samchain/econo-pairs-v1 huggingface dataset:
At the same time, unemployment in the euro area remains high, and the necessary balance sheet adjustments in the public and the private sector will continue to weigh on economic activity. This assessment is also reflected in the December 2013 Eurosystem staff macroeconomic projections for the euro area, which foresee annual real GDP declining by 0.4% in 2013 before increasing by 1.1% in 2014 and 1.5% in 2015. Compared with the September 2013 ECB staff macroeconomic projections, the projection for real GDP growth for 2013 has remained unchanged and it has been revised upwards by 0.1 percentage point for 2014. The risks surrounding the economic outlook for the euro area are assessed to be on the downside. Developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect economic conditions. Other downside risks include higher commodity prices, weaker than expected domestic demand and export growth, and slow or insufficient implementation of structural reforms in euro area countries. BIS central bankers’ speeches  1  According to Eurostat’s flash estimate, euro area annual HICP inflation increased in November 2013 to 0.9%, from 0.7% in October. The increase was broadly as expected and reflected, in particular, an upward base effect in energy prices and higher services price inflation. On the basis of prevailing futures prices for energy, annual inflation rates are expected to remain at around current levels in the coming months. Over the medium term, underlying price pressures in the euro area are expected to remain subdued.

Net capital inflows into the euro area continued to be the main factor supporting annual M3 growth, while the annual rate of change of loans to the private sector remained weak. The annual growth rate of loans to households (adjusted for loan sales and securitisation) stood at 0.3% in October, broadly unchanged since the beginning of the year. The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) was –2.9% in October, following –2.8% in September and –2.9% in August. Overall, weak loan dynamics for non-financial corporations continue to reflect their lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non-financial sector balance sheets. Since the summer of 2012 substantial progress has been made in improving the funding situation of banks. In order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential that the fragmentation of euro area credit markets declines further and that the resilience of banks is strengthened where needed. The ECB’s comprehensive assessment before it adopts its supervisory role under the single supervisory mechanism will further support this confidence-building process. It will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions. Further decisive steps to establish a banking union will help to restore confidence in the financial system.
In this regard, the debate should focus on finding the incentives to increase the domestic production and support domestic savings. Over the time these would improve our current account balance, and improve the availability of our foreign currency assets;  c)  the expansion of the economic agents’ funding sources. In this regard the authorities should implement policies that support the development of the non-banking financial sector and that sustain the establishment of capital and debt market for private entities. The accomplishment of these targets shall firstly require the strengthening of the financial reporting standards; the completion and improvement of the legal framework for the developments of business relationships and the improvements in the protection of creditors and consumer rights, regarding the financial institutions and products. In more practical terms, these measures are expected to improve the availability of the funding sources for the economic growth, and gradually decrease its dependence from the banking sector;  d)  the improvement and the completion of the legal and operational framework to strengthen the crisis management capacities of the public authorities. In this regard, the authorities should identify the necessary measures for the prevention, the treatment and the elimination of financial crisis consequences. Bank of Albania believes it is important that each public authority carry out an assessment of its legal, financial, human and technological capabilities, to perform its role in the crisisprone situations. Needless to say, throughout this process, the coordination among the public authorities should be at the highest level.

Ardian Fullani: Financial supervision and measures to strengthen financial stability Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the International Conference for the 10th Anniversary of the Central Bank of the Republic of Kosovo, Prishtina, 30 October 2009. *  *  *  Dear Governor Rexhepi, Distinguished ladies and gentlemen, It is a pleasure for me to participate in this Conference which is perfectly organized by the Central Bank of the Republic of Kosovo, and to witness the amazing progress this institution has achieved in such a short but intense period of time. The energy and desire of the local staff to contribute to the history of this institution, has been rightly channeled by the vision and experience of several managing professionals that have given a valuable contribution in chairing this institution in the last years. I am sure this story will continue to be a successful one, based on the commitment of the management of the Central Bank of Kosovo to achieve and comply with the best work organizational and efficiency standards, by pursuing a clear long-term policy of investing in the quality of its personnel, and by supporting actions that contribute to maintaining fruitful inter-institutional cooperation. In addition, I want to thank the organizers for giving me the honor to speak in front of you today, regarding a topic that has become so relevant in the last year, following this unprecedented international financial crisis.
Management of the Petroleum Fund The Petroleum Fund is currently one of the world’s largest institutional investors, on a par with the largest pension fund in the US and the largest European fund. With the rate of growth that can be expected, the Petroleum Fund will be larger than these two funds in the next year or two. Norges Bank manages the Petroleum Fund on behalf of the Ministry of Finance. This is a challenging task that has been given high priority within the Bank. We have established what we believe is a professional management organisation. Performance is measured against the benchmark portfolio defined by the Ministry of Finance and the results are published in a quarterly report. So far, Norges Bank has achieved an excess return every year. Management costs have been low. In terms of net earnings, Norges Bank has added close to NOK 15bn to the Fund. The total return for the Fund is largely determined by the benchmark portfolio. Since 1997, the real return has averaged 4.2 per cent. Of this, 0.4 percentage point can be attributed to active management, for which Norges Bank is responsible. The Fund has become a large investor in international equity markets. Norges Bank recently established a group dedicated to actively supporting best practice corporate governance in companies where the Fund has ownership interests. Norges Bank already makes extensive use of its voting rights and has voted in about 17 000 cases this year.

In that case, the country is poorly poised to cope with an end to easy money. The economic literature includes many studies that look at the relationship between income from natural resources and economic growth. An article by Jeffrey Sachs and Andrew Warren entitled “The curse of natural resources”2 sets the basic tone: Countries with large income from natural resources  1  Hermod Skånland, ”Norge og oljen – gamle eller nye utfordringer”. (Norwegian only). Lecture, 2 November 1988. 2  Jeffrey D. Sachs and Andrew M. Warner, The Curse of Natural Resources. European Economic Review 45 (2001), pages 827-838. 1/8  have generally recorded weaker economic growth than comparable countries. Professor Thorvaldur Gylfason illustrates this relationship for a large selection of countries in an article published last year.3 Both Gylfason and other authors4 in this field point to Norway as an exception to this general rule. Norway’s management of its petroleum revenues is often referred to as an example of successful organisation. 5  The construction of the Petroleum Fund In 1990, Norway established a transparent system for managing government petroleum revenues. All the revenues are transferred directly into a foreign currency fund, the Petroleum Fund. The Storting (Norwegian parliament) must adopt a resolution on any use of the capital in the Fund. Spending will be prioritised in the same way as for other government spending. There is no hidden use of revenues, or any use for special purposes. The Fund is strictly and effectively “out of bounds” to special interests.
What is happening is that people who use the scheme are getting a free ride at the expense of those who do not use it. Had the latter been consulted, they might well have preferred to see their taxes put to a different use. The other example comes from New York. Defending his proposal to introduce a congestion charge for vehicles entering Manhattan, Mayor Bloomberg is reported to have said that the question was not whether people wanted to pay, but how they wanted to pay: whether through a higher incidence of respiratory and other diseases and increased health care costs, or by reducing the number of polluting vehicles in the city and using the money collected through the charge to improve public transport. The Central Bank of Malta raised its central intervention rate twice last year and again in January. Wasn’t this risky for an economy finally showing growth? The primary objective of the Bank’s monetary policy is price stability. As is typical for small, open economies, however, the Bank does not target inflation directly. Instead, the Bank pursues this objective by using the exchange rate as its intermediate target and the level of the external reserves as its operational target. In the absence of capital controls, interest rates on the Maltese lira are inevitably influenced by those offered by the currency to which it is pegged, the euro.

With expectations rising faster than the ability of governments to meet them out of available resources, however, the norms of prudent financial management were put aside and growing resort was made to deficit financing. Understandably, politicians are wary of asking citizens to give up any of the rights they have acquired in the process, especially on the eve of elections. The problem is that there comes a time – and that time is now in Malta as in some older EU members – when the financial burden of an extensive welfare system (itself compounded by the effects of an aging population) and of a large, and relatively inefficient public sector becomes too heavy to bear. It also deprives the economy of both the resources and the flexibility necessary to respond successfully to the competitiveness challenge coming from low-cost or more efficient producers. This is a challenge which cannot be ignored. The people need to be told that certain attitudes and practices are unsustainable, and that the only effective response to the relentless march of globalization, to EU membership and other sources of competitive pressures is nothing less than a culture change, a complete break with the past. I believe it is possible to build an alternative, more efficient system for managing the economy and which nevertheless reconciles the objectives of social cohesion and financial sustainability. It is in this broader context that I have often called for a wider application of means testing.
Expecting a longer life, happy people defer immediate gratification and save. In consequence, they enjoy a more prosperous tomorrow as they harvest the fruits of their investment. In these models, happiness is not just fulfilling; it is self-fulfilling. Exercise and dieting generate similar self-improving behavioural cycles. Take gym attendance. A recent study found that providing a small financial inducement to attend a gym generated radically different fitness behaviour. 16 It served as a catalyst for an exercise regime which, once begun, was much more likely to be completed. Improving health improved life chances, inducing long-sighted behaviour which was then both fulfilling and self-fulfilling. While self-improving cycles shape individual behaviour, they can also have broader social consequences. Studies have found strong behavioural contagion not just between friends, but between friends’ friends and indeed friends’ friends’ friends. In other words, people’s behaviours have “three degrees of influence”. 17 Sociological contagion has been found in studies of happiness, exercise and dieting. It may have a neurological explanation, as imaging suggests we often incorporate friends’ views and attitudes into our brains as if they were our own. 18 Latterly, models of economic systems have got in on the act. Growth, too, can be selfimproving or endogenous – for example, because investment in human capital is selfreinforcing. 19 Working, like dieting, is good for self-esteem and long-term productivity. Idling, like over-eating, is bad. History suggests a strongly self-reinforcing relationship between saving and growth. That is probably why cross-country studies point to such strong growth enhancing effects of financial deepening.

Moreover, whether a country intends to implement the New Accord by the end of 2006 or perhaps later, the Basel Committee recommends that supervisors everywhere encourage their banks to strengthen their abilities to identify, measure, and manage the full range of risks they face through internal processes. At the same time, I am very encouraged to hear that banks and supervisors share the notion that none of our countries, regardless of our stage of development, can foster our own economic growth unless our banks are adequately capitalised and well managed, our financial systems stable, and our markets transparent and open. I believe that the New Basel Accord goes a long way toward achieving and strengthening those three objectives. Certainly we hope that, over time, more banks and more banking systems will adopt the more advanced approaches to risk measurement and management laid out in the New Accord. When banks are adequately capitalised and well-managed, they are better able to promote growth by providing credit to consumers and businesses alike. But more broadly, when banking systems worldwide are  BIS Review 52/2003  5  adequately capitalised and well-managed, the international financial system becomes more stable, better able to promote sustainable growth, and more resilient during periods of distress. Thank you for your attention. 6  BIS Review 52/2003
In France, the development of macroprudential policy led to the creation, under the 2013 Banking Law, of the High Council for Financial stability (HCSF), chaired by the Minister for Finance, and on which the Banque de France plays an active role. This High Council meets once a quarter with a total of eight members, three of whom are independent economists. It identifies any risks of potential financial “bubbles", and has the power, where necessary, to implement a series of macroprudential measures, including a countercyclical capital buffer – currently set at 0% – or tighter lending standards. Ten years after the start of the crisis, eight years after London and Pittsburgh, it’s time now to stand back and take stock. Our achievement today is that the objective has largely been met.10 The first assessments show that these reforms have had a significantly positive impact on the soundness of banks, both in terms of their ability to withstand liquidity shocks and their solvency, with the core capital ratio (Common Equity Tier 1 or CET1) of the main banks operating at international level rising by 5 percentage points since 2011, from 7.4% at end-2011 to 12.3% at end-2016.11 As for the four largest French banks, their own funds have more than doubled since the crisis: in 2008 they amounted to EUR 132 billion; in 2016 that figure reached EUR 296 billion. Put another way, the majority of French banks have increased their capital levels by more in the past eight years than in the previous century.

But undoubtedly, finance without rules could be the ruin of the economy. To be sure, financial regulation is necessary particularly because financial crises often have considerable economic and social costs, with serious and lasting repercussions. A study by Laeven and Valencia 8 in 2013, which considers 147 banking crises between 1970 and 2011, estimates the median output loss between the peak of activity before the crisis and the three years after at around 23% of GDP, and the median increase in public debt over the same period at 12% of GDP, while total government bailout spending amounts to almost 7 percentage points of GDP. Moreover, beyond the immediate effects, financial crises reduce the economy’s longterm potential: companies cut back on their R&D, capital and infrastructure investment, which results in a decline in productivity and a slowdown in technological progress. The 2007–2009 crisis is unfortunately an illustration of this; it was the worst crisis since that of the 1930s. The financial imbalances generated by the bursting of the subprime bubble in the United States spread rapidly to the global economy. The crisis affected both the level and trend of GDP, leading to a permanent loss in wealth. Cumulative GDP losses compared to the pre-crisis trend are estimated at a quarter of global GDP. 9 In a number of countries, in particular in southern Europe, GDP has still not returned to its pre-crisis level. II.
In itself, comparing the long-term forecasts with the inflation target would have justified raising the policy rate rather than leaving it unchanged. And subsequently some people have asked: Given the probability and arguments supporting such a decision, why wait? However, the Governors referred to the more benign short-term and long-term inflation outlook since the publication of the previous forecast [in July] and that in many important respects it seemed more positive than was considered likely then. Inflation developments were more favourable than expected. Wage rises and wage drift were also lower and housing market activity more subdued than had been projected. In addition, oil prices have been on the decrease and credit growth has slowed down. In view of these developments, although in many ways they involve only short-term changes in indicators that are known to be volatile, the Governors felt there was ample reason to wait, at least for the time being. A large amount of information will of course reach the Board of Governors before December 21. If the pointers continue in this direction, there may conceivably be no need to increase further what is already undeniably a tight monetary stance. On the other hand, if nothing of particular note is reported, the analysis at hand when the current interest rate decision was made will determine the decision on December 21 and a policy rate hike could be in the offing. As far as can be seen, there is reasonable consensus on the Central Bank’s decision among the main observers in Iceland and abroad.

The idea for building up the reserves was aired at the Central Bank’s annual meeting in March this year, so it should not come as a surprise. Given the scenario I have been describing, the Board of Governors seems to have ample justification for taking this pause to consider the position carefully and decide the next steps, not only with reference to the more positive assumptions that have now emerged since the July forecast, but also by examining the risks I have mentioned. If the current outlook holds and everyone stays alert and strong, inflation will be brought down over a relatively short period. The most important consideration is to achieve a satisfactory course for the exchange rate, whereby the current account deficit will primarily be reduced by increased exports, decreased imports of capital goods and a sufficiently tight stance to deter consumers from spending on other imports. The other and much less favourable way to adjust the current account would be through a sharp currency depreciation. Such action would have many uncomfortable side-effects which are well known. As yet, the former option is much more likely namely a soft landing.
No, I believe that if one really aims at exchange rates that are irrevocably fixed, then one should move all the way, that is go for monetary union. As long as two currencies are distinguishable, their relative price might change. So the choice is between flexible exchange rates and monetary union. Needless to say, since Switzerland is not a member of the European Union, joining the eurozone is not an option worth discussing at this stage. Fixing the franc against the euro would not even be a second best. It would rather be the worst of all worlds by suppressing our monetary independence, and, at the same time, exposing us to all the dangers of speculative attacks by setting us up, the back against the wall, alone against the market. 3. Our post-euro experience  What has happened since January 1, 1999, all in all, has proven very reassuring. Our worst fears have not materialized, and indeed, in some ways, the outcome has been even much more favourable than we could have hoped for. First, let me briefly sum up our experience with regard to the fears of “euroization” and of the loss of our monetary degree of freedom. As expected, the Swiss franc was not crowded out by the euro. Sure, the euro circulates in Switzerland, just like the Swiss franc circulates in neighbouring France and Germany, but the phenomenon remains marginal, and it does not exceed the use of the French francs, German marks and Italian liras in the pre-euro world.

Petar Goshev: Problems in measuring inflation Opening speech by Mr Petar Goshev, Governor of the National Bank of the Republic of Macedonia, at the workshop “Problems in measuring inflation” organized by the National Bank of the Republic of Macedonia, Skopje, 22 May 2007. *  *  *  Ladies and gentlemen, dear friends, Please allow me to welcome you on behalf of the Central Bank, to thank you for your participation in today's workshop, and to wish a fruitful day for all of us present here today. This is the third workshop in the past two years, organized, or as it is now the case, co-organized by the Central Bank, which along with the international conferences and seminars on expert level, which increase in number, have been our new component of activities aimed at: increasing our own professional capacity, opening of the National Bank to the domestic and international expert community for the purpose of mutual improvement of the abilities to identify and solve the problems in the area of macroeconomics and for increasing the transparency in our communication with the public. Today's workshop has been organized in cooperation with the State Statistical Office, and the topic of discussion are the problems related to measuring of inflation. I do not think it is necessary to explain why the State Statistical Office: the State Statistical Office produces the data on inflation, while the National Bank is one of the main users of those data. Why this subject – problems in measuring inflation?