samchain/econo-pairs-v1 huggingface dataset:
For the euro area as a whole, the fall in GDP projected by the IMF and the European Commission for 2020 is, respectively, 7.5% and 7.7% (and the related whole-world decline would be 3% and 3.5%). These scenarios incorporate the effect of the measures approved in the fiscal, monetary and prudential areas, to which I shall later refer, such that the declines in activity would be significantly greater in the absence of these measures. In any event, what has been confirmed in recent weeks is that the recovery will not be free from difficulties, and that scenarios more unfavourable than those currently considered cannot be ruled out. These macroeconomic scenarios also offer an estimate that the budgetary cost of the crisis will be very high, owing to the dual effect of the alleviating measures adopted and, above 3  These are scenarios 2 and 3 constructed using the Banco de España quarterly model in the analytical article cited (see footnote 2). The assumptions on which scenario 1 rested, where a virtually full lifting of the restrictions on activity was assumed after eight weeks, appear to have been exceeded already by events. 12  all, of the operation of the automatic stabilisers. That will lead to a very high budget deficit this year, with its subsequent pass-through to overall general government debt.

If the uneven pace of economic recovery in the euro area is confirmed and if we see a risk of inflation being too low for too long, we can take action in June. We can act in various ways, depending on the situation. At present, however, it is too early to say what exactly we’re going to do. A lot depends on the forthcoming economic data and on our staff growth and inflation projections, which are to be released in June. Your room for manoeuvre is limited as interest rates are already very low: the key rate is only 0.25%. They are low but they can still go lower. Are negative interest rates in the euro area possible? Negative rates are one of the instruments available to us. They have been discussed extensively by the Governing Council. We are technically and legally prepared for such a possibility. And market participants are well aware that we are contemplating such a move. Wouldn’t negative rates discourage people from keeping their money in banks? This depends on how negative they would be. Indeed, rates that fall deep into negative territory could have an impact on depositors. But a deposit rate slightly below zero does not necessarily imply that depositors would be affected, while still providing incentives for banks to lend more. In recent years, the ECB has used a number of non-standard monetary policy tools. It has purchased bonds on the market, pumped hundreds of billions of euro into the market in the form of cheap loans for banks.
That might be because they hold assets directly in their trading books. For example, the £ of credit trading losses of RBS in 2008 amounted to 40% of the total net accounting losses of RBS between 2007 and 2010. 5  Or they might be exposed to a corporate sector that, if asset prices adjusted, would have a debt overhang. Our stress tests show that losses on corporate loans can account for more than a third of banks’ losses in an economic shock, even though they account for only a fifth of banks’ loans. iii)  Markets lack resilience and so amplify adjustments  There are myriad reasons why this can happen and I’ll discuss some live examples later. 4  Research by Bahaj, Foulis and Pinter (2016) suggests that a 10% fall in UK commercial real estate prices is associated with a 1% decline in firm investment. 5 See the report by the board of the Financial Services Authority (2011), ‘The failure of the Royal Bank of Scotland’, for additional information. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  When markets amplify price adjustments, the other channels become more powerful. And there is also an important direct effect on the economy: the cost of new finance to the wider economy is driven up and its availability driven down. In extreme cases, markets can become dysfunctional and effectively shut out access to finance. UK high yield bond issuance markets were closed for four consecutive quarters during the global financial crisis of 2008-9.

I’ll highlight two areas where markets have evolved in ways that raise questions about their resilience, even if all the intermediaries are safe. They might mean investors aren’t able to take the liquidity of markets for granted if they adjust. In both cases, there is no proven problem for markets or the economy. Inquiries are, as the police like to say, ongoing. Through our market intelligence gathering, I’m pleased to say that market participants are helping with those inquiries. And I look forward to the contributions of this Centre too. i) (Mis) use of volatility measures  Against a backdrop of relatively stable markets, some investors may have developed an appetite for betting that a range of markets, including bond markets, will remain stable. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  That means selling options – effectively insurance against moves in market prices. A put option, for example, is insurance against falling prices. An investor who buys this insurance is guaranteed a sale price for the asset insured, regardless of what happens to the market. If prices are currently higher but then fall below the guaranteed price, an investor that wants to sell will incur some loss – think of this as the insurance excess – but the insurer will pay for the rest. If markets stay stable, as the insurer is betting they will, no payout is made and the insurance collects a premium. While markets are stable, it’s a nice little earner for the insurer.
Imports from countries where the price level is lower than in Norway are increasing, resulting in a fall in prices for a number of consumer goods. On the other hand, higher production in large countries such as China and India has led to higher prices for energy products. As a result, the overall rise in consumer prices has edged up both at home and abroad. The projections in the Inflation Report are based on an interest rate path that in the Executive Board’s assessment provides a reasonable balance between the objectives of monetary policy. Previously, we based our analysis on various technical assumptions concerning future interest rates. One such assumption was market interest rate expectations. As from Inflation Report 3/05, we now base our projections on an interest rate path that we consider reasonable. This gives Norges Bank more active ownership of the projections that are presented and of the uncertainty we believe surrounds these projections. The arguments favouring a very low interest rate in Norway are to some extent less relevant. The outlook and analyses suggest a gradual increase in the interest rate towards a more normal level, but we expect the adjustment to occur in small, not too frequent steps. Output growth is high and may in isolation suggest a more rapid increase in the interest rate ahead. This would reduce the risk of bottlenecks in the economy with rising cost inflation and continued debt build-up.

We export not only goods but also services - primarily transport and travel services - also computer and IT services and the volume of these services has been increasing rapidly during the last three years. The FDI inflow that has reached the 9 billion kroon level in recent years proves our competitive position in the Baltic Sea region as well as a broader region. Equal distribution of investments between the main sectors of economy is an indication of the balanced economic development (in 2001, for example, manufacturing industry - 20%, transport and communications - 23%, wholesale and retail trade - 14%). It is also important to note that the FDI inflow was not contingent on the privatisation of former SOEs. And finally, our competitiveness is demonstrated by the yield of investments made in Estonia and reinvesting of substantial part of annual profits which in 2001 amounted to 3,8 billion kroons. This is also shows our competitiveness. The readiness of Estonian economy for the integration with the European economic system is demonstrated especially well by such key sectors of our economy as the financial and telecommunication sectors. Here we talk about the complete opening of the market to domestic and foreign competition, strong state supervision and integration of Estonian enterprises in the big multinational corporations. What should we focus on in the future? Estonia is no longer a catching-up candidate country as it was three-four years ago. However, we still cannot say that the restructuring of our economy has been completed.
It also involves patrolling the frontiers of our powers and  6  Id. at 483. 7  Dodd Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111–203, 124 Stat. 1376 (2010). 8  12 U.S.C. § 5365. 9  12 U.S.C. § 5365(a)(1). 10  12 U.S.C. § 1842 (c)(7). 11  Ben S. Bernanke, Chairman, Board of Governors of the Federal Reserve System, September 18, 2013, Press Conference. BIS central bankers’ speeches  3  recognizing where and when the rule of law forecloses options. This is essential to the credibility of the central bank, a concept closely connected with the public’s trust. To conclude, I hope these remarks about financial stability also reflect on what our legal colleagues have accomplished at the ECB. In this regard, I pay tribute to the leadership of Antonio Sáinz de Vicuña, and to his work not only in presiding at the birth of the euro, but guiding the ECB to take the extraordinary actions necessary to preserve the euro. As President Draghi accurately forecast, they have been enough. Antonio, as you step down as general counsel, I congratulate you on the accomplishment of the mission, and applaud you for a job well done. Thank you, ladies and gentlemen, for your kind attention. Disclaimer: The views expressed are the views of the author and do not necessarily reflect the views of the Federal Reserve Bank of New York, or any component of the Federal Reserve System. 4  BIS central bankers’ speeches

Total debt issuance last year was USD 1.25 trillion, about 30% lower compared to 20133. Morgan Stanley and Oliver Wyman estimate that industry balance sheets committed to bonds, foreign exchange and commodities contracted 25% over the past five years owing to tighter post-crisis regulations, and could decline another 10% in the next three to four years, with banks looking to trim capacity to improve returns on risk-weighted assets as regulatory costs and challenging markets continue to drag on returns4. 5 However, the story going forward is more upbeat. Infrastructure and sustainable financing offer opportunities for investors. Asia will need USD 8 trillion of infrastructure by 2020 5, and within that, ASEAN will need USD 110 billion a year in infrastructure investment through 20256. The World Bank Group has pledged to support climate-friendly development with USD 16 billion per annum in direct funding and mobilised USD 13 billion in external private sector capital annually by 2020. Technology and innovation will underpin and drive such growth opportunities. The inaugural Singapore FinTech Festival running this week demonstrates the tremendous potential that technology holds for capital markets to seize these opportunities and helps us cope with the market challenges. 6 The ASIFMA conference programme reflects these trends, opportunities and challenges. Tomorrow’s concurrent panels will cover macro and market developments in China, India and ASEAN, as well as opportunities in infrastructure financing, sustainable financing, big data and 1/7  BIS central bankers' speeches  cyber security.
Financing conditions remain highly supportive, which contributes to a strengthening in credit creation. They continue to support our baseline scenario of an ongoing economic recovery and an increase in inflation rates. At the same time, given prevailing uncertainties, the Governing Council will continue to monitor economic and financial market developments very closely and to safeguard the pass-through of its accommodative monetary policy to the real economy. Over the coming months, when we have more information, including new staff projections, we will be in a better position to reassess the underlying macroeconomic conditions, the most likely paths of inflation and growth, and the distribution of risks around those paths. If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate. Let me now explain our assessment in greater detail, starting with the economic analysis. Euro area real GDP increased by 0.6%, quarter on quarter, in the first quarter of 2016, after 0.4% in the last quarter of 2015. Growth continues to be supported by domestic demand, while export growth has remained modest. Incoming data point to ongoing growth in the second quarter of 2016, though at a lower rate than in the first quarter. Looking ahead, we continue to expect the economic recovery to proceed at a moderate pace. Domestic demand remains supported by the pass-through of our monetary policy measures to the real economy. Favourable financing conditions and improvements in corporate profitability continue to promote a recovery in investment.

In an environment of accommodative monetary policy, the swift and effective implementation of structural reforms, in line with the 2016 countryspecific recommendations recently approved by the European Council, will not only lead to higher sustainable economic growth in the euro area but will also make the euro area more 2  BIS central bankers’ speeches  resilient to global shocks. Fiscal policies should also support the economic recovery, while remaining in compliance with the fiscal rules of the European Union. Full and consistent implementation of the Stability and Growth Pact over time and across countries is crucial to maintain confidence in the fiscal framework. At the same time, all countries should strive for a more growth-friendly composition of fiscal policies. We are now at your disposal for questions. BIS central bankers’ speeches  3
03.04.2018  Spain: From Recovery to Resilience Banco de España-IMF High-Level Seminar Luis M. Linde Governor  Ladies and Gentlemen, Let me welcome you to this Banco de España and International Monetary Fund joint conference devoted to the recent evolution of the Spanish economy in the Euro-Zone and European Union context. I would like to thank the International Monetary Fund, represented here today by David Lipton, First Deputy Managing Director, Poul Thomsen, Director of the European Department and Andrea Schaechter, Mission Chief for Spain, for their proposal to organise this conference. The Banco de España was more than pleased to accept, considering it to be very timely and of great interest. As to the title of the conference: “Spain: From Recovery to Resilience”, allow me, before going forward, a candid clarification: I can assure you that it is far from our intent to suggest any pessimistic forecast or premonition. The title refers to our economy’s resilience in the face of a hypothetical cyclical downturn which, needless to say, we hope will be later rather than sooner. In 2017 Spain’s economic recovery maintained the strong growth path of previous years, exceeding expectations for the fourth year in a row. In particular, GDP grew by 3.1%, meaning that the economy has grown above 3% for the third consecutive year. Strong domestic and external demand pushed GDP up, and the economy has proved quite resilient to uncertainty shocks.

To achieve this goal without hampering long-term economic growth, the composition of the fiscal adjustment is very relevant. Moreover, the combination of this consolidation efforts with other structural reforms on which I will focus later might be crucial in order to smooth and reduce the public finances adjustment needs. In addition, given the high degree of decentralisation of public spending in Spain, all government decision centres must contribute to this effort. To this end, it is crucial to provide efficient mechanisms to finance the different competences, permitting citizens to identify the bodies responsible for implementing the different public policies. On a related matter, let me mention that the adequate access to external financing by regional governments – be it by credit provided by financial institutions or through the capital markets – is of particular importance to avoid a pro-cyclical stance in the provision of the public services, and guarantee market pressure geared towards fiscal discipline. Currently, an exceptional mechanism is in place, namely the “Fondo de Liquidez Autonómica”, whereby the central government provides funds to most regions, in the form of bilateral loans, in exchange for a heightened control over their fiscal policies. However, in the current favourable macroeconomic and financial context, regions should regain market access. Challenges of the Spanish labour market The second session of the Conference is devoted to the challenges facing the Spanish labour market. During the last three years, the annual growth rate of employment has been 3.0%.
Although the cost of bank credit for households and firms and of fixed-income securities issues rose as the single monetary policy adopted a more neutral stance, these costs reached levels which, from a historical perspective, should be classified as moderate. In any event, somewhat less generous financing conditions than those prevailing during the recent period of exceptionally low interest rates are better suited to the circumstances of the Spanish economy. Consequently, they provide some relief following a lengthy phase of high demand pressure, while helping to make our growth pattern healthier. The strength of demand has been met by very favourable elements in the supply-side response. All the productive branches contributed positively to the expansion of output, though mention should be made of the continuing momentum of construction and the notable dynamism of the manufacturing branches, closely linked to the recovery in the European economies. It is worth noting once again the Spanish economy’s continuing high employment-generating capacity, both in 2006 and in early 2007, since this feature is playing a key role in the continuity of this long expansionary cycle. The strong growth of employment in 2006, at a rate of more than 3% for the year on average, contributed decisively to sustaining domestic spending.

11  Carhart M. (2003), “Global Tactical Asset Allocation” in Litterman R. (ed) “Modern Investment Management”, Goldman Sachs Asset Management, John Wiley and Sons, New Jersey, 2003. 12  Solnik B. (1974), “Why Not Diversify Internationally Rather Than Domestically?” Financial Analysts Journal. 30, 4 (July/August 1974). Reprinted in Financial Analysts Journal. 51, 1 (January/February 1995). 13  Stewart F., Pension Fund Investment in Hedge Funds, OECD Working Papers on Insurance and Private Pensions, No. 13. OECD September 2007. 14  Survey on investment regulations of pension funds, OECD, July 2007. 4  BIS Review 134/2007  4.  payment systems, which process the cash settlement of a transaction,  Beyond doubt, this model is simplified a bit and serves only as a starting point for further analysis. I would like to confine it to two elements: securities settlement systems and payment systems. Securities settlement systems and payment systems currently comprise a couple of large systems of international, pan-European or even global character (e.g. CLS) operated either by private institutions (Euroclear, Clearstream, EURO1 and STEP2) or by central banks (TARGET) as well as by many domestic and local systems, including central depositories of securities and depositories maintained by central banks, clearing houses and other systems, e.g. card systems. On account of the adopted diverse legal and market solutions, the present system of capital market infrastructure cannot be deemed optimal.
(vii)  In case of an excessive increase in the liquidity surplus or the emerge of extraordinary fluctuations in the market even at reasonable levels of excess liquidity, to enhance the effectiveness and flexibility of monetary policy and liquidity management strategy, in addition to YTL deposit buying auctions with standard maturities, reverse repo auctions and Central Bank liquidity bills with maturity up to 91 days may also be used actively. As a matter of fact, technical procedures regarding the issue of the said bills were completed by the Central  BIS Review 1/2007  9  Bank, by “the Communiqué on Liquidity Bills” published in the Official Gazette, number 26310, dated 5th of October 2006. (viii)  Currently, depending on liquidity conditions, whether there will be standard one week or two weeks YTL deposit buying auctions will be held or not, if there will be an auction, the maximum amount to be drained through the auction is announced at 10.00 at Reuter’s CBTY page. In 2007, the Central Bank may hold New Turkish Lira deposit buying auctions with standard maturities of 1, 2 and 4 weeks and continue to announce the maturity and the maximum amount to be bought in the auction(s) on Reuters’ CBTY page. Starting from 2007 onwards, no announcement will be made on the said page on days when no auction is deemed necessary according to liquidity conditions.

Given that this research was originally focused on the reasons r-star had risen, it’s ironic that I and others have ultimately dedicated much more of our careers to understanding why it’s dropped. In recent years, r-star has been averaging well below 1 percent. And it’s actually now lower than at any time before the Great Recession. One of the reasons for this dramatic decline in r-star lies in changes to the major factors determining potential growth: labor force growth and productivity growth. Baby boomers are retiring and fertility rates have come down. Both of these demographic shifts have significantly slowed labor force growth relative to past decades. Productivity growth has also fallen considerably from the boom years of the late 1990s and early 2000s. All the rapid changes in technology that we see around us every day may make this seem 1/4  BIS central bankers' speeches  counterintuitive. But for the moment, being able to order a Nintendo Switch and have it arrive the same day is, shockingly, not increasing productivity in a meaningful way. I could go on for quite some time on this topic, but will leave it to another day! I should note that these demographic and productivity trends are not unique to the United States. In fact, we’ve seen similar slowdowns in growth and sharp declines in r-star in other advanced economies.1 So why did I take you back to simple days of the millennium bug, when you were playing Snake on your phone and ordering takeout from a paper menu?