samchain/econo-pairs-v1 huggingface dataset:
Miguel Fernández Ordóñez: Developments in Spain Testimony of Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, before the Senate Budget Committee in relation to the draft State Budget for 2012, Madrid, 30 May 2012. *  *  *  Ladies and gentlemen, I appear before this Committee at a vitally important juncture for our country. A severe crisis continues to assail the Spanish economy, making it a centre of attention not only for the euro area countries, but probably for the world economy. Against this background, the 2012 Budget is a key instrument for shoring up the credibility of our public finances and our economic policy in general, and for restoring confidence in our economy. The seriousness of the current situation is inextricably linked to the European sovereign debt crisis, which worsened last year, spreading to countries with sounder economic fundamentals than those initially affected. The depth of the crisis and the difficulties in overcoming it can be attributed to the macroeconomic imbalances built up by various economies, imbalances that reached an excessive scale owing, perhaps, to the apparent protection afforded by the Monetary Union. But the current critical situation may not be understood without considering a European element relating to the absence of suitable mechanisms within the Union to tackle problems on this scale and to the difficulties of shaping a strategy enabling them to be corrected in an orderly manner.

Traditional surveys of market participants or the general public tend to be biased in their sampling and framed in their responses. As in quantum physics, the act of observing can itself alter behaviour. These realities may call for exploring non-traditional means of revealing people’s preferences and sentiments. To give one recent example, data on music downloads from Spotify has been used, in tandem with semantic search techniques applied to the words of songs, to provide an indicator of people’s sentiment. Intriguingly, the resulting index of sentiment does at least as well in tracking consumer spending as the Michigan survey of consumer confidence. 51  And why stop at music? People’s tastes in books, TV and radio may also offer a window on their soul. So too might their taste in games. Indeed, I am interested in the potential for using gaming techniques, not just to extract data on people’s preferences, but as a means of generating data on preferences and actions. Existing models, empirical and theoretical, often make strong assumptions about agent behaviour. Theoretical models are based on axiomatic assumptions. Empirical models are based on historical  49  Rotemberg (1984), for example, discusses the statistical rejection of rational expectations models for consumption and labour demand. 50 Tuckett and Nyman (2017), Shiller (2017) and Nyman et al (2018). 51 Sabouni (2018). 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  behaviours. These restrictions may, or may not, be borne out in future behaviour.
Japanese companies can also take advantage of Singapore as a hub for knowledge and market intelligence. Over the years, we have developed a network of institutions that have a deep reservoir of knowledge on China, India and Southeast Asia. Our businessmen are also familiar with these countries. We are now building up links with the Middle East. 46. Japanese companies based in Singapore can enjoy not only benefits from the JSEPA, but also 10 other FTAs that Singapore has concluded with major economies like the US, South Korea and Australia. I would like to highlight the Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India as it is the first comprehensive FTA that India has signed with any country. Conclusion 47. The rise of China and India will shift the global economic centre of gravity from West to East. Remaking our economies cannot be an occasional exercise. Governments must respond boldly and continuously to the imperatives of our changing times. Likewise for companies. This is the only way to ride the rising Asian tide. 48. Thank you. I will be happy to take your questions. BIS Review 83/2005  5

The three consortium members have completed many successful twinning projects in the financial sector and have gained a sound project management capacity. We have strongly committed ourselves to this project for various reasons. We are encouraged by the progress achieved by the financial supervision authorities in Montenegro in bringing financial sector regulation closer to the EU requirements. Also, there are many signs of already built cooperation with the Montenegrin authorities that need further strengthening. Bulgaria, the Netherlands and Montenegro are in the same IMF constituency  BIS Review 168/2009  1  which has created good mutual knowledge of their economies and fostered long-term cooperation on financial issues. We consider our experience relevant to Montenegro not only because of the scale of the economy, but also because of the similarities of the supervisory structures. In the accession process we have learnt several major lessons. Bulgaria did not ask for any transitional periods or derogations concerning the banking sector acquis communautaire. Furthermore, all EU directives in this sector were transposed in time and most of them long before the deadlines. This approach has turned to be a success since the early adoption of the EU rules in financial supervision contributed to the smooth functioning of the financial market and fostered the stability of the financial system. One of the main keys to the smooth transition in the accession process is the cooperation between the institutions involved in financial regulation and supervision.
Abstracting from credit and liquidity risk, the most prevalent source of risk for longterm debt is duration risk: that is, the sensitivity of the bond price to changes in the yield curve. I will come back to this when discussing the duration channel of large-scale central bank asset purchases. [11] Monetary policy exerts its effects on the yield curve not only through pure rate expectations but also through term premia. Chart 4 shows a model-based estimate of the yield curve response to a change in policy rates for the euro area. [12] The surprise used here is a combination of what I previously described as a pure rate surprise and a forward guidance surprise. It therefore affects yields across all maturities. While Chart 4 shows that changes in rate expectations explain the bulk of the yield curve response, part of it is attributable to changes in term premia. Chart 4 Instantaneous impact of conventional policy surprise on expectations and term premia (basis points)  Source: ECB calculations. Notes: The chart depicts the instantaneous impact of a conventional monetary policy surprise on the yield curve and its components. The policy surprise is identified through high-frequency changes in the common component of a set of euro area short-term interest rates of maturities up to one year. The surprise (normalised so that the one-month rate is reduced by 10 basis points) thus captures effects beyond a pure target rate surprise. These effects may be interpreted as a signalling element of conventional monetary policy.

A recent paper examines how economists and commentators, when confronted with a flattening curve in the past, often argued that “this time is different”. [31] That is, they claimed that special factors were contributing to the flatter curve and that these compromised the standard interpretation of the curve as a harbinger of recession. As I mentioned at the beginning, the current euro area yield curve is indeed quite flat from a historical perspective, with the spread between ten-year and one-year yields amounting to about 30 basis points, which is around 1 percentage point lower than on average. [32] I will certainly not make a binary statement on whether this time is different. In particular, a sound assessment of the future growth outlook should be based on a wide range of indicators and models, rather than the yield curve alone. Moreover, there are two further issues to consider. First, the current flattening of the curve has mainly been induced by the long end of the curve coming down, rather than by the short end coming up. This constellation is different from previous episodes of yield curve inversion, as is shown in Chart 11. Hence, the inversion of the yield curve observed this time is not occurring in a context of monetary policy contraction raising the short end of the curve. Chart 11 Decomposition of change in the slope of the yield curve (percentage points)  Sources: Bundesbank, OECD, Thomson Reuters and ECB calculations. Notes: Update of the corresponding chart in De Backer et al. (2019).
Kouvavas, O., Osbat, C., Reinelt, T. and Vansteenkiste, I. (2021), “Markups and inflation cyclicality in the euro area”, Working Paper Series, No 2617, ECB. 9. However, the concentration of accumulated savings among higher-income households limits the extent to which this buffer can support the recovery in consumption, and the real value of excess savings has declined due to inflation. Copyright 2023, European Central Bank

EMU - an important part in EU cooperation When asked about the likelihood of EMU being actually established on time, some observers declare that “the EMU process has reached a point of no return”. I neither can nor want to be so categorical. But that EMU will be realised on time in accordance with the Treaty does seem highly probable. The political determination is strong, as has been demonstrated time and again when conflicting views threaten the process. I am glad the debate has now started in Sweden and that it is concentrating to a greater extent on the consequences for Sweden of joining the monetary union or remaining outside, rather than on whether the EMU project as such is good or bad. What I still lack in the debate is an appraisal of EMU in a broader policy perspective. The purpose of the economic and monetary union is the same as for the European Union: closer European cooperation on such areas as integration, growth, employment and prosperity. The European Union is often discussed in Sweden in terms of a Brussels bureaucracy that deals with the length of cucumbers or the curve of bananas. That is of course both incorrect and unfortunate. The Union should be seen as an arena or, if you like, a playing field. For some years now Sweden has been a player, which involves learning the rules and taking initiatives for the development of Europe in concert with other countries.
During this period the deficit to GDP ratio only shed two percentage points to 12%. In contrast, the second half of the 1980s featured an emphasis on reducing expenditure. In the process the deficit was slashed to 2% of GDP. A perceptible dividend of this policy was an acceleration in the growth rate to an annual average of 8.6% in the 1990s. At this stage, therefore, there can be no doubt about the urgent need to reduce the fiscal deficit primarily through better expenditure management. Broad policy statements of intent will no longer do. The budgetary allocation process must be radically changed so as to ensure that expenditure is minimised and delivers value for money. Perhaps the greatest obstacle to an effective implementation of such an approach is the negative short-term economic impact which expenditure cuts are likely to entail. It is thus crucial that the private sector be in a position to take up the slack as the State reduces its role in the economy. And for this to happen, there have to be the best possible conditions for the attraction of local and foreign investment. There are indications, however, that our performance is not quite up to standard in this regard.

Globalisation and Increased International Competition Such considerations lead us to another major challenge, that of globalisation and increased international competition. Malta is particularly susceptible because it has a very open economy. Developments in the international market place are indeed likely to become even more relevant because the process of globalisation continues unabated. Facilitated by the progressive dismantling of trade barriers, this process has been characterised by a rapid growth in factor mobility and crossborder investment, and has given rise to harsh competition based on innovation, dynamism, improved  2  BIS Review 50/2003  quality and low cost. It has also become easier for new entrants to gain access to global markets, including the countries of Central and Eastern Europe, many of which are now our competitors. Globalisation has, therefore, brought more uncertainty because there will be winners and losers. Although the process probably involves more than simply a zero-sum game, it is also true that countries which adapt to the new competitive conditions more rapidly will grow at the expense of those which are slower to react. This is a crucial consideration for Malta, which is a very small player in the global market place, and therefore a price taker, but which depends heavily on exports to maintain the living standards of its people. While there are many enterprises in Malta which are rising effectively to this challenge, the cost pressures associated with the macroeconomic imbalances and the inefficient practices described earlier are proving to be too much of a burden for some others.
The performance of the relatively low-capitalised banking sector has been devastating during the last decade. 7. Conclusion  To conclude, leverage has been a major contributing factor in the current financial crisis. Excessive leverage has amplified the shocks to the financial system. Moreover, the now inevitable de-leveraging is imposing further stress on the system. To enhance the longerterm resilience of the financial system, effective regulation to curtail banks’ leverage is required. In an attempt to put a lower bound on banks’ leverage, I strongly support enhancing current risk-weighted capital requirements with a simple leverage ratio. A leverage ratio effectively serves as a safety valve against the weaknesses and shortcomings of risk-weighted requirements. It ensures a minimum capital buffer that protects banks against unexpected losses and underestimation of risk. As we have learned from the current crisis, the failure of risk models may quickly turn banks that seem comfortably capitalised into poorly capitalised banks. Let me emphasise again that I don’t advocate replacing the current Basel II regime with a leverage ratio. This would be unwise, as we would forgo all the advantages of the riskweighted requirements. In particular, we would lose valuable indicators of banks’ levels of risk. And, quite frankly, there is no real alternative in sight, at least not readily. In discussions with my central banking and regulatory colleagues I detect increasing interest and willingness to examine and consider the proposal of a leverage ratio as a complement to the risk-weighted capital regime under Basel II.

And regardless of the debate surrounding our monetary policy, it is in Germany that support for the euro is strongest, and still growing: 81% at the end of 2016. Support is also strong on average in the euro area (70%) and in my own country (68%). However, we are all agreed that monetary policy alone is not enough to ensure stronger growth. 2. To achieve stronger growth, our countries must reform and Europe must rapidly bring two supplementary levers into action. The first growth lever for the euro area is more reform in our countries and a better collective economic strategy. Growth and employment would be stronger in Europe with more structural reforms where they are a priority, such as in France, and more public investment for instance and fiscal support in those countries with room for manoeuvre, such as Germany. Regarding reform, like you, I would like France to accelerate; I say it frequently in my country. These reforms are compatible with the European social model that we share; many successes in Europe have demonstrated this. But you must not consider your French neighbour to be “unreformable”. France has not been immobile over the past few years. Pensions have been reformed. Reforms such as the CICE tax credit, the Responsibility Pact and the so-called “El 2/4  BIS central bankers' speeches  Khomri” labour law have substantially reduced the burden for businesses. France has met its deficit reduction targets for the past two years. This fiscal credibility must continue to improve in 2017.
The role of insurers in the digitalisation of our economy It is essential for our economy to adapt to the digital revolution: it creates incredible opportunities, but with them, new risks against which the insurance sector, once again, can bring stability and protection. I would like to discuss two subjects in particular: Firstly, cyber-insurance. The cyber-insurance market is still underdeveloped. Insurers can and should take inspiration from their own experiences in tackling cyber-risk, and use it to develop a more mature French and European cyber-insurance offering. The coverage against cyber-risk is a very real concern that affects all companies – both small and large – as cyber-attacks are becoming increasingly frequent and costly: according to figures from Euler-Hermès, 57% of French companies were victims of these attacks in 2016, compared with 32% in 2015. We at the Banque de France, alongside the Eurosystem and our G7 colleagues, have made cybersecurity one of our strategic priorities. And secondly, personal data and big data. Naturally, the spread of connected objects that is triggering an exponential rise in the amount of data available on insurance policyholders represents an opportunity for the business of insurance, which consists precisely in collecting and exploiting data in order to quantify and put a price on risk. Nonetheless, I would urge insurers to take a responsible approach: we need to strike the right balance between segmentation and the sharing of risk between policyholders. The basic principles of solidarity and risk-pooling that are intrinsic to insurance are at stake.

I would like to add a few words on the bad controversy that had surrounded the Sapin II law, and which now luckily seems to be behind us. Much has been said about the measure which gave the possibility to the Haut Conseil de stabilité financière (HCSF) to limit life insurance withdrawals in the event of a crisis, and which was, according to some, an impingement on French citizens’ freedom to dispose of their savings. These allegations were, perhaps, temporarily detrimental to life insurance; it would therefore be in your interest as professionals to point out, against certain populist excesses, the truth, which you know: these powers are only intended to be used in serious and exceptional circumstances, to better protect the rights of policyholders. Here again, our concern is to preserve stability. II. The essential role of insurers in the financing of our economy The insurance sector is the largest institutional investor in the euro area, with total assets of close to EUR 7,800 billion in the second quarter of 2017, of which more than EUR 2,600 billion for the French market alone. Better steering these flows to sectors that need long-term financing 1/3  BIS central bankers' speeches  is essential for our economy. What comes to mind are infrastructures, of course, but also companies, which need more equity financing to be able to innovate more: as innovation is more risky, it is financed through capital rather than debt.
So, from having experienced a rise of almost one million people between 1950 and 2000, this group will increase by half as much, or by half a million people, over the next 50 years. BIS Review 46/2003  3  This trend means, according to Statistics Sweden's forecasts, that the economically active population in Sweden will have to support an increasingly large percentage of the young and old. Today, each person of working age supports 0.7 people that do not work. By 2050, it is forecast that each worker will have to support 0.84 people. If we only look at the elderly, there are 0.29 people that are 65 years or older for every worker. By 2050 this ratio is forecast to have risen to 0.42. These developments will entail ever increasing demands on higher labour force participation among the elderly. According to a study by Statistics Sweden, the percentage of Sweden's retirement pensioners that have to work to support themselves is forecast to rise by 50 per cent by 2035. One part solution to the problem comes from the immigrant population. It is people with a foreign background that are forecast to account for the net contribution to the economically active population. By 2015 it is forecast that approximately every fifth person in Sweden between 20 and 64 years will have been born outside Sweden or have foreign-born parents. Meanwhile, the number of Swedes with Swedish-born parents will be fewer in 2015 than in 2000.

One important factor was that many low-productivity firms went bankrupt in connection with the sharp economic slowdown at the beginning of the 1990s, while other firms implemented cutbacks of lowskilled labour that had less qualified tasks. When the economy began to grow again there was plenty of unemployed labour, and it was possible to attain high growth without inflation gathering pace. Another cause was the IT boom towards the end of the 1990s, which also contributed to productivity growth. In the years ahead, we can also expect to have good productivity growth in Sweden. Increases in productivity growth can be a solution for large parts of the corporate sector, but this is less often the case for parts of the public sector. Quality care and education often require a strong presence of human labour. Nevertheless, there is probably much to be gained by organising and financing the public sector in new ways. The contribution made by trade union organisations in this regard could prove to be a decisive success factor. Here, the Nordic countries have an advantage over others through a high degree of organisation and an established cooperation between employers and employees. The education sector also faces considerable challenges. When the current generation of teachers in Sweden retire, a substantial increase in new teachers will be needed. According to the National Labour Market Board, the number of new recruitments required to replace retired teachers is forecast to come to around 100,000 up to and including 2015.