samchain/econo-pairs-v1 huggingface dataset:
The uncertainty habitually surrounding estimates of the impact of tax changes, which peaks at times of marked cyclical swings, will call over the rest of 2015 and in 2016 for a monitoring of revenue that enables risks of slippage to be identified and pre-emptive action to prevent such risks materialising. Notably, in a country as decentralised as Spain where more than 40% of public spending is by local and regional government, the Budget affecting central government and the Social Security system offers a partial view of the budgetary policy for next year. We must wait until October for the 2016 budgetary plan for the overall general government sector, including the regional and local governments. It is that document which will allow a full analysis of the budgetary forecasts for next year and which is, indeed, the draft on which basis the European Commission will deliver judgement in autumn, under the new European governance arrangements. Meeting our fiscal consolidation commitments remains the best anchor for preserving credibility and for ensuring, first, the stabilisation of the level of public debt and, subsequently, its reduction. In this respect, the different tiers of government (central, regional and local) must fulfil these commitments to the same degree of stringency. The Budgetary Stability Law has instruments at its disposal to achieve this aim. Conclusions I shall now sum up.

In any event, mention should be made of the contribution of monetary policy and the significance of the decision adopted in January this year to enlarge the securities purchase programme with the inclusion of government debt securities. Since then, we have witnessed not only further monetary easing and the depreciation of the euro, but also a more uniform transmission of expansionary impulses to the various countries in the area and, in particular, to those such as Spain which were comparatively more affected by the fragmentation of European financial markets. The latest monetary policy measures have translated into a significant improvement in the Spanish economy’s financing conditions. This improvement is visible not only in the lower cost of new funds, but also in a progressive – but slow – normalisation of credit in Spain. Aggregate balances continue to post negative rates of change, reflecting the headway in the deleveraging of our households and firms; however, these rates are increasingly less negative and are compatible with the growth of new financing flows. Performance of and outlook for the Spanish economy On preliminary estimates in late July, the Spanish economy is expected to have grown by 1% in the second quarter of this year. This growth rate highlights the dynamism of the current recovery phase, now under way for two years. Recent indicators suggest this expansionary trajectory will hold in the second half of the year.
Even in a crisis situation – in conditions of collapsing confidence and very low interest rates – monetary theory assumes that a central bank will always be in a position to influence inflation and demand by steering expectations of the future path of its interest-rate instrument in the future. These theoretical prescriptions are based on the assumption of perfect market arbitrage. Intertemporal arbitrage is indeed what makes monetary policy effective in normal times. It ensures that the return on a long-term security is equalised with the return on a strategy of holding a very short-term security – paying the policy rate – and rolling it over until the end of the policy commitment. In this crisis, however, market arbitrage was simply unavailable. The disappearance of market arbitrage was a challenge for monetary policy. But by no means did it imply policy ineffectiveness. It called for central banks to engage in non-standard measures and play an intermediation role that the market was unwilling or unable to perform. The ECB fulfilled its role of market-maker in particular by providing liquidity to banks without limit, for “as long as was needed”, to restore normal market functioning. Note here a difference between the ECB and the Federal Reserve. Even in normal times the ECB conducts monetary policy through loans, rather than via direct purchases and sales of securities. Unlike Fed discount-window lending, however, our loans are untargeted. They are an instrument for the routine provision of monetary policy liquidity, rather than part of selective assistance to distressed banks.

It is all about getting the banking system into a position where it can demonstrate robust capital and liquidity buffers, and to do so by facing up to the discipline of the market rather than the support of the authorities. The Edinburgh fund managers are an important part of that market discipline. In a market economy, you are in the front line of defence and discipline. Now, I cannot say that the UK is insulated from the risks we observe in other parts of Europe. As our most recent Financial Stability Report, published just before Christmas, made clear, “the United Kingdom is only partially insulated given the interconnectedness of European financial systems and the importance of their stability to global capital markets”. As the Report also made clear, there are other, probably more medium-term risks posed by evidence of low bond yields in many advanced countries and signs of an intensifying search for yield as capital flows into alternative assets, including into emerging markets. Against this backdrop of risks, it is in the collective interest of banks to continue to build up progressively their capital and liquidity resilience so that they support not only themselves, but also the stability of the financial system as a whole. The Basel III agreement, and the reform programme of the G20 and the Financial Stability Board set up under the G20, will provide the supporting framework by which the authorities will back up the discipline of the market to achieve and maintain financial stability.
And, indeed, wage growth has been, and remains, subdued (Chart 9). But other factors have conspired to push inflation well above the MPC’s 2% target. First, the substantial depreciation of sterling, though helpful to the necessary re-balancing of the UK economy, also simultaneously raised import prices. We initially underestimated how strong this impact would be, but we now think that the rise in import prices as a result of depreciation has added somewhere between 4¼% and 6½% to the level of consumer prices. Second, commodity prices – especially oil prices (Chart 10) – have been on something of a roller-coaster, rising sharply on the back of strong growth in the emerging economies up to mid-2008, then falling back sharply as global activity collapsed at the end of 2008. They have subsequently rebounded, reflecting both the recovery, especially in the emerging economies, and temporary adverse supply factors (bad weather affecting agricultural commodities; unrest in the Middle East and North Africa affecting oil). Finally, the increase in the standard rate of VAT has also boosted inflation. The blue swathe in Chart 11 shows our estimate of the combined contribution of these three factors, for a range of plausible assumptions, together with the actual inflation rate (the red line). The green swathe is the implied contribution from all other influences on inflation.

Charles Bean: The economic outlook Speech by Mr Charles Bean, Deputy Governor for Monetary Policy of the Bank of England, to the Northern Ireland Chamber of Commerce, Belfast, 19 May 2011. *  *  *  Good afternoon! It is a great pleasure to be back again in Belfast. I am particularly pleased to be addressing you in this historic venue, whose grandeur bears witness to Belfast’s long history as a key hub for international trade. That is symbolised in the stained glass windows on the ground floor, which show Neptune, the god of the sea, flanked by images representing the industries synonymous with Victorian Belfast: Navigation; Spinning; Weaving; and Engineering. The local economy has changed considerably since those days. And change will be a theme that runs through my talk today. It is now 18 months since the economy began to recover from the worst fall in output in the post-war period. Since its trough in 2009 Q3, estimated GDP has risen 2½%, leaving it some 4% below its peak prior to the financial crisis. But towards the end of last year the pace of recovery appears to have slackened. Excluding the effects of the snow, which the ONS say reduced output by about ½ percentage point in the fourth quarter, activity was reported to have been broadly flat across the final quarter of last year and the first quarter of this one; see Chart 1.
The counterpart to placing greater weight on the level of and fluctuations in risk premia is being more attentive to money and credit quantities. There is plenty of such interest at present of course, as evidenced by the number of mentions in the minutes of the MPC’s meetings. But we must ensure that interest is sustained. And in a world of global banking and capital markets, that surely means looking at wider measures alongside our normal broad money (M4) aggregates. It is surely not at all uncommon these days for firms around the world to hold part of their currency liquidity with banks overseas. At the Bank, we have had another go 7 at creating a wider measure of UK money growth that takes account of international deposit-taking activity (Chart 13), and also at similar measures of “world money growth” (Chart 14). In both cases, the swings over the past decade are more pronounced on the wider measure, especially for the UK. I am particularly struck that these aggregates start to pick up during late 2003, just about the time when the Bank’s  3  Carney M (2009), “Some considerations on using monetary policy to stabilize economic activity”, remarks to a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming. 4  See Bank for International Settlements (1986), “Recent innovations in international banking”, prepared by a Study Group established by the Central Banks of the Group of Ten Countries, known as the “Cross Report”.

India has acceded to the Treaty of Amity and Co-operation in Southeast Asia (TAC) and adopted the Joint Declaration for Cooperation to Combat International Terrorism, signalling its strong commitment to ensure peace and security in the region. India is now a dialogue partner with ASEAN at the Summit level. Last year, the leaders adopted the suggestion of Indian Prime Minister Vajpayee and signed the ASEAN-India Framework Agreement on Comprehensive Economic Cooperation, an interim step towards an eventual ASEAN-India FTA. Both sides have agreed to start negotiations on trade in goods this year, including an ?early harvest programme? to boost trade in selected sectors. Singapore supports this far-sighted initiative and will work actively with India and other ASEAN members to fulfil this vision. The India-Singapore CECA Bilaterally, India and Singapore are already negotiating a Comprehensive Economic Co-operation Agreement (CECA), which will be a firm basis for expanding the India-ASEAN relationship. The rewards are not only economic, but also strategic. Singapore naturally hopes to gain freer access to the Indian market. But the benefits extend well beyond this. Singapore wants to strengthen its economic ties with many different centres of prosperity and growth, and not be overly dependent on one or two major trading partners. A strong relationship with India will complement our rapidly growing links with China, and help us to realise the strategy of growing two external wings in the region, with the two emerging economic giants.
Bank of England  Page 5  One of the most striking global trends over the past half century has been an overall decline in the level of risk-free interest rates – risk-free in the sense that they are returns on lending that carries a negligible risk that payment obligations will not be met by the borrower. Chart 1 shows how, when we look at this over a longer period of time, ten-year UK nominal rates have fallen compared to where they were in the 1980s. Both the very low levels of interest rates we have seen in the years leading up to the Covid pandemic, and their recent rise from those levels, must be seen against the backdrop of that downward trend. Chart 1: The UK ten-year nominal rate has fallen over recent decades Ten-year zero coupon yield (spot interest rate) from UK gilts (a) Per cent 15  15  10  10  5  5  0  0  -5 1985  -5 1990  1995  2000  2005  2010  2015  2020  (a) Sources: Bloomberg Finance L.P, Tradeweb and Bank calculations. A good part of this decline can be explained by lower inflation itself. It reflects the success of inflation targeting in delivering low and stable inflation over long periods of time. Under inflation targeting, monetary policy makers act decisively to return inflation to target whenever shocks cause prices to rise or fall by too much.

Looking closer at individual sectors reveals that productivity was significantly boosted by very high growth in manufacturing sector productivity in the decade before the financial crisis, much faster than in the preceding 25 years. This is the period sometimes referred to as the ‘Great Moderation’, a period characterised by unusually low volatility in both economic activity and inflation. But following the financial crisis, manufacturing productivity growth fell back sharply. This fall in manufacturing productivity is the main cause of the slowdown. The reasons behind it are much debated – and productivity may be harder to measure in the modern economy where businesses invest as much in intangible capital, like software and branding, as in physical capital, like buildings and machinery. Measurement problems could be a big part of this. But much also points to structural change. Perhaps new ideas have become harder to come by, or perhaps technological innovation and specialisation have faded as globalisation slowed. Bank of England  Page 8  Whatever the reason, when productivity growth is weak, companies gain less from installing new capital. So weaker productivity growth has meant that firms have sought to borrow less to finance investments at a given interest rate. This reduction in the demand for capital has lowered the equilibrium rate. The second important factor is population ageing.
Yet on the other hand, adopting technological innovation may also mean efficiency improvements for banks, although it is true that in the short term adapting to the new way of providing financial services and managing their assets will entail hefty costs for established banks. For society as a whole, the use of new technologies in finance may mean significant advantages in terms of cost savings and financial inclusion. As regulators, we have to promote the adoption of innovation while continuing to treat all participants symmetrically so that regulations governing the same activities are comparable, irrespective of the type of company providing the services. As I mentioned earlier, the decrease in non-productive assets has been one of the main factors which has contributed to the return to profitability of the Spanish banking system in recent years. Nevertheless, although it has decreased significantly, the share of these assets in banks’ balance sheets continues to be historically high and, consequently, banks should take advantage of this point in the cycle to make further progress in this area. Another important challenge for Spanish banks relates to the need for them to achieve reputational improvements. After the economic crisis, litigation increased notably, resulting in sizeable costs for banks which have a negative effect on their profitability. This increase in legal costs is not confined to the Spanish banking system but has also been observed in other jurisdictions.

In the third quarter, inflation developments were marked by the downward dynamic of energy prices and the persistence of moderate rates in services and industrial goods. The annual rate of change in the harmonised index of consumer prices (HICP) held steady at 1% in August, for the second month running, while underlying inflation, which excludes energy and food prices, stood at 0.9%. In fact, since 2013, inflation in the euro area has stood on average at 0.9%, practically half the level observed during the first 10 years of EMU, of 2.1%. In parallel, the indicators of long-term inflation expectations, based on financial market information, have fallen sharply since the end of last year and stand at very low levels, which broadly coincides with the signals obtained from surveys. These indicators are regularly used to monitor the degree to which inflation expectations are anchored to the ECB’s medium-term inflation target (below, but close to, 2%). Although most of the reduction in inflation expectations, according to market indicators, seems to stem from the fall in the inflation risk premium, the level of this premium is in negative territory, which would indicate that agents are hedging the risk of very low or even negative inflation rates. This absence of inflationary pressures and the weakness of demand, along with expectations of falling oil prices and a deteriorating global environment, led to a further downward revision to the Eurosystem inflation projections.
Although the size of the decline in employment measured varies from one source of statistics to another, the overall picture is still clear; employment has been weaker than anticipated, while economic growth has been stronger. This phenomenon is known as jobless growth, or jobless recovery. The parallels to the recent developments in Sweden are obvious (Figure 4). Despite the increasingly clear signals of stronger economic activity, growth in the labour market is very slow, particularly in the business sector. Productivity growth is tangible in both the United States and Sweden, while many countries in Europe are still struggling with a relatively weak growth. However, one important difference in the comparison between the United States and Sweden is that both the rate of growth and the increase have been much more dramatic in the United States. The same applies to the size of the decline in employment, which has been much more significant in the United States. This means that comparisons between Sweden and the United States should be interpreted with caution. 6  BIS Review 9/2004  4.

We are happy to notice that President Draghi has underscored that investors would now face equal terms related to the Outright Monetary Transaction programme, as announced by the ECB. Draghi pointed out another risk factor in July, when he stated that risk premiums are not only linked to default or liquidity, “but they also have to do more and more with convertibility”. 2 President Draghi emphasised that this kind of risk is unacceptable. I believe the ECB has taken the relevant measures to eliminate such risks. Financial investors are risk-averse. They react to signals, expectations about the future and real adjustments. No doubt some European countries have a long and bumpy road ahead of them, before they get their government deficits and debt under control. My message is that positive steps have been made. As a consequence of the measures taken by the ECB, as well as initiatives taken by the European Union and by member states themselves, risk premiums have recently come down. If measures are carried out as intended, it is quite likely that global investors will again allocate the relevant part of their asset portfolios to European government bonds. Final remarks Let me return to an overall macroeconomic perspective: to factors decisive for sustainable growth. The existence of a large, broad-based business sector that is exposed to international competition and trade promotes learning and development. This is true for any country. In countries with abundant natural resources, the exposed sector may easily be scaled back, while sheltered sectors expand.
I very much doubt it given the usual time lags observed in the diffusion of past technologies and the differences in productivity levels between firms. The second type of lag, space-lags, refers to the uneven diffusion of technology across firms. Frontier firms usually enjoy stronger rates of productivity growth than imitators in the same sector. In France, the productivity growth of frontier firms has remained steady – or even increased – throughout the slowdown [slide 7]. This may reflect winner-takes-all phenomena. For example, in the digital economy, due to network externalities, one firm with a marginal comparative advantage can seize the whole market and benefit from the low marginal cost of production of additional units of its product. However, these phenomena may be specific to ICT-producing sectors. Productivity growth in frontier firms mostly reflects the actual pace of technological advance and supports techno-optimists views. I’ve shared with you a few thoughts on these three promising hypotheses. To conclude, let me share with you what I see as priorities in order to exit the low growth trap and prevent the risk of secular stagnation. We must obviously accelerate domestic reforms in order to foster innovation and an entrepreneurial spirit. But at the European level, we need to tackle the persistent “investment crunch” which followed the financial crisis. Thus, we first need a “Financing and Investment Union” in Europe to steer abundant savings into investment and provide adequate financing for innovation.

We also need, as a second step, a collective economic strategy in the euro area, which could be backed up with a euro area “Finance Minister”: growth and employment will be stronger in Europe if we combine more structural reforms where they are needed – such as in France and Italy – and more fiscal and/or wage support in those countries with room for manoeuvre – such as Germany. On that note, I wish you very fruitful discussions throughout this conference and I shall now leave the floor to the first session on measurement issues. Thank you for your attention. 3/3  BIS central bankers' speeches
The Treasury Market Practices Group (TMPG), a private sector group of market professionals sponsored by the New York Fed, has played an important role in these efforts. Building on analysis that started before October 15, 2014, the TMPG released earlier this year an updated set of best practice recommendations and a companion white paper discussing automated trading.3 As is typical of TMPG initiatives, the group’s work on automated trading was undertaken to support market liquidity amid these changes in the market ecosystem. Much work remains to calibrate an appropriate response to changes in market structure, and last month’s conference “The Evolving Structure of the U.S. Treasury Market” provided a valuable opportunity for the official and private sectors to engage in a healthy and open debate on a range of related topics.4 The conference, organized by the Treasury, the Federal Reserve Board, the New York Fed, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, featured a review of the agencies’ July 2015 Joint Staff Report and highlighted a number of key issues, including the adequacy of the Treasury market data currently available to the public and to the official sector, the impact of the current regulatory environment on liquidity, and some potential operational risks posed by shifting market structure and trading behavior.5 The Treasury made clear at the conference that work in this area is ongoing when it disclosed plans for the agencies to issue in the near future a request for information on the next steps outlined in the Joint Staff Report.

As I stated in my introduction, such an assessment is very useful for us, and we will take the committee's recommendations on board in our work going forward. Thank you for your attention. 3/3  BIS - Central bankers' speeches