samchain/econo-pairs-v1 huggingface dataset:
At the same time, stock issuance up to the third quarter of 2007 is higher than that of 1996. Notice, however, that the persistent weakness of expectations indicators and the effect of the recent increases in inflation on families’ purchasing power imply a risk for private consumption growth. 2  BIS Review 120/2007  As a result of the above, the GDP and aggregate demand growth have been somewhat below the forecasts of the September 2007 MPR. There, the GDP growth forecast for this year was 5.75% to 6.25%, with a downward bias. The evidence accumulated so far, indicate that the GDP growth will be in the lower part of the range. The turbulences in international financial markets could be affecting expectations of consumers and entrepreneurs. In fact, consumer expectations have worsened and the forecast of the GDP growth in expectation surveys has fallen. The most important development in recent months, however, has been inflation. Inflation has picked up, reaching annual rates of 5.8% in September, both for total CPI and core CPI (which excludes perishable foods, energy and regulated tariffs). This surprising rise of inflation has been influenced by unusual (and simultaneous) increases in the prices of food items, given rises in their foreign similes and harsh weather conditions in Chile. These high prices have not only persisted but also intensified in the last months. Additionally, electricity power rates have also increased, as a result of natural gas restrictions coming from Argentina, and the replacement of hydro by oil-based electrical generation.

Many were barking up the wrong tree: Hedge funds and private equity were not the main culprits but suffered. Let me sum up the unfolding of events in 6 points: 1.  Credit spreads reach record lows in the first half of 2007. The combination of relatively low interest rates for a long period of time, the trend to lay off credit risk out of balance sheets and to securitize and an increasing focus on short-term returns have led to a strong demand for credit risk, especially from nonbank investors. As a result credit spreads fell to all-time lows, leading to a mispricing of credit risks. Additionally, many investors relied greatly on credit rating agencies for the valuation of complex financial instruments and their use as collateral. 2. Strong economies and higher commodity prices were fuelling expectations of tighter monetary policy before the crisis started. In the first half of the year the economic situation proved to be very robust. Most major central banks were normalising interest rates. Strong demand for commodities put upward pressure on prices so that interest rates were rising in the first half of the year. 3. Mortgage rate re-settings at higher interest rate levels caused delinquency rates to rise, most pronounced in the sub-prime mortgage market. BIS Review 120/2007  5  This led to losses in the hedge fund sector and increasing difficulties in finding a fair value price for structured deals. Moreover, investment funds experienced difficulties in NAV pricing, resulting in the temporary closures of some funds.
Corporate credit growth is slowing, but Norges Bank’s thirdquarter bank lending survey indicates that enterprises’ access to bank credit has improved and that this tendency will continue in 2009 Q4. At the same time, borrowing in the bond market has become more accessible and less costly. The decline in business investment will probably come to a halt in the course of 2010 as growth recovers, funding conditions improve further and interest rates remain low. Banks’ tightening of credit standards has been less pronounced for households than for enterprises. All the banks participating in Norges Bank’s lending survey expect credit standards for households to remain unchanged ahead. BIS Review 139/2009  9  Lower interest rates in the period to summer and easier access to residential mortgage loans have fuelled housing demand. House prices have shown a seasonally adjusted increase of approximately 14 per cent since the trough in November 2008, and the decline in household credit growth has levelled off. Housing investment may start to increase towards the middle of next year. 10  BIS Review 139/2009  Interest rates in Norway are low. This has led to renewed growth in household consumption, and there are prospects that household demand will continue to rise. According to surveys carried out by TNS Gallup and Opinion, household expectations with regard to the outlook ahead are more optimistic now than they were in autumn 2008. In addition, housing wealth has improved as a result of higher house prices, which may underpin growth in consumer spending.

On the other hand, continued relatively low unemployment in Norway will contribute to pushing up wage growth. Wage growth is projected to increase to 4¼ per cent in 2010, rising further to 4¾ per cent towards the end of the projection period. The severe cyclical downturn and the decline in commodity prices have resulted in very low consumer price inflation in many countries. The year-on-year change in consumer prices is negative in the US, the euro area, Sweden, Japan and China. Core inflation is more stable, but has also edged down recently. Moderate growth prospects and lower-than-normal capacity utilisation in most advanced economies will lead to low consumer price inflation among our main trading partners throughout the projection period. The key policy rate was reduced to prevent inflation from falling too far below target and to mitigate the impact of the global downturn on the Norwegian economy. Underlying consumer price inflation in Norway has slowed in recent months to an estimated rate of just below 2½ per cent, reflecting the effects of lower wage growth, reduced capacity utilisation in the Norwegian economy and low inflation abroad. Although the krone depreciation last autumn has pushed up import prices, the effect of the depreciation is probably now waning. BIS Review 139/2009  13  After a period of falling productivity, unit labour costs are high. The projections are based on an increase in firms’ margins ahead through an increase in prices.
Of this growth, card payments were the strongest driver.4 In the European Union, card payments reached a total of over 29 billion transactions in 2008, also growing at a rate of almost 9%.5 This shows the immense potential of this means of payment to generate revenue for the financial industry through growth, even at a time when interchange fees are under pressure. In my view, SEPA offers tremendous opportunities for further harmonisation of the use of cards, making them an even more attractive means of payment. But, besides the harmonization of card standards, more competition in the European cards market can bring additional benefits to consumers. Therefore, the Eurosystem remains convinced that an additional European card scheme is needed. Three initiatives are under way: PAYFAIR, EAPS and “Monnet”. The Eurosystem has maintained close contacts with all these initiatives to create an additional European card scheme. We are pleased to see that one of the initiatives has recently started a pilot with a large merchant, and that another initiative is operational among some of its constituent schemes, especially for ATM withdrawals. We are hopeful that these initiatives, whether separately or jointly, will come to fruition in the near future. In essence, for SEPA for Cards to become a success, card payments need to be positioned as a real alternative to cash: efficient, fast and guaranteed. This could and should be delivered by the already existing card schemes and the foreseen additional ones. However, this will not be enough.

This development is also beginning to appear in Sweden, at least in the larger cities. Abroad the ATMs often have independent owners, who charge a small sum (SEK 10-15) to customers wanting to use their ATMs. The customers are happy to pay this for the benefit of being able to withdraw cash on the spot rather than having to go several blocks to find a bank and stand in line there. One may wonder why both the use and distribution of cash show different patterns in Sweden than in other countries. Evidently, we like cash, even if it is difficult to get hold of. So although developments  4  BIS Review 51/2002  are clearly moving towards increased use of cards and paperless payment instruments, the cashless society still lies some way in the future. IT reduces the risks IT makes the payment system more efficient in a number of different ways, some of which I have already indicated, but technology can also contribute to reducing risks. Trade in shares, bonds and currencies with the accompanying derivative products entails, for instance, that large credit risks arise between the banks managing the payments, what are known as settlement risks. The necessity of reducing these risks has become increasingly clear. Let me take foreign exchange trading as an example. The foreign exchange market has a huge daily turnover. On two occasions the credit risks in foreign exchange trading have become uncomfortably evident; when Bankhaus Herstatt was declared bankrupt in 1974 and when Barings Bank fell in 1997.
William J McDonough: Future challenges for bankers and bank supervisors  Remarks by Mr William J McDonough, President of the Federal Reserve Bank of New York, before the 106th Annual Convention and Financial Services Forum of the New York State Bankers Association, held in New York on 6 April 2000. *  *  *  I am pleased to be with you today to discuss the new world that bankers and bank supervisors alike face in the wake of historic financial reform and continuing technological and financial innovation. Clearly, these are exciting, heady times. The American banking system has just posted its eighth consecutive year of record earnings, exhibiting substantial resilience and strength in rebounding from the troubles of the late 1980s and early 1990s. In doing so, banks have contributed substantially to, and benefited enormously from, the longest economic expansion in our nation’s history. Simply put, most people in our country have never had it so good. And yet even as we celebrate our good fortune, we must bear in mind that this very prosperity exposes the seemingly unstoppable US economy to certain very real risks. Today I would like to discuss the important issue of maintaining sound lending practices at this critical juncture in the extraordinary economic cycle we are enjoying. I’ll also address the impact of technology on banking, the Gramm-Leach-Bliley Financial Modernization Act, and conclude with an update on the effort to revise the Basel Capital Accord.

There is the rise in commodity prices relative to the global price of finished goods and services, which means that we have to pay more for the raw materials that we need. And there is the substantial depreciation of sterling, which is a counterpart to the necessary re-balancing of the economy, but which also implies that we have to pay more for our imported goods and services. The second, and related, point is that while monetary policy cannot ultimately insulate us from the associated hit to our living standards, it can affect the adjustment path. In particular, the MPC’s chosen approach has been to accept a temporary period of above-target inflation, rather than seeking to hold inflation as close to the 2% target as possible at all times. Achieving the latter would have required a markedly higher level of Bank Rate and with it most probably a somewhat higher level for sterling. That would have moderated some of the external inflationary impulses facing us, but would also have depressed activity and pay even more and retarded the requisite re-balancing of the economy.
The connection measure takes value 0 when none of the directors of a given firm are directors of other firms. 38  All speeches are available online at www.bankofengland.co.uk/speeches  38  Table 2: Distribution of director connectivity  Sources: Bureau van Dijk and Bank calculations. Notes: Measurement of director connectivity as in Khwaja, Mian and Qamar (2011). Table 3: Regression of firm-level productivity growth on director centrality  Sources: Bureau van Dijk and Bank calculations. Notes: The table shows results from a panel regression of yearly productivity growth on firm size, the natural logarithm of the number of directors and the natural logarithm of firm centrality. Productivity is measured as gross value added per employee; size is measured as the natural logarithm of the balance sheet item “Total Assets”; centrality is measured as the number of connections (with other directors via other companies) of the most connected directors of the given firm. The sample period covers 2000-2013. T-statistics correspond to standard errors that are clustered at the firm-year level. Significance levels are * p < 0.1, ** p < 0.05, *** p < 0.01. 39  All speeches are available online at www.bankofengland.co.uk/speeches  39  Chart 20: UK vs. US labour market churn Percentage of employment in previous period  8% 7% 6% 5% 4% 3% 2% 1% 0%  2000  2002  2004  2006  2008  2010 UK US  2012  2014  2016  2018  Sources: ONS, United States Census Bureau and Bank calculations.

Other things being equal, that relative dissaving in the West would have reduced any global savings/investment imbalance. In terms of international capital flows, the current account surpluses in the East found their counterpart in net external borrowing in the West. This is a story about net capital flows. And that is what my world has in mind when it expresses concerns, rightly, about persistent global macroeconomic imbalances.5 Such cumulative imbalances eventually lead to macroeconomic adjustment, which can be painful. Deficit countries end up having to save more (relative to investment) and export more (relative to imports). Exchange-rate regimes come under pressure. And surely there is a lot to this story. But an explanation resting solely on net flows seems insufficient. Europe provides a striking case. The external position of the Euro Area was broadly flat through the mid-2000s, so if the net position were all that mattered, Europe would have been a bystander in the global elements of the crisis. In fact, the starting pistol for the crisis in international money markets was fired in Europe in mid-2007, when a Continental investment fund suspended redemptions following the decline in US ABS values. Overall, even before the euro area’s distributional issues came to the fore, collective current account balance did not protect Europe from the early phases of the crisis. Nor had the fall in world real interest rates set off a boom in property prices and mortgage borrowing in, for example, Germany. Yet Germany’s banking system was not remotely spared crisis.
Compromise solutions have been mentioned, such as issuing a parallel currency, IOUs … All these measures can be found in the non-standard toolbox that any government might consider when it runs out of other options. But they all come at a high price. Whether they are needed or not is something that only the Greek Government can decide. Would capital controls in Greece help to stabilise the situation? BIS central bankers’ speeches  1  That is one of the many measures I was referring to. The Treaty says that there is free movement of capital, but exceptional measures can be authorised. In Cyprus these measures were considered necessary, but it’s difficult to speak generally. In an extraordinary situation, each country has to call on exceptional measures as the case requires. Talking about them beforehand could have negative effects on the markets. Can Greece default within the euro area? I don’t want to theorise concerning the destiny of Greece. If you take a look at other examples, there have been defaults in the United States and other monetary unions, with no political consequences. What matters is European countries’ perception of political cohesion and their willingness to remain together. The more the euro area is seen as a mere cooperation between sovereign states, the less you can imagine it making the extra effort necessary to remain united. And the more you believe the euro is more than a single market, the more you will believe that we are willing to defend it with all possible means.

These include improvements in service delivery by the public sector, having a stable and sustainable tax system, maintaining stability in the exchange rate, preserving political stability, consistency in government policy, and continued investment in infrastructure development. Other areas highlighted include addressing high lending rates, increased efforts in the fight against corruption and reducing bureaucratic processes. Further, respondents were of the view that government needs to take appropriate measures to enhance private sector involvement in decision-making and streamlining licensing requirements. In closing, I wish to thank you all for attending this virtual meeting and hope that you will use the occasion to explore the survey findings and recommend appropriate measures to contribute to the enhancement of the business environment. It is now my singular honour and privilege to officially open the workshop and wish you all fruitful deliberations. I thank you for your kind attention. God bless you. 2/3  BIS central bankers' speeches  3/3  BIS central bankers' speeches
The drop in fuel prices will also help to contain the inflationary pressures and will contribute to sustain disposable income (Figure 5). A second transmission channel relates to the worsening of financial conditions. The global increase in risk perception and deep adjustments of financial prices restrict access to goverment and corporate funds. This has driven various central banks to take action to ensure the proper operation of the markets. In Chile, among other measures, the CBC Board adjusted the operation of liquidity programs it has been applying since November 2019, included corporate bonds among eligible collateral for all the liquidity operations in pesos offered by the Bank and launched the purchase of banking bonds from the open-market operations system (SOMA) participants for an amount in UF1 equivalent to up to USD 4 billion. At our Monetary Policy Meeting yesterday we also communicated that we will raise the amount of this bank bond purchase program to up to USD 8 billion. And for the outstanding balance (USD 5.5 billion) the maturity constraint for eligible instruments will be eliminated. The steep drop in companies’ activity because of social isolation of workers and clients and their inability to carry on their normal tasks has resulted in a significant increase in their financial needs, as they must continue to cover their costs in a context of heavy loss of income.

The duration of these stops will depend on the COVID-19’s behavior, but in any case, it will take a big toll on second-quarter investment. The baseline scenario assumes that these projects will resume normally towards the third quarter of this year. We must bear in mind that the economy’s performance since last October provides a weak starting point to deal with the COVID-19 emergency. Although the latest IMACEC2 showed a recovery in activity levels— including the February figure (2.7%) we published this morning—the sanitary measures affect more acutely those sectors that had already been hit by the social unrest. Also, household consumption is coming from a significant contraction in the latter part of last year, while investment was sustained by construction and other works, mainly mining projects. In the labor market, the national unemployment rate as reported by the National Statistics Institute for the moving quarter ending in February showed a bigger increase than in previous months, while other indicators point to a marked worsening in employment quality. Particularly striking is that in recent months a large proportion (92%) of the increase in total employment has been in salaried informal jobs, which do not provide the benefits that formal salaried employment does, including paid sick leave (Figure 7). Some financial variables such as the exchange rate, stock prices, and credit growth were also in less favorable levels than they showed at the onset of the social crisis.
Ladies and gentlemen, An important transformation in the international financial landscape is the introduction of the euro which has indeed been a defining event. The objective was clearly to facilitate trade and investment within the region by removing the distortions in economic relationships introduced by exchange rate volatility. As a result, where there were previously 12 currencies, there is now only one. Corporations dealing with the 12 euro countries are now able to keep their books in one set of accounts and make operating and investment decisions without having to be concerned about exchange rate changes. For the rest of the world, it has been described as “island of price stability” in addition to the dollar area, to which capital can flow. Four factors are important in determining a currency's international role: relative stability, which would reduce the risk of holding assets in that currency; a strong exchange rate; so that capital losses can be avoided; deep and liquid financial markets for that currency, to enable holders to diversify, liquidate and adjust their investment portfolios; and finally, a strong regulatory support to minimise the possibility of crises. Indeed, the international success of the euro in coming years would depend on the extent to which these criteria are met. The introduction of the euro has of course given impetus to other regional initiatives to pursue similar efforts to unify national currencies into a single regional currency. Such initiatives are being pursued in Latin America, Africa and the Middle East.

The changing structural pattern of trade in the region reflects the growing intra-regional trade which now accounts for almost half of Asia's total trade from just a fifth a decade ago. Intra-regional trade has also been enhanced by the opening up of large regional markets such as China. The share of East Asian exports to China has doubled in the past decade to about 10%. While there has been significant attention on the  2  BIS Review 62/2002  competition that China will create for other countries in the region, the focus should also be on the complementarities that are already feeding the regional growth process. A third discernable trend in the region is the growing importance of domestic demand in the regional economies, supported by domestic-oriented policies in recent years, which would ensure that the gains in intra-regional trade could be sustained. In terms of financial flows, the development of regional markets is contributing towards strengthening the prospects for a deepening of Asian financial markets and promoting greater regional financial integration. The region is also studying the feasibility of establishing an Asian Bond Market to recycle part of the region's high level of savings to finance productive activity within the regional countries. To encourage the regional flows to be recycled into investments in the region, efforts have been taken to develop the capital market particularly in the area of securitisation, credit guarantee and market infrastructure.