samchain/econo-pairs-v1 huggingface dataset:
Irrespective of credit developments, I believe we all agree that wealth and economic development always go hand in hand with entrepreneurial initiative. A country cannot progress without entrepreneurs and companies deploying their resources, efforts and work, while risking their reputation and assets, to service society, on many occasions creating  1  As is known, some economies, such as the United States, depend less on bank financing as their markets are much more developed. In the EU, attempts are being made to develop the so-called Capital Markets Union (CMU), but we are still far from having a truly alternative financing channel to banks, excepting large corporations. 5/13  something new, different and innovative. Of course, this is an area where Catalonia has always been a point of reference within Spain. Though we may tend to forget, Spain continues to have European and even global leaders among its companies, which are a benchmark in their sector. Undoubtedly, to develop and grow, business activity needs financing. Hence the significance of banks for economic development. In this respect, when institutions manage their risks appropriately, they are promoting an effective allocation of available economic resources. Banks’ risk analysis and evaluation, prior to granting financing, means they act as an essential filter for the functioning of the economy. They enable the correct allocation of available financial resources by distinguishing between those projects with a high probability of success and those lacking in medium-term viability. True, excessively tight lending standards may act as a brake on innovation and growth.

But, as we have seen, when this filter does not work properly, and when lending standards are excessively loose, ultimately too many projects that prove non-viable are financed, destroying value for the economy. Lessons from the crisis One thing the crisis has reminded us of, sadly, is that financing a firm or individual which, a priori, has little chance of meeting its payment obligations is very poor business, for three reasons. First, economically, this is a bad agreement both for the customer concerned and for the bank. Second, it is too for the country’s legal system, which sees a significant increase in its workload, thereby delaying and hampering its workability. And third, from a social standpoint, what is involved is very poor business with harmful consequences for society in the form of dismissals and evictions. It is always better not to have granted a loan than to have to deal with a non-performing loan, although some error in granting loans is inevitable. Moreover, looking at our real estate bubble, it is likewise obvious that any loan should be granted thinking of the likelihood of both the principal and the associated interest being repaid, instead of basing oneself on the value of the collateral. Of course, the responsibility for analysing the ability to pay falls on the bank, not on the customer. Undoubtedly, applying strict standards means having to say “no” on many occasions to applications for funds.
There were few plans for large-scale investment, and they mainly concerned the renewal of modernization of existing equipment. Retail sales contracted in February, after posting a substantial rise in January. Employment levels remained stable in industry, except in the automobile sector, where they declined. The retail and market services sectors showed little change, but employment fell in the building industry. Increasing use was made of flexi-time, annualized working time and part-time working to respond to variations in demand. BIS Review 32/1997

Jarle Bergo: Monetary policy challenges and experiences in Norway Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), for the Norwegian Shipping Club, Oslo, 4 September 2006. Please note that the text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 16 August, Inflation Report 2/06 and on previous speeches. *  *  *  Introduction Monetary policy in Norway is oriented towards low and stable inflation, with annual consumer price inflation of close to 2.5 per cent over time. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment. Monetary policy functions through an interaction with other components of economic policy. Among other things, this interaction must take into account that the Norwegian economy is exposed to strong external influences, particularly through developments in oil and gas prices. Oil gives us an economic asset that is not available to many other countries, but it also poses considerable challenges. First, when oil is extracted and sold, our national wealth is transformed from petroleum wealth into financial assets. Norway’s national wealth belongs not only to our generation, but also to future generations. The authorities must therefore exercise fiscal discipline, taking into account long-term considerations. Moreover, the size of the cash flow from petroleum activities varies considerably.
Clearly in this case the bank staff had little, if any, regard for the financial circumstances and the lack of investment experience of the customer; nor did the bank staff adequately explain the risks and penalty of early termination. This is a blatant breach of the customer’s trust. The HKMA cannot condone this kind of practice and will take necessary supervisory and disciplinary actions to protect the interests of bank customers. In this particular case, the bank agreed to cancel the policy and refunded the full amount of the first year premium to the customer and the bank staff concerned has been suspended by the HKMA from selling investment products for a period of three years. What do we expect bank consumers to do to protect their own interests? Justice upheld, sounds a happy ending. But there is always the other side of the equation. There is a commonly held view that the responsibility for consumer protection rests with banks, the regulators and the Government. I don’t think this is a helpful view if we want to promote consumer protection. True that banks owe their customers the duty to look after their interests and to treat them fairly. True that the Government should provide the legal framework and set the policies for protecting consumers. Equally true that regulators will use their powers to enforce the consumer/investor protection requirements. But an important piece is missing from the jigsaw.

So the message is: consumers of financial services have to be responsible for the decisions they make and the consequences of such decisions. Think twice before you sign on the dotted line. Conclusion To conclude, the key takeaways are: •  banks must treat customers fairly by looking after their interests and not treating them just as target of sales; and  •  bank customers must learn to become “smart” as well as “responsible” consumers of financial services. Then how do we go about in achieving these two objectives? For banks, the HKMA will ensure that there is a set of robust but fair rules governing banking conduct. We will enforce these rules vigorously through on-site examinations and off-site surveillance. We will investigate and, if appropriate, take enforcement action against breaches when they are reported by customers or detected by the HKMA. But we appreciate no external forces can be as effective as internal controls and culture in guarding against breaches. We therefore consider it important for the boards and senior management of banks to share and cherish the same value as we do in terms of treating customers fairly.
We address the causes of inflation in the Czech Republic in our blog article (Adam and Michl, 2022). The central bank's large balance sheet can lead to changes in monetary policy transmission. This is also because when key interest rates are raised, monetary policymaking expenses increase. We pay interest to members of the Czech Banking Association, i.e. commercial banks, for their excess liquidity deposits. To give you an idea, the CNB paid CZK 15.3 billion to the banks in interest on deposited liquidity in May 2023, which may amount to CZK 185 billion for 2023 as a whole. This can lead to a change in the behaviour of banks, i.e. how and to whom they provide loans, by how much they raise deposit rates. In a system with excess liquidity, banks easily buy government bonds and government debt is monetised. An important lesson for me is that we will try not to repeat 2017 at the CNB and conduct monetary policy in a conventional manner. In his article, "Less is more" for the IMF's magazine, Professor at the University of Chicago and former Governor of the Reserve Bank of India Raghuram Rajan said: "Central banks have constrained their own policy space with asymmetric and unconventional policies, ostensibly intended to deal with the policy rate touching the lower bound. They have triggered a variety of imbalances that are making fighting inflation harder today." More purposeful and less interventionist central banks would probably do better than a high-inflation, high-debt, low-growth world (Rajan, 2023).

Third, and connected with the previous condition, they should preserve the incentives to pursue sound fiscal policies. Ultimately, sound public finances are indispensable for the provision of a truly safe asset. Lastly, the sizable current account surplus and the strong overall fiscal position of the European Union, compared to those of other advanced economies, can be seen as a call for greater investment. Among the main areas of necessity, we should prepare our economies and citizens for challenges related to climate change, ageing and digitalisation. More importantly, the EU lags behind the US in terms of productivity growth. These challenges are widespread and common to all our economies, and therefore a common and  8  Leandro and Zettelmeyer (2018), “The search for a Euro Area safe asset”, Peterson Institute for International Economics Working Paper, 18-3. 9 Brunnermeier et al. (2017), ESBies: Safety in the tranches, and ESRB (2018). 10 Zettelmeyer and Leandro (2019), “Beyond ESBies: safety without tranching”, in Risk sharing plus market discipline. A new paradigm for Euro Area reform. 7/8  safe source of financing would be tailor-made for them. It could also provide some stabilisation for the economy, as investment provides a safety net in times of economic distress.
The integration of the international financial system, the removal of restrictions on capital mobility and the increasing trade volumes have contributed to the evolution of dollarization. Although it was a phenomenon in different economies for a long time, the word “dollarization” has become a well-known term in the 90’s. In this period, the number of countries that gave foreign currencies the legal tender status increased and the official dollarization has been a widely discussed issue. Alternatively, unofficial dollarization has expanded even more and become a pervasive phenomenon in a wide range of countries. The number of countries where the ratio of foreign exchange deposits to total deposits higher than 30 percent increased from 7 in 1990 to 46 in the year 2000 1 . Similarly unofficial dollarization in Turkey has also evolved during this decade. In this sense, I will focus on unofficial dollarization in the rest of my speech. Distinguished Guests, In general, dollarization occurs in circumstances where residents lose confidence in their own currency. The evidence from countries has also shown that dollarization process advances by certain stages. At the first stage, domestic currency loses its function of being a store of value, which is called “asset substitution”. Following this basic level, dollarization takes the form of “currency substitution” referring to the domestic currency’s loss of functions as being unit of account and means of payment. Apart from this, dollarization can take some other forms like “liability dollarization”, “payments dollarization”, “real dollarization” and “financial dollarization”.

If interest rates rose faster and reached a level 100 basis points higher in 2020 than what the CBO has assumed, the net debt service burden would be about 3 ¼ percentage points higher by 2020, all else equal. Given the uncertainties around economic forecasts that far into the future, it would be highly desirable for the fiscal authorities to put in place a medium-term program of fiscal consolidation now, while market conditions are benign. At the same time, I think we must be careful and not focus exclusively on the imperative of fiscal consolidation. That is because fiscal policy adjustments have important implications for  1  2  The 2011 remittance figure is a preliminary unaudited estimate. BIS central bankers’ speeches  the level and composition of economic activity more broadly–both here and abroad. If we must undertake fiscal consolidation– and over time we must–then we need to be cognizant that this adjustment will need to be accompanied by other offsetting changes in the composition of economic activity in our and the global economy. 2 One way of illustrating these interrelationships is to use the following accounting identity, which imposes an adding up constraint on the overall economy: If you define private-sector net saving as the private balance and public sector net saving as the public balance, then: Private balance + public balance = current account balance.
Actually, about a third of the PRA’s authorised firms are in run-off. But that is in part a testament to the successful regulatory regime that the UK has been running for the insurance sector. And, whatever the regime, we cannot be certain this will be the case in every conceivable circumstance. For this reason, the PRA continues to place the resolution arrangements for insurers on both the domestic and international agendas. The banking crisis further taught us all that we need to be looking at potential storms ahead and not to be misled by periods of fair weather. For the PRA this means it will assess firms not just against current risks, but also against those that could plausibly arise in the future, carrying out increased business model analysis. For insurers, this involves monitoring emerging risks and taking preparatory steps to deal with what may result, with firms holding capital commensurate to their evolving risk profile. This approach is embedded as part of Solvency II, for example with the requirement for each undertaking to conduct a forward looking assessment of its own risk and solvency needs. The fallout from the global financial crisis has accentuated the need for an open, two-way dialogue between regulator and regulated. This is especially true in times of change or stress. To ensure policyholder protection, regulators need to be alert to emerging risks and this is best achieved through a “cards on the table” approach.

Jean-Pierre Danthine: Presentation of the Swiss National Bank’s Financial Stability Report 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, 18 June 2015. *  *  *  As my colleague Thomas Jordan has explained, global economic growth in the first quarter of 2015 was below expectations. However, over the last 12 months, we have seen an improvement in international economic and financial conditions, although substantial risks remain. The domestic environment has become more challenging due to the strong appreciation of the Swiss franc that followed the discontinuation of the minimum exchange rate in January 2015. Against this background, I would like to examine the situation at Swiss banks from a financial stability perspective, looking first at the big banks and then moving on to a discussion of domestically focused banks. A more detailed assessment of the situation can be found in the latest Financial Stability Report published today. Big banks Further improving resilience Over the past year, the Swiss big banks have continued to improve their capital situation, albeit at a slower pace than the year before. They already meet most of the requirements which will apply from 2019. While acknowledging the progress made, the SNB recommends that the big banks do not lose momentum in their efforts to improve their resilience. This is particularly warranted with regard to the leverage ratio.
To reach this objective, three conditions need, in my view, to be fulfilled: •  firstly, the monetary strategy should be set in a medium-term framework. More generally, the European policy mix should consist both of a medium-term stability-oriented monetary policy and of a medium-term fiscal policy aiming at a balanced budget (or “close to balance” as stated in the Stability Pact).1 This medium-term stability-oriented policy mix is the best we can do to create the conditions for durable growth in the euro area. And it is now widely agreed in the European Union that the policy mix should not give the illusion that it can fine tune the economy;  1 By urging governments to aim for a fiscal position close to balance or in surplus in the medium term, the Stability Pact enables them to let automatic fiscal stabilizers come into play during recessions without exceeding the 3% reference value. In short, it allows them to create a fiscal buffer during normal economic periods that can be drawn on if an asymmetric shock occurs. BIS Review 112/1997  -2-  •  secondly, the strategy pursued should provide a clear anchor to inflation expectations. This implies the public announcement of a quantified definition of the final objective of price stability; for instance, the Banque de France aims at an inflation rate not exceeding 2%;  •  thirdly, the strategy should be based on a forward-looking approach.

Mr. Hannoun discusses the operational framework for EMU and the challenge of managing price stability Speech by the Deputy Governor of the Banque de France, Mr. Hervé Hannoun, at the Financial Times European Economic and Monetary Union Conference in London on 20/11/97. I am delighted to take part in this discussion on the framework for the single monetary policy in Stage Three. I will address what I consider to be the two main categories of issues in this context: those related to monetary policy strategy on the one hand, and those related to the execution of monetary policy operations on the other hand; in other words, strategic and operational issues. 1. STRATEGIC ISSUES What are the main strategic issues relating to the formulation of the single monetary policy? I will consider in turn: •  the final objective,  •  the intermediate target,  •  the role of the exchange rate as an indicator, and  •  the starting level of interest rates in the euro area at the end of next year. 1.1. Final objective: a quantified definition of price stability The final objective of the single monetary policy is clearly stated in the Maastricht Treaty: according to article 105, “the primary objective of the ESCB shall be to maintain price stability”. Only a monetary policy geared towards the objective of price stability can create the conditions for durable and sustainable growth.
Whilst I would hope that all banks have some form of internal ratings system, and whilst the Committee's proposals are intended to offer incentives to banks to upgrade their systems to the Committee's standard for recognition, banks cannot be forced to adopt loan ratings systems that conform to the Committee's criteria, and nor is there an unlimited global supply of supervisors capable of monitoring such systems. In the absence of external ratings - which the Committee is not in the business of promoting - there has to be a simple uniform weighting on unrated credits. While this outcome may be inevitable, we do need to think carefully about the possible consequences. First, given that we have to have a simple alternative to the internal ratings approach, it is important that the new Accord provides the right degree of capital incentive for banks to progress over time to using internal ratings. It is the Committee's firm intention to ensure that the final Accord provides modest incentives for banks to adopt the internal ratings approach. There is a conservative bias in the standard approach; and internal ratings in measuring risks more accurately should, for lower risk business, result on balance in lower capital requirements. The objective of ensuring some capital incentive for banks to progress to risk sensitive measurement does, of course, have to be balanced against the objective of roughly maintaining the overall amount of capital in the financial system.

The Committee's statement that ratings should not be 'point in time' but 'must represent a conservative view of a long run average probability of default for the borrower grades' attempts to introduce such a balance. Such ratings ought to be reasonably robust to the normal ups and downs of economic activity. The Committee has backed this up with requirements for minimum lengths of data histories to underlie the internal ratings, so helping to ensure that they incorporate some experience of economic low points. Over-optimism by banks in allocating ratings could also induce procyclicality. The Committee proposes several checks on this. In particular, supervisors will look at the ratings allocated to some individual loans, and also compare the distribution of loans across rating bands with those of different banks. Ultimately, of course, we will have to rely on those charged with daily supervision of banks, backed up by the Pillar 3 disclosure requirements, to ensure that ratings are not set in a way which risks undue procyclicality. Impact of the Basel Accord on SMEs Leaving aside the issue of how the risk sensitive capital requirements will behave over an economic cycle, I would also like to touch on the question of how they may affect the supply and pricing of finance to certain types of borrower. If risk sensitivity means a greater distinction between different types of borrower, we need to consider carefully whether the right outcome has been achieved.