samchain/econo-pairs-v1 huggingface dataset:
The UK’s current account position creates some additional vulnerability, but recent developments in overall corporate debt are neutral (though with a caveat I’ll come on to explain), and household developments slightly offsetting. Rather, the underlying level of economic vulnerability has returned to a standard level after a long period in the aftermath of the financial crisis in which it was subdued as debt levels fell back. That’s consistent with the Financial Policy Committee’s judgement that the degree of underlying economic vulnerability is at a standard level. That judgement drives our assessment of how resilient the financial system needs to be, in particular how large should be the buffers of capital banks run with. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  Chart 13 ‘Adding up’ the impact of debt vulnerabilities on the possible damage caused by a 1-in-20 economic earthquake  Notes: Figure based on Aikman et al. (forthcoming). The black line ‘adds up’ the combined impact of each vulnerability indicator at time t on the 5th percentile of real GDP growth cumulatively over the next three years. For example, the point labelled 2005q1 shows the estimated impact of these vulnerabilities on the left tail of GDP growth over the period 2005q1-2008q1. The decomposition uses full sample coefficient estimates (based on 16 advanced economies 1980-2017), applied to the UK data. Each indicator enters relative to its UK historical average, so that if credit growth and the current account deficit were at their average levels, the bars would be zero.

Chart 2 Highly indebted companies cut investment  Chart 3 UK current account balance as a  and employment more than unleveraged  percentage of GDP since 1955  companies in the global financial crisis Investment  Employment  Percentage change in crisis  % of GDP 6  15 10 5 0 -5 -10 -15 -20 -25 -30 -35 -40 No leverage  4 2 0 -2 -4 -6  High leverage  -8 1955  Sources: S&P Global Market Intelligence and Bank calculations. 65  75  85  95  05  15  Source: ONS  Notes: Change in investment and employment in the financial crisis for unleveraged companies and companies with high leverage ratios. Percentage change reflects the average log change in investment and employment between 2007 and 2009. High leverage companies are those with net debt/EBITDA ratio higher than four in 2006. See, for example, Olivier Blanchard and Gian Maria Milesi-Ferretti, ‘(Why) Should Current Account Balances Be Reduced?’, IMF Economic Review, April 2012 and Julián A. Caballero, ‘Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?’, Economic Journal, March 2016. 5  5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  Recent developments  What, then, has been happening in the UK to these drivers of underlying economic vulnerability? Developments are summarised in the ‘heat map’ below (Chart 4). The colours represent how high each indicator is relative to past outcomes.
That is why in the case of essentially technical judgments it is sensible to rely upon collective wisdom, and there are other areas in which we do precisely that. The Law Lords, for example, reach their decisions by aggregating individual judgments, and the same is true in the United States Supreme Court. The MPC is based on the same principle. For such a system to work it is crucial that the individual members of the MPC give their best judgment and do not try to reach an artificial consensus. When policy is clearly off-track, as in the spring of last year, it is not difficult to reach unanimous decisions, as the Committee did through 1997. But when policy is finely balanced, disagreements about the precise level of interest rate are not only likely but an indication that policy is broadly on-track. That is why the motto of the MPC should perhaps be “divided we stand, united we fall”. Some commentators have been unable to resist labelling members of the Committee as either “hawks” or “doves”. There is a fundamental problem with this labelling. It makes no sense in the new system to describe individuals as hawks or doves. Each member of the Committee has the same inflation target. Unlike some other central banks, MPC members cannot entertain closet views about the attractions or dangers of slightly higher or lower inflation. Their task - to which they will be held personally accountable - is to hit the Government’s inflation target.

I’ll discuss how the development of new risks associated with climate change is beginning to change the practice of risk management at financial institutions in terms of governance, risk identification and management, scenario analysis and transparency. I’ll also say a few words on why I believe it is appropriate, even critical, for supervisors to focus on this particular risk. Before proceeding, I will emphasize that I am speaking for myself and my views do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. Climate Change and Risk Management The discussion of climate change and risk management has introduced a new lexicon for risk discussions. Physical risk is the potential for losses as climate-related changes disrupt business operations, destroy capital and interrupt economic activity. Transition risk is the potential for loss resulting from a shift toward a lower-carbon economy as policy, consumer sentiment and technological innovations impact the value of certain assets and liabilities. These effects will be felt across business sectors and asset classes, on strategies and operations, and through the balance sheets and income statements of financial firms. At a practical level, risk managers at financial institutions need to develop the appropriate tools to identify, monitor and manage these risks. From one perspective, climate-related risks may manifest as realizations of familiar risks such as credit, market, operational, legal and reputational risk. The tools risk managers use, however, will need to change to reflect new data, changing relationships, and evolving interconnections.
Spencer Dale: MPC in the dock Speech by Mr Spencer Dale, Executive Director, Monetary Policy, and Chief Economist of the Bank of England, at the National Asset-Liability Management Global Conference, London, 24 March 2011. *  *  *  I would like to thank Alina Barnett, Rohan Churm and Michael Hume for their considerable help in preparing this speech. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. The remit of the Monetary Policy Committee is clear: to hit the 2% inflation target. But inflation in February was 4.4% – well above the target. It has been above target for much of the past 5 years. And it is likely to remain so for the next year or so. At the same time, monetary policy remains at extraordinary loose levels. This month marks the second anniversary of Bank Rate being reduced to 0.5%; it’s lowest ever level. And the stock of asset purchases financed by central bank reserves – QE – remains at £ billion. There is an onus on the Committee to explain how its actions are consistent with its remit. There is a good case for the defence. But we need to continue to make it. It needs to be made if international investors, such as many of you here this morning, are going to continue to have the confidence to invest in the UK. More generally, it needs to be made to preserve the accountability and credibility of the Committee.

3  The relevant clause of the remit states “The framework is based on the recognition that the actual inflation rate will on occasions depart from its target as a result of shocks and disturbances. Attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output.” See http://www.hmtreasury.gov.uk/d/open_letter_from_chx_to_boe_22032011.pdf  2  BIS central bankers’ speeches  MPC’s initial judgement was that over the next few years less than half of the increase in import prices would feed into higher UK consumer prices, with the remainder being absorbed in margins or lower nominal wages. This judgement was based in part on a number of influential studies made in the years prior to sterling’s depreciation which suggested that the degree of exchange rate pass-through in many countries, including the UK, had fallen significantly during the period of Great Moderation. Indeed, a general view had emerged amongst many academics and commentators that pass-through in many major economies had fallen close to zero.4 The MPC’s initial judgement that around 40% or so of the increase in import prices would pass through into consumer prices was at the top end of this emerging view. However, that judgement now looks woefully optimistic compared to the degree of pass-through we think has occurred, which is closer to 100%.5 This error of judgement can more than account for the surprising strength of inflation through 2009 (Chart 2).
This renewed effort has both greatly deepened our understanding of economics and shaped our policy response. The crisis is now behind us. The recovery in the euro area is resilient and is increasingly broadbased across countries and sectors. Domestic demand, supported by the ECB’s monetary policy, is the mainstay of that recovery. Five million more people are employed now than were in 2013, and unemployment though still too high is at an eight-year low. Worldwide, the financial sector is now more resilient. The global economic outlook is also improving, and downside risks are moderating. However, what we need in Europe to ensure that economic growth and higher prosperity is sustained through time are structural reforms and a renewed sense of purpose for the EU. Started in the aftermath of the Second World War, European integration was the response to citizens’ desperate need for peace. The system of treaties between governments that had dominated European relations between the two wars and even before had utterly failed to deliver what governments are mainly for: security and prosperity. Pooling sovereignty on issues of direct common interest became the new basis for cooperation between the European nations. At the time such a project seemed bold and optimistic – just as calling for further, deeper integration seems bold and optimistic today. But our founders were right. Europe has delivered peace, prosperity and political stability for a period of time that has no precedents in its modern history.

Miguel Fernández Ordóñez: Seeking solutions to Spain’s economic, financial and fiscal issues Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Annual Assembly of the Instituto de Empresa Familiar (IEF) Madrid, 23 May 2011. *  *  *  Many thanks for inviting me to talk at your Assembly. And since one of the functions of your Institute is to seek solutions to the legal and institutional environment in which the company moves, I’ve decided to focus my address today on what I think about this matter. Resolving a country’s economic problems should be no different from what any individual or company does to improve its situation. First, acknowledge that we have problems; second, identify the changes needed; and third, apply them. I’ll try to apply these guidelines to what, in my view, are our main problems: the relatively low level of educational attainment of the labour force; the need to adjust the imbalances accumulated over the course of 14 years of expansion; massive unemployment; and, for a year now, the mistrust of the markets to which we have to resort for funding. Let’s begin by looking at two examples where problems were not properly identified. The first of these was thinking that the main source of our difficulties was the international financial crisis and not the imbalances accumulated further to a long expansion based on indebtedness and the deterioration of our competitiveness.
Total new lending to households in 2021 amounted to € which is higher than the € credit that was granted during the pre-pandemic year of 2019 and well above the € granted during 2020. The momentum has been maintained in the first two months of 2022 as well, since the new lines of credit amounted to € against € last year. Total new lending to businesses in 2021 accumulated to € which is higher than the € granted in 2020 but subdued when compared with the € granted in 2019. It is evident that the banks' financial position, the regulatory measures and initiatives taken by both the European Central Bank and Central Bank of Cyprus are the factors that contributed to this positive post-Covid development of the banking sector providing support to the economy. However, banks must, for their own good and profitability as well as for the good of the Cypriot economy, become better and more efficient at serving their clients. I have made this point to the CEO's and Chairmen of the banks a number of times and I also called a meeting between the CBC, economy stakeholders like KEBE, Institute of Certified Public Accountants of Cyprus, the Cyprus Bar Association and the Cyprus banks to promote and facilitate better and more efficient ways of doing business with the banking sector. Whereas as agreed, follow-on meetings have subsequently taken place  3/5  BIS - Central bankers' speeches  between the stakeholders, I'm forced to say that I have not seen practical progress.

Here is how Norman described the relationship between the Bank of England and the Government in the 1930s: AUDIO INSERT: “The Bank of England has always been constitutionally a private body... but what matters is not the position on paper but the position in practice. In monetary as in other matters the Government of the day must have the final word and this is fully recognised.” Today, the position on paper and the position in practice are the same. Our job is given to us by the Government and by Parliament. But for me, the story of the modern independent Bank of England began exactly fifteen years ago in early May 1997. It was a Bank Holiday Monday, immediately following the general election. After an early morning tennis match, I returned home to find a message from the Governor, Eddie George. He wanted to meet me in the Bank as soon as possible. An hour later we met in his office, alone in the imposing building known to most of you only by the facade shown on television. Eddie told me of his meeting that morning with the Chancellor, Gordon Brown, who had explained the proposal for Bank independence. It was something for which Eddie and I had worked for five years since Britain’s departure from the Exchange Rate Mechanism in 1992. Now we had a chance to show what an independent central bank could do.
So it is in Singapore, where the vision of e-administration development has been based on three basic areas and each of them contains elements related to 25 safety, privacy and confidence. 1. Networked Government as the basis for development. This administration network is to put into practice the motto: “Many offices, one administration.” It must also be effective, efficient, safe and adequate to the needs. 2. Delighted Customers as a manifestation of the focus on satisfying customers’ needs. Within this area, public e-services must be convenient and easy to use, they must go beyond the borders of organization and respect customers’ privacy. 3. Connected Citizens is an area that supports active attitudes demonstrated by the citizens. The area is best summarized by the following catchwords: Citizens as stakeholders, creation of communities and greater confidence and security. 20  Ibidem. 21  Top of the Web. User Satisfaction and Usage Survey of eGovernment services,” December 2004. 22  “Public Sector Technology & Management,” Vol. 2.2, March/April 2005, p. 14. 23  “Top of the Web – User Satisfaction and Usage Survey of eGovernment Services,” December 2004. 24  The research conducted by IBM Corporation, more information can be found, for instance, in “Paperless Trading:” Benefits to APEC”, Ministry of Foreign Trade and Economic Cooperation, 2001. 25  www.egov.gov.sg.

Having in mind that the Macedonian economy is characterized by initially high trade deficit and current account deficit (substantially mitigated by the private transfers) it is essential for the macroeconomic policy decision-makers to consider the experiences of the advanced transition economies with respect to all significant aspects related to the process of real convergence to the EU, including the enlargement of markets and facing with increased competition, possible effects from the liberalization of the goods and capital flows, as well as the possible measures and reactions of the macroeconomic policies with respect to these issues. High trade deficit, and consequently the current account deficit, had certain repercussions on the monetary policy conduct. Lack of foreign exchange in the Macedonian economy caused constant pressures for depreciation of the Macedonian Denar, which under a strategy of exchange rate targeting ultimately produced relatively higher interest rates. Such conditions changed significantly in the last two years. The political stabilization of the country and of the region, given the maintained macroeconomic stability and clear European orientation confirmed in 2005 with the acquiring of the status of candidate country for European Union membership, created environment for significant positive achievements in almost all sectors of the economy. In the external sector, higher growth rates of exports are recorded, which in 2005 were twice higher than the growth rate of imports of goods. The stabilization generated high foreign exchange inflows from private transfers that enabled significant decrease of the current account deficit. In 2006, sizeable external inflows were registered from the continuous privatization process.
BIS Review 76/2009  3  their decisions to spend on durable goods, awaiting uncertainty to clear up. Households, however, would continue to spend on non-durables. Actually, the share of goods like foodstuff in the total consumption basket would increase. Durable and investment goods, meanwhile, are the ones subject to this wait and see strategy and, by their own nature, their purchase can be postponed. Thus, there are two possible equilibria: B and C, both with output below the original level A. Furthermore, we can think that in case C the loss of confidence is very big, which magnifies the fall in demand that may result from a cyclical adjustment. In such a case pessimism dominates. Everyone thinks that economic activity will fall due to increased uncertainty and that is exactly what happens, so pessimism is justified. This point is more general: facing multiple equilibria, how do private expectations coordinate for the economy to converge to one or the other? Evidently there is no natural mechanism, so failed coordination can easily lead the economy to settle in the worst equilibrium. The exercise I have presented is pretty simple and it surely overlooks many relevant aspects, especially the dynamics that might allow us to analyze the loss of confidence. It is still helpful because it explains why the increase in uncertainty triggered by the deterioration in output and the financial crisis deepens the fall in output, whose effects can be substantial.

If world economic activity had remained strong, it would have been reasonable to count on the Riksbank continuing to raise the repo rate. BIS Review 26/2001  1  A look at the threats we perceived in December as being liable to push inflation up above our forecast, shows that they have become less troublesome. At the same time, the clouds that were gathering over the U.S. economy have thickened and darkened. To date this year the Federal Reserve has cut its interest rate a total of 1.5 percentage points. The first cut, announced in January in between the regular monetary policy meetings, surprised the market by its magnitude as well as its timing. Another cut came at the end of January and a third last week, on 20 March. There has been a spate of negative news about the global economy in general and certain companies in particular and international stock markets have remained turbulent. US economy difficult to assess The focus at present is on the U.S. economy. Its future path is highly important for economic developments in Sweden. In order to arrive at a clear picture of the situation, we need to judge the effects of alternative outcomes. During the 1990s the United States experienced its longest economic upswing ever without any serious signs of accelerating price and wage increases. A more efficient economy, with strong competition and functional product and labour markets, accompanied by advances in computer and telecom technology, are said to have contributed to a higher rate of potential growth.
This pattern is to be expected in particular when the driving force comes from lower interest rates: rising house prices augment house-hold wealth and together with low interest rates this points to increased house-hold consumption. The consumption ratio has been low, however, ever since 2001 despite the increased lending and higher house prices. That households both borrow and save so much and do so simultaneously may seem paradoxical. The major share of the loans is probably  3/5  connected with house purchases in the second-hand market. The cash flows that are generated when borrowing rises without a corresponding aggregated counterpart in the financing of new housing can be used for either consumption or financial investment. At the aggregated level it accordingly looks as though in recent years loans have gone to saving. We have seen the same development in, for example, the UK. We have no simple explanation of what underlies this. One conceivable explanation is that the stockmarket fall in 2000 and the subsequent economic slowdown stimulated prudential saving on account of labour market uncertainty and also led to increased saving by those who were directly hit by the share price fall. Population groups that are approaching retirement, for example, may have increased their saving in financial assets in order to restore their wealth after the stockmarket fall. Moreover, many elderly people may have chosen to move to a cheaper dwelling and thereby converted some of their real wealth into a financial asset.

Our analysis of the risks in the forecast did, however, include the possibility of the slowdown being broad and pronounced. But the information received during the summer has supported the assessment that last spring’s dip in international activity was transient. At the same time, the continued increase in oil prices has to be weighed into the general assessment. It is hard to be certain about what has caused the high oil prices but there are many indications that an important factor is demand. The price rise is probably due to a combination of increased demand for oil from rapidly expanding economies such as China and India and the fact that production capacity has not yet been adjusted sufficiently. In recent months, it seems that another contributory factor has been uncertainty about the consequences of hurricane Katrina. It is reasonable to suppose that the oil price may fall back from the current high level but predicting the future price we should allow for is genuinely difficult. As to the consequences of the high oil price, it seems that the price rise to date has not appreciably curbed global growth. This is probably because many industrialised countries have become less dependent on oil. In Sweden, for example, oil’s contribution to energy supply has decreased from around 70 per cent in 1970 to just over 30 per cent in 2004. There has probably also been a balancing effect in that the high price of oil seems to have been generated in part by strong demand in Asia in particular.