samchain/econo-pairs-v1 huggingface dataset:
Specifically, in the case of the 2022 revision, on Banco de España estimates, higher commodity prices, increased uncertainty and the lower growth of world markets will reduce growth by 0.7 pp, 0.6 pp and 0.5 pp, respectively. These factors by far outweigh others operating in the opposite direction. These include the fact that, on the latest Quarterly National Accounts (QNA) figures published,2 GDP grew more vigorously in the second half of 2021 than anticipated in the December projection exercise. Likewise operating in favour of output growth is the stimulus provided by the measures included in the National Plan to respond to the economic and social consequences of the war in Ukraine, approved on 29 March by the Spanish Cabinet,3 to which I will refer briefly later on. In any event, assuming that the war will not extend over a long time horizon, activity will continue to be underpinned by the foreseeable improvement in the epidemiological  1  See “Macroeconomic projections for the Spanish economy (2022-2024)”, Box 1, “Quarterly report on the Spanish economy”, Economic Bulletin, 1/2022, Banco de España. 2 Specifically, the new QNA figures revise the GDP growth rate in 2022 upwards by 0.8 pp. 3  The projections do not incorporate estimates relating to the proposal submitted to the European Commission by the Spanish and Portuguese Governments to reduce the impact of higher gas prices on wholesale electricity prices, because it is not yet clear how this measure will ultimately materialise.

7  The main measures with a direct budgetary impact include the € State-funded discount available to all citizens on every litre of fuel purchased (from 18 April to 30 June), the existing discounts on energy taxes being extended to 30 June, the offsetting measures and direct support for the transport sector and electricity-intensive industries (amounting to € billion) and the plan to take in refugees (with a budget of € billion). 7  Need for an incomes agreement There is an additional dimension to the response to the current situation, one that is highly specific to the present shock and of the utmost importance. Specifically, as I have explained, the attack on Ukraine has exacerbated the geopolitical tensions that were already driving steep price rises in energy commodities, the bulk of which we import from abroad. This increase in the price of imported energy amounts to a loss of income for the Spanish economy. And as I have reiterated on a number of occasions, lower income for the economy as a whole inevitably entails a reduction in its agents’ income. Against this background, these agents (essentially firms and households, but also general government) would be well-advised to internalise this reduction in national income and reach a burden-sharing agreement, so as to avoid triggering a price-cost feedback loop.
In some countries, where systemic risks have increased appreciably, it may also be appropriate to apply macroprudential policies that enhance the financial system's resilience. Their procyclicality, however, should be avoided. Vulnerabilities and risks in the non-bank financial sector have also increased and should be monitored closely. At the same time, headway needs to be made in improving this sector's regulatory framework, in particular to address leverage and liquidity mismatches. An incomes agreement As I was saying, on the information available, there is no evidence of second round effects occurring at present, at least not on a widespread basis. Euro area wages have remained subdued. In fact, real wages have declined significantly. However, wage growth is gaining pace, underpinned by strong labour markets and the effect of inflation on wage demands, both of which are expected to continue. Profit margins have also remained moderate overall, albeit with much heterogeneity across countries, firms and sectors. Nevertheless, the pass-through of costs to final prices has also been increasing and has been higher than in previous episodes. Moreover, as I said before, the longer the current high inflation persists, the more likely these second-round effects are. To avoid this, it is essential that economic agents accept as inevitable the loss of income caused by the rise in the cost of imported commodities.

The banks play a central role in financial stability as the majority of payments go through the bank system. The Swedish banks fund half of their borrowing through deposits from the general public and half of it through loans from one another and on the financial markets. If problems arise that prevent the banks from obtaining funding by borrowing from one another or on the financial markets, they can borrow from the Riksbank. The Riksbank is what is usually known as the lender of last resort. Figure 6 TED spread Difference between 3-month interbank rates and government security rates Basis points 500 450 400  500 Sweden Euro area USA  450 400  350  350  300  300  250  250  200  200  150  150  100  100  50  50  0  0  Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09  Sources: Reuters EcoWin och Riksbanken. 6  BIS Review 160/2009  During the financial crisis several financial markets ceased functioning. The banks’ confidence in one another declined and they became unwilling to lend to one another. Developments during the crisis can be illustrated by, for instance, the so-called TED spread, the difference between the interest on three-month interbank loans and three-month treasury bills. As confidence between the banks declined, the TED spread increased during the crisis and peaked when Lehman Brothers fell (Figure 6).
In that regard, the recent announcement by the European Central Bank of its determination to conduct unlimited intervention in the sovereign secondary markets, provided effective conditionality is fulfilled, constitutes a significant step towards the normalisation of market conditions in the euro area. Yet, the return to a smoothly operating monetary union cannot be completely achieved by simply relying on ad-hoc reactions by policy-makers. Institutional arrangements must be reviewed in order to restore adequate incentives for domestic authorities to prevent the reemergence of destabilising imbalances and to ensure that any residual risks arising in specific jurisdictions that could affect the area as a whole would be addressed by integrated mechanisms operating at the euro area level. The recent changes introduced in the European Union to strengthen the requirements and the mechanism for the surveillance of domestic fiscal policies and structural reforms, together with the creation of the EFSF and the ESM – which we now know will be soon be launched – are good examples of the required institutional reforms. BIS central bankers’ speeches  1  At the same time, a specific source of risks for the smooth functioning of monetary union that needs to be addressed directly is the financial instability experienced in specific jurisdictions.

Up to now payments for over 14 thousand businesses and over 93 thousand households, totalling more than BGN 9 billion, have been suspended , which really and considerably eases the financial conditions during the hardest time of the crisis. The crisis has moved the external financing conditions issue to the top of the agenda. You know that the crisis triggered the accumulation of deficits which must be financed and the required financial buffers must be maintained. Therefore, we had to give an additional signal to markets and investors that Bulgaria stays stable in the crisis in terms of its financial position and its 1/2  BIS central bankers' speeches  monetary regime. This signal was given with the EUR 2 billion swap line set up between the European Central Bank and the Bulgarian National Bank, and it has been read unequivocally as a positive one by markets, rating agencies, and investors alike. I want to point out one very important thing – the conclusion about Bulgaria’s strong financial position remains valid now, despite the developments in the last months. A drastic change of this direction would be a mistake with serious repercussions. All measures so far pursued in relation to the banking sector, which I believe were successful and timely, do not, in any way, diminish our concern of what is happening and is going to happen in the coming months.
The agenda for these visits is always packed, but that’s part of the point – to meet with a diverse array of representatives in order to get a comprehensive picture of what’s happening on Main Street and its interaction with state and national developments. At the end of my talk I will be happy to answer any questions you have about the economic outlook from my perspective. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve System or the Federal Open Market Committee, also known as the FOMC. National economic conditions I would like to begin by taking stock of where we are at the moment. Then I will address my expectations for the performance of the economy over the remainder of 2013 and into 2014. Since the end of the Great Recession in mid-2009, we have had 15 consecutive quarters of positive growth of real GDP. However, the average annual growth rate over that period has been just 2.1 percent. Although the unemployment rate has declined by 2.5 percentage points from its peak of 10 percent in October of 2009, much of this decline is due to the fact that the labor force participation rate has fallen by 1.5 percentage points over this period. Recall that discouraged workers who do not actively look for work are regarded as not participating in the labor force and so are not counted as unemployed even though they are without jobs.

Erdem Başçi: The importance of commodity price movements Opening remarks by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the Conference on “Policy responses to commodity price movements”, Istanbul, 6 April 2012. *  *  *  Distinguished guests, Welcome to the conference on the “Policy Responses to Commodity Price Movements” jointly organized by the International Monetary Fund, the IMF Economic Review and the Central Bank of the Republic of Turkey. As I will deliver another speech in the panel session on the second day of the conference, I will attempt to keep this inaugural speech as brief as possible. As you will recall, we hosted a conference on commodity price volatility in Istanbul last September within the context of G-20 program. These two conferences on similar topics in such a short time are clear indicators of how important the commodity price movements are for the global economy. Why are commodity prices so important? When we think of what is covered by “commodities” more closely, we also come up with how we should approach this issue. Usually, the term “commodity prices” represent energy prices (mainly the crude oil), food prices and the prices of some main industrial inputs. Energy prices are very closely monitored by economic units and policy makers, for it denotes the cost of one of the most significant inputs for the entire economy. Energy is one of the primary cost factors for firms. It is also a considerable item for households’ heating and transportation expenditures.
For a start, regulation goes hand in hand with supervision. We will continue to ask searching questions about the quality of a firm’s assets, the rigour of its risk management, the experience on its board, the plausibility of its resolution plan and so on. That is the bread and butter of our role. Meanwhile, the reforms will be treated to revisionist history and the calls of counter-revolution. Now, reasonable people can disagree about the right balance of financial regulation in order to achieve our goals. The most celebrated example of this is how to trade off the cost of higher bank lending rates, which dampens investment in the economy, versus the benefit of reducing the probability or severity of future financial crises. Unless some other breed of revolutionary brings an end to capitalism itself, then I think that debate will go on for a long time after we are all dead. But in my view, the post-crisis reform package – taken as a whole – strikes the right balance between the competing interests present within our mixed economy system. Brexit does not affect this judgement. The UK financial system must be robustly regulated and supervised whatever the outcome of the government’s negotiations with the European Union. As my colleagues on the Financial Policy Committee and I put it last month: “the FPC will remain committed to the implementation of robust prudential standards in the UK financial system.

It is sometimes claimed that we regulators are hell-bent on pursuing the stability of the graveyard by crushing all life out of the financial system – in other words, that we don’t really believe in the mixed economy system. I will leave you to judge whether our regulation, which allows a medium sized bank to run a balance sheet that is thirty three times bigger than its shareholders’ equity, is consistent with the idea that we are insisting on a risk-free system. This is plainly not a zero-failure regime. I also sometimes find individuals in institutions we supervise and regulate who think we take a wicked glee in constantly rewriting the rules. That is also wrong. Revolution is not of itself an objective, so like all self-respecting revolutionaries we are focused on defined goals:   a strong and stable banking system with no taxpayers’ money spent on bailing out a PRA-regulated financial institution; and    a resilient insurance sector which does not pass risks back to policyholders when they crystallise. I think those goals are in sight, and the remaining path to them is now largely set. Therefore, while I cannot speak for other countries, my assessment is that here in the UK we have reached the end of the revolutionary period in which major reforms to prudential standards were required in response to the 2008 financial crisis.
This definition is critical to clarifying the public interest-objective in a stable financial system, and that this public interest can diverge from the private interest of a firm in profit maximisation without reference to the public interest. One of the biggest lessons I take from the financial crisis is the need to ensure that the boards and management of firms appreciate and act consistent with the public interest. To achieve this end, we need a much better definition of the “public interest”, which will come from the legislation. The second important point regarding the meaning of the PRA’s objectives is that it will not be the PRA’s role to ensure that no firm fails. Rather, the PRA will seek to ensure that any firm it regulates that does fail should do so in a way that avoids significant disruption to the supply of critical financial services. Nevertheless, failure is not without cost and there is inherent uncertainty about whether a firm can fail without damaging the financial system and the supply of critical services. Consequently, the PRA will expect a given level of resilience to failure from all firms. Now, I recognise that we have a lot to do still on resolution planning to be comfortable about our objective of avoiding a “no failure” regime. For large banks, we are making progress on resolution planning, and this world is different to five years ago, but we are not there yet by any means.

This, too, we hope will support credit availability. It is too soon to assess the impact of all these changes on the resilience of the financial system and on credit creation. We will monitor the results of these actions very carefully, and we will be prepared to amend our judgements in the light of experience. The key point here is that we are applying judgement to our decisions on regulation and within a framework that quite explicitly defines and seeks to balance our objectives of resilience, the primary objective, and, subject to that primary objective, supporting credit conditions and economic activity. To be clear, in this world of judgement-based regulation, we will not get all the calls correct, not least because the future is uncertain. But, I am a lot more comfortable that we have a framework in which we can apply judgement more consistently and be held to account for those judgements in a more open way. There is one further element to the package of reforms, namely the measures proposed by the Commission chaired by Sir John Vickers, which the government intends to place into legislation in the near future. I fully support the Vickers proposals. The key plank of this is to ring-fence commercial from investment banking and, in doing so, define the scope of commercial banking that can be inside the ring-fence. This will be a major structural change for the banking system, and will have important implications for us as regulators.
But it is estimated to stand at anything up to $ billion in 2003 prices. Across Asia, growth rates were reduced by SARS by between 1 and 4 percentage points. Yet in the final reckoning, morbidity and mortality rates were, by epidemiological standards, modest. Only around 8000 people were infected and fewer than 1000 died. On 15 September 2008, Lehman Brothers filed for Chapter 11 bankruptcy in a New York courtroom in the United States. Panic ensued. Uncertainty about its causes and contagious consequences brought many financial markets and institutions to a standstill. The market for Credit Default Swaps (CDS) froze, as Lehman was believed to be counterparty to around $ trillion of CDS contracts. Media and modern communications fed this frenzy and transmitted it across markets. Banks hoarded liquidity for fear of lending to infected banks, causing gridlock in term money markets, spreads on lower-rated companies’ bonds spiked and there was an effective boycott of the remaining large US investment banks. Professor Paul Krugman, Nobel prize winner in economics, commented: “Letting Lehman fail basically brought the entire world capital market down.” The macroeconomic impact of Lehman Brothers’ failure will never be known with any certainty. IMF forecasts of global growth for 2009 have been revised down by over 5 percentage points since Lehman’s failure. Yet in the final reckoning, the direct losses from Lehman’s failure seem likely to be relatively modest. Net payouts on Lehman’s CDS contracts amounted to only around $ billion. These similarities are striking. An external event strikes.

For its part, the SNB will continue to monitor developments on the mortgage and real estate markets closely, and will reassess the need for an adjustment to the countercyclical capital buffer on a regular basis. BIS central bankers’ speeches  3
In the UK, the Independent Commission on Banking suggested a capital surcharge of 3% of risk-weighted assets (RWA) for banks that could not be resolved. In its 2015 assessment of capital adequacy, the Financial Policy Committee estimated that capital would need to be around five percentage points higher if there was no resolution regime in place. It is also argued that resolution will not work; that while it may be a way of dealing with idiosyncratic failures, in a systemic crisis authorities will be reluctant to bail in shareholders and bank creditors. This binary distinction between idiosyncratic failure and fully blown systemic crisis seems to me oversimplistic. For sure, if we were suddenly to find ourselves pitched back into the middle of a systemic crisis, with a number of major institutions having failed or on the point of failure and a complete breakdown of trust and confidence, orderly resolution of individual banks in itself is unlikely to be able to stabilise the system as a whole. But we did not suddenly arrive in late 2008 in the midst of full blown financial crisis. Had the authorities had better, less disruptive options available over the previous 18 months to deal with a series of failing institutions, the disruptive, explosive nature of the crisis might well have been minimised. There would still have been very major losses and failures. But we would, in my view, have had a much better chance of a more orderly, less damaging correction of an overleveraged banking system.

Gent Sejko: Financial inclusion, governance, tackling nonperforming loans, and Albania’s milestones for 2020 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the meeting organised by the Albanian Association of Banks, Tirana, 12 February 2020. * * * Dear ladies and gentlemen, It is always a pleasure for me to attend meetings and round tables with representatives of banks operating in Albania. They are also an excellent opportunity to discuss and harmonise our efforts for a stable deepening and expansion of the financial market, as one of the core pillars of the economy and the main driver for sustaining development and enhancing the public’s welfare. I would like, in my brief address, to bring to your attention some highlights of 2019, regarding the contribution of the banking and financial systems, as well as some milestones for 2020. Let me first focus on the overall state of affairs in the Albanian economy. The devastating earthquake that hit Albania on 26 November 2019 was a major event with a strong impact for 2019, on all the sectors of economy and the whole society. It was an unexpected shock giving rise to economic and psychological consequences in the affected areas and beyond. On the other hand, it was a difficult test, and I may say that all banks passed it successfully, in terms of continuity of financial market’s critical functions.