samchain/econo-pairs-v1 huggingface dataset:
Employment growth Per cent 6 4  6 4  General government  2  2  0  0 -2  -2 Manufacturing  -4 91  BIS Review 14/2001  92  93  94  95  96  97  98  99  -4  00  1  Whereas the upturn was balanced for a long period, the public sector has laid claim to a large share of the increase in the labour supply in recent years. Manufacturing employment has fallen markedly since 1998. The mainland economy features some aspects that are associated with a boom period, although growth is low. After several years of mainland GDP growth in the order of 3-4 per cent, activity is now increasing by less than 2 per cent a year. The economy is operating near capacity limits. New working time reforms, increased use of sick pay and disability benefits and a reduced supply of labour from other Nordic countries are restraining growth in many sectors. Moreover, there is no evidence suggesting that productivity growth in Norway has picked up to the levels in some of our neighbouring countries. Risk premia for private companies in the US Percentage points 6  6  4  4 High risk  2  0  Medium risk  Low risk  2  0  1993 1994 1995 1996 1997 1998 1999 2000 2001  International equity prices declined sharply last autumn. In the US, output and employment are stagnating.

Back then employment could be generated through the reduction in wage costs that a devaluation entailed and thanks to the improvement in competitiveness that immediately came about in companies. But this formula is no longer viable, and thankfully so, because the benefits for Spain of being part of the euro far outweigh those of retaining the peseta in the long run. But if we accept this constraint now upon us, we must be consistent and accept that this time we can no longer, as we did on several occasions in the past, adjust our competitiveness and, therefore, increase our growth rate without changing our singular institutional framework. And in this forum I should mention the responsibility that large and small firms alike must embrace. With all due diligence they should adopt the organisational reforms and adapt their working procedures so as to enable them to use as soon as possible all the changes introduced into our legal and institutional framework aimed at making hiring easier. Let me move on now to the problems I mentioned at the start of my address. These concern the markets’ doubts, reflected in the higher cost that the Kingdom of Spain has been paying for a year to raise funding. Blaming this on greedy or evil markets would be a waste of time, and might distract us from the fact that these costs can only be reduced if we adopt the domestic measures and reforms needed as soon as possible.
At the other end of the spectrum, finding ‘the average’ for a collective Committee statement is tough in the short time available, except where a majority has decided to change Bank Rate, or where ‘no change’ is driven by some clear common factors that it would be unreasonable to withhold from the public sphere until publication of the minutes a fortnight later. ‘Individualism’ is also reflected in our public speeches and appearances before Parliament. Those individual exercises range widely – from assessments of the conjuncture, through examinations of particular parts of the transmission mechanism, to reflections on monetarypolicy making more generally. 3 But whatever the subject or scope, we are each speaking for ourselves, not for the Committee as a whole. Taken together, all this plainly sets up centrifugal forces, or Blinder’s ‘cacophony problem’. As put that matters, since it is of course the systematic component of monetary policy that is doing the work in stabilising nominal trends. Households, firms, the financial markets need to figure out what the Committee – or, somehow, its marginal member(s) – thinks is going on in the economy and how it will react in setting Bank Rate (‘our’ reaction function). But there are centripetal influences too. I shall highlight two. First, the aim of each member is not to be in a minority but for their preferred level of Bank Rate to be that chosen by a majority of the Committee.

Jean-Pierre Danthine: Swiss banks from a financial stability perspective Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 1 December 2014. *  *  *  In my remarks, I would like to look at the situation of the Swiss banks from a financial stability perspective, taking the big banks first and then moving on to a discussion of domestically focused banks. Strengthening the resilience of the big banks Since the last media news conference, the Swiss big banks have improved their capital situation once again. The Swiss National Bank recognises the considerable progress made in this area as regards both risk-weighted capital ratios and leverage ratios. It is also of the opinion that the strengthening of the big banks’ resilience must continue, for the following reasons. First, risks in the economic and financial environment remain high. In several of the adverse scenarios considered by the SNB, the estimated loss potential for the big banks continues to be substantial relative to their capitalisation. This is also the case when viewed in a historical perspective, as evidenced during the recent financial crisis. Second, while the big banks’ risk-weighted capital ratios are above the average for large globally active banks, the same still cannot be said for their leverage ratios.
That was resolved progressively during the 1990s, culminating in the Government’s announcement in 1997 that an operationally independent Bank of England was charged with achieving a clear inflation target. A stable monetary environment has reduced the quite unnecessary risk of self-induced ‘boom and bust’ flipping about demand conditions across the economy as whole. For users of financial markets, the most visible sign of the change was the reduction in yields on conventional government bonds with long maturities, which had previously compensated for high and highly uncertain prospective inflation rates. By ushering in a world with a credible nominal anchor, one source of uncertainty and risk was significantly reduced. The ex post annualised volatility of ten year gilt yields has halved: from over 200 basis points between 1970 and 1997, to under 100 basis points since the current monetary regime was introduced (Table 1). That means that, as corporate treasurers, one source of unavoidable uncertainty about your long-run borrowing costs has been very significantly reduced. The introduction of the new monetary regime did not, and of course could not, remove uncertainty about the quarter-to-quarter, or indeed year-to-year, path of the economy and inflation. And so there remains a degree of unavoidable uncertainty about the short-term path of official rates, as the Monetary Policy Committee responds to cyclical developments. Transparency can reduce that uncertainty, through our making clear what we think is going on in the economy and how, generally, we react to changes in the outlook.

Overall, this is akin to writing deeply out-of-the-money options, exposing the banking system to tail risk. That should not be too surprising given that commercial banks’ liabilities are money, and so they are in the business of providing liquidity insurance. But it does make it difficult for market participants to assess, and price for, how much risk there is, albeit contingently, in the system as a whole. Conclusion Many of the developments I have reviewed are, of course, good news. Most obviously, longer life expectancy! Greater macro economic stability; financial innovation distributing risk more efficiently – these are pretty good things too, including for you as corporate treasurers. As a result, some risks have been reduced or are now easier to manage. But risk management challenges do unquestionably remain for you as corporate treasurers. Some, such as those arising from pension provision, essentially boil down to your appetite for risk and the mix of business/financial risk you want. Others stem from a range of uncertainties in capital markets. When and how global imbalances will be resolved. Whether risk is underpriced. How still-new structured finance markets would withstand a marked pick up in defaults. You will each have your own list. Those uncertainties and risks have to be identified, priced and managed. The official sector cannot make them go away. But it is our mission to reduce uncertainties stemming from monetary policy and its implementation. Some important sources of uncertainty in the past were, in fact, avoidable.
BIS Review 73/2002  1  Banks which concentrate on asset management are struggling especially with the repercussions of the poorer performance on the capital markets and costs, which have risen sharply just in the last few years. For banks primarily active in interest-earning business, economic development plays a pivotal role. As already mentioned, due to the slowdown in economic activity, a deterioration in loan quality and the resultant need for higher provisions is something this business segment must reckon with. Of some 250 banks which published their half-yearly results, two-thirds saw their profits decline vis-àvis the first six months of the previous year. Thirteen banks even posted a loss; the remaining banks, however, recorded a rise in profits. The aggregate profit was down by 21% compared with the yearearlier period. Despite the regrettable case of Banque Cantonale Vaudoise, the overall situation is favourable as far as equity ratios are concerned: all banks continue to meet the capital adequacy requirements. The average capital ratios of all banks (excluding the big banks, September) exceeded the regulatory minimum by 79%. 98% of banks reported at least a 20% capital surplus. The overall picture can be characterised as follows: the Swiss banking sector suffers from uncertain economic prospects and the tense situation on the financial markets. Many financial institutions are forced to take corrective action. Measures taken range from cost cuts, streamlining the product line, decreasing risk exposure, continued tightening of risk and liquidity management to capital increases and mergers.

For the most part, these measures are implemented without delay. Plans for cooperation on a logistical level and in connection with raising capital have become more attractive as well. It is to be hoped, however, that the reluctance to give up an often only presumed autonomy will be overcome sooner rather than later. The idea that a bank is only a «real bank» if it is itself involved in the entire value chain as much as possible is a thing of the past. Moreover, further development will depend heavily on the economic trend and the stabilisation on the financial markets. Two things merit particular mention: firstly, the capital ratio of Swiss banks is on a comfortable level overall, allowing them to act from a position of strength. Secondly, banks in Switzerland have mostly used the prosperous years since the end of the nineties to bring their lending business in line with the risks and to reform their liquidity and risk management. Under the current difficult circumstances, these efforts are now paying off. In other words, the problems facing the Swiss banking system will be solved. The banks in Switzerland have the necessary strength. Structural changes are taking place at a fast pace and are likely to progress even more quickly. The banking system may be undergoing radical changes, but is nevertheless stable. The role of the euro in payment transactions A little less than a year ago, the euro was introduced in the European Monetary Union in its physical form.
As the Prime Minister rightly declared recently, "the time has come for proof on the ground, rather than legislative cathedral building". xii I am well aware of the risk of appearing to give easy or excessively theoretical lessons, but I speak here with the conviction of the practitioner and even - if you will allow me in this last part of my speech with the passion of the public servant. Public management is not necessarily an easy task, but it is possible. Calling for the transformation of public services today means refusing to become resigned to a public service that is seen as outdated and unable to cope. I believe in the public service as a national asset: throughout our long history, from Bonaparte to Charles de Gaulle, public services have frequently been a catalyst for unity, modernity and even productivity. Transforming public services can and must serve to boost France’s competitiveness. xiii Pious hopes? No! There are perfectly good examples of modernisation of public services here in France, even in the very recent past. We could talk about our army, but I'll start with the current Public Accounts Directorate (Direction Générale des Finances Publiques), formed from the merger of the National Tax Office and the National Public Accounts Office (Direction générale des impôts and Direction générale de la comptabilité publique).

Conference at the Académie des sciences morales et politiques Paris, 19 June 2023 Governance of public expenditure and public services: is there any hope left? Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 of 19 Dear Chairman, Dear Permanent Secretary, Dear Academicians, Ladies and Gentlemen, It is an honour for me to speak before you today and I wish to warmly thank your Chairman and my esteemed predecessor, Jean-Claude Trichet. This year, your collective discussion focuses on the theme of "Good governance". Six years ago, at the invitation of Michel Pébereau, I had the opportunity to use the theme of "Reform" to reflect upon international financial regulations. Today, I will tackle a different aspect: good governance in the public sphere. I would like to thank a number of people who are committed to this cause and who have been kind enough to be here today. As the head of a public institution and a fervent supporter of the public service – and also as a citizen – I consider this to be an essential matter. France appears to be drifting towards a "strange defeat", or, at the very least, a gloomy resignation, reflected in constantly increasing government expenditure and public debt (I), together with diminishing intellectual investment in economic optimisation and public management strategies. (II) There is also a growing feeling that essential public services are continuing to deteriorate. In the face of this public crisis, is there any hope left?
Moreover, market participants interpreted the Fed’s revision of its monetary policy strategy as an indication that the Fed will continue pursuing an expansionary monetary policy for an extended period. This, along with expectations of a major fiscal stimulus package, supported investor risk sentiment and caused inflation expectations in the US to rise. What is more, in Europe, the agreement reached in July on the creation of an EU recovery fund led to a further decline in risk premia on sovereign bonds. Page 1/5  Zurich, 17 December 2020 Andréa M. Maechler  News conference  Overall, risk markets were able to benefit for considerable periods of time, despite the volatile market environment. There was some divergence between the US and Europe, however: While the leading US equity index, the S&P500, hit a new record high as early as the beginning of September driven by technology stocks, price developments on the major European stock markets were more moderate. Thanks to the rally in November, all major indices are up on mid-year. According to the latest reading, Switzerland’s SMI is up around 3% (cf. chart 1). On the interest rate markets, yields on long-term government bonds continued to reflect expectations of an ongoing low interest rate environment. Although yields on US Treasuries did trend upwards slightly overall in the second half of the year, 10-year US Treasuries continued to trade at historically low levels – around 0.9% according to the latest figures – following the marked drop in interest rates at the beginning of the year.

The yield on 10-year German government bonds continued to decline from mid-year under the influence of the ECB’s bond purchases. A moderate decline in yields was also observed in Switzerland. For example, the latest reading shows the yield on 10-year Confederation bonds just below the mid-year values, at around –0.6% (cf. chart 2). On the foreign exchange markets, the persistent downtrend of the US dollar has been the dominant theme in recent months. On a trade-weighted basis, the dollar has depreciated by over 7% since the end of June. Against the backdrop of predominantly positive risk sentiment, the dollar was less in demand as a safe-haven currency. The rise in inflation expectations in the US is also likely to have contributed to the depreciation of the dollar. The euro, by contrast, has appreciated by almost 3% on a trade-weighted basis since mid-year. It strengthened in particular following the announcement of the EU recovery fund, which market participants interpreted as a sign of stronger fiscal cohesion within the euro area. Trading in the pound sterling has been volatile over recent months in light of the ongoing Brexit negotiations; the currency has appreciated over 2% on a trade-weighted basis since mid-year. The Swiss franc trended mainly sideways on a trade-weighted basis during the summer months, before coming under renewed appreciation pressure in the autumn due to the second coronavirus wave and heightened uncertainty ahead of the US elections.
In fact, in 2016 the Spanish economy recorded a current account surplus of close to 2% of GDP and the external balance is expected to perform positively over the medium term, although probably less so than during the last two years. 3/8  The normalisation of financial conditions The recovery in economic activity and competitiveness is also related to the decline in financing costs. Since the most acute phases of financial stress in the second half of 2011 and in the first half of 2012, there has been a gradual normalisation of the financing costs of firms and households, with less divergence from the interest rates paid by economic agents in other Eurosystem countries. The decline in the cost of financing has stimulated business investment and helped to enhance household spending possibilities, with a positive impact on economic activity. The normalisation of financial conditions has also extended to the level of household and business debt, which has fallen significantly in recent years, in relative terms. In keeping with this reduction in private sector debt, aggregate bank lending continues to decline, although at increasingly slower rates. This is the case, in particular, of lending to households and non-financial corporations that do not belong to the construction and property development sector.

Secondly, promoting competition in certain markets for goods and services used as inputs in other productive processes would contribute to reducing the gap between Spanish firms’ average productivity growth and that observed in other developed countries. Specifically, it would be worth reviewing some of the regulatory elements in place in certain network industries, such as telecommunications, transport and energy, and professional services. Finally, there are aspects of labour market regulation that have a bearing on weak productivity growth. The tying of firm-level wage increases to productivity is still very limited. For instance, the figures available indicate that fewer than 6% of workers are covered by firm-level agreements. In addition, the fact that employees with temporary contracts continue to bear the brunt of adjustments to negative shocks raises the volatility of employment and discourages the formation of human capital. Lessening the differences between the different types of contract, which would be negative if it were a disincentive to the demand for labour as a whole, would contribute to promoting productivity gains and reducing inequality. The challenge of reducing public debt I shall now address the high level of public debt, one of the most notorious legacies of the crisis. After increasing by more than 60 percentage points relative to its pre-crisis level, the public debt/GDP ratio has stabilised at around 100% of GDP, against a background in which our budget deficit level remains high when compared with other euro area countries. 6/8  We need to consider the risks this situation poses.
The Riksbank now publishes a twice-yearly report analysing the stability of the Swedish financial system. In a crisis situation, the central bank plays a very important role. It may then need to go in and act as lender of last resort, that is, to grant emergency liquidity assistance (ELA) to banks and financial companies if this is considered necessary to prevent the financial system from collapsing. The two objectives of price stability and financial stability are related to each other in different ways, in addition to both being important components of an efficient payment system. The stability of the financial system is of course a necessary condition for a policy aimed at price stability, as the latter is fairly meaningless if the country is threatened with economic collapse. The financial stability objective can therefore in one sense be said to be superior to the objective of price stability. At the same time, it is very probable that price stability in the long run promotes financial stability, for instance, by making the price system function better and thereby reducing the risk of bad investments. However, price stability is no guarantee of stability in the financial system, which is illustrated, for instance, by the problems in the Japanese banks at the beginning of the 1990s. There is thus no reason for central banks to focus solely on the price stability objective and thereby assume that financial stability will follow automatically – both objectives are important. Other objectives than price stability and financial stability?

The pick-up in economic activity in the United Kingdom has been sharper than in the United States and, according to most analysts, it appears to be underpinned by sounder foundations. Inflation is holding on a path consistent with the target of 2% and it should also be borne in mind that the prices of certain assets, housing in particular, have been moving on a rising trend and have reignited debate on the role the central bank and its monetary policy should play in preventing potential bubbles. Here, although the Bank of England has not yet modified its accommodative monetary policy stance either, the prevailing expectations are already discounting a more or less immediate change. The latest messages from the Bank of England suggest, in any event, that when rates begin to rise they will do so very gradually, remaining below historical values for a lengthy period. The monetary policy of the Bank of Japan The differences are even more marked in the case of the Bank of Japan. Nor can we forget that, prior to the international crisis, the Japanese economy had not overcome the effects of its own domestic crisis which began in the 1990s following a substantial credit boom and a burgeoning real estate bubble. The various economic programmes implemented since have not managed to put the Japanese economy back on a stable growth path, illustrating the difficulty involved in restoring normality when an economy enters a perverse cycle of deflation and contraction of activity.