samchain/econo-pairs-v1 huggingface dataset:
In addition, to guarantee that we act in the general interest of the euro area, and not that of individual countries, the central banks of the Eurosystem are all completely independent and free from political influence. This independence is sometimes questioned, but it is a strength: we have to commit over the long term to serving the mandate entrusted to us – price and currency stability. This independence is therefore governed by a strict framework: a clear objective; an obligation to report results regularly to our citizens and to their elected representatives; and a democratic process for the appointment of all senior figures. 4/6  BIS central bankers' speeches  III. What remains to be done, tomorrow, collectively The euro has brought great benefits, in the form of soundness, confidence, unity and sovereignty – as I have endeavoured to remind you. However, it also raises questions, which I have tried to answer, while at the same time underlining that the euro cannot be held responsible for everything that happens. But we have not yet come to the end of the road. We cannot ignore the rising tide of Euroscepticism in Europe, and the extreme case of Brexit. I particularly like this saying, attributed to Dante, one of the great citizens of Florence: “Some wait for time to change, others seize the moment and act.” But what direction should we take? Less Europe?

b) The euro is an “all-risks insurance” for all Member States This view appears to be the opposite of the preceding one; in fact it stems from an equally false perception: attributing excessive evils or benefits to the euro. A currency is an essential nominal value; but this alone does not determine the real performance of the economy. In the first part of the 2000s, once it had acquired the collective gain of the euro, France and Italy, like many 3/6  BIS central bankers' speeches  Southern European countries, wrongly believed that it was possible to let up on competitiveness efforts, which are nonetheless an ongoing imperative – “there is no free lunch”. Today we are suffering the consequences: we have lower economic growth and employment than some of our neighbours, such as Germany and Spain, which succeeded in carrying out the reforms necessary for enterprise (corporate sector), employment, education and expenditure reduction (public sector). Contrary to what some say, our lag in growth is not due to excessive fiscal discipline. The government debt to GDP ratio has more than doubled in Italy since 1980, and it has risen fivefold in France. When my generation was 18 years old, debt stood at 20% of GDP in France. For your generation today, it verges on 100% of GDP in France and in Italy stands at over 130%. We have failed when it comes to intergenerational solidarity and sustainable development.
With these additions, we reaffirm the Board's decision to not only disclose rigorously how the institution is managed, but also use its autonomy to improve the quality and transparency of its processes beyond what it is strictly required by law. The Monetary Policy Report In recent months, inflation and growth were below the estimates in the June Report. However, the main differences were related to factors that we consider to be transitory, in particular supply-side factors that affected the performance of activity and the level of certain prices. For this reason, neither the outlook for the economy for the next two years nor the general orientation of monetary policy, differs much from the projections contained in it. In the baseline scenario I will examine in a moment, core inflation —the CPIEFE— will gradually return to 3% as from mid-2018, after several months around 2%, while headline inflation will rise somewhat faster, as prices of its most volatile components return to their historical patterns and market expectations about the world prices of fuel and foodstuffs are confirmed. We expect GDP growth to pick up beginning in the second half of this year. With this, the activity gap should remain fairly stable for some time, to begin closing gradually towards the second half of 2018.

Indeed, the data show that, beyond the difficulty of calculating productivity by sector, the negative effect of the decline of mining ore has taking its toll on this industry (figure 12). The evidence from Chile suggests that there are important inefficiencies in resource allocation across firms and that there would be first order gains from measures aimed at improving them, which, unlike the case of human capital, could generate gains sooner. To back this last analysis, the document provides some international comparisons on productivity, microeconomic evidence on how the productivity of firms evolves, and its degree of dispersion. In particular, from a comparative perspective, although Chile's productivity appears to be aligned with its GDP per capita, it is about 60% that of the United States and less than that of the richer OECD countries, which implies that there is great room for improvement (figure 13). In Chile, as in many other economies, there appear to be significant gains from fostering a better allocation of productive resources, helping the more efficient firms to grow and the less efficient to shrink and eventually exit the market. As can be seen in table 3, 9  resource reallocation is an important source of TFP growth. For this, it is essential to have flexible labor markets that allow adjusting the endowment of companies when necessary, developing the financial system to direct resources to where the good ideas are and implement rules that facilitate the creation and dissolution of companies.
On top of this, a substantial part of the growth in one of our best-performing sectors - exports - is generated by offshore trade, which by its nature creates fewer jobs domestically than does the more traditional entrepot trade, not to mention domestic exports. What this means is that, however quickly the recovery penetrates society as a whole, and whatever the efforts made to open up new areas of economic activity, a large pool of unemployed may still be left behind. These fellowcitizens will have a legitimate claim on the community for assistance in one form or another, and how to tackle this issue without further compromising fiscal discipline will be a great challenge. It is a challenge that many developed - and not-so-developed - economies have been grappling with for many years. But it is a fairly new and unfamiliar challenge for Hong Kong. A related issue is the question of property values, although how far this should be classified as a structural or a cyclical issue is uncertain. Hong Kong's property market is a complex and volatile creature: it is not at all clear how the various factors on the demand and supply sides have contributed to the extraordinary collapse we have seen in the market over the past five years. How the market will behave in the future is even less clear, though it does seem that there has been some stabilisation in prices recently.

The things that set great risk managers apart, like great navigators, are their ability to work with their captain and crew as a unit, their skills at employing the tools at their disposal to deal with risks at hand, and their attention to their surroundings for signs of impending threats. With that, I wish you all a smooth-sailing journey ahead and a productive and fruitful conference over the next two days. Thank you. 5/5  BIS central bankers' speeches
Cash changeover positive but entails practical challenges It is not only the banks’ services that need to become more user-friendly, cost-effective and certain over time, our banknotes and coins also need to develop in the same way. When the new banknotes and coins are introduced, starting next year, the size and weight of the banknotes and some of the coins will decline and two new denominations will be introduced; the 2-krona coin and the 200-krona banknote. The banknotes and coins will thus become much more user-friendly and will be cheaper to handle. Safety is also increased through the new security features. I believe that we all agree these improvements are positive for all parties concerned. However, as with electronic payments, the introduction of the new banknotes and coins will give rise to some practical problems and friction during a transitional period. 4  BIS central bankers’ speeches  Firstly, there is a huge amount of banknotes that are to be replaced; 300 million banknotes are to be withdrawn and around as many are to be put into circulation. For coins the figure is 500 million to be distributed in both directions. Secondly, Sweden has one of the world’s most automated cash systems. This means that all appropriate equipment in Sweden must be adapted to be able to handle the new banknotes and coins.

The international economic picture has darkened considerably and in the Inflation Report published at the end of March GDP growth was estimated at 2.4 per cent for both 2001 and 2002. This entails a reduction of a whole percentage point for the current year and half a percentage point for next year, compared with the Report published in December. The growth figures are still good in an historical comparison, but we have undoubtedly begun the slowdown that appeared desirable in December. The question now is whether the downturn will be too rapid and too severe. A good starting point When one considers this question, it is useful to observe that the Swedish economy has a pretty good starting point. A lot has happened since the crisis years of the early 1990s. Deregulation of the financial, telecommunications and electricity markets, as well as the ongoing liberalisation in trade has increased competition in the economy and forced companies to become ever more efficient. A purposeful management of the bank crisis and an equally single-minded consolidation of the central government finances have restored the international confidence in Sweden that had become rather tarnished. We have directed our policies towards price stability and thus, hopefully, left behind us a long period of price and wage spirals, followed by devaluation and where growth was lower than in our competitor countries. A credible inflation target is now seen as a necessary condition for macroeconomic stability.
In a more specific aspect, the European integration processes will slowdown, as far as our firms will not be able to withstand the competitiveness pressures. For this reason, I think that the regional and Albanian authorities should continue with the implementation of structural reforms, which aim to: Increase the formalisation level of the economy, as a tool for raising competitiveness, for promoting consolidation, for improving the governance of firms, and for lowering their financing costs; Promote the development of firms in fields where the region and Albania provide competitive advantages, such as tourism or the agro-industry, and in those fields that have high value added, such as the information technology or the financial services. Development capital markets, as a tool to support new and innovative firms and as a partner to share the financial risk of entrepreneurs in the stage of the expansion and development. Dear participants, Let me emphasise that, notwithstanding the focus on the future challenges, the report shows optimism for the region. It notes that, unlike the other emerging economies, the presentation of productive industries will contribute to the increase of employment. Also, the regional integration in industry has the capacity to generate growth of productivity, to better compete with the imports and contribute to the growth of regional exports. The institutional adoption and convergence is considerably important for the integration of Albanian firms in the global output chain, and for strengthening their sophistication and specialisation in the global market.

Nevertheless, the Report notes that productivity growth slowed down; hence, the firm dynamics is identified as one of the main issues that should concern our region. The main reasons of these developments seem to derive from some factors: First, the low capacity of markets and firms to regenerate, decelerates the replacement of non-productive firms with new innovative ones, and hinders the efficient allocation of resources. Second, small firms do not succeed in increasing their output or the number of employees. Studies show that their productivity is rather lower compared with larger firms. Smaller firms make up the majority of producing entities – around 80% in EBRD region, and 95% in Albania. For this reason, more should be done for the integration of smaller firms into global production networks, finding human capital, access in the financial system or capital markets. The Bank of Albania deems that the development of the financial system is indispensable for the economic development of the country. In this regard, through our policies, we are trying to encourage a more efficient allocation of bank lending, in order for it to be less fragmented or concentrated in certain sectors of the economy. Also, we are closely monitoring the financial and borrowing situation of micro-economic firms, including those in the agricultural sector. These firms have a considerable share in the gross value added and in the number of employed persons in Albania.
Part of the consensus is that Basel III should be seen as a set of minimum requirements. Hence, countries are free to impose more stringent rules if they wish. But we should not underestimate how Basel III strengthens bank-capital adequacy rules. A fundamental feature of the new framework is the significant increase in required minimum capital levels. All banks must hold common-equity capital of at least 7% of their risk-based assets, compared with only 2% previously. In the event of a credit boom, banks under Basel III would potentially need to hold a further 2.5% in common equity, bringing the total to 9.5%. Finally, the most systemically important banks must hold up to 2.5% in additional common equity. That is a total of 12%, a sixfold increase from pre-crisis levels for these institutions. The Basel Committee supports a regulatory framework that is both prudent and as simple as possible. Hence the Basel III agreement introduces several simplifying changes to the regulatory framework. For instance, the definition of capital now focuses on tangible common equity, the truest form of loss-absorbing capital. Moreover, all components of the capital base and associated deductions such as goodwill or deferred tax assets must be disclosed in a fully comparable manner. By standardising and simplifying the measure of capital, Basel III makes the regulatory framework easier to understand, and will enable market discipline to work better. Another important step has been the introduction of a non-risk based leverage ratio as a supplement to the risk-based requirement.

•  The facts therefore served as a stark reminder that self-regulation just doesn’t work, primarily because of the imperfections in certain financial markets, which are neither transparent nor efficient (like the CDS market for example) and can generate potentially huge negative externalities. Thus, regulation and supervision were once again elevated to their rightful role after the crisis – a role they should never have lost. By way of an aside, I note that the crisis was triggered in the United States by unregulated entities (conduits) or banks that weren’t applying Basel 2 requirements (investment banks which theoretically were regulated by the SEC). By contrast, French banks for example, where supervision was at times branded “intrusive”, managed on the whole to get through the different phases of the crisis relatively unscathed. ii)  What rules should apply to finance? •  Once a consensus had been reached over the need to reinforce financial regulation and supervision, the next question was naturally: what kind of regulation? •  The principle that guided the regulators, notably on the Basel Committee, was that finance should once again be made useful to the economy: that it should serve the economy rather than govern it.
These observations confirm that the relationship between economic activity and inflation, as postulated by the Phillips curve, has continued to play a role at the euro area level.3 The link between inflation and economic slack is complicated by several factors. On the one hand, the degree to which prices respond to slack may depend on the state of the business cycle and could change, in particular, in severe and protracted recessions. The empirical evidence on such non-linearities, however, is not conclusive. On the other hand, secular shifts in the economy may have altered the relationship between inflation and economic slack. For instance, the trend towards a deeper integration of the global economy over the last decades is likely to have increased the importance of global relative to local conditions in shaping domestic cost and price pressures. A further often-cited factor is demographics – and especially the trend towards greater longevity – which may have interacted with cyclical conditions by inducing households to save more and, ultimately, put downward pressure on inflation.4 Empirical evidence on this issue is inconclusive and demographics would 2/5  BIS central bankers' speeches  only have lasting effects on the economy if left unattended by monetary policy. Overall, these observations have three important implications for monetary policy. First, the evidence confirms that the core Phillips curve connection linking inflation formation to resource utilisation remains a key ingredient in explaining the prevailing disinflationary pressures.

Jean-Pierre Roth: The Swiss economy and financial centre – successes and new challenges Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Handelskammer Schweiz-Österreich und Liechtenstein (Foreign Trade Chamber for Switzerland-Austria and Liechtenstein), Vienna, 25 February 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Mid-2003 saw the start of a remarkable, broad-based economic upswing in Switzerland which is still underway, even if business cycle uncertainty has increased in the recent period. A number of factors indicate that the long-term growth outlook, too, has improved for Switzerland. These factors include the increasing globalisation of our economy and the opening up of the labour market to the EU. The Swiss economy is participating in globalisation through increased direct investment as well as growing foreign trade. At the same time, there is more competition on the domestic goods market, although a fair bit still remains to be done in this area to complement the opening up of the labour market to the EU. Globalisation and market opening present companies and economic policymakers with challenges that become particularly acute when setbacks occur – as in the case of the current international financial market turbulence.
Basel III has incorporated the so-called “capital buffer for the most significant (or systemic) institutions”, applicable to institutions exceeding certain size, complexity and interconnectedness thresholds; and, moreover, the “countercyclical capital buffer”, which requires an increase in capital at times of credit expansion in order to reinforce bank solvency when the risks associated with such credit materialise. After all these changes, what would be left for post-crisis reform? Fundamentally, the completion of the review of the risk-based capital framework being undertaken by the Basel Committee. In terms of the essentials, Basel is reviewing the way the denominator of the capital ratio, Risk-Weighted Assets (RWAs), is calculated, i.e. the way in which the risks for which capital is required are measured. The aim of this review is to strike a better balance between simplicity, comparability and risk-sensitivity. BIS central bankers’ speeches  3  From now to the end of 2016, the date set for the finalisation of the post-crisis reforms, what are still to be decided are the reforms of the standardised approaches for measuring credit and operational risk; the use of internal models for these two risk categories: the possibility of establishing an additional surcharge based on the leverage ratio for global systemic institutions; and the design of the so-called “capital floors” in the calculation of RWAs. With regard to the standardised approaches, I shall focus on that applied to measuring credit risk, as this aspect is one of the most important, as it is of course for credit cooperatives.

Luis M Linde: The Spanish banking system – situation and challenges Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the University of Almeria, Almeria, 18 July 2016. *  *  *  Let me first thank the Universidad de Almería and all the sponsors for their invitation to participate in the inauguration of this three-day conference on cooperative banks. In my address I shall first briefly review the current situation of the Spanish banking system, including the cooperative sector, and the main challenges it faces. Secondly, I shall tackle some of the current regulatory developments in the banking sector, with a reference to the European regulation on bank recovery and resolution. Situation of and main challenges to the Spanish banking sector During the first half of 2016 global financial markets were markedly volatile, as a result of various factors. Firstly, forecasts of global economic growth have been revised downwards since the last quarter of 2015; secondly, the weakness shown by the emerging economies, particularly those most dependent on commodities exports; and, thirdly, the unstable social and political setting, compounded by the decision by UK citizens on 23 June to back the exit from the European Union. These factors have prompted a correction in asset prices on different markets which, though it eased from mid-February, has regained momentum since 23 June as a result of the increase in uncertainty and greater volatility.