samchain/econo-pairs-v1 huggingface dataset:
Miguel Fernández Ordóñez: Overview of the Spanish economy in 2006 Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Governing Council of the Bank of Spain on the occasion of the presentation of the Annual Report 2006, Madrid, 14 June 2007. *  *  *  Ladies and gentlemen, In 2006 the behaviour of the world economy and of the European economy in particular provided a highly favourable setting for the continuation of the Spanish economy’s 13-year-long expansion. The world economy grew by 5.4% last year, up even on the high rates of the previous two years, this being the most dynamic three-year period of growth for more than 30 years. The strong increase in oil prices in the first half of the year and the less expansionary stance of macroeconomic policies did not check this dynamism, which was moreover compatible with the containment of inflation rates worldwide and with a more favourable financial market performance. The geographical distribution of growth was more balanced and more favourable for the Spanish economy. The notable recovery in the euro area, along with economic firming in Japan, offset the slowdown in the United States. The contribution of the emerging economies to the global expansion, with China and India to the fore with growth of around 10%, remained a key factor. Latin America also grew satisfactorily and its inflation fell to all-time lows, against a backdrop of generally prudent macroeconomic policies which have contributed to a further reduction in the region’s financial vulnerability.

But it remains to be seen how wages will react in the face of more buoyant domestic demand. Throughout 2006 the stance of demand-side policies was consistent with the pick-up in private agents’ spending. However, in the monetary policy realm, the strength of the recovery warranted a gradual adjustment in monetary conditions by the European Central Bank. Following the rise in official interest rates in December 2005, the ECB continued in 2006 progressively to withdraw the stimulus provided in recent years in the light of the observed risks to price stability in the medium term. Turning to budgetary policies, the improvement in the business cycle contributed decisively to tax revenue growing substantially above forecast in 2006 and to the euro area budget deficit declining by almost 1 pp. Given the persistence of high deficits in many countries, it is of paramount importance to harness the opportunity provided by the current boom to complete the ongoing restructuring of public finances and to push through measures to boost productivity and employment generation. Precisely in this latter area, the year 2006 saw progress – albeit uneven across countries and economic policy areas – in the application of the structural reform agenda. Undoubtedly, the favourable performance in 2006 in terms of employment and growth in activity is largely the result of the course of the business cycle.
Yet, cautiousness is needed, as once the profitability breakeven is crossed, prices can respond stronger to the overall cycle and wage pressures. Hence, central banks have to be cautious in accommodating, as not always this is warranted by low inflation. Low prices might be a reflection of a more structural features (competition for instance), or cyclical ones (such as profitability). In the first case, the impact of the central bank is constrained, while in the second case – once the impact of the profitability cushion wanes – the monetary accommodation can add to stronger inflation pressures than acceptable. Chart 20: CESEE GDP deflator, unit labor costs and mark-ups (percent change) 15.0  Mark-up, change in % Unit labour cost, change in %  10.0  GDP deflartor, change in %  5.0  0.0  -5.0  -10.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Eurostat, SEE Jobs Gateway Database, National Statistics and Authors’ calculation. Conclusion In the last couple of years we have dealt with the issue of the impact of the monetary policy normalisation, of the ECB in particular, on the region. At the current stance, not only that normalisation is distant, but rather stronger accommodative approach is being employed. The prolonged monetary expansion has called for greater vigilance in the context of excessive risk –taking and debt build-up. At the same time, more scrutiny has been put on the causes of the low inflation that might possible disclose a need for cautiousness in providing monetary stimulus.

In its latest report on Croatia6, the Commission has released the assessment showing that both household and corporate debt are within prudential levels, though still above the levels suggested by the economic fundamentals. The risks are moderating, but remain relevant mainly related to high concentration of corporate debt, exposure to currency risk and potential solvency risk for companies due to the high debt burden relative to corporate financial assets and equity. 5  European Commission Country Report Bulgaria 2019 Including an In-Depth Review on the prevention and correction of macroeconomic imbalances. 6 European Commission Country Report Croatia 2019 Including an In-Depth Review on the prevention and correction of macroeconomic imbalances. 10  Chart 12. Private debt to GDP by countries  Source: IMF Global debt database. Overall, private debt appears sustainable in most CESEE countries, though risks still remain. External environment remains challenging, making the region vulnerable to economic downturn, capital flows reversals and sharp tightening of financial conditions globally. In the event that monetary and financial conditions remain easy for too long, it may stimulate excessive risk-taking and build-up of financial stability risks. This calls for authorities in the region to maintain and further strengthen macro-prudential frameworks, if needed, to reduce vulnerabilities and enhance resilience to shocks. 11  *** The second issue that we tackle in this note is the phenomenon of “missing inflation” and the “wage–price puzzle”.
First-generation crypto-assets were born of a desire to create a disintermediated means of payment that would not have an issuer and that would circulate on decentralised settlement infrastructures beyond the control of banks and governments. As a result of this, their actual footprint remains marginal, however much media attention they may receive. Furthermore, as intermediaries in exchanges, these assets are far less efficient than our existing currencies, for a variety of reasons, including their volatile prices, transaction costs and transaction times, which make it hard to use these assets as a means of payment, plus the risks to which users and service providers are exposed. Stablecoins seek to remedy the shortcomings of first-generation 1/4  BIS central bankers' speeches  crypto-assets, especially their volatility, by being backed by real assets. But even with Stablecoins, the whole crypto-asset payment chain remains highly exposed to a range of risks, from legal, financial and operational risks, to major vulnerabilities in terms of money laundering and terrorist financing, and consumer and investor information and protection issues, including a non-zero risk of capital loss even in the case of Stablecoins. There are also issues, in our countries upholding the Rule of Law and in our regulated market economies, in terms of complying with core competition and privacy principles.

2/4  BIS central bankers' speeches  To help to meet these challenges, we at Banque de France are focusing our activities around two main areas: 1/ Support and implement regulatory frameworks and supervisory practices that promote innovation and the stability of our financial system Most of the current regulatory framework predates the technological breakthroughs that we are now facing. Accordingly, it makes sense to adjust the regulatory framework to these  technological developments, the challenges they present and the attendant risks. The same naturally applies to our supervisory framework and methods. For this reason, we are actively involved in multilateral cooperation work, such as the G7, the G20, the Financial Stability Board and the Committee on Payments and Market Infrastructures, particularly on crypto-assets and enhancing cross-border payments. We are also supporting the European strategies on digital finance and retail payments published by the Commission in the final quarter of 2020 and especially the two flagship initiatives, namely the draft Markets in Crypto-Assets (MiCA) Regulation and the future Digital Operational Resilience Act (DORA) Regulation on operational risks in the financial sector. 2/ Be involved as a participant in the evolution of payment systems However, adapting the regulatory framework will not be enough. At the Banque de France, we believe we also need to be part of the evolution of payment systems by pursuing, at this stage, two goals: facilitate and experiment.
The latest issuance of 30-year green bond by the HKSAR Government is indeed the longest tenor green bond issued by a government in Asia and the Global Medium Term Note Programme is the first such programme dedicated to green bond issuances set up by a government in the world. Encouraged by overwhelming market response, we plan to double the overall borrowing ceiling to $ billion which will provide more room for exploring future issuance in other currencies, project types and channels. 12. By the end of 2019, $ billion of green bonds had been arranged and issued in Hong Kong with a significant number of them by Mainland and overseas entities. While we do not have the 2020 figure yet, our estimates show that the issuance pipeline remained strong during the year despite the disruptive effect of Covid. We are seeing increased issuer and product diversity and expect the strong momentum to continue. Mainland China has just announced the ambitious 2060 carbon neutrality target. We believe Hong Kong, which adopts international standards in green bond issuance, is the ideal platform to raise green capital from international investors to support this transition and are looking at ways to facilitate this, in particular within the Greater Bay Area. Clearly structured credit products can also take a place in helping to meet this huge financing needs in the many years to come. 13. Of course we also have other initiatives that specifically promote the structured credit market here.

Asia including China is clearly a key focus area. Take the Bond Connect as an example, in 2020 the scheme recorded an average daily turnover of nearly RMB30 billion, representing a growth of 82% over 2019. This accounts for 52% of foreign investors’ total turnover in the CIBM market, and shows that Hong Kong continues to be the preferred channel for investing in the Mainland market. The next exciting thing will be the launch of the Southbound Bond Connect, which will open up a ground-breaking conduit for Mainland investors to access the international bond market via Hong Kong. All these will be important impetus for the further development of fixed income including structured credit markets in Hong Kong. 11. Another important macro trend is the burgeoning green and sustainable bond market. The global green bond market has grown from practically non-existent ten years ago to $ billion in 2020. Recognising this trend, Hong Kong launched a few supportive initiatives in the last few years, including the Green Bond Grant Scheme in 2018. The latest Government Budget announced a new Green and Sustainable Finance Grant Scheme, which will focus on green and sustainable bond issuers and borrowers and extend the scope of eligible products, external reviewers and expenses. To create the demonstrative effect and establish a benchmark yield curve, the Government itself has issued two rounds of green bonds since 2019 that are aligned to international standards such as ICMA’s Green Bond Principles.
By comparison, the fluctuations in the value of foreign exchange reserves are more moderate. The National Bank holds 1,290 tonnes of gold reserves. This means that, as the price of gold changes, the composition of the currency reserves changes in value terms – as does the risk profile of the currency reserves. In other words, a sizeable advance in the price of gold led to a substantial increase in the share of gold and thus also a significant rise in the risk that earnings would fluctuate. At the same time, our gold reserves represent a very special asset which, from a historical point of view, is likely to provide a crucial protective function in periods of extreme crisis. 2  BIS Review 123/2006  What conclusions can we draw from these considerations? The 2004 revision of the National Bank Act gave the SNB more leeway in its investment policy. Since then, we have made use of this leeway within the bounds set by monetary policy, at least with respect to foreign exchange reserves. An essential prerequisite was – and remains – a risk management operation which is committed to bestpractice methods and takes full account of the special features of a central bank in its considerations. The requirements of monetary policy will continue to have a strong impact on SNB investment policy in the future. The room for further improvements in the risk/return ratio is limited. As a result of their function, the currency reserves encompass large financial risks, while the comparable returns are relatively low.

Technically speaking, this means we cannot determine an optimal commitment period for our investments. In point of fact, our investment horizon is usually relatively long-term, although it can be abruptly shortened in the event of a crisis. Finally, we also pay special attention to reputation risks when engaging in specific investments. One of  BIS Review 123/2006  1  the SNB's most important assets is its good reputation and its credibility. Damage to its reputation could also have a negative impact on monetary policy. Consequently, in cases of doubt, we avoid investment classes and instruments that may be expected to have a damaging impact on our reputation. We are also very risk-conscious when it comes to potential conflicts of interest. For instance, all staff engaged in practical investment activities are shielded from confidential monetary policy information. Effective risk management requires that all relevant risks be identified and assessed regularly, in a manner that is as unbiased as possible. Experience has shown that technical failure is seldom at the root of serious losses. The greatest losses result from a lack of risk consciousness, from a total failure even to recognise significant sources of risk. This danger exists when risk assessment is restricted exclusively to easily measurable quantitative risk variables, excluding areas such as processes or legal risks, which are referred to as 'operational risks'. For this reason, we also include operational risks in our assessment. However, while pursuing this broader route, we certainly do not neglect the regular quantitative measures for assessing financial investment risks.
As a result of this decline, the Libor, which is supposed to reflect the major banks’ unsecured refinancing costs, is now hardly ever based on effective transaction prices but instead relies almost exclusively on estimates. In response, the UK’s Financial Conduct Authority has announced that it will no longer maintain the Libor after 2021. All market players will have to make careful preparation for this. In Switzerland, work on replacing the Libor is already well advanced, but a complicating factor is the rate’s widespread use. The national working group on Swiss franc reference rates (NWG), which is in charge of ensuring a smooth transition, has identified SARON as the preferred alternative solution to the Libor. SARON has already established itself as a reference interest rate, and there is now an interest rate curve based on SARON. It is crucial to have a SARON-based curve capable of being used instead of the Libor curve, for price setting across the Swiss franc capital market. Amounts outstanding on the overnight swap market (OIS) based on SARON are currently low, but are likely to grow significantly in the future. In this connection, I would also like to mention that the first SARON-based futures contract was launched only around ten days ago, and traded on the Eurex platform. In the future, when products based on SARON (loans, mortgages, etc.) are brought to market, trading volumes for the associated collateral instruments will increase. These instruments, in turn, can be used for loan pricing.

The existing money market infrastructure managed by SIX has many advantages: for instance, it has a wide range of participants, including the SNB, who make up a homogeneous market and interact on a shared platform. Moreover, that infrastructure is highly automated and standardised. It is in the process of being upgraded, to better respond to the changing needs of participants. A new repo trading platform, CO:RE, was launched in 2016. Moreover, a new triparty agent is being set up which will offer market participants a wide range of services and will enable a more efficient management of collateral through closer integration with pure trading activities. Page 7/9  Finally, a resilient and modern repo market infrastructure is essential to allow the SNB to deploy its entire monetary policy toolkit effectively and at any time. Indeed, the SNB uses the same SIX platform as private participants to implement its monetary policy, by auctioning/exchanging repos or reverse repos or even issuing SNB Bills. As you will recall, the latter were issued at the beginning of the crisis. They proved to be an efficient and flexible way to absorb liquidity. I will now turn to the second point: the replacement of the Libor as the reference money market interest rate. It should be noted that the decline in transaction volumes for the unsecured segment of the money market involves not just the Swiss franc but all currencies.
Norman T L Chan: Keynote speech - HKAB & HKIB Distinguished Speaker Luncheon Keynote speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the HKAB & HKIB Distinguished Speaker Luncheon, Hong Kong, 26 September 2019. * * * Mary (Huen), Patrick (Fung), distinguished guests, ladies and gentlemen,  Introduction 1. I have been Chief Executive of the HKMA for 10 years. This will be the last time I speak to you in my official capacity. 2. I would like to take this opportunity to look back at what all of us here have accomplished during those 10 years. 3. When I say “all of us”, I do mean everyone represented here today. 4. Under conventional wisdom, our relationship is not designed to be friendly or close. We all know that there is potentially going to be some sort of friction between the regulator and regulatees. If there were no friction, at least one of the two sides would not be doing their job properly. 5. But if we succeed in working together, we accomplish something of vital importance. We ensure that Hong Kong can fully trust the financial services that you provide and which keep our economy going. 6. Today, I want to look back over the last 10 years and see how well we have all done.

In other words, ensuring that the banking industry caters fully to the needs of the wider economy and community, rather than focussing purely on the most profitable activities and market segments. 31. Hong Kong is a capitalist, free-market place. But the regulatory authority works not only for the industry but also for the public. And our population has a keen sense of community and fairness. 32. In the last 10 years, anyone concerned with public policy, corporate governance and business regulation has noticed rising expectations of good corporate citizenship. I took over as Chief Executive of the HKMA just a few months after the SFC and HKMA pushed through a solution to the Lehman minibonds episode. I think everyone learned some valuable lessons from that. 33. One market segment we need to consider is the elderly and low-income retail customer. 34. Some of these retail clients obviously have limited savings to deposit and limited banking 3/5  BIS central bankers' speeches  needs, and the reality is that they will not provide banks with much fee or interest income. However, the community expects banks to provide them with basic services, essentially on a pro-bono basis. 35. Some of them have difficulties using technology, and cost-saving service-delivery channels such as ATMs, online banking or mobile device. We could try harder to persuade – or even compel – the elderly to adopt modern technology, in the name of efficiency or modernity.
Strong cooperation will not be a panacea, however, as legal and other restrictions on data sharing differ from one jurisdiction to the next, and it is unlikely that all such restrictions can be overcome. But cooperation and legislation to facilitate sharing with foreign authorities appears to be the best available strategy. Significant practical barriers also exist that can, at times, limit the quality of data collection and analysis available to support effective supervision and regulation, which include barriers to sharing data that arise from policies designed to protect privacy. For example, some private-sector databases and bank’s loan books include firms’ tax identification (ID) numbers as identifiers. Mapping those ID numbers into various characteristics, such as broad geographic location or taxable income measures, can be important for effective analysis and can be done in a way that does not threaten privacy. However, as a practical matter, a firm may have multiple ID numbers or they may have changed, but the Internal Revenue Service usually cannot share the information needed to validate a match between the firm and the ID number, even under arrangements designed to protect the confidentiality of the taxpayer information obtained. In addition, a significant amount of financial information is collected by private-sector vendors seeking to profit from the sale of data. These vendors have invested in expertise and in the quality of data in order to meet the needs of their customers, and the Federal Reserve is a purchaser of some of these data.

Between 2004 and 2009, this expanded at an annual average of 5.3%. On the other hand, government investment remained broadly unchanged during this period and declined in the last two years, in part because actual outlays often fell short of targets. The dual challenge of maintaining a high level of investment spending while reducing the budget deficit, therefore, implies that it is recurrent expenditures that must be cut. Progress has already been made by reducing subsidies, through the privatisation of the shipyard and by aligning utility rates more closely to production costs. For next year, however, while an increase of less than 1% in recurrent spending is planned, few specific cuts have been identified. In this context, the latest Annual Report of the National Audit Office suggests there is ample scope for controlling expenditures more effectively and for improving revenue collection. 13 While taxpayers have every right to expect value for their money, a substantial, durable fiscal correction requires a fundamental reappraisal of the role of the state in providing services. The need to prioritize expenditure programmes has not been fully addressed. As a result, the most difficult challenges, such as how to ensure sustainable funding for tertiary education, pensions and health services, remain to be tackled. 14 Domestic consumption must return to a sustainable level. It is an inevitable adjustment for economies like ours that have lived beyond their means for far too long.