samchain/econo-pairs-v1 huggingface dataset:
This is the way we have tried to work so far, and we will continue to do so as long as necessary. When I come here to the Committee on Finance hearing to answer questions on monetary policy, that subject is usually what my introductory speech concerns. Today it will be slightly different. Recent developments clearly show how closely our main tasks, financial stability and monetary policy, are linked. I would therefore like to begin by talking about those points of contact and various measures we have taken to ensure that certain financial markets will function more normally. With this as a base, I will then move on to the interest rate decisions and the financial turbulence from a monetary policy point of view. Finally, I would also like to make a brief comment on our own experiences of earlier crises and the future of the global financial system. Monetary policy and financial stability – why is the system so important? One can say that the payment system and to some extent the financial markets are the circulatory system of our economy. What is usually referred to as financial stability concerns, to put it simply, working in various ways to ensure the financial system is stable and functions efficiently. For example, individuals, companies and organisations must be able to make and receive payments in an efficient manner.

And her stories have served as the inspiration for new fiction, ranging from faithful imaginations of the future lives of Austen’s characters (Death Comes to Pemberley by PD James) to modern re-workings (Bridget Jones’s Diary by Helen Fielding) and even more fanciful retellings that feature the living dead (Pride and Prejudice and Zombies by Seth Grahame-Smith). Banknote design What might Jane Austen have made of the new £ note had she been able to join us today? She might not have immediately recognised it as money. Banknotes have changed almost beyond recognition since Jane received her £ for Susan. Back then, the Bank of England was issuing partly printed notes for completion in manuscript. The £ sign and the first digit were printed but other numerals were added by hand, as were the name of the payee, the cashier’s signature, the date and the number. Notes could be for uneven amounts – it wasn’t until 1745 that notes were part printed with set denominations, with the first £ issued only 18 years before Austen’s birth. You can see an example of a note that Austen may have received on the screen behind me. Remarkably, the new £ is not the first banknote on which the Austen name has appeared. That award must go to Jane’s brother Henry. Henry was, for a time, a banker, with interests in Hampshire and London. In the Austens’ times, many banks were small and local, and could issue their own banknotes. And so it was with Henry.
Before doing so, however, I shall offer a brief overview of the financial situation last year in Spain. Spanish banking system Inevitably, the Spanish financial system was affected during 2001, albeit unevenly, by the aforementioned shocks. The economic slowdown throughout the year translated into a lesser rate of banking activity than in previous years, resulting in growth in total assets of 7.3% in consolidated terms. Though below this, the growth rate of credit remained high, especially in respect of mortgage lending, which made for an increase in the level of debt and, in turn, saw credit markets gain weight relative to securities markets. The Spanish banking system was scarcely affected by the shocks discussed earlier, with the exception of the Argentine crisis, whose repercussions were more telling. Notwithstanding, our banks are weathering the storm caused by the Argentine crisis thanks to an appropriate and prudent provisioning policy. Although this has meant reduced earnings, these have still continued to outgrow those of most of the major international banks. The cyclical turnaround has also led to an increase in bad loans. Yet owing to the relatively strong growth of credit, this has not been reflected in default ratios, which have held at historical lows. The solvency of Spanish banking institutions was bolstered last year, breaking with the trend seen since 1997, although this improvement is mainly attributable to secondary capital.

A second reflection is that the presence of and adherence to a legally sound, open and stable institutional framework that is respectful of creditors' and debtors' rights is the only way to generate the confidence and support of international financial markets in such a way that domestic saving shortfalls may be financed. My third reflection considers the need for clear, credible criteria beforehand as to how to distribute the costs of crises. Such criteria should strike a balance between both domestic and foreign private creditors. Coverage of the shocks experienced by the international financial system last year would be incomplete without some reference to the set of shortcomings highlighted in the so-called ENRON case, which goes beyond the particular scope of this company and reveals weaknesses of a more institutional and systemic nature. These events were significant since they showed that, even in economies with more sophisticated institutional arrangements, some types of conduct with great destabilising potential may occur. The ENRON case was important not only in quantitative terms but also, and especially, in qualitative terms, witnessing a series of legally dubious practices which go beyond the strictly financial field: conflicts of interest, serious corporate governance shortcomings,  6  BIS Review 38/2002  excessively ad-hoc accounting practices deviating from prudential principles and from what is a fair view of the real economic situation, manipulation of information, etc. And all this set against the inoperativeness of the internal and external control mechanisms of the company.
Moreover, labour demand continued to be met by a significant influx of labour from abroad. The opening of the labour market within the context of the bilateral agreements with the EU creates additional growth potential. The competitive position of our economy is high, and the recent depreciation of the Swiss franc on the foreign exchange market gave it an additional boost. While exports continued to increase at a rapid pace, their growth rate may slow down somewhat compared with 2006. The healthy state of the economy and the improvement in the labour market have a favourable impact on consumer sentiment. Since the beginning of the year, household spending has been increasing at very steady pace. A continuance of this trend is possible, since the current near full employment is likely to lead to an increase in real wages. During the next quarters, companies will continue to step up equipment investment since the rate of technical capacity utilisation – in particular in the manufacturing sector – is high. Construction investment should stabilise at a high level. BIS Review 67/2007  1  These developments in demand components led us to revise our GDP growth forecast upwards for 2007. For the current year, we now expect growth close to 2.5%. Development in monetary and financial conditions In the Swiss capital market, we have been observing a steady increase in long-term interest rates over the past three months. The yield on 10-year Swiss Confederation bonds reached 3% in May.

Ardian Fullani: Bank-business relationship in Albania Greeting speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the meeting “Business Bank Communication Day”, Tirana, 20 October 2005. *  *  *  Ladies and Gentlemen, Recently, the promising paces in the increase of crediting to the economy from the banking sector make us realize that the numerous meetings organized with the scope of approaching banks to businesses are finally producing their results. Nonetheless, it is yet, too soon to describe it as a victory. Without diminishing the significance of these meetings, I think that the expansion of business crediting is not an effortless issue to be solved, especially when considered that our economy is still in transition. Frequently, the solution to the arousing issues goes beyond the good will of both, the business and banking community. Thus, avoiding the rhetoric of the previous meetings which habitually sets one’s party claims against the other, I would like to emphasize the need of a better coordination of efforts by the two communities to the solution of various issues. A few days ago, on the privatisation anniversary of one of the participant banks present in this meeting, I stressed the necessity of intensifying the institutional relationship between the banking system and the different business associations. Therefore, this meeting is an outstanding example of putting this initiative into practice and I trust it will serve as a good start of the regular contacts between the banking association and the business one.
Of the jobs created since 2012, over 2.7 million or around 80% have been full-time. Around half (over 1.7 million) have been taken by women. Employment rates among the youngest (aged 16-24) and oldest (aged 55+) have both risen strongly, by around four to five percentage points, respectively. The jobs bonanza has been fairly broadly-based across the occupational spectrum too (Chart 4). Unusually, all of the main categories of occupation have seen a rise in employment rates since 2012. As elsewhere, this boost has been largest at the higher-skill (such as managers and directors) and lower-skill (such as elementary occupations) ends of the occupational spectrum, with the mid-skilled benefitting least.2  2  For example, Haldane (2018), Autor (2014) and Autor (2017). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 4: Change in UK employment by profession Percentage change in employment between 2011 and 2018 25  20  15  10  5  0 Managers, Professional Associate Administrative Skilled Trades Caring, Sales and Directors and Occupations Prof. & Tech and Occupations Leisure and Customer Senior Occupations Secretarial Other Service Service Officials Occupations Occupations  Process, Plant and Machine Operatives  Elementary Occupations  Sources: ONS and Bank of England calculations. Notes: Ordering defined by ONS 1-digit SOC 2012 classification. Despite a slowing economy, this large and evenly-distributed jobs bonanza has continued apace. The stock of available job vacancies – a measure of aggregate demand for workers – currently stands at around 830,000, close to its all-time high.

•  Thailand is therefore poised to assume the role of a connector – by acting as a link or point of reference for the entry of global banks into the subregion. This is underpinned by our established financial platform, familiarity with the local business practices, as well as close cultural ties among our people. •  Of equal importance is our own inherent understanding of the challenges of developments faced by GMS, through our own experience. This is particularly important in two aspects. •  First, Thai financial institutions are still focused on core financial intermediary functions such as payments services, deposit, and loans which serve the basic needs of the real sector. Thai banks are inclined to serve the needs of the real economy rather than in speculative types of businesses such as proprietary trading. For these reasons, Thai banks are also less complex, with good risk management  2  BIS central bankers’ speeches  and strong capital base. Regulators in Thailand and GMS neighbours can understand fairly well the business model of our banks and their risk. We believe that given the lesson of the current global crisis, this type of bank model makes good sense for home and host regulators. •  Secondly, both regulator and the banks in Thailand could well remember the bitter experience of our own economic and financial crisis in 1997. We understand that financial liberalization needs to be properly sequenced.
Such measures should prevent adverse effects on the monetary policy transmission mechanism stemming from the ongoing tensions in parts of the euro area financial markets. They should in particular mitigate the effects of strains in financial markets on the supply of credit to firms and households. First, several measures have been enacted to ensure that banks maintain access to funding markets.   We have decided on three-year refinancing operations to support the supply of credit to the euro area economy. These measures address the risk that persistent financial markets tensions could affect the capacity of euro area banks to obtain refinancing over longer horizons.   Earlier, in October, the Governing Council had already decided to have two more refinancing operations with a maturity of around one year.   Also, it was announced then that in all refinancing operations until at least the first half of 2012 all liquidity demand by banks would be fully allotted at fixed rate.   Funding via the covered bonds market was also facilitated by the ECB deciding in October to introduce a new Covered Bond Purchase Programme of € billion.   Funding in US dollar is facilitated by lowering the pricing on the temporary US dollar liquidity swap arrangements. These measures should ensure that banks continue to have access to stable funding, also at longer maturities, which gives them the opportunity to continue lending to firms and households. Second, some banks’ access to refinancing operations may be restricted by lack of eligible collateral.

Against this background, the Commission’s recent legislative proposals on Credit Rating Agencies, which the ECB broadly supports, is also discussed by this Committee. Credit ratings have a direct impact on the market functioning and the wider economy. A sound and robust framework must thus be created. This framework should be geared towards the following objectives: to reduce market volatility; to enhance the quality of rating process; and to restore market confidence. The two issues that are of particular importance are, first, the assurance of appropriate underlying methodologies and the transparency of ratings; and second, the reduction of hardwiring of ratings in legislation and market practices. Ratings simplify complex risk assessments. But they should only be one of several inputs for investors. In particular, they should be no substitute for financial institutions and other investors to carry out their own assessment. This is the main step towards avoiding mechanistic reliance on external credit ratings. Let me say a few words on how the ECB itself uses ratings. In practice, for the large majority of marketable securities (such as sovereign bonds) the Eurosystem Credit Assessment  1  Subject to approval by Finnish Parliament. BIS central bankers’ speeches  3  Framework mainly uses the ratings issued by eligible credit rating agencies. At the same time, the Eurosystem does not mechanically rely on these assessments, as it is aware of the limitations of methodologies.
With the emergence of TPP, PSD2 makes it possible to dissociate administrative tasks – proper to the opening, maintenance and management of an account – from those others which generate revenues for banks thanks to the existence of those accounts. In this way the traditional role of banking as a single, or main, payment services provider is diluted. TPP are now legally authorised to gain access to banking infrastructure at the request of their customers, which threatens to weaken both customers’ links with banks and the stability of transactional revenues. One of the ways in which the banking industry could react to this challenge would be through the development of Application Programming Interfaces (API), open for massive use by third parties. These technical means, which allow resources to be shared among different environments, are a clear option for the future. Not only would controlled access to banking environments thus be promoted, in line with the more technical provisions implementing PSD2, but also, insofar as API are designed flexibly, they are set to open a window of opportunity for the obtaining of new revenues, since they enable a broad range of valueadded services – e.g. those linked to the remote identification of customers – to be deployed. Moreover, like TPP, banks could make use of these same API to provide services equivalent to those of these new competitors, differentiating themselves and offering other, higher-value-added services. In this new scenario, I wish to share a thought with the customers.

The Banco de España has dedicated notable efforts to promoting financial education for many years. Along with the CNMV (National Securities Market Commission), it has since 2008 promoted the Financial Education Plan, to which numerous institutions and public and private associations covering a wide spectrum of social sensibilities have adhered. The objective of the Plan is to enhance citizens’ capacity to take well-founded financial decisions and, in this respect, it aims to reach out to the entire population and have a durable presence over time. As part of this Plan, and with the focus on the young, the Financial Education Programme for Schools – an initiative supported by the Ministry of Education, Culture and Sport within the framework of the collaboration agreement signed in 2009 with the Banco de España and the CNMV – has recently been launched for another year. This Programme, currently in its sixth edition, seeks to bring basic knowledge of personal finances to the classroom so as to prepare pupils to meet the basic challenges in the financial area that they will face throughout their lives. Key concepts such as saving, income, personal budgeting, what things cost, quality of life and responsible consumption are all developed in the Programme. In the past five years around 300,000 pupils have benefited from it. More generally and in order to reach out to all citizens, another notable component of the Financial Education Plan is the website finanzasparatodos, which has been open to the 7/8  public since May 2010.
Urban Bäckström: The Swedish economy cyclical upswing or a more fundamental improvement? Speech held by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, at a meeting with Institut International d’Etudes Bancaires, held in Stockholm, on 19 May 2000. *  *  *  The current economic situation in Sweden differs appreciably from the early-1990s, when our country was on the brink of a serious financial crisis, with a currency and banking crisis, sizeable public sector deficits and rapidly rising unemployment. Today the picture is considerably brighter. The question I want to consider here with you is whether the impressive performance in recent years amounts to a conventional cyclical upswing or has to do with a more fundamental improvement in the workings of the Swedish economy. In the three years from 1991 to 1993, the Swedish GDP fell by a total of 5%, employment dropped more than 10%, unemployment shot up from 3 to 8%, the public sector financial deficit grew to 12% of GDP and government debt accumulated rapidly. Meanwhile, the stock of non-performing loans in the banking sector peaked at 10% of GDP or 8% of the total loan portfolio. The fixed exchange rate was questioned, there were sizeable interventions and for some days in the autumn of 1992 Sweden’s central bank raised its instrumental rate to 500%. Various explanations have been put forward for the depth of Sweden’s economic crisis.

In some cases, however, the situation is improving and the recent more proactive approach of the Japanese supervisory authorities deserves a commendable mention in this respect. I stress again that I am not intending to cast doubt on the value of consolidated supervision, but rather to point out that the reality does not always match the rhetoric. The answer can only be for individual supervisory authorities to build up a relationship of trust which allows for a free flow of information in both directions, adequate safeguards on the confidentiality of information received and an avoidance of over-hasty and disruptive supervisory action based on that information. At the end of the day the effectiveness of global regulation depends in large measure on cooperation among regulators. As a major international financial centre, Hong Kong will continue, after 30 June 1997 as it has done before, to play its part in fostering such cooperation. BIS Review 55/1997
And businesses are unlikely to want to expand while capacity is lying idle and there is still much uncertainty about the outlook for demand. But the substantial depreciation of sterling – down nearly 25% since the start of the crisis – should, over time, help to boost the contribution of net exports to UK growth. We have seen some of the fruits of that in the robust performance of manufacturing over the past year. As I already noted, the economy began to grow again more than a year ago, in the fourth quarter of 2009. And over the first year of the recovery, growth was around the UK’s historical average rate. In part, that was on the back of the boost to growth from a slowing in the rate of inventory de-stocking. Given the prospective fiscal consolidation, the maintenance of such growth rates requires a pickup in the contribution of private domestic final demand and in net exports. In our November Inflation Report, our central view 3 , predicated on market interest rates, was for the recovery to be maintained, with the boost from a stimulatory monetary stance and from the past depreciation of sterling offsetting the continuing headwinds from de-leveraging and fiscal consolidation. Since the November Report, we have, of course, had the first estimates from the ONS of growth in the final quarter of last year. They suggest that the economy contracted by 0.6%. In part, that was down to the disruption caused by the snow.

Another example is the Netherlands which, like Sweden, is normally characterised as a small, open economy. Even there, worrying signals similar to those in the Swedish and American economies can be perceived. The improved economic activity has led to falling unemployment and rising asset prices. During the last two years, total lending has risen at an annual rate of around 15%. In the Netherlands too, a large part of this rise in lending can be explained by rising prices, especially house prices. Dutch house prices rose on average 15.8% during 1999. As a comparison, it can be mentioned that Swedish house prices rose by approximately 8% during the same period (prices for tenant-owned apartments rose to a considerably higher extent, however). In the Netherlands, household indebtedness in relation to GDP has traditionally been low, but has risen dramatically in recent years and today amounts to almost 45% of GDP. If we compare the developments in Sweden, the USA and the Netherlands, we see Dutch property prices have risen considerably faster than Swedish and American prices both in real and nominal terms. In this context, the development in Sweden appears to be less sensational. What can the Riksbank do if the build-up of risk increases? An increasing level of indebtedness in the economy, combined with rising asset prices, involves greater vulnerability to changes in the macroeconomic environment, i.e. growing risks. The obvious question then, is what the authorities can do to prevent such a build-up of risk.