPIEFE inflation (*) (annual change, percent)  10  10  10  10  8  8  8  8  6  6  6  6  4  4  4  4  2  2  2  2  0  0  0  0  -2  -2  -2  -2  -4  -4  -4  -4  07 08 09 10 11 12 13 14 15 16  07 08 09 10 11 12 13 14 15 16  IPoM Mar.2014 Mar.2014 MP Report  Jun.2014 MP Report IPoM Jun.2014  (*) Gray area, as from the second quarter of 2014, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).

BIS central bankers’ speeches  9  Table 1 International baseline scenario assumptions 2012 GDP growth Trading partners' GDP World GDP at PPP  2013 (f) IPoM Jun. 14  2014 (f) IPoM Mar. 13  3.4 3.1  3.3 3.0  2015 (f) IPoM IPoM IPoM IPoM IPoM IPoM Dec. 13 Mar. 14 Jun. 14 Dec. 13 Mar. 14 Jun. 14 (annual change, percent) 4.2 3.6 3.7 3.6 3.8 3.9 3.9 3.9 3.5 3.5 3.3 3.7 3.8 3.7  United States Eurozone Japan China India Rest of Asia (excl. Japan, China and India) Latin America (excl. Chile)  2.8 -0.6 1.9 7.7 5.1 3.8 2.7  1.9 -0.4 1.5 7.7 4.6 3.9 2.2  2.5 1.3 1.3 8.2 6.4 4.7 3.7  LME copper price $ Brent oil price $  361 112  332 109  Terms of trade  -4.1  -3.2  2.6 2.7 2.4 1.0 1.2 1.0 1.3 1.5 1.6 7.4 7.3 7.3 5.3 5.4 5.4 4.0 4.1 4.1 2.9 2.3 2.0 (levels) 340 310 300 310 101 106 106 108 (annual change, percent) -1.6 0.2 -0.9 -0.5  2.7 1.4 1.0 7.2 6.3 4.5 3.4  2.9 1.5 1.1 7.2 6.3 4.5 3.4  3.1 1.7 1.0 7.2 6.2 4.4 3.0  290 100  285 101  290 103  -1.5  -1.1  -1.5  (f) Forecast. Sources: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts, the IMF and statistics bureaus of respective countries.
On the part of the financiers, it is crucial for financial institutions to build their capacity and capabilities to be able to better assess the viability of green projects, given the complexity and ever-evolving technology. Limited technical know-how on the part of the financial institutions on the green sector can lead to hesitation to provide funding or any form of protection or guarantees due to perceived risks. Limited financial literacy of project sponsors such as corporates and micro, small and medium enterprises (MSMEs) would also put them in a disadvantaged position in project evaluation. Many may also be unaware of the available financing instruments and suitable financing for their green ventures. Although Malaysia is a high saving nation with high gross national savings, averaging above 20%, without addressing this, there will continue to be a mismatch between where the money sits, and where it is needed for green investments. Green investments would continue to appear aspirational rather than a necessity. 1/3  BIS central bankers' speeches  The pursuit of climate action, including expanding climate finance is one that calls for action from four key actors – first, the Government; second, businesses; third the NGOs and civil societies; and finally, the financial sector. Businesses need to pay attention to the environment. Simply put, there can be no profit without the planet. The NGOs and civil societies could play diverse roles in support of the climate agenda including creating deeper awareness and highlighting problems.

Our main concern is that across euro area countries domestic vulnerabilities are still very large, which implies a limited ability to withstand adverse external shocks and to kick start a new phase of sustainable growth. The vulnerabilities of many euro area countries are related to the high stock of debt, both public and private, and to a number of structural rigidities and institutional bottlenecks that prevent an optimal allocation of resources across factors of production, and thus limit total factor productivity growth. The current environment not only urgently calls for the implementation of structural reforms, but also provides the right conditions for their implementation. With our monetary policy, the ECB is greatly contributing to an environment favourable to implementing structural reforms: our accommodative monetary policy stance helps countries to gain time, time to implement the necessary measures to increase resilience and thus support sustainable growth. However, there is only a limited role for demand-side policies. Fiscal space is limited and monetary policy cannot carry the burden of the adjustment alone. For the euro area to become more resilient and sustain stronger growth, national governments need to bring about further structural change 1. Work in this regard has already started, and the reform wave of the countries hardest hit by the crisis is showing some initial results, such as a GDP recovery related to comprehensive labour market reforms. Other reforms, mainly on product markets, are expected to bring about GDP gains, but they need to be implemented in full.