samchain/econo-pairs-v1 huggingface dataset:
There would be risks to output and inflation in the medium term if we were to allow inflation of domestically produced output to rise above target unless we were confident that falls in import prices would indeed continue for some years. The lesson that we should not place excessive weight on one month’s figures is as true of inflation as it is of retail sales. In December CPI inflation was 1.6%. Three months ago it was 1.1%. Six months ago it was 1.6%. Yet the broad outlook for the economy - a central view of continuing steady growth with low inflation - changed rather little during the period. The MPC cannot fine tune short-run movements in output and inflation. When the MPC published its Inflation Report in November, some commentators said that inflation was seemingly stuck at around 1%, and that if growth were to continue at around trend then it was difficult to see why the Committee’s central view was that inflation would pick up to the 2% target looking ahead around two years or so. Since then inflation has risen by half a percentage point in only three months. Stating the point in that way shows how silly it is to place so much weight on small changes in inflation and small deviations of inflation from target. The appropriate response by central banks is to examine all the economic data, and to focus on the outlook for inflation in the medium term. That is exactly what the MPC will continue to do.

Recently the gap between saving rates in the UK and the rest of the G7 has narrowed considerably, not as a result of higher saving in the UK but lower saving elsewhere. In large part this reflects changes in fiscal policy. There is ample empirical evidence that higher government borrowing lowers national saving. And for twenty years or more the G7, while lecturing each other and the rest of the world on the need for fiscal discipline, has continued to borrow more and more. The ratio of net public debt to GDP in the G7 has more doubled since 1980 from around 25% to around 60%. The UK is the only member of the G7 in which the ratio is lower than in 1980. The UK has a clear framework for fiscal policy. Although rules and frameworks cannot guarantee that governments will pursue sustainable fiscal policies, as the large deficits in the early 1990s illustrated, they make deviations from medium-term sustainability more transparent. But in the rest of the G7 the absence of a clear framework, as in Japan and the United States, or the lack of credibility in the stated framework, as in the failure to enforce the Stability and Growth Pact in the euro area, has made it easier to let the fiscal position slip. As a result, the G7 fiscal deficit is now close to its 25-year peak, and the average national saving ratio has halved. At home, the Government’s fiscal rules constrain the path of fiscal deficits.
The main idea I would like to convey in these introductory remarks is that if during the crisis economic policies have concentrated – with some justification – on measures that are intended to have a short-term impact, the time has come to shift the focus onto reforms which are designed to have only medium and long-term effects but that, through a change in expectations can provide a shot of confidence, a key ingredient for resuming a sustainable growth path. The global economy is certainly recovering from its deepest downturn since World War II. We have witnessed a period of crisis in which economic policies have reacted in an unprecedented manner, focusing on countering in the short run the highly adverse economic and financial situation. Major central banks reacted decisively by providing abundant liquidity to financial systems and substantially cutting their key interest rates. These standard monetary policy measures were later complemented by other, non-conventional measures, to avert the threat of a drastic loss of liquidity in the financial system as a whole and support the flow of credit to firms and households. Fiscal authorities, in turn, put in place a number of measures aimed, first, at supporting financial systems and, further, at stimulating demand. And there is broad consensus that this policy reaction was warranted and has played a crucial role in halting the risk of collapse and containing the crisis.

June and the first half of July showed the first signs of weakening inflationary pressure, this is still not enough to speak of a steady decline in the inflation rate. In July, households’ inflation expectations continued to rise. In these conditions, even one-off factors might have a longerlasting impact due to their secondary effects. To prevent this, it is essential to create conditions that would encourage the propensity to save. For this, we need higher interest rates. We should not tolerate high inflation expectations in order to prevent their anchoring at this high level and avoid a more significant increase in the key rate that would be needed further on in this case. The second topic is the economy. According to our estimates, economic growth sped 1/3  BIS central bankers' speeches  up considerably in the second quarter. High-frequency indicators show that Russia’s economy has bounced back to its pre-crisis levels. Output in two-thirds of the major industrial sectors already exceeds pre-crisis levels, and this upward trend continues. Oil production has not restored yet. Output has also not recovered in international air transportation and hotel and restaurant business. However, this was due to remaining anti-pandemic restrictions, rather than insufficient demand. Moreover, the pandemic drastically affected the structure of demand and supply. In my previous statement, I mentioned the changes caused by the transfer of a significant portion of employees to work from home, as well as the elevated level of inventories now formed by companies.
At the same time we intend to keep a higher minimum level of capital adequacy ratio than the European standards, in order to provide for some cushion for other forms of risk like operational risk; Third, we try to gain as much as possible out of the experience and knowledge of other countries in the region, which are in a more advanced stage in their efforts of adopting Basel II requirements either partly or fully. We have also the privilege of being close to the euro area member countries, like Italy and Greece, with their banks playing an important role in our financial system. This gives us the possibility to benefit out of expertise of the supervisory authorities of these countries, in the process of adopting new requirements; Fourth, we have expanded our cooperation with other “peer” countries in the region, as the variety of problems found in our countries is very similar and the experience sharing in this respect, is very practical; Fifth, we are trying to promote an environment where issues of Basel II are being discussed in a professional level. We are not focusing only on directly involved parties (including government, other supervisory authorities of the financial market) but also on relevant clients of the banking and the financial sector. Concluding, I would like to stress that Basel II represents a logical and appropriate successor to Basel I. It embeds recent and past lessons and gives excellent directions to financial system and supervision authorities how to move ahead.

This means that enhanced information disclosure required by Basle II, could be problematic if not supported by a proper public understanding. That’s why I feel a bit concerned about the effectiveness and appropriateness of an immediate implementation of Basle II. Therefore a more gradual approach may be necessary. This approach could take the form of an interim standard between Basel I and Basel II that could offer banks in emerging market economies some of the benefits of Basel II without having to face a prohibitive cost. This means that Basel II adoption should not be made mandatory in financial assessments (of WB, IMF for example) and countries should be left with the option to keep Basel I. EU banking directives are mandatory for our countries that opt to join EU. As Basel II elements are embedded in EU Directives, and as our countries are making progress toward integration in the EU, we shall be faced with the challenges of Basle II implementation. I’d like to point out three challenges in particular. Albania as many other East European Countries host a considerable number of foreign banks. These consist mostly of branches or subsidiaries of banks from EU countries which eventually may have to implement the new system including its most advanced elements if their head offices decide to adopt it throughout the network for consistency and competitiveness reasons.
10  And fourth, the emergence of the digital economy poses significant challenges and opportunities for tax systems  9  See, for instance, Card, D. and J. E. DiNardo (2002): “Skill-biased technological change and rising wage inequality: Some problems and puzzles,” Journal of Labor Economics, 20 (4), pp. 733-783. 10 See Guner, N., M. Lopez-Danieri and G. Ventura (2016): “Heterogeneity and government revenues: Higher taxes at the top?” Journal of Monetary Economics, 80, pp. 69-85. 5  around the globe. For instance, research for the US suggests that profit-shifting to low-tax jurisdictions reduces the tax bill of US-owned companies by about 20%. Thus, 11  globalisation and the growing reliance on intangible assets demand new ideas to limit the erosion of corporate income tax. In this situation, the international dimension of tax design emerges at the forefront of the policy debate. Against this backdrop, for instance, the OECD has launched a welcome initiative, known as the Base Erosion and Profit Shifting Project (BEPS), which brings together 115 countries with the aim of ensuring that profits are taxed where the economic activity takes place and where value is created. 12  As you can see in the conference programme, we have an excellent menu of papers covering a large amount of topics, related to these and other issues. They will provide new and valuable insights in the realm of fiscal policy, and will therefore improve our understanding of this field, both from a theoretical and an empirical perspective.

Confidence among financial market participants remains insufficient. The pressure on participants who are still only able to refinance themselves in the market on a very short-term basis remains high. As long as uncertainty with respect to the scope of the credit problems exists, the disruptions on the money market are likely to persist. Second, the central banks have played a fundamental role in calming and stabilising the money markets through close consultation and targeted operations. The SNB reacted rapidly to the tensions in the Swiss franc money market. The flexibility of our monetary policy instruments demonstrated its value in this difficult setting. Above all, short-term interest rates calmed as a result of the measures taken. The difficulties in bank refinancing over longer terms and the rise in risk premiums in the money market came about through the loss of confidence. Central banks can not compensate this lack of confidence simply by injecting additional liquidity. On the contrary, the financial market participants themselves must take the fundamental steps needed to restore this confidence. Third, the crisis in the money market once again clearly demonstrates that liquidity management is a core task of each and every bank, falling within the direct accountability of bank executive management. Liquidity provisioning must begin in good times. It is critical that sufficient liquid assets be held. Only first-class securities are suitable for this purpose. These can be sold in the markets or mobilised via repo transactions, even in difficult conditions.
Loans expanded for several successive years at annual growth rates ranging from 60 percent to 80 percent in real terms. The share of foreign currency-denominated loans to households grew more than five times, from 2.2 percent of GDP in December 2004 to 11.6 percent of GDP in 2008. Moreover, the share of foreign currency-denominated loans to the corporate sector picked up substantially (Chart 3). Overall, financial intermediation (loans to the private sector/GDP) increased from 16.6 percent in 2004 to 39.3 percent in 2008 (Chart 4). BIS Review 5/2010  7  Chart 3 Breakdown of foreign currency-denominated loans granted by financial institutions percent of GDP  14 loans to households  11.6  12  10.6  loans to non-financial corporations  9.2  10 8  7.1  7.5  7.1  6  9.8  4.7 3.3  4 2.2 2 0 2004  2005  2006  2007  2008  Source: National Bank of Romania Chart 4 Breakdown of loans to the private sector 45  percent of GDP  loans to non-financial corporations a.o.

This owes to the fact that, if synchronised crises occur in any of the cited components – sovereign debt, exchange rate, inflation and banking system – synchronised recession episodes are likely to follow. Certainly, simultaneous resorting to external financing with a view to underpinning a great many anti-crisis programmes makes the resources to each country relatively less available and costlier than in the case where only a small number of countries use a given amount of resources. In addition, synchronised recession episodes could translate into greater individual recessions for the economies in which the export-oriented sector holds a sizeable share in GDP. Against this background, the difficulty in adopting a package of reforms and in securing external funding is bigger in the context of the quasi-singular episodes when a large capital inflow cycle ends. Romania took this into account at the time of asking for financial assistance from the EU, the IMF and other international financial institutions to cover the financing gap estimated for 2009 and 2010. I will get back to this topic in the concluding section of the paper. The modern age of global finance saw several episodes of such synchronous, heavy capital inflows. In principle, once in a while, foreign investors find enough reasons to invest relatively large amounts of capital in emerging economies. Considering the time period that elapsed after World War I, one may assert that the pattern failed to repeat itself in the ’30s, the ’40s and the ’50s.
Today I will highlight two aspects that I believe are key drivers for Hong Kong’s growth in the next few years. The first is the gradual financial liberalisation in Mainland China and the second is the wider external use of the renminbi (RMB). The gradual financial liberalisation in mainland China In the gradual financial liberalisation process in Mainland China, we can observe three key patterns: inflows being de-regulated before outflows, direct investment flows being liberalised before portfolio investment flows, and collective investment schemes being relaxed before individual investors. Specifically, during the early stages of Mainland China’s reform process, in the late 1970s and early 1980s, only Foreign Direct Investment (FDI) was encouraged. Hong Kong has been the largest source of FDI for the Mainland, accounting for more than half of the total amount in 2009. In the opposite direction, Mainland China’s Overseas Direct Investment (ODI) has also been liberalised gradually over the years. Hong Kong has been the largest recipient of ODI flows from the Mainland. At present, about 60% of ODI from the Mainland has gone to Hong Kong or via Hong Kong to other places. The significant share of Hong Kong in Mainland’s FDI and ODI underscores the unique role of Hong Kong as a gateway for foreign enterprises to access the Mainland market, while at the same time being a springboard for Mainland institutions to gain exposure to international markets. With respect to portfolio investment flows, market attention has been focusing on portfolio flows from advanced economies towards Mainland China.

3  Pier Carlo Padoan, A Shared European Policy Strategy for Growth, Jobs, and Stability, February 2016. BIS central bankers’ speeches  3  Member States would be free to join, and the Convergence Fund would be allocated to financing common goods such as European infrastructure investment or refugee settlement. In a second stage, this budget could become a stabilisation instrument, centralising a welldefined set of policy instruments, such as a European layer of unemployment insurance. The third and final stage of fiscal integration would only be achieved if agreement can be found both on financing (direct revenue-raising capacity and common debt issuance) and on the desirable level of business cycle synchronization. This perspective would be a powerful incentive for national discipline and commitment as shown during the march to the Euro. How to set up a legitimate institution with a genuine administrative capacity? Further integration and democratic accountability should progress together, as discussed in my recent article with Jens Weidmann. We need to enable the European economic administration to be more efficient, while establishing strong enough political legitimacy to ensure balance between liability and control. These institutional changes obviously require a new Treaty. First, we need a legitimacy-enhancing appointment process. The Finance Minister could thus be appointed for a five-year period by the European Council acting by qualified majority on a proposal from the president of the EU Commission.
Public authorities and industry professionals need to combine forces and continue looking for ways to redirect French savings. Without necessarily making it an issue in the upcoming electoral debate, the solution could aim to be compatible on three levels: with the low interest rate environment, with the need to better channel resources towards productive investment – and therefore corporate equity – and with the expectations of savers. Prompted by the increase in life expectancies and the need to prepare for retirement, savers are adopting increasingly long-term investment horizons: they are more 2 ACPR, 2015 Annual Report, October 2016. Page 4 sur 7  concerned with the security of their investments than with liquidity. Taking inspiration from the new Euro-croissance policies, it makes sense to offer savers new, complementary forms of saving products that are less liquid and include some form of long-term capital guarantee, and that allow them to take advantage of the higher returns offered by equities over the long run. We also need, at the very least, to avoid any tax distortions that might penalise these products more than liquid and risk-free investments. Given the current low rate environment, the ACPR is taking care to ensure that insurers remain alert to the risks of adverse developments and take appropriate measures to counter them.

A review phase of the standard formula and the long-term guarantee package is  Page 6 sur 7  scheduled at the European level for 2018-2020. This step provides an opportunity for improvement in at least three areas: -  Firstly, the simplification of the regulatory framework. The complexity of the standard formula is neither desirable for the industry which has to produce these new calculations, nor for supervisors, nor for financial markets. -  Secondly, insurers should remain a genuine lever for financing the economy. The insurance sector is the largest institutional investor in the European Union, with almost EUR 9,800 billion invested in the economy in 2015. You have often brought this issue up with me... and it has now been clearly identified at the European level. There are already plans for improvements in two areas, upstream of the review phase: infrastructure corporates on the one hand – EIOPA has proposed a revision; highquality securitisation products on the other. More generally, it is essential to consider the potential deterrent effect of Solvency 2 on more “risky” investments, which are necessary to ensure the proper functioning of our economy: equities, whether listed or unlisted, loans to SMEs and MTEs but also green assets or investments in innovative companies. -  Finally, we know that Solvency II is more volatile than the previous regime. Measures have already been integrated to limit the procyclical effects of a market value-based balance sheet.
Lars Nyberg: The Swedish card payment market - current challenges and future developments Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at Scandinavian Card Markets, Stockholm, on 3 February 2003. *  *  *  To begin with, I would like to thank you for the invitation to participate in this conference. Given the short time at my disposal, I will confine myself to discussing a few of the salient features of the evolution of the card payment market in Sweden, identifying also the forces that appear to have driven this evolution. Judging from the latest innovations in this area, I will touch upon possible future developments. Lastly, in my capacity as central banker, I will talk about some relevant policy issues. The evolution of the card payment market in Sweden Let me start by making a few observations concerning the market development in Sweden. 1. Card payments have grown rapidly, but the use of cards is still far behind that of the other Nordic countries (fig.1). Between 1990 and 1997, the number of card payments per capita in Sweden grew at a steady pace, picking up speed quickly at the end of the decade. Still, when the new millennium started, the number was no more than half of what can be observed in the other Nordic countries. This is somewhat surprising, considering that payments systems and payment patterns are otherwise quite similar in these countries.

Number of card payments per capita and year 100  100  80  80  60  60  40  40  20  20  0  0 1990  1991  1992  1993  Sweden  1994  1995  Finland  1996 Norway  1997  1998  1999  2000  Denmark  1  Shares of number of transactions with debit, credit and charge cards 100% 90% 80%  Charge cards Charge cards Credit cards Credit cards  70% 60% 50% 40%  Debit cards Debit cards  30% 20% 10% 0% 1997  2001  2  Shares of payment instruments of total number of non-cash payments 2000  1990 direct debits 4%  direct debits 8%  checks 0,2%  checks 15% card payments 29%  card payments 7%  credit transfers 63%  credit transfers 75%  3  M0/GDP Percent 5%  5%  4%  4%  3%  3%  2%  2%  1%  1%  0%  0% 1990  1991  1992  1993  Denmark  1994  1995  Finland  1996 Norway  1997  1998  1999  2000  Sweden  4  Long term M0/GDP trend in Sweden Percent 12%  10%  8%  6%  4%  2%  0% 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 5  Number and value of transactions with Cash card per SEK billions millions year 0,3 4,5 4,2 4,0 0,2  3,5  0,2  3,0  0,2  2,9 0,2  2,5 2,0 0,1  2,0  0,1 1,5 0,1  1,5 1,0  0,1  0,5 0,0  0,0 1998  1999  2000  number of transactions (millions)  2001  value of transactions (SEK billions) 6  Card payments per capita and year and MO/GDP, average 1995-2000 70  numbercard payments per capita  Denmark 60  Finland  50  Norway  40 30 Sweden 20 10 0 0.0  0.5  1.0  1.5  2.0  2.5  3.0  3.5  4.0  4.5  M0/GDP, percent 7  Number of terminals and number of transactions per capita and year, average 1995-2000 Number of transactions per capita  70 Denmark  60 Finland 50 Norway 40 30 Sweden  20 10 0 0  2  4  6  8  10  12  14  16  18  Terminals per 1000 inhabitants 8  Central Bank involvement Legal and regulatory barriers?