samchain/econo-pairs-v1 huggingface dataset:
Progress here has helped Spain in ceasing to evidence excessive macroeconomic imbalances, in the opinion of the European Commission, expressed in the conclusions of the report it issued on 5 March as part of the European Semester. This is a positive result which should nevertheless not distract us from the need to continue adopting measures that further the correction of the imbalances still in place, even though appreciable progress is being made. Of most visibility and weight has been the redressing of the external deficit. Following a deficit of 10% of GDP in 2007, the external balance posted a surplus of 1.5% of GDP in 2013. From the standpoint of its contribution to GDP growth, net external demand has substantially cushioned the fall-off in domestic demand. The opening-up of our productive system to the external sector through trade flows and foreign direct investment is, as you know, one of the factors that has most boosted the modernisation of the Spanish economy in recent decades. The aggregate share of goods and services imports and exports from 1995 to 2013 has risen from 45% to 66% of GDP, outpacing countries such as France and Italy, although it is still some distance off those economies with greater export potential, such as Germany. The buoyancy of Spanish exports has exceeded the increase in global trade. Our export share in the world total, in real terms, has increased over the past five years to around 2.2%, slightly above the relative weight of our economy in world output.

Research indicates that by 2007 the percentage of nonprime mortgages that went into default within their first year rose to 10 percent compared with 3 percent of such loans originated in 2003. While falling home prices appear to be the primary factor explaining this sharp increase in early defaults, most of the increase cannot be explained by traditional risk factors. 4 A potential explanation is that individual home buyers often falsely indicated on their mortgage applications that the property they were buying would be their primary residence. Using an extensive set of data on loan performance that we have developed with Equifax, we find that multiple first mortgage lien holders – that is, people owning more than one home – account for about 40 percent of the dollar volume of seriously delinquent mortgage balances, up from about 5 percent in 2004 (Chart 10). 3  There are a few caveats to note about this trend. First, there are several categories of spending by households that are lumped into the personal consumption expenditures category in our official GDP statistics that can fairly be counted as investment. These include spending on consumer durable goods, education, and, possibly, medical care, and their combined share of total personal consumption expenditures (PCE) rose over the period in which the saving rate declined. Second, other forces were at work to push down the personal saving rate. Prominent among these is a secular decline in the share of health care expenditures paid out-ofpocket by consumers, lessening the motivation for precautionary savings.
As a representative of a country that has had floating exchange rates for over thirty years now, I can only underscore the importance of an exchange rate regime that reflects the realities of the market. During the past three decades, the Swiss franc has been an essential factor in the development of the Swiss economy. However, it was never a reason for our exporters to sit back and relax. On the contrary, the franc put pressure on them to become more efficient and to specialise in those product areas in which we have a real competitive edge. Consumers also profited from the strong Swiss franc in that the prices for imported goods have fallen significantly. A currency that is accurately priced enables the economy to benefit from improvements in its terms of trade triggered by productivity increases. If a country’s currency is undervalued, products are sold on the market at give-away prices, and productive resources are inefficiently allocated. The functioning of a currency system, therefore, plays a pivotal role in the development of a country’s prosperity, and monetary reform, as China is currently expected to tackle, is a very delicate undertaking. Unless new monetary rules and mechanisms can immediately convince the market of the appropriateness of the new regime, a risk of speculative pressure will emerge. Switzerland has experience in this regard as well. We ultimately opted for flexible exchange rates, i.e. a system in which the Swiss franc’s value is continuously in line with market forces.

On this occasion, a string of scientific and cultural events covering the whole year was organised, namely conferences on monetary issues, banking history seminars, exhibitions, stamp and coin issues, as well as cultural events reunited under the “The Cultural Days of the NBR” project inspired by the excellent cooperation with the European Central Bank in 2009. At this moment in its historical development, when the National Bank of Romania celebrates its 130th anniversary, the institution enjoys the status of a national central bank in the European Union. Our institution is a member of the European System of Central Banks and is currently making strenuous efforts for adopting the euro in the years ahead. If I were to find some key words to define the features of the National Bank of Romania, in fact what it stood for and what it still stands for today, these would certainly be the following: a sound, stable, trustworthy, reforming and dynamic institution. After 130 years, it is all the more relevant that the National Bank of Romania had its ups and downs, similarly to the history of Romania, which has also seen peaceful and progress periods followed by dramatic moments. The common denominator of all these was the fact that the National Bank of Romania has always provided support to the country in order to overcome the trying times. The institution we are celebrating today bore the brunt during World War One, having to cover all the related expenses.
All this must be attained in a setting in which new developments and circumstances will be emerging – and they are in fact appearing already – to make our analytical and supervisory tasks more demanding. In any event, enjoying society’s trust and recognition will involve being able to respond successfully to this challenge. To be able to accomplish our mission and reach both objectives, the Banco de España is going to have to adapt. But such adaptation must also stand on sound pillars. The first of these pillars is our independence. Independence is a necessary condition for achieving the aforementioned objectives and it is independence alone that can offer us the best guarantees of success. Secondly, the exercise of independence should be underpinned by analysis and decisions based on the utmost intellectual rigour. This is also the best base from which to address the necessary accountability and transparency to society. Thirdly, we can only properly perform our dual role of members of the Eurosystem and public servants by the pursuit of excellence in our work and by promoting the excellence of our staff. Such excellence has been and is, no doubt, one of the hallmarks of this institution. It is my firm commitment to maintain and enhance the Bank’s human capital. To conclude, I shall adhere to the tradition launched by Governor Linde when he took office and end, as he did, with a quote.

Zeti Akhtar Aziz: Developing a robust competency framework for the Malaysian banking industry Opening speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Industry Competency Framework Study Focus Group Discussion, Kuala Lumpur, 6 December 2005. *  *  *  Saya berasa amat bangga kerana diberi peluang untuk menyampaikan sepatah dua kata dan seterusnya merasmikan Sesi Wacana Institut Bank-Bank Malaysia. Saya ingin mengucapkan terima kasih atas penyertaan anda dalam temu ramah eksekutif yang merupakan input yang amat bernilai dalam pembentukan rangka kerja kompetensi industri yang akan dibincangkan hari ini. The banking sector will remain the pillar of our financial system, as it evolves to offer more innovative financial solutions to meet the changing needs of the economy. The industry however, needs to be well positioned in a financial landscape that is continuously being redefined. While new opportunities have emerged, there are also new challenges on the horizon. Foremost amongst these is intensified competitive pressures, spurred by financial liberalisation and technological revolution. Other challenges include the growing demands of customers for differentiated product offerings and valueadded services at more competitive prices, excellent service quality, and superior level of efficiency. Strategic opportunities also arise from new growth areas and a larger marketplace as economic integration regionally and globally gather pace, driven by increasing regional and global trades and investment flows. Banking institutions must be ready for the challenges and be well equipped with distinct capabilities to take advantage of the opportunities that the new environment accords.
Jean-Paul Redouin: Monetary and financial stability – a dual role for a central bank: recent lessons Speech by Mr Jean-Paul Redouin, First Deputy Governor of the Bank of France, at the Money and Banking Conference 2010, Central Bank of Argentina, Buenos Aires, 3 September 2010. *  *  *  Introduction 1. It is an honor to be speaking at such a distinguished conference on the occasion of the 75th anniversary of Central Bank of the Republic of Argentina. 2. Anniversaries of central banks are special. It is so because time is inherent to central banking. Indeed, time is at the root of a Central Bank credibility and is essential to its tool kit. Time plays a great role in many aspects of a Central Bank action. Let me just take three concrete examples:   the first and obvious one is inflation : time is necessary to firmly anchor expectations;    foreign exchange interventions played a great role in the European construction: time is necessary for a Central Bank to play against the market;    time will also be necessary to monitor systemic watch responsibilities; this new approach of the risks will require the Central Banks to develop their capacity to take “the long view”. 3. Being the first speaker in this session, I will focus my remarks on the dual role of central banks in terms of monetary and financial stability. I will address three main points closely interlinked in the light of our recent experience.

The challenge, now, is to calibrate and phase in the new framework in a way that does not impede the recovery. The macroeconomic assessment of the reforms underway will help us strike the optimal balance. 25. Beyond capital and liquidity, other important initiatives are aiming at addressing systemically important financial institutions and cross-border resolutions. To better deal with the problem associated with systemic firms, progress is being made to improve the capacity to resolve them orderly, and to strengthen ex ante preparedness, contingency planning, cooperation and information exchange among the relevant authorities. 4  BIS Review 113/2010  26. There is a broad agreement for an approach that may have two pillars. One is about tools and measures to limit the risk of their failure; the other is about tools and measures to limit the consequences of their failures. Discretion is required to allow national authorities to strike the balance between the two pillars and tailor regulatory and supervisory actions to domestic conditions. The challenge is to ensure that national policies to address the risks associated with these firms are consistent, mutually supportive and thus avoiding regulatory arbitrage. But beyond international initiatives, enhancing supervision at the domestic level remains very critical. 27. Higher and better capital and liquidity standards are not sufficient conditions to secure the stability of the financial sector. Changes in the practice of micro-prudential oversight are also needed. Indeed, a lesson from the crisis is that the way supervision was performed prior to the crisis has likely contributed to it.
When potential output rises slowly for structural reasons, growth will be weak even if economic policy is expansionary. In spite of devaluations and fiscal expansion with a view to boosting demand, growth has remained lower than in many other industrialised countries. This is an important lesson to bear in mind when discussing monetary policy’s functions and tasks. Other economists have been less interested in why employment has been slack and unemployment has risen and more concerned with unemployment’s tendency to remain at a high level. The observation that unemployment, having risen, tends to stick at a high level or falls back to normal levels only gradually is usually described in terms of hysteresis and BIS Review 38/1997  - 10 8  persistence. An explanation for the occurrence of persistence tendencies is provided by the insider-outsider model. Briefly, an increase in unemployment does not lead to wage restraint because those who have lost the jobs--the outsiders--exercise no influence on wage setting. Instead of a restrained wage rise, with lower labour costs and a possibility of taking on additional labour, the wage increases remain high and the outsiders remain out of work. 9 Strictly speaking, this does not constitute an increase in equilibrium unemployment but it still amounts to unemployment that is more or less permanent. In Sweden, wage increases tended to accelerate in the 1995 round of settlements even though unemployment was high. Statements by representatives of labour market organisations are indicative of a propensity to give real wage increases priority over increased employment.

12  10  10  8  8  6  1 6 -6 4 y rs . 6  4  4  2  2  0  0  76  77  78  79  80  81  82  83  84  85  86  87  88  89  90  91  92  93  94  95  96  S o u rce : S ta tis tics S w e d e n  approximately the same magnitude as the unemployment rate.1 Sweden’s increase in unemployment can in this way be estimated to cost around 10 per cent of GDP a year, which is equivalent to SKr 150 billion. Considering the sensitivity of general government finance to variations in unemployment and production, the cost to the public sector, in the form of lower  1  Assuming that changes in the capital stock roughly parallel employment and that average productivity is constant. BIS Review 38/1997  -4-  tax revenue and increased expenditure on unemployment support, for example, may actually be as high as 9 per cent of GDP or SKr 135 billion.2 Conversely, an appreciable reduction of unemployment implies decreased social tensions as well as substantial economic gains.
In the present context this means that a succession of good news items about a company’s profits may lead investors to project the trend well into the future and accordingly generate an over-reaction; if the share price then rises, this is seen as confirming the analysis. A period of good returns also boosts the investor’s self-confidence, making her/him bolder and more prone to take risks. Bit by bit the over-reaction takes shape and, if the worst 3 comes to the worst, leads to a bubble. A phenomenon - also studied in experimental psychology - that works against taking an independent stance is group thinking. It is not easy to stick to an opinion that differs from what a majority of the group seems to hold; “surely all the others cannot be wrong” is a common thought. An example with which you may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer one that has many guests - they simply rely on the judgement of others. Even if you hold a different opinion from others, it could be profitable to act as you think the majority will. An investor who considers a stock to be valued above its fundamental level could still decide to buy or hold on to the stock if he or she believes that others might still be interested in buying the stock at an even higher price, for instance due to the factors mentioned earlier. In a paper the authors draw 1  Hagstrom, R.G.

This means that the Riksbank must make assessments of how the krona will develop in relation to other currencies during the forecast period, and assess what effect the development of the krona will have on demand for Swedish goods, as well as the impact the krona will have on consumer prices. None of these assessments is simple. Allow me first to point out the mechanisms that are important with regard to a direct impact on inflation via import prices. If the krona weakens and prices on the goods we import are determined in the exporter’s home country currency, the weaker krona will have a direct impact on import prices. For the weaker krona to have a full impact on prices of imported goods in the consumer channel, all domestic intermediaries must pass the price increases on to the end consumer. During the years with a floating exchange rate we have been able to note that the weakening of the krona has not had the impact on consumer prices that we had expected. One explanation could be that internationalisation and increased competition have first and foremost meant that the exporting companies endeavour to adapt their prices to developments on the markets where they sell, in order to retain their market share. It is reasonable to imagine that large corporations with sales and production spread around the world can act in this way without facing large fluctuations in profits.
When new information changes the economic outlook, we must of course reconsider our view of how the repo rate should be set in the future. But this is hardly a reason to refrain from being as open and clear as possible about what we currently believe will happen. As I have said on previous occasions – it would be roughly like the Swedish Meteorological Institute refraining from publishing five-day forecasts because conditions might change in the meantime. Another argument against publishing interest rate paths is linked to the way the market functions. This means that in principle the financial market agents could stop looking for other information if they have access to the central bank’s forecasts for interest rates in the slightly longer term. How the market views economic prospects is normally reflected in the long-term market rates. This source of information could thus be lost and this would impair the functioning of the market. But I find it very difficult to imagine that the market agents would stop making independent assessments because we are now publishing our own view of interest rate developments. They know as well as we do that we are living in an uncertain world and that the forecasts we make are constantly being revised. They have strong reasons for continuing to look for information via other channels than the Riksbank and for assessing this information, even when we publish our forecast of the future interest rate path.

We host crisis management groups for the UK’s globally systemic banks, insurers, and systemic CCPs and attend all such meetings internationally for firms with significant operations in the UK. And we conduct exercises with other major jurisdictions to test preparedness. 10  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  10  That means recognising that because risks to financial stability are constantly evolving we must continue to work together to identify emerging vulnerabilities in a timely and consistent manner. 12  And that means not merely resisting the forces of fragmentation but actively building an open global financial system that places increasing reliance on, and deference to, each other’s national regimes when they achieve similar outcomes. A decade on from the start of the crisis, now is the time to take the high road to the benefit of all. 12  Just as the FSB is doing in its work to assess the financial stability implications – both opportunities and risks – of FinTech. 11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11
This is mainly because households’ interest expenditure will stop falling and then rise as the repo rate is raised. BIS Review 25/2010  9  Figure 9 Inflation measured as the CPI and the CPIF Annual percentage change  Source: Statistics Sweden  From crisis interest rate to monetary policy in an economic downturn The Executive Board of the Riksbank decided at the latest monetary policy meeting to hold the repo rate unchanged at 0.25 per cent to attain the inflation target of 2 per cent and to give sufficient support to the economic recovery. We are expecting to begin raising the repo rate again in the summer or in early autumn 2010 (Figure 10). This is slightly earlier than in our last forecast, which is because of the two components I mentioned. The financial markets have become increasingly stable and statistics on economic activity – such as slightly higher growth abroad, stronger employment and higher inflation – have gradually confirmed the picture of the recovery being on firmer ground. Figure 10 From crisis interest rate to monetary policy in a recession Per cent  Source: The Riksbank  10  BIS Review 25/2010  At the same time, we are now assuming that the increases in the repo rate can be made more gradually. This means that the forecast for the repo rate in the longer term is marginally lower than before, just under 4 per cent at the beginning of 2013. But, of course, forecasts so far ahead are very uncertain.

On the contrary, they need to contribute to the design of the measures to make them robust and effective across countries. Similar holds for regulatory objectives, as what is considered a priority for regulators in advanced countries, like the G20 countries, might not be considered as urgent in emerging market countries. In this regard, I welcome and strongly support the effort of the Basel Consultative Group (BSG) as a forum for deepening the engagement of the BCBS with non-member authorities, international institutions, and regional groups of banking supervisors on the regulatory reform and banking supervisory issues. I see cooperation between the BCBS and the BCG as a key component helping to design robust regulation and supervision, taking into account financial sector aspects in both advanced and emerging markets and developing countries. As a member of the BCG, the CNB has actively participated in the work of the group. We contributed to the work agenda evaluating major intended and unintended consequences of Basel III implementation for emerging and smaller economies in the past. We also hosted a workshop on this topic in 2013. As I see your workshop agenda, I appreciate that you are going to discuss the timely issue of sovereign exposures in emerging markets. The reasons for the high share of government bonds in commercial bank assets in emerging markets are clear and straightforward. Financial markets in these countries are still under development and shallow, which is limiting their ability to diversify assets.