samchain/econo-pairs-v1 huggingface dataset:
In addition, the depreciation of our peso, although an important incentive for the export sector, in the short term has negatively affected the imported components of domestic expenditure. Along with this, it is worth noting the decline in economic expectations in recent months, which, on one hand, are a reflection of this scenario of slower growth, but on the other, may end up negatively affecting domestic demand. Expectations for investment and consumption have been falling for quite some time already, and more sharply in the most recent past. The Economic Perceptions Index (IPEC) and the Monthly Business Confidence Indicator (IMCE) have posted continuous declines this year. As of July, the two are below their neutral levels (figure 1). Besides, they show significant deterioration in some specific items, most notably those related with the convenience of buying durable goods, the perception about employment and the appropriate level of inventories. Meanwhile, the Business Perceptions Report published by the Bank in August revealed that firms perceive an increase in uncertainty, which has influenced both their own and their customers’ investment and spending decisions. Increased uncertainty naturally results in investment projects being pushed back (the “wait-and-see” option in specialized jargon), which could partly explain the reduction in investment. As I said, monetary policy has responded strongly and decisively to the worsening of our domestic scenario, generating significant monetary impulse. By mid-2013 we expressed the  2  BIS central bankers’ speeches  need to adopt a more expansionary monetary stance that would ensure that inflation would converge to the target.

14  Report, Sept. 14  2016 (f) Report, Sept. 14  (annual change, percent) 3.4  3.9  3.9  3.8  3.9  2.4 1.0 1.6 7.3 5.4 4.1 2.0  2.1 0.8 1.0 7.3 5.4 4.0 1.7  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  3.0 1.7 1.5 7.2 6.2 4.5 2.6  3.2 1.8 1.2 7.0 6.5 4.8 3.3  300 106  310 108  315 106  (levels) 285 101  290 103  305 104  300 101  -0.9  -0.5  -0.8  -0.5  3.5  3.3  3.2  3.8  3.7  3.7  4.4  (annual change, percent) -0.2  -1.1  -1.5  (f) Forecast. Sources: Central Bank of Chile based on a sample of investment banks, Bloomberg, Consensus Forecasts, the IMF and statistics bureaus of respective countries.
SPEECH  The coronavirus crisis and SMEs Speech by Christine Lagarde, President of the ECB, at the “Jahresimpuls Mittelstand 2021” of Bundesverband Mittelständische Wirtschaft Frankfurt am Main, 1 March 2021  It is a great pleasure to have the opportunity to speak to you today. At the ECB we care deeply about connecting with small and medium-sized enterprises (SMEs), since they are the foundation of the European economy. SMEs make up 99.8% of all non-financial companies in the EU, provide 66.6% of jobs and generate 56.4% of added value. [1] It is decisions by companies like yours to invest, hire and innovate that put the European economy on a path to growth. But in Germany, being part of the Mittelstand has a special quality that is about much more than the firm’s size. It is about the philosophy of how to do business and the spirit of management. As Ludwig Erhard said, what defines the Mittelstand is “eine Gesinnung und eine Haltung”[2], how one acts and behaves in society. This way of doing business has brought tremendous economic success. Of the 2,700 “hidden champions” worldwide – SMEs that are leaders in niche markets – almost half are part of the German Mittelstand. [3]  1/8  And it has also helped to pull Germany through times of great crisis. The Mittelstand was central to the country’s Wirtschaftswunder after the Second World War. It was critical to Germany’s swift bounceback from the global financial crisis in 2008.

Just like households, entrepreneurs can be savers and investors, but also employers and borrowers that depend on access to loans. SMEs in particular rely on funding from banks, since they typically do not access capital markets. Over the last decade, 43% of external finance for SMEs in the euro area has come from bank loans – double the share for large firms. [9]  So when the lockdowns began, SMEs across Europe turned to banks to meet their liquidity needs – and it was vital that a cheap and elastic supply of credit was available. 3/8  This is where the ECB stepped in. We monitor SMEs’ access to finance very closely, including through a special Europe-wide survey. And we took a series of measures specifically designed to help channel credit to firms in need. First, we launched our pandemic emergency purchase programme (PEPP), which helped stabilise financial markets. That was crucial to ensure that bank lending rates did not tighten suddenly, since bank loans are priced off sovereign borrowing costs. Second, we recalibrated our targeted longer-term refinancing operations (TLTRO III), lending to banks at the lowest rate we have ever offered, but only on the condition that they used the funds to lend to firms. Banks have taken up € trillion in these operations so far. To access that liquidity, banks have to provide collateral, so we also decided to make loans to smaller businesses and the self-employed eligible as collateral for our operations.
In contrast, it is often the case for monetary policy that changes in the policy rate push both domesticallygenerated output and inflation in the same direction (for example an increase in the policy rate would, all else equal, reduce both output and inflation, and vice versa)—so-called Divine Coincidence. For monetary policy, trade-offs instead can arise from exogenous trade-off-inducing supply shocks. In these exceptional circumstances, the remit instructs the MPC to balance the trade-off between the speed at which inflation is returned to target and the support that monetary policy provides to jobs and activity. The UK has experienced a series of such shocks since the global financial crisis, during which a large adjustment to the supply side of the economy has meant a lower exchange rate, lower growth, and higher inflation (Chart 8).

In the following, I would like to describe the development of inflation over the past few months and explain our latest inflation forecast in more detail. The dotted curve in the graph shows our inflation forecast of June 2001. At the time, we expected inflation to climb slightly to 1.6% by mid-2002 and, subsequently, to recede gradually towards 1.2% by the beginning of 2004. This forecast was based on the assumption of a robust development of the world economy and a stable three-month Libor rate of 3.25%. We assumed at the time that the economic slowdown experienced in the United States and Europe would be overcome as early as in the second half of 2001 and that the Swiss economy would be able to perform according to its potential. The price of oil was expected to stand at approximately USD 25 per barrel. Our forecast of June overestimated the inflationary development of the last few months. Year-on-year inflation, as measured by the national consumer price index, dropped to 1.0% in the third quarter 2001 from 1.5% in the second quarter. In October inflation amounted to 0.6%, and to 0.3% in November. This sharp decrease can be mainly attributed to the marked fall in oil prices and prices of other foreign goods. Moreover, upward price pressure on domestic goods also eased markedly in November after still having been substantial until October. The dashed curve in the graph shows our latest inflation forecast. The table contains the average annual inflation rate according to the new forecast.
36 Dealing with the magnitude of financial cycles or bubble dynamics that economies typically face from time to time requires some absolute prudential limits. In Singapore, we have employed the following limits on property loans: •  Loan tenure cap of 35 years. BIS central bankers’ speeches  5  •  Loan-to-value ratios of 80%, 50%, and 40% for the first, second, and third property loans respectively, for tenures less than 30 years; for loan tenures more than 30 years, the loan-to-value ratios are 60%, 30%, and 20%. •  Total debt-service ratio of 60%, taking into account all debt obligations and using a medium-term interest rate of 3.5% for residential properties. (Current mortgage rates are generally below 2%.) •  Cap on banks’ property-related exposures at 35% of their total exposures. 37 In fact, macroprudential policies need not even be limited to prudential tools at the disposal of central banks or financial regulators. In the face of abundant global liquidity, credit-based prudential measures may not constrain loan growth or asset price increases sufficiently. Singapore has therefore also adopted fiscal measures such as stamp duties on buyers and sellers of properties as part of the macroprudential toolkit. •  The seller’s stamp duty ranges from 4% to 16%, while the buyer’s stamp duty ranges from 3% to 18%. •  These are essentially transactions taxes that aim to curb the speculative flipping of properties. 38 Third, it is important to draw a distinction between macroprudential policies and capital flow management measures.

We do not intervene in internal political discussions, whether in Greece or elsewhere. It is important that the independence of the Bank of Greece and its governor is preserved. Personally, I have the highest appreciation for Mr Papademos and Mr Stournaras as economists and policymakers. I must stress that an independent statistical system is also crucial. I won’t comment on Greek judicial decisions, but one should not underestimate the damage inflicted on Greece’s credibility by never-ending legal action against the former president of Elstat. Mr Georgiou discharged his duty in compliance with the European framework and his findings remain unchallenged today, including by the government. Do you think that the planned pension cuts for 2019 should be suspended or postponed, as the government wants? Has the government made any concrete proposals ahead of the mission and in view of the 2019 draft budget? The government also plans tax cuts in 2019 using the expected excess primary surplus, affecting ENFIA and social security contributions, among others. Do you agree with these measures? In line with what I said on the refocusing of our contribution to the programme, we do not want to discuss specific fiscal policy measures. What is essential for us is that fiscal targets for 2019 are met and that the budget composition is growth-friendly. As is the case in a number of countries in the euro area, it is important that the level of direct income taxation supports economic growth while ensuring that fiscal targets are met.
Just the reverse, I would say, in the light of quite a few years in the vicinity of decision-making in economic policy. Economic outlook in the coming years A suitable starting point for a discussion of the economic future is the October Inflation Report. Our assessment there assumed that international economic activity will tend to slacken but still remain relatively strong. We counted on GDP growth in the OECD area being 3.8% this year, followed in the next two years by 3.0 and 2.7%, respectively. Inflation would remain relatively low, partly in view of strong competition in the international markets. Growth in Sweden was judged to be 4% this year, 3.7% next year and 3.0% in 2002. Domestic demand growth would be relatively high for consumption as well as investment. A damper was expected, however, from an appreciation of the krona. A gradual increase in inflation was predicted, so that two years ahead the rate would be approximately in line with our target. As usual, we identified various risks in our forecast. One was the possibility of the oil price staying at a high level. We also considered that the exchange rate might be weaker than economic fundamentals in Sweden would warrant in the longer run. Another risk was that of higher wage increases. It was conceivable that the wage rise would be even higher than the annual rate of just over 4% we had assumed for the coming two years, due, for example, to far-reaching demands for compensation and parity.

4  BIS central bankers’ speeches  The tensions eased through various channels, among which the activity of CESCE, which bolstered the extension of guarantees and bonds to Spanish companies to participate in international tender procedures and projects. Regulation by the Banco de España The Banco de España, in the performance of its functions, lays down a series of accounting and prudential rules that determine the requirements made of banks in the pursuit of their activity. These rules comprise the regulatory implementation of Spanish legislation which, in turn, is determined by European regulations and by the agreements reached on the Basel Banking Supervision Committee. Let me begin with accounting regulations and, in particular, with the rules on country risk provisions, which are particularly significant in international trade transactions. In these financing operations there is, alongside the risk of commercial insolvency, so-called country risk, which includes, by way of sovereign risk, transfer risk (i.e. that it is not possible to meet debts abroad owing to a lack of currency or the legal impossibility of transferring currency) and other risks arising from international financial activity, such as expropriation and natural disasters. As what is involved is a risk other than habitual commercial risk, it requires a differentiated treatment under default provisioning rules.
It is possible that the e-krona could play a role for Sweden's crisis preparedness. But in any case, the Riksbank needs to clarify its role as provider of money in appropriate forms in a crisis situation. In the same way as the Riksbank is ‘lender of last resort’ for the banking system, we have a responsibility to enable payments in a crisis, to be a ‘money provider of last resort’. Personal reflections Two years of intensive work on the e-krona have now passed and I will be leaving the chairmanship of the steering group as the project enters the next phase. It has been two incredibly educational years, but I think it is still too early for me to decide whether or not I shall support an e-krona for the general public in the future. As has hopefully been clear from my earlier reasoning, this depends on whether it emerges that there are better alternatives to guarantee both the security and efficiency of the payment market. And to answer this, the analysis needs to continue. At the Riksbank, we will work in two parallel tracks: partly, we will develop the pilot version of a simpler form of the e-krona and learn the lessons that may be needed if it turns out that an e-krona is to be issued. And partly we will deepen our analysis of the consequences for Sweden if the payment market should become entirely privatised.

A case in point is the SNB’s decision to introduce the minimum exchange rate of CHF 1.20 per euro in September 2011, and then discontinue it earlier this year. As mentioned, in enforcing the minimum exchange rate, the SNB intervened heavily in the foreign exchange markets, and did not refrain from taking on significant balance sheet risks, particularly in 2012. At the time, interventions were necessary to counteract upward pressure on the Swiss franc resulting from substantial capital inflows and a lack of outflows due to flare-ups in the European debt crisis. Towards the end of 2014, the minimum exchange rate again came under increasing market pressure, requiring renewed interventions by the SNB. This time, however, the international environment was very different. While expectations of an interest rate rise in the United States were mounting and the dollar was appreciating, from mid-year onwards there were signs in the euro area of further monetary policy easing, and the euro started to weaken across the board, pushing the EUR/CHF exchange rate close to the CHF 1.20 per euro floor. On the back of these developments – also reflecting the collapsing interest rate differential – Swiss franc investments again became relatively more attractive. Given these circumstances, and in view of quantitative easing in the euro area, the continuation of the minimum exchange rate policy would have meant a permanent, potentially uncontrollable expansion of the SNB balance sheet.
5  Around a half (5000) of all Maltese outlets have already applied and around 3250 have been awarded the FAIR mark, meaning that around 25% of all eligible outlets are actually participating. (Figures from May edition of Euro Times). 4  BIS Review 77/2007

This is also crucial. As these restructured loans, which were totally necessary, did not deplete banks, they were able to ramp up lending. Last year, the corporate loan portfolio expanded by 9.9%, which is nearly twice as much as in 2019. In turn, the Bank of Russia pursued a policy making it easier for banks to address these two tasks — restructure loans and issue new ones. We introduced regulatory relaxations to ensure that the volatility of various financial indicators in the market did not affect banks’ balance sheets. These measures included short-term easing providing more time to banks to adjust to the situation for them to avoid camouflaging problems and toxic assets. Looking at other nations, we know how all this might affect lending conditions. Incidentally, many banks did not even use these relaxations, which also confirms the stability of the system as a whole. Nonetheless, this provided them more comfort to continue restructuring and expand lending. In addition, we released buffers — capital cushions accumulated over previous years — for consumer and mortgage loans, which increased capital for lending. In our opinion, these measures were sufficient. What is the situation in the banking sector now? By the beginning of 2021, 75% of loan repayment holidays ended. In other words, restructured loans now pose objectively lower risks to banks’ financial standing. Moreover, the absolute majority of borrowers have managed to resume their scheduled repayments. This means that they really needed loan repayment holidays and easing for that period (which was not writing-off, but easing).
CoCos or contingent capital issuance instruments that count as additional Tier 1 and satisfy our conditions amounted to another € billion. Internal capital generation, either by retained earnings or by extra provisions, and we calculated the provisions that are above what would have been the normal trend of evolution of provisions because indeed, as you well know, since last year banks have been increasing provisions just preparing for the exercise and the two things together amount to € billion. And then the other measures, asset sales and others, amount to € billion. This is a measure of the front-loading by the banks in preparing for the exercise, which is important to highlight because capital increases or increases in extra provisions done last year indeed reduced the numbers that the exercise could detect in the end. 2  BIS central bankers’ speeches  The stress test itself, it’s also important to highlight that the severity of the scenario in the adverse case was indeed higher than in previous exercises. In fact, if we compare with previous exercises, taking the metric of the GDP drop in the adverse scenario, after two years in this present exercise the GDP on average would drop by 5.1%, whereas in previous exercises it dropped by 3% or 4% only. And this exercise had a third year which was not present in the previous exercises, so that the overall drop in GDP in the adverse scenario over the three years comes to 6.6%.

The AQR itself resulted in a gross impact on asset values in need of adjustment by € billion, € billion of which did not generate a capital shortfall. So if you add up the € billion with the € billion shortfall, you get the overall impact on the banks of € billion coming from the comprehensive assessment. This you can compare with the expectations in the market. I just quote two examples of publications by investment houses of September, the more recent ones, of two big investment banks. One made calculations for a sample of 37 banks and found that, considering the measures already taken by the banks, the shortfall would be zero, and three banks would fail. The other one considered a sample of 34 banks and concluded that, taking  BIS central bankers’ speeches  1  into account the capital measures taken by the banks in 2014, zero banks would fail and the capital shortfall would be zero. This compares with our result that out of the 25, 12 banks have already taken measures in 2014 that are enough to cover their shortfall. But there are then 13 banks that still have either to exactly apply their restructuring downsizing as it is foreseen in their plans with the European Commission, or they will have to come up with ways to increase their capital. So this is an important explanation of the meaning of the results that we have.
17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Chart 3: UK Phillips curve Wage inflation (%)  40 35 30 25 20 15 10 5 0  0  2  4  6  8  10  12  14 -5  Unemployment rate (%) 1971-1997  1998-2012  2013-2017  Fitted 1971-1997  Fitted 1998-2014  Fitted 2013-2017  Sources: ONS and Bank of England calculations. Notes: Wage inflation refers to annual whole economy total pay growth. Chart 4: US Phillips curve  Wage inflation (%) 10 9 8 7 6 5 4 3 2 1 0 0  2  4  6  8  10  12  Unemployment rate (%) 1971-1982  1983-2011  2012-2017Q1  Fitted 1971-1982  Fitted 1983-2011  Fitted 2012-2017Q1  Sources: Thomson Reuters Datastream. 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  Chart 5: UK trade union membership Per cent of employment 60 50 40 30 20 10 0 1892  1902  1912  1922  1932  1942  1952  1962  1972  1981  1991  2002  2012  Sources: Department for Business, Energy and Industrial Strategy, Thomas and Dimsdale (2017) and Bank of England calculations.

To listen as often as we speak; to try and better understand the issues people tell us matter to them, rather than the issues we tell them ought to matter to them; to close that gap between “us” and “them”. With the fortunes of the economy uncertain, the value of this grassroots intelligence has never been greater. So where is the UK economy at this critical juncture? Overall, the picture is a reasonably reassuring one. The UK economy has grown for 17 consecutive quarters. Output has increased by around 2% over the past year, just a little below its historic trend rate. Employment in the UK is at its highest rate since 1973. Unemployment is currently at its lowest since 1975. Confidence among businesses and consumers remains solid. And inflation, which had been below its 2% target for three years, has bounced back sharply recently. Nonetheless, the UK economy clearly does face a number of important challenges. Consumer price inflation (CPI), at 2.9%, is currently well above the government’s inflation target of 2%. It is likely to move further above that target during the course of this year, probably reaching 3%. Meanwhile, growth in the UK has slowed fairly sharply since the end of last year, as higher prices squeeze households’ purchasing power in the shops. Activity in the UK economy remains below its long-run potential. And, of course, all of this is before the full effects of Brexit have been felt.