samchain/econo-pairs-v1 huggingface dataset:
With monetary policy now transferred to the European Central Bank, the policies left to us are fiscal and structural ones. And if I were to be consistent with the recommendation I made to watch over all fronts, I ought now to give an exhaustive list of each and every economic policy. But as Madame du Chatelet’s friend said, “The secret of being a bore is to tell everything”. Thus, out of respect for you, I shall choose only what I consider to be most significant in the fiscal and structural field. Structurally speaking, while the loss of competitiveness is one of the risks looming over the economy, the boosting of productivity should remain the driving principle of all reforms. The National Reforms Programme, as indicated in the Banco de España Annual Report last June, duly includes the liberalisation and market flexibility policies the Spanish economy needs. It is now a question of adhering to it. The programme provides for very important liberalisations such as those of the railway and energy sectors, which have so often been put back. If they are diligently and ambitiously rolled out, they could contribute effectively to the growth of the Spanish economy. The gearing of public spending towards infrastructure and investment in Research, Development and Innovation should also be maintained.

Growth in the third quarter may turn out to be a bit less than we saw in the first half of the year, though we think there is only a slight risk of a double dip. The road to recovery is turning out to be a bit bumpy as relatively weak consumer spending and the ongoing problems in financial markets are keeping growth far less robust than we would like. To date, the manufacturing sector has been a key source of growth during the recovery. After an unusually steep decline from late 2007 to mid-2009, manufacturing output has grown rapidly over the past year, although the level of manufacturing output remains well below the previous peak. A major force behind the growth of manufacturing output has been an unusually pronounced inventory cycle. Production has expanded as firms across a variety of industries have been rebuilding their stocks to bring them into a better balance with sales. Another driver of manufacturing output over the past several quarters has been a pronounced rebound of our exports of manufactured goods. Economic activity abroad has been recovering from its weak levels in 2009, and that global recovery has helped fuel demand for our products, particularly capital goods. The importance of manufacturing in the recovery makes it a timely topic for our regional economic briefing, namely, trends in the manufacturing sector here in the Second District. II.
Unilateral deregulation would be nothing less than a lose-lose scenario with serious consequences for the stability of the global financial system – we would be paving the way for the next financial crisis – as well as the competitive landscape for US and European banks. International cooperation on financial reforms is a common good that has been extremely precious during these past eight years and is crucial to our future. 5) The fifth challenge is to complete the European framework and ensure greater consistency between regulation, supervision and resolution. Since 2014, the euro area has taken decisive steps with its Banking Union, which now ensures the uniform supervision of the banks of 19 countries. But in order to complete it, further progress is needed on three levels. First, with regard to concrete mechanisms, the second pillar of the Banking Union, which deals with “resolution” in the event of difficulty, must be finalised and simplified. Second, laws and requirements, which all too often accumulate diverse additional regulations and amendments, should be coordinated in a consistent manner. Moreover, cross-border banking mergers in Europe are still too difficult. Lastly, as regards the interaction between institutions, we should develop a better interaction between the various European authorities, and even envisage, going 5/7  BIS central bankers' speeches  forward, a single authority that would strive to enhance the soundness of the European banking sector. And in addition to the regulatory aspect, we must endeavour to implement what I call the Financing Union for Investment and Innovation.

Broad money demand will fall if individuals or firms use the increased cash injected into the system to pay down bank debts, or simply seek to borrow less. Similarly the supply side of broad money can contract if banks consciously shrink their balance sheets. That would happen, for example, if the banks are short of capital or funding, or simply can’t earn sufficient return on their assets. All of these demand and supply factors have been at work in recent years. As a result, the balance of forces between the demand and supply of broad money against the injection of narrow money has meant that growth in the stock of broad money in the economy has remained weak. That does not mean that QE has been unsuccessful, as many commentators seem to conclude. Without QE, the amount of broad money in the economy would clearly have shrunk much further than it did – it actually held up reasonably well while the economy was contracting. Had broad money shrunk a lot further, the resulting deflation would have meant that the outcomes for output and employment in the UK would have been far, far worse than they have been.
Sukhdave Singh: Global financial markets and their impact on Malaysia Keynote address by Dr Sukhdave Singh, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Financial Markets Price Outlook Conference 2015 “Global Financial Markets and their Impact on Malaysia”, Kuala Lumpur, 16 June 2015. *  *  *  As the Financial Times newspaper likes to put it: “These are financial times.” If anyone had doubts about that, the financial crisis in the advanced economies (AEs) was a reminder of how very much we do live in financial times, how large finance has become, how the tentacles of global finance have encircled the globe. A crisis that started in the mortgage market of a large nation reverberated around the world spread through the globalised financial and economic system. To understand why, imagine a landscape – a flat plain dotted with many ponds and lakes of water. None of them connected to each other. If anything happens in one body of water, it does not affect the others. That is the global financial system before globalisation. However, if we now dig channels between the different bodies of water so that we have a system of interconnected ponds and lakes, the nature of that system has changed. Now, if water rises in one lake, it will also flow through the channels to the other lakes and ponds. That is the global financial system. A system of connected national financial systems and markets, large and small.

The benefits of global financial integration Financial integration brings benefits to the Malaysian economy. Being a part of the global financial system facilitates trade and investment flows between Malaysia and the rest of the world. It has allowed foreign investors to invest in Malaysia with full confidence that the profits from such investments can be easily repatriated back to their home countries. Malaysian exporters and importers can freely trade with the world in full confidence that they could conveniently receive and make payments in any currency they wish in a quick and efficient manner. At one time, the lack of banking relationships made it necessary for BNM to established bilateral payments arrangements with central banks in many other developing economies to facilitate payments for trade between Malaysia and those economies. The expansion of correspondent banking has now made such arrangements largely redundant. The globalisation of finance has allowed Malaysian corporates to tap global sources of funds to support their investments and operations in other parts of the world, hence broadening their economic opportunities. It has allowed Malaysian fund managers to invest in other markets to diversify their investments and increase the yields to their unit holders. It has allowed foreign funds to invest in our financial markets, adding depth and liquidity to these markets. It has allowed foreign financial institutions to operate in our markets and our financial institutions to operate in foreign markets. Therefore, our engagement with the global financial system brings real benefits to the economy.
In 2006, the real GDP (at current prices) grew by 12.4 percent and by 4.2 percent (at constant prices). It is expected that strong growth rates will be maintained in the medium term. This will contribute to increasing the production capacity of the national economy and have a positive impact on all its sectors. International credit rating agencies have raised the credit rating of the Kingdom to advanced grades, and commended the efficiency and soundness of the national economy and the economic reform programs. This climate has made domestic and international investors more interested to participate in and benefit from the various investment opportunities in the Saudi economy. The banking system in the Kingdom has exercised a vital role in boosting the national economy. It has made great progress, using the latest technologies and various banking products, under a supervisory system keen to meet domestic requirements and legislation as well as international standards. The contribution of the banking sector to housing finance is expected to increase as soon as the real estate mortgage law is enacted. It is worth mentioning that the size of real estate finance provided by commercial banks reached Rls 13.4 billion at the end of the second quarter  BIS Review 14/2007  1  of 2006. SAMA has permitted a number of banks to offer products for real estate financing. Banks are constantly working to develop innovative products to meet the needs of the housing market.

Let me be clear: I am not making a value judgement about these regulations. What I am saying is that, if we want banks to adapt successfully to the post-crisis world, we need to give them sufficient visibility about the future. Finally, regulation needs to be mutually consistent. In particular, if we want banks to be bigger players in a more market-based financing mix, we need to ensure that regulation supports that transition and does not unduly impact banks’ ability to transact in capital markets. We know that one side effect of the reform agenda so far has been banks retreating from, or scaling down, certain market making activities. 5  See for example Buch, C., and Esteben, P. (2014), “Do better capitalized banks lend less? Long-run panel evidence from Germany”, International Finance 17:1. 6  Härle, P., Lüders, E., Pepanides, T., Pfetsch, S., Poppensieker, T. and Stegemann, U. (2010), “Basel III and European banking: Its impact, how banks might respond, and the challenges of implementation”, McKinsey Working Papers on Risk, Number 26. 4  BIS central bankers’ speeches  This is a particular issue for less liquid markets, such as ABS, which depend on market makers that can absorb temporary supply-demand imbalances. It is also one reason why part of the CMU Action Plan is a call for evidence on the cumulative impact of financial services reforms.
Forecasts of inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions. Disturbances to the economy may result in changes in the forecasts. Data revisions imply that the current economic situation is not fully known. Our ambition must be to reduce uncertainty with regard to our own response pattern. That actual interest rate developments will deviate somewhat from Norges Bank's forecast will probably be the rule rather than the exception. Overall, inflation measured by the CPI-ATE is projected to pick up gradually over the next three years towards 2.5%. Developments since June have resulted in somewhat lower inflation than expected, and we must take this into account when drawing up the next Inflation Report. Looking ahead, labour shortages are expected to push up wage growth this year and next. Pressures in the economy are expected to continue to build up before receding towards a normal level. The forecasts are uncertain and we also attempt to shed light on this. The figure illustrates the uncertainty surrounding the forecasts. The wider the fan chart is, the more uncertain the forecast. The uncertainty implies that the interest rate should normally be changed gradually, so that we can assess the effects of interest rate changes and other new information about economic developments. Changes in forecasts are nothing new to financial market participants, who frequently change their expectations concerning future interest rates as the economy is exposed to disturbances.

Christian Noyer: Financial stability in Europe and in the world – a French perspective Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Open podium debate on “The euro in the financial crisis – lessons and perspectives”, Copenhagen, 22 March 2010. *  *  *  It is a great pleasure to be here in Copenhagen at the gate of the euro area. This makes it all the more stimulating to discuss here with you issues related to the single currency, the financial crisis and the emerging new financial order. It allows for sharing experience and perspectives, which in and of itself is valuable for policy-makers. I would like to focus my remarks more on the emerging new financial order. More specifically, in the few minutes I have, I would like to share with you some thoughts, in a candid way, on three important policy questions. How can we make our financial systems more resilient? How can we reduce the procyclicality of financial systems? How can we best address systemic risk? Resilience Central banks have a strong stake in the resilience of financial systems. An environment of financial stability reduces the risk that monetary policy instruments become less efficient due to frictions and volatility in financial markets. Strong prudential standards are a certainly a prerequisite.
… On the evidence of the previous six months, the MPC bears a closer resemblance to a post-graduate seminar than to a forum for strategic decision-making. …To put [several] economists in the same room is to invite what one commentator has called paralysis by analysis. As a result the Committee’s conclusions are entirely unpredictable.” Since the beginning of 1998, the Committee has been unanimous at only one out of sixteen meetings. That was in July of last year when the Committee voted to hold interest rates constant at 7.5%. Disagreements have become the norm, and are much less remarked upon by the press than they were before. Moreover, disagreement is now more widely accepted as natural. It would be strange if the uncertainties facing the Committee were not reflected in small differences of opinion. And views of the appropriate level of rates have never differed by more than 0.5 percentage points. Nor have these technical disagreements led to “paralysis by analysis”. Indeed, the Committee has reduced interest rates by 23 percentage points since October of last year. It was precisely the analysis that led to the action. The willingness of the MPC to change interest rates either up or down in order to meet the symmetric inflation target has altered commentator’s perceptions of the Committee itself. Early in its history, commentators were unable to resist labelling members of the Committee as either “hawks” or “doves”.

Since the end of 1992 output has grown at an average annual rate of 2.8%, well above the post-war average. More significantly, growth was more stable, with a standard deviation less than one-half that of output growth in earlier post-war decades. And unemployment, as measured by the Labour Force Survey, has fallen from 10.7% at its peak in 1993 to a current level of 6.3%. So since the inflation target was adopted inflation has been lower, and growth as high, as in any post-war decade, and both have been more stable. And total output in the economy has now increased for 27 consecutive quarters, the longest period of uninterrupted growth since the Second World War. Part of the credit for this improvement in UK macroeconomic performance belongs to the policy framework (both pre- and post-MPC), and part was the result of favourable economic circumstances. From 1992 to 1996, the ability to grow at above trend rates without an increase in inflationary pressure was made possible by using up the margin of spare capacity created by the deep recession of the early 1990s. After 1996, inflationary pressures were contained by lower commodity and other world prices, and the impact of a sharp appreciation of sterling. These developments have had a significant impact on inflation. And they were largely unpredicted. So, although monetary policy has faced some difficult choices over the past two years, it has benefited from an unexpected downward movement in imported inflation. These external influences have offset a much higher level of domestically generated inflation.
I do not share this view. Price stability, defined as the inflation rate being below but close to 2%, is the anchor of the adjustment process and it is our duty to deliver it within our mandate. Very low government bond yields can indeed weaken the incentives for sound fiscal policies, and this is why we need strong and credible fiscal rules. But the suffering of young and longterm unemployed in our countries should suffice as an incentive to reform. Conclusion To conclude, the main lesson of the crisis is that a major financial shock leaves a set of initial conditions that can only be worked through by policies on both the supply and demand sides of the economy – that is, structural reforms and monetary and fiscal support. Key to the effectiveness of those reforms, however, is that they are fast – to avoid drawing out the disinflationary process – and that they focus on productivity as well as competitiveness. Today the reform agenda facing European countries is largely about productivity, and this means that pursuing reforms aggressively is less likely to have negative short-term effects. Many of the reforms that lead to downward price pressures and higher real interest rates have already been done, and their effects are working their way through the economy now. The remaining reforms are more about boosting investment demand and productivity and so raising growth today. Thus, it makes little sense for European countries to stop reforming now.

Monetary policy: achievements and review? Már Guðmundsson, Governor of the Central Bank of Iceland. Monetary policy meeting of the Iceland Chamber of Commerce, held at Harpa in Reykjavík on 17 November 2016  Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long-standing tradition of holding a meeting like this one on economic developments and prospects and monetary policy. The meeting is held following the publication of the Central Bank’s autumn forecast and, in latter years, the Monetary Policy Committee’s interest rate decision. In recent years, it has been the practice to select a particular topic for the meeting, and in keeping with this, today’s topic is: Is independent monetary policy too costly? This departs somewhat from the contents of the Central Bank’s Monetary Bulletin and current tasks of monetary policy, but I will touch on these towards the end of my speech today. Yesterday the Bank published Monetary Bulletin 2016/4, which contained the Bank’s new macroeconomic forecast, and announced the Monetary Policy Committee’s interest rate decision. The big picture of the current state of the economy is that things have seldom been better. Icelanders have received a significant boost from improved terms of trade and growing goods and services exports, particularly due to strong growth in the tourism sector. It is this that underlies the vast increase in Icelanders’ real income and the country’s high employment level. In addition, Icelanders have proven more cautious this time than often before during an economic boom.
As of end June 2008, credit portfolio of the banking system accounted for nearly 43% of total assets, increasing by 3.6 percentage points relative to end-year 2007. Consumer deposits remain the main funding source for the activity, accounting for 80% of total assets. Business funding through the credit lines from the parent banks increased to 9% of total assets in the first half of 2008. As of end June 2008, return on average assets was estimated at 1.3% while return on average equity equalled to 16.6%. Capitalization indicator of the financial sector, and in particular of the banking one, increased slightly. Capital adequacy rate of the banking sector showed a slight increase to 17.3% as of end the first half of 2008. Liquidity indicator continues to remain at higher levels compared to the other regional countries. Liquid assets of the banking sector share 47% of total assets, dropping by about 5.7 percentage points relative to end-year 2007. The spread of the U.S. economy crisis to the international financial markets and the uncertainty for the nature of its effects, the institutions’ map, the types of instruments and its extent, do theoretically increase the risk of its impact on the financial system at home. Basically, this crisis has not provided its impact on the banking activity in Albania.

In every meeting with you, I will highlight the need of strengthening the control on the business of the institutions you are governing. In addition to the fact that only this way the personal philosophy of each of you with regard to the development of the institution will come true, this process is vital to the well-functioning and safety of its business, even more given its rapid growth. In this context, the control structures should act rightly and extend to all the bank’s activities. Given the absence of a good collection, processing and reporting process of the business data, the control process on the institution’s activity finds itself jeopardized. The process of the banking sector’s data collection and processing has improved over the recent years as a result of investments in modern technological systems. In many cases, however, it is observed that the adoption of these systems is made only partially and hastily. Their full potential is not used and the banks’ personnel may not be fully familiar to their use; hence, weakening the necessary human control on these systems. Consequently, the control process on the institution’s activity is segmented, and the process of data collection, processing and reporting at the required quality and time is hampered. As a result, you being heads of commercial banks and us the system’s regulatory authority, risk to take decisions on data which are not fully accurate and furthermore are “old”. Being present in different banks and in different levels, a final solution should be found to this issue.