samchain/econo-pairs-v1 huggingface dataset:
Among the causes behind this, the author highlights how the opening up and globalisation of economic relations has promoted the rise of new emerging powers – with China to the fore – on the global stage. These powers are significant not only economically, but also politically and geo-strategically. This has resulted in the growing complexity of global governance and in a rivalry that currently threatens to break the multilateral arrangements in force since the Second World War. We should recall that Chinese membership of the WTO was not accompanied by a parallel process involving its transformation towards a market economy. Indeed, China retained high export subsidies, was hardly open to foreign investment and pursued industrial and technological policies that distorted international relations. This has prompted continuous complaints by the Western powers. Partly, one of the arguments behind the protectionist reaction led most recently by the United States has been the WTO’s inability to correct these distortions. Yet it should be stressed that the US shift towards bilateralism in international relations has significant consequences, beyond merely trade considerations, that stretch to the struggle for leadership of technological developments and, more generally, to an effort to sustain a privileged position in the economic and political arenas. The United States is not an isolated case in the shift. And undoubtedly bilateralism, linked in part to free market economy constraints, has gained weight recently in how other nations operate globally.

If we look at the performance of the banking industry over the last decade, the Asian financial crisis clearly marks a watershed. Between 1992 and 1996 our research indicates that the profitability of the average bank in our sample, measured by return on assets, improved by around 0.7 percentage points. It appears that this performance owed little to the macroeconomic environment of the time. Rather, it was due to improved performance at the individual bank level, driven by bank-specific factors such as more efficient operations and improving asset quality. In contrast, between 1997 and 2002 the average return on assets declined by more than 0.7 percentage points. This deterioration was largely driven by macroeconomic variables, with deflation contributing most to the worsening profitability. Bank-specific factors were less significant during this period in explaining both average performance and variations in performance across banks. 2  BIS Review 32/2003  It may seem somewhat obvious to say that the lower profitability of the banks over the last few years has been largely due to the poor economic environment. Certainly, as participants in the syndicated loan market, you will be well aware of the impact of the current sluggish state of the economy on loan demand and margins. But the conclusion does have important implications if we look to the future. If the profitability of the banks has gone down with the economy, equally it should go up with the economy as it improves.
In so doing, we have not remained indifferent to the transformations referred to above and the avenues of research inspired by them. Consistent with this broad perspective on central bank research, our economists engage in an extensive variety of topics, some of which go beyond the more traditional focus  7  of central banks. For example, we have recently placed emphasis on the study of the aggregate effects of structural reforms in product and labour markets, the distributional consequences of tax policies, the evolution of income inequality and the assessment of the financial competences of the population, to name but a few. More generally, we believe that high-quality theoretical and empirical analyses are necessary to fulfil one of our core mandates: understanding and monitoring developments in the euro area and Spanish economies. We see high-quality research as an indispensable tool to adopt sound policymaking decisions. In this regard, in recent years Banco de España has aimed to further improve the standard of its research activity and to strengthen collaboration with other institutions. Overall, these endeavours reaffirm our commitment to research, as the fundamental basis for good policy decisions, and I hope they will enhance our research output in the future. I would not like to miss this opportunity to underline the importance of relying on accurate and available statistics for economic analysis and research. It is my view that allowing independent researchers to access high-quality data is a necessary step to advance in the knowledge of the issues referred to above.

I would like to convey my sympathy to our colleagues of the IFS, 10  who had the opportunity to work in close collaboration with him, and to the academic community in general for this loss. Finally, let me express my gratitude to the organisers for making this conference possible and to all of you for attending. I wish you a very productive meeting and a pleasant stay in Madrid. Thank you very much for your attention. 11
Yet given their scale, the returns to modest improvements in these firms could be dramatic. As a thought experiment, imagine productivity growth in the second, third and fourth quartiles of the distribution of UK firms’ productivity could be boosted to match the productivity of the quartile above. That sounds ambitious but achievable. Arithmetically, that would deliver a boost to aggregate UK productivity of around 13%, taking the UK to within 90-95% of German and French levels of productivity respectively. The policy question is how to effect those improvements. One idea which offers real potential comes from the Productivity Commission chaired by Sir Charlie Mayfield. 64  This starts from the assumption that not only  is there a long tail of companies, but that many are unaware of that fact. For the same reason most car-owners believe they are above-average drivers, most companies might well believe they have above-average levels of productivity. In fact, we know most companies have below-average levels of productivity and a large fraction of them have seen no productivity improvement for several decades. The Mayfield Commission aims to create an app which enables companies to measure their productivity and benchmark themselves against other companies operating in similar sectors and regions. By shining a light on companies’ relative performance, the aim is that this would serve as a catalyst for remedial action by company management. Indeed, the aim is to provide firms not only with a means of benchmarking themselves, but with tools to improve performance along identified areas.

30  There are a number of possible explanations for such a phenomenon. Stifled competition in certain sectors and for certain products may have prevented the trickle-down of innovation. 31  For example, restrictions on  patents and intellectual property (IP) might restrict new entrants and retard replication. A related hypothesis is that, in today’s globalised markets, network economies of scale and scope are more potent, generating natural monopolies in which single or small sets of players dominate market share. 32  A third hypothesis is that the emergence of a long tail of non-frontier companies, failing to keep pace with innovation, is the result of management failings. For example, Nicholas Bloom and John Van Reenen have shown that weaknesses in management processes and practices go a long way towards explaining the long  21  Gordon (2012) and Cowen (2011). Gordon (2012). 23 Decker et al (2016) argue there has been a fall in entrepreneurship in high tech sectors over recent decades. 24 Gordon (2014). Jones and Romer (2010). 25 See Tuuli and Batten (2015) for a summary of this debate. 26 Craft (2004). 27 Brynjolfsson and McAfee (2011). 28 Mokyr (2014a and 2014b) and Baily et al (2013). 29 Comin and Hobijn (2010). 30 Andrews et al (2015). 31 Andrews et al (2015). 32 For example, Haskel and Westlake (2016). 22  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  tail of low productivity manufacturing companies.
I am confident that today, among other things, we will also build new bridges to coordinate our efforts for a sustainable financial system, within and beyond geographical boundaries. 5/5  BIS central bankers' speeches

Benoît Cœuré: Interview with Politico Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, and Politico, conducted by Mr Pierre Briançon on 23 March 2016, and published on 30 March 2016. *  *  *  The last Governing Council meeting on 10 March seemed to be marked by some ambiguity on negative interest rates. On the one hand, the message was that rates wouldn’t get much lower. On the other, there was the signal that there could be exceptions… The question we are always trying to address is how to design our policy so that it is effective in the situation we face at a given moment. The package announced on 10 March was very potent, both in intensity and in sheer volume. Negative interest rates are not our main instrument, they just support our overall policy. And looking ahead, we’re not short of instruments – our choice is quite large. We will be able to deal with adverse situations if necessary. You indicated that the ECB wasn’t deaf to the banking sector’s concerns about the impact of negative rates on banks’ profitability. Banks’ profitability has improved when you look at the global overall impact of our monetary policy, that is, stronger credit demand and lower risk in the economy. And, as a matter of fact, the interest margin of banks has gone up, not down. Of course, the impact is different depending on banks’ business models and on how negative the rates are.
One last point before I end, I believe that most of us now agree that central banks need to maintain financial stability in addition to price stability. Therefore, we also need to improve our understanding of the implications of globalization on financial stability, as well as the tools to conduct monetary policy in addition to the interest rate tool for stability purposes. 4  BIS Review 33/2009

Mark Carney: Speech at the Mansion House Bankers and Merchants Dinner Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, London, 12 June 2014. *  *  *  Introduction My Lord Mayor, Ladies and Gentlemen. A year ago when my predecessor Lord King delivered his final Mansion House speech, he noted “clear signs that a recovery in the UK, albeit modest, [was] underway.” That recovery was due in no small part to measures he and his colleagues had initiated including extraordinary monetary stimulus, recapitalisation of the banking system and innovative support for lending. The task a year ago was to secure that recovery in the face of continued domestic frailties and ongoing international weaknesses. At home, unemployment and underemployment remained elevated, productivity growth was anaemic, and debt levels were high. Abroad, the European crisis had moved only from its acute to its chronic phase and financial markets were demonstrating their fragility during the “taper tantrum”. With this backdrop and with real wages around 10% below their pre-crisis levels, it was not surprising that consumer confidence, though improved, remained low. Business confidence was similarly shaken by past shocks and current scepticism about the ongoing strength of demand. The Bank responded to these challenges.
Developments in the nominal and real exchange rate over the past year probably reflect an improvement in the terms of trade and an increase in oil cash flows into the Norwegian economy. After several expensive wage settlements - and a short period of a strong krone - had weakened profitability in the Norwegian business sector, a depreciation of the krone and more moderate wage agreements contributed to restraining the decline in activity and employment. However, costs in the business sector remain high and competitiveness remains measured by relative labour costs are still fairly weak. It is now close to 5 per cent weaker than the average for the period 1970-2004 and about  5  See Akram, Q.F (2003) ”Real equilibrium exchange rate for Norway”, Norwegian Journal of Economics, no. 2, p. 89-112, and "Oil wealth and real exchange rates: The FEER for Norway ”. Working Paper No. 2004/16, Norges Bank, by the same author. 6  As measured by the import-weighted index I-44. 4  BIS Review 38/2005  15 per cent weaker than in the mid-1990s. Manufacturing industry is nevertheless faring well at present thanks to favourable prices and market conditions. Low real interest rate The easing of monetary policy has resulted in low real interest rates. Short-term real interest rates have fallen by close to 4 percentage points since the end of 2002. It would seem that it is not only changes in the real interest rate that have an influence, but also its level.

New information gradually emerged about the outlook for other countries and the Norwegian economy, indicating that inflation might be very low. Inflation fell markedly from summer 2003, and continued to fall up to spring 2004. Consumer price inflation has subsequently edged up, albeit slowly. Low international interest rates and favourable terms-of-trade developments for Norway have curbed the effects of low interest rates on the krone exchange rate. Higher imports from low-cost countries, competition and more efficient Norwegian production and trading processes have also kept inflation low. One year ago, underlying inflation was close to zero. In April 2005, the year-on-year rise in consumer price inflation adjusted for tax changes and excluding energy products was 0.8 per cent. The rise in prices for domestically produced goods and services has been higher and has picked up over the past year. BIS Review 38/2005  1  Adjusted for the direct effects of the decline in interest rates on house rents and lower rates for day-care places, the rise in prices was 1.0 per cent in April. Alternative measures of inflation also show that underlying inflation has edged up. Background for the deviations from the inflation target in 2004 and the first months of 2005 Prices for imported consumer goods continued to fall through 2004, but at a slower pace than in the previous year. A weaker krone in 2003 contributed to a deceleration in the fall in prices for clothing and footwear and the decline in prices for audiovisual equipment moderated.
At that date, the Governing Council will decide on whether to launch a digital euro. We will then need a few years of serious preparatory work to turn an e-euro into reality. * Let me say it again: on both digital currency and payments, we in Europe must be ready to move as quickly as needed or risk an erosion of our monetary sovereignty – something we cannot tolerate. European citizens must have access durably to effective and independent means of exchange. Recent experience in another field shows that we can do it. Six years ago, there was almost no climate policy among central bankers. Today it has become an important topic with concrete technical advances. I could have spoken of another “road for the future”: green finance. Here also, France and Europe have a strong initial advantage: Paris is home to the global secretariat of the NGFS with about 100 members now; its financial centre participants are ahead in their disclosure of and commitments regarding climate-related risks; France is the  first European country in terms of outstanding of green bonds. And last month, the French ACPR published the first climate pilot exercise worldwide actively involving both the banking and insurance sectors.

We closed the last ones almost 20 years ago. Client relationships will remain the preserve of private players, to which central banks will provide the central bank money. There are also fears that CBDC accounts will “drain” commercial deposits and dry up bank liquidity. No: as I see it, they will offer no greater advantage in terms of remuneration, and there will have to be a limited amount that can be held in them. In addition, the ECB has shown that it is more than capable of safeguarding bank liquidity… If the CBDC is going to replace any liquid financial assets, then it is more likely to be banknotes in the long run and crypto-assets. In short, the scenario of a CBDC causing massive bank disintermediation is more a finance-fiction fantasy than a serious analysis. The “interbank” or “wholesale” CBDC would enable the efficient and secure settlement of transactions. We, as Banque de France, have already completed five experiments and will carry out four more by the end of this year, with private and public actors alike. We will publish through the summer a comprehensive stocktaking. Let me already stress three major lessons we learnt: -  Two experiments – one that was carried out with the EIB and SG Forgei and another that was carried out with Euroclear/Agence France Trésor,ii have proved that tokenised central bank money helps settling financial securities more efficiently and rapidly (instantaneously, compared with D+2 currently). It generates savings in liquidity and capital, which in turn lowers costs.
In The Pursuit of Love and Love in a Cold Climate she describes the marriage of Linda, the heroine, to the son of the Governor of the Bank of England. The marriage between Linda and the incredibly boring Tony is doomed from the outset. As Lady Montdore explained, “Bankers don’t seem to be much to look at - so extraordinarily unsuitable having to know them at all, poor things, let alone marry them”. I don’t suppose Lady Montdore would have come to this lecture, but if she had I would point out to her that life is full of surprises. Risk, luck, fate, uncertainty, probability theory - we all have names for the game of chance. Most decisions in life involve risk. Sometimes we embrace it, as when we enjoy a bet on the Grand National, and sometimes we avoid it, as when we insure our houses against fire. The playing of the hand we are dealt may be a pleasure in bridge but a burden in life. We accept that Lady Luck has her part to play in our personal lives. But in our collective life - public policy - the role of probabilities rarely takes centre stage. An informed discussion of public policy issues, however, requires an analysis of the risks and uncertainties involved. Whether in policies for health or transport, matters monetary or meteorological, in times of war and peace, decisions should reflect a balance of risks.

Although the nominal krone exchange rate has depreciated this year, the competitiveness of Norwegian industries is still rather weak. The krone has now reverted to around the level prevailing in the mid-1990s, while labour costs in manufacturing rose by 13 per cent5 more than among our trading partners in the same period. The developments in the krone exchange rate proved to be reversible, but the loss of competitiveness and jobs caused by relatively high wage growth in Norway is difficult to recoup. A precondition for a considerable improvement in competitiveness is probably that real wage growth is lower than productivity growth in the business sector for a period. Experience shows that this occurs in periods when there is excess capacity in the economy. This means that changes in competitiveness over time  4  Q. Farooq Akram (2003): “Reelle likevektsvalutakurser for Norge” (Real equilibrium exchange rates for Norway) in Norges Bank’s Occasional Papers, no. 31 (Norwegian only). 5  Wage figures for trading partners have been revised since the publication of “Report on monetary policy in 2003 – the first eight months”. BIS Review 53/2003  5  depend on real economic factors and on aspects of wage formation and cannot be controlled by monetary policy. However, with flexible inflation targeting, the social partners can normally expect low wage growth to have a greater impact on competitiveness because it can result in a weaker krone.
In the end, this will make the whole structure more stable and robust. 2. Origins of the sovereign debt crisis in Europe  It is striking that those countries which experienced the European sovereign debt crisis in 2010 – notably Greece and Ireland – were among the best performers in terms of growth in economic activity within the European Union (EU) over the decade preceding the crisis (charts 1 and 2). Indeed, Ireland was called the “Celtic Tiger”, drawing a parallel with the fastgrowing “Asian Tigers” in earlier decades. While prima facie a paradox, the relationship between strong pre-crisis growth and the severity of the crisis itself reveals much about the origins of the underlying economic, structural and institutional weaknesses that lie at the heart of recent events. The introduction of the euro in 1999 led to a sharp fall in real interest rates especially in the so-called peripheral countries of the euro area, as nominal interest rates converged to low German levels (Chart 3). In addition, the credibility of monetary policy’s commitment to maintain price stability was bolstered by the institutional changes associated with Monetary Union (Chart 4). The resulting improvements to the growth outlook were further supported by the completion and deepening of the EU Single Market and the prospect of structural reforms underpinning national competitiveness in this integrated market. In this context, the outlook for income growth in the peripheral countries was widely believed to have been transformed for the better.

These spreads began to rise following the turnaround in the international markets and they had a tendency to rise more on the Icelandic banks than on other banks with every event or news that prompted a general rise in risk aversion and in CDS spreads. The spreads peaked around the end of March and have come down quite considerably this month. The CDS market is an opaque and unregulated one but, nevertheless, CDS spreads are a reference for the terms that would be available to the banks if they were to go to the market. In our view, the CDS levels on the Icelandic banks have been out of proportion to their underlying financial strength, their credit rating and spreads on comparable banks in other countries. It also seems that the CDS market is thin, turnover in CDS transactions on Icelandic banks appears to be limited. One reason behind relatively high CDS spreads on Icelandic banks maybe the fact that a sizeable amount of Icelandic bank bonds issued in recent years ended up in CDO´s which have been in a process of being unwound over the last few months. However, this alone does not explain the very high spreads. It is also quite remarkable that the CDS spread on the Republic of Iceland rose very substantially, even to 400 to 500 points when it was at its highest earlier this year. This happened despite the fact that on a net basis, the Icelandic Government has no external debt.