samchain/econo-pairs-v1 huggingface dataset:
In fact, a  BIS Review 88/2006  3  study by the ECB shows that the closer a country comes to an excessive deficit, the more likely it is that the forecast the government presents officially will later turn out to be wrong. There is a strong bias towards unrealistic optimism once a country’s deficit approaches 3% of GDP. The same result was indicated in a study by Lars Jonung and Martin Larch. What challenges does the future hold? Let me say something in this respect about the new member states. It is all too apparent that the collapse of Germany’s leading role in fiscal discipline has also set a bad example for some of the larger new member states. This despite the fact that Germany now appears to be in the process of correcting its deficit. Given that public finances did deteriorate so much in Poland, Hungary and the Czech Republic during the first years of this century it is fortunate both for themselves and for the euro area that these countries have postponed joining ERM II and the attempt to rapidly adopt the euro. They have made clear that their government finances must be in order before the process of joining the euro area begins. Had they tried and locked their currencies within ERM II they may well have stayed in that position for a long time, becoming in the meantime targets for speculation – as their poor public finances would have lent little credibility to their overall economic policy.

The part that has been much in focus has been the monetary policy regime – in Sweden and the UK, inflation targeting with a specific target for inflation and regular and transparent inflation forecasts has worked well. But inflation targets, or for that matter Denmark’s euro peg, would never have been as successful had fiscal policy not been reformed in parallel, with clear rules and budgetary ceilings in Sweden and Denmark which put the problems squarely in the sight of the public. Considering the UK fiscal deterioration the last couple of years, one might draw the conclusion that the so called golden rule, i.e. only borrowing for public investment, is not a clear enough rule, but that expenditure ceilings and targets for the fiscal balance are more effective. In fact those euro area countries that have some sort of national transparent targets and evaluation of fiscal policy have managed to retain some order in their public finances; Finland being a prominent example. The power of targets and transparency is that the public, with the help of comments from analysts in the media, can evaluate clearly how the government is doing in relation to a long-term norm. Is fiscal policy in line with the target, or is it deviating from target? The idea of being on or off target is quite easy to grasp, and if the process is transparent, experts and the public alike will learn to trust the figures. In this area most countries still have a lot to do.
The growing demography of Africa has resulted in the clearing of land in order to accommodate for more houses and areas for cultivation due to the significant dependence of the majority of the population on agriculture. According to UNEP 2003, 60% of the tropical forest areas that were cleared in Africa as a whole between 1990 and 2000 were converted to permanent agricultural smallholdings. The cutting and not replacing of trees contributes to global warming. Worse still is the burning of forests to clear land for grazing or agriculture which also releases carbon dioxide. Desertification is another area of concern for the continent. Over 45% of Africa is affected by desertification, while 55% is at high-to-very-high risk of erosion (UNEP 2003). Desertification is compounded by the other major environmental concern of deforestation. In fact, studies have shown that mortality rate, maternal health, and girl child education in the region are directly linked to environmental changes such as deforestation. In rural areas, households rely on females to fetch firewood, therefore, continued deforestation implies longer walking distances for women and girls. These result in complications in pregnancy, other ailments, as well as less time for girls to do school work. Studies have also shown that women and girls in Africa spend an average of three hours a day fetching water, hence expending more than a third of their daily intake of food (UNDP 2003).

The other is to fix structural shortcomings in the euro area architecture that had allowed imbalances to build up in the first place. BIS central bankers’ speeches  1  On both counts, the euro area has made considerable progress. Despite strong recessionary headwinds, euro area governments have markedly improved their fiscal positions. Average government deficit ratios fell by more than a quarter over the last two years and, excluding interest payments, were approaching balance at the end of 2013. Simultaneously, most of the stressed euro area countries have made remarkable progress in gaining competitiveness. Over the past five years, the cumulative unit labour cost differential vis-à-vis the euro area have fallen by more than 20 percentage points in Ireland, around 15 percentage points in Greece and Spain, and almost 10 percentage points in Portugal. This was accompanied by substantial improvements in the export dynamics of these countries. Overall, we see the euro area’s economic recovery gradually taking hold, albeit at a slow and uneven pace. In parallel, the architecture of Economic and Monetary Union (EMU) has been strengthened in ways that many would have considered inconceivable two years ago. Perhaps most important for monetary policy, and certainly most topical for this conference, are the concrete and ambitious steps towards a banking union. By establishing the Single Supervisory Mechanism (SSM), European policy-makers have demonstrated a firm commitment to a stringent and uniform application of common supervisory standards.
We work diligently to respond to the challenge, while paying attention to the two points of communication – immediate communication with the public and communication with the media. We do our best to follow the best practices of the European  central banking union, which is largely confirmed with the assessments of our transparency. In doing so, we not only struggle to increase intensity, but also quality of our communication. Here I would mention the practice of constantly improving the quality of information and analyses we publish, improving the methodological explanations for the statistics that we publish, timely informing of all novelties in statistical surveys, improving the structure of our website, concurrent publishing of statistics and statistical press releases for their explanation, providing international comparability of our data through continuous implementation of international standards. In this regard, we are in the final stage of creating an analytical tool for easier access and search of statistics by all external users. We hope that our commitment is noticeable for you as media representatives, who analyze our work on a daily basis, by following the press releases, data and positions that arise from the central banking operations in the country. For us, you, the journalists, are one of the main conveyors of monetary policy messages to the public. Not as our spokespersons, but as individuals and professionals respected by the public, who daily follow our work, which is very often presented in tables, graphs, reviews and data series that almost always require focused reading and analysis before being commented.

Bank deposits refer to money that is issued by, and is a claim on private banks. Each time a bank extends credit, new money is created. Bank deposits now account for 98 percent of the broad money supply (M3). The increasing use of new payment methods, such as mobile payment solutions, suggests that this percentage will continue to rise. We have to ask ourselves: should we allow private solutions to compete freely in developing means of payment, or must the authorities play a role? The crucial factor is whether solutions based on private money deliver the characteristics the payment system should have. The system must be able to channel payments swiftly, safely, at low cost and in a user-friendly manner. The means of payment itself – our money – must be universal, because money is only useful if it is widely used. This requires trust. Deposit guarantee schemes and banking regulation promote trust in banks’ deposit money. Trust is also underpinned by being able to convert to another secure alternative, ie cash. Norges Bank assists private operators in implementing faster and safer payments. We cooperate with other authorities to oversee and supervise the payment infrastructure to ensure robustness and efficiency. Privacy rules prevent unauthorised access to payment information. But there are some characteristics deposit money lacks. Nor is direct and immediate settlement between two parties, without the involvement of a third party, possible without cash. The system is vulnerable to advanced attacks.
Sometimes, it has been a bit of both. As I see it, the structural problems with forward guidance come in two flavours. First, the type of forward guidance that financial market participants crave is precise, time-specific guidance. This makes their job of pricing assets and inferring central bank signals easiest. But this is also the type of forward guidance central banks are, rightly, least willing to provide. The path of policy ought to depend on the path of the economy, not the passage of time. And that path is uncertain. So from a policymaker perspective, imprecise, state-dependent guidance is the preferred form. This difference in requirements gives rise to an inherent tension. Either guidance ends up being ex-ante over-precise and ex-post unreliable. Or it is ex-ante imprecise but then serves little or no ex-post signalling role. We have seen examples of both types in the UK, with early forward guidance erring towards the former and recent forms towards the latter. So-called “dot plots” combine, for me, the worst of both worlds. There is a second problem with forward guidance, first articulated by Stephen Morris and Hyun Shin several years ago. 42 The provision of public policy signals may dampen incentives among market participants to invest themselves in understanding the economy. These risks have I think been realised in practice, with forward guidance encouraging too much poring over central banks’ words and too little poring over the data on which monetary policy decisions are based. That is the wrong way around.

CDS quotes on sovereign debt instruments issued by CEE countries  percentage points  450  basis points  180  3.0  400  160  2.5  350  140  300  120  250  100  200  80  150  60  100  40  50  20  0  0  2.0 1.5 1.0 0.5  Source: Reuters  Poland  Romania  Hungary  Poland  Nov.17  Sep.17  Jul.17  Mar.17  Sep.17  Jul.17  May.17  Mar.17  Jan.17  Nov.16  Hungary Germany  May.17  Czech Republic Romania  Sep.16  Jul.16  May.16  Mar.16  Jan.16  -1.0  Jan.17  -0.5  Jan.13 May.13 Sep.13 Jan.14 May.14 Sep.14 Jan.15 May.15 Sep.15 Jan.16 May.16 Sep.16 Jan.17 May.17 Sep.17  0.0  Czech Republic  Source: Reuters, NBR calculations 15  Figure 22. Composition of the deficit on the balance on goods  Figure 21.
Thereafter the model takes over and the interest rate gradually falls back, in line with the model’s estimated reaction pattern. In the course of a couple of years, the interest rate has returned to its starting point.9 As the chart shows, the degree of spread in the results is considerable. If we were to draw a fan chart, or confidence intervals, around each model, it would become clear that the uncertainty is even greater than the spread alone indicates. The results must therefore be interpreted with caution. If we were nevertheless to draw a conclusion on this basis, it must be that an interest rate increase will dampen GDP growth in the course of the subsequent year – all else being equal. Somewhat further ahead, inflation will also recede. As the interest rate returns to normal, GDP growth and inflation will pick up again. Our macroeconomic model NEMO has a more precise theoretical construction than the VAR models. NEMO is a dynamic stochastic general equilibrium (DSGE) model, and has many features that are similar to corresponding models in other central banks. It describes the behaviour of households and firms. Economic agents are forward-looking when making decisions so that expectations are of significance. There are three economic agents: households, firms and a central bank. Households demand goods and supply labour. They assess how much to spend relative to saving and how much they should work subject to their budget constraints.

But the specific nature of France’s situation makes it impossible to single them out as the central cause: rates are low across the euro area, and yet, on average, the levels of debt carried by households, firms and state governments have declined as a share of GDP, whereas in France they have increased. Page 11 of 14  This is more a justification for greater vigilance in our country. I shall turn now to two current limits of monetary policy. 2.2  Two limits requiring vigilance  Financial stability The first area where vigilance is required is regarding the consequences of low rates for financial stability. It is important first to stress that the financial sector’s capacity to absorb shocks has been substantially reinforced since the great 2008-09 crisis: balance sheets have been cleaned up and bank solvency and liquidity have been improved thanks to the European and international regulations known as Basel III, and to a considerable reduction in the weight of non-performing loans. What is more, the effects of monetary policy include some positive aspectsxi that are all too often overlooked by the banks: lower financing costs; a reduced cost of risk due to the improvement in borrower solvency. That said, while accommodative monetary policy is a benefit for economic agents, prolonging it puts pressure on the profitability of financial players – both banks and insurers alike.
2  BIS Review 6/2007  The SEC regulates the investment companies, merchant banks, venture capital companies, unit trusts and the rating agencies. Under the provisions of the Act, the SEC issues financial regulations to ensure that companies listed in the Stock Exchange operate in an orderly manner preserving the stability of the capital markets and, as a whole, the financial system. The registered insurance companies, the insurance broking companies and ancillary service providers are regulated by the IBSL to safeguard public interest. The insurance policies consist of long-term savings of the public and, therefore, the sustainability of insurance companies is important for longterm savers. All financial institutions operating in Sri Lanka are required to comply with the recently enacted Money Laundering Legislation, Countering the Terrorist Financing Legislation and the Financial Transaction Reporting Act. Relevant regulations will be issued shortly. The recently introduced Payments and Settlements Act provides wide powers to the Central Bank to regulate the national payments system. Despite these legislation and financial regulations, there are many operations by the financial intermediaries which cannot be captured by one or more financial regulation. One such category is financial conglomerates, which engage in banking and finance, insurance and stock market transactions. They still have a leeway to take advantage over others. Regulating these conglomerates is a real challenge. There is a limit to impose rules on all aspects of operations which will lead to overregulation and that should be avoided. Improved understanding of potential risks may bring in better results.

Ranee Jayamaha: Glimpse of current financial regulations Inaugural speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Client Seminar on International Trade, organized by HNB (Hatton National Bank), Colombo, 13 November 2006. *  *  *  Mr Theagarajah, officials of HNB, Mr Richard Lightbound from Wachovia Bank, distinguished participants, ladies and gentlemen. Thank you for the invitation extended to me to be present at the client seminar on Trends in International Trade. Let me congratulate HNB for taking the corporate social responsibility seriously and arranging a forum to exchange stakeholder views on an important subject. Generally, regulations are not liked by anybody. Same goes with the financial community in Sri Lanka. However, the common factor is that even regulators do not like to rule by regulation. For a better appreciation of the past and present financial regulatory environment, let me first set out the key elements underlying financial regulations. In summary: (a) regulations are mainly a reaction to an action by the financial community, although there may be instances in which regulations are brought in on hindsight with a forward-looking approach, but they are a few; (b) there is a clear difference between the objectives of regulators and market participants; (c) regulations are not necessarily a oneway street. They are not there only to tighten markets.
With effort and sacrifice our society has overcome problematic situations, some not so distant in time. And the pandemic will certainly be no exception. As in other previous crises, it is vital that we should be able to draw lessons allowing us to improve those aspects that have fallen short, that have not worked as foreseen or that need to be strengthened. Naturally, this need to draw lessons applies to banking regulation, but also to health, social insurance and economic aspects that have evidenced shortcomings. As you know, the banking supervisory and regulatory frameworks were overhauled to include the lessons we learned from the previous financial crisis. While unrelated, we could say that the situation caused by COVID is the first test for this global reform and, almost inevitably, we will be assessing the functioning of the different components of the new framework after facing this global, exogenous, severe and totally unexpected shock. Let me begin with a very swift reference to the supervisory framework. I believe we will all agree that the launch of the Single Supervisory Mechanism (SSM) after the financial crisis entailed a major transformation for all euro area supervisors and banks. 1  As you know, I was involved in the creation and early working years of the SSM, so objectivity may fail me; we all tend to defend that which we have helped create. But I honestly believe that, in spite of its defects, we now have a truly European supervisory powerhouse.

We should recall that credit in the private sector has not ceased to decline since the financial crisis. Firms only began to increase credit further to the health crisis and to the subsequent shutdown in activity. Indeed, the paradox is that it was after the outbreak of the pandemic that this variable began to indicate that the buffer should be activated, naturally, due to the growth of publicly backed credit and the simultaneous slump in GDP, not because of a real alert. The credit-to-GDP gap is known to emit erroneous signals in circumstances such as those currently prevailing. Consequently, as well as monitoring a series of indicators, the Banco de España has decided to use two specifications for this gap: (i) the standard one defined by the BCBS and (ii) an alternative, tailored to the characteristics of the Spanish economy’s credit cycle. However, the activation of this buffer has recently been justified in some jurisdictions with the aim of creating room for manoeuvre in good times that can then be used in periods of stress. The logic behind the activation of the buffer for this reason is similar to that which was applied in our now-extinct countercyclical provision. Finally, new responsibilities have been assigned to the three sectoral supervisory authorities in Spain, as a result of the implementation of this new policy, including to the Directorate General for Insurance and the National Securities Market Commission (CNMV), which have been given tools similar to those I have just described.
For instance, now in 2019 Germany is going to be one of the countries with a lower growth rate. And yet it was the euro area’s growth engine two or three years ago. There is not an accumulation of divergences, but situations change. Some countries that were underperforming are now overperforming, and vice versa. And this is not going to depend on monetary policy. Monetary policy has to take care of price stability and some real factors that can explain inflation levels across the euro area. But it’s exactly the same in the 3/4  BIS central bankers' speeches  United States. Do you think a single currency area can work in the long term without having a single budget to address shocks, banking problems or competiveness issues? I think the institutional architecture of the euro area has not been finalised at all. We have made some progress with the creation of the European Stability Mechanism, and we have launched the banking union, but this project is not complete. We have to finish the European Deposit Insurance Scheme (EDIS) and we need to complete the capital markets union. I am fully in favour of having an instrument with a stabilisation capacity. It can take different forms. Of the kind French president Emmanuel Macron is proposing? If you look at what was agreed in the European Council, it was a first step in the right direction. But that should not be the steady state of the instrument.

Luis de Guindos: Interview in Corriere della Sera Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, in Corriere della Sera, conducted by Mr Federico Fubini on 13 June 2019. * * *  The 5y5y forward inflation rate is at an all-time low and clearly below where it was when Mario Draghi first hinted at quantitative easing (QE) in 2014. The ECB has already done some more easing and President Draghi himself mentioned that there was an interesting discussion at the latest Governing Council meeting on different tools to do some more easing – the asset purchase programme (APP) and others. What do you need to see in order to decide to do more? What we need to see is a de-anchoring of inflation expectations. This has not yet happened, despite the fact that there has been a drop in market-based inflation expectations. If you look at the survey of professional forecasters, the situation is a little bit different – expectations have remained stable. Then we need to see if there is a significant additional drop in economic activity – a crystallisation of the downside risks that we have indicated. We can always try to look forwards to get an idea of what might happen, but ultimately the reality is the reality. And, well, let’s see what happens. But I think the important part of our stance is that we are totally ready to react. We will have time enough to know the future when it arrives.