samchain/econo-pairs-v1 huggingface dataset:
For example, the costs of meeting new requirements on emission levels may be sufficient to put some companies out of business. Banks may also find themselves directly affected if they find that the value of property that they have taken as collateral is impaired by contamination. •  Legal risk can take a number of different forms. Most obviously, banks like other companies are at risk if they themselves do not comply with relevant environmental legislation. But more specifically, they are at risk of direct lender liability for clean-up costs or claims for damages if they have actually taken possession of contaminated or pollution-  1  BIS Review 108/2000  causing property as a result of realising security. There is also the even more worrying prospect that in some jurisdictions the mere act of lending to a company or project which causes environmental problems may lead to the lender incurring some liability for clean-up costs. Banks may protest, with some justification, that they should not be forced into the role of “environmental police”, but this may carry little weight in some courts. •  Reputation risk may arise even in the absence of lender liability, particularly if banks are seen as associated with large-scale projects that are viewed as socially or environmentally damaging, such as dam projects. The growth of globalised protest movements and the use of the internet to disseminate information have greatly increased the risk that individual companies will be the subject of concerted campaigns of public criticism.

One point that is particularly relevant to banks that finance companies or projects in countries like China is that the rules of the environmental game can change very quickly. The authorities in China are getting serious about cutting emissions and pollution, as the requirement by the Beijing Municipal Government on the Shougang Steel Group to cut back its output has shown. The problem in China is that regulations are not always strictly enforced. But this can change overnight, resulting in major compliance problems for the companies concerned and increased risk for the banks that have lent to them. Hong Kong banks which lend into China would therefore be well advised to keep this in mind. Finally, banks should pay close regard to their own “corporate ecology”. Banks can contribute to environmental protection by the way in which they manage their use of resources in their own operations. In this way banks can be responsible corporate citizens while at the same time reducing business costs. The type of measures that can be adopted include saving on energy consumption, recycling of paper, waste management, purchasing environmentally friendly products and use of video conferencing to cut down on unnecessary travel. Use of office automation such as email can also help to reduce the consumption of paper, provided of course that staff can be encouraged not to print out the messages.
13  Figure 7 Inflation indicators (annual change, percent) 6  CPIEFE for services and disaggregation (1) (2) (annual change, percent) 6  6.0  6.0  5  5.5  5.5  4  5.0  3  3  4.5  2  2  4.0  1  3.5  0  3.0  CPI  5 4  Services  CPIEFE  1 Goods 0  -1 2.5  -1 14  15  16  17  Indexed and/or regulated  4.5 4.0  Other  3.5  Services excluding foodstuffs and energy 16  18  5.0  17  3.0 2.5 18  Figure 8 CPI inflation forecast (*) (annual change, percent)  CPIEFE inflation forecast (*) (annual change, percent)  6 5 4  Sep.18 MP Report  3  6 6  6  5 5  5  4 4 3 3  Sep.18 MP Report  4 3  1  Dec.18 2 2 MP Report 1 1  Dec.18 2 MP Report 1  0  0 0  0  2  11 12 13 14 15 16 17 18 19 20  11 12 13 14 15 16 17 18 19 20  (*) Gray area, as from fourth quarter 2018, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).

Fernando Restoy: Challenges for banking resolution Closing remarks by Mr Fernando Restoy, Deputy Governor of the Bank of Spain and Chairman of the FROB (The Fondo de reestructuración ordenada bancaria – Fund for Orderly Bank Restructuring), at its conference, Madrid, 4 June 2014. * 1  *  *  Introduction  Good evening. I welcome this opportunity to share with you some thoughts on banking resolution. I cannot think of a more qualified audience to discuss this matter than that invited by the FROB for this conference, with representatives of competent authorities in the field, among others. I will organise my remarks as follows. First, I will briefly describe how I see the general global framework for banking resolution established after the crisis. Next, I will review the special features of the European case. And finally, I will concentrate on the lessons to be drawn from the Spanish experience, with a special reference to issues relating to the institutional design of banking resolution. 2  The global framework for banking resolution after the crisis  We all know that banking resolution has not achieved the status of a well-defined policy area until very recently. Actions taken by authorities in relation to failing or likely-to-fail institutions have followed a discretionary case-by-case approach, particularly with respect to the availability of public funds to protect banks’ creditors.
A case in point is the decisions we have taken in Frankfurt since the start of the crisis, such as interest rate cuts, the unlimited supply of liquidity, purchases of bonds and covered bonds and three-year refinancing operations, which, while aimed at resolving problems of the euro area as a whole, have proven particularly beneficial for Spain. But there are other less evident instances, such as when Europe obliges us to use competitive procedures to award banks that have been taken over or oversees the granting of public aid. Admittedly, this makes bank restructuring a lengthier and more complex process, but it should be acknowledged that it helps Spain ensure that sell-offs are open to all new investors that may be interested and that the taxpayer’s money is better allocated. The help of the European institutions should likewise be appreciated when, in compliance with the new economic governance framework, they obliged the Spanish authorities to be rigorous in cutting the budget deficit. This has not been to the liking of some but, however we view it, it is rightly one more reason to be confident about Spain’s possibility of emerging from the crisis. The discipline required by Europe, which may prove uncomfortable and even debatable in the short term, has, like monetary discipline, extraordinarily positive effects on our economy in the medium term. It is as though Spaniards had taken out insurance so that our governments, authorities and companies cannot take decisions that harm Spain in the long run.

What should drive this debate is market participants’ need for information to make sound and secure credit and investment decisions, rather than the concerns some have about what was once considered secret. Transparency promotes confidence, and in light of the increasingly international nature of markets, we must ensure that disclosure in different countries is sufficient and broadly consistent to promote greater financial stability across markets. That will no doubt require additional harmonization of accounting standards so that supervisors, bankers, and other market participants alike can better understand and act appropriately to manage their exposures to markets or institutions abroad. Managing international financial crises Our efforts to promote stronger banks through changes in the capital accord, while crucially important, also need to be seen in their broader context. The capital accord is part of a broader series of initiatives to promote stronger financial systems globally, and more generally to reduce the likelihood of future financial crises. During the latter part of the 1990s the international financial system has endured perhaps its greatest stress in the post-war period, and currently, we again are seeing signs of strain associated with the global slowdown in growth. The experience of recent years has reinforced old lessons and brought home new insights about maintaining financial stability and sustained growth. In particular, a broad consensus has developed on ways of strengthening the institutional framework at the national and international level to create more robust, and thus more crisis-resistant, economies.
Points to the right and above the curve are inefficient in the sense that it is possible for monetary policy to achieve a smaller sum of squares for the inflation-gap forecast for a given sum of squares for the output-gap forecasts, or vice versa. In the Monetary Policy Reports, the Riksbank usually presents alternative scenarios with a different repo rate path in addition to the main scenario. These generate other paths for inflation and the output gap. Figures 4 and 5 show examples from February 2008 and February 2009. The sums of squares that can be calculated from these paths are shown in Figure 6. Two observations can be made here. The first observation is that the sums of squares in the main scenario are smaller than in the alternative scenarios – the main scenario is closer to origin in Figure 6. The main scenario is thus more successful in terms of stabilising both inflation and resource utilisation. The alternative scenarios are clearly inefficient compared with the main scenario. This does not necessarily mean, however, that monetary policy is efficient in the sense that the main scenario lies on the modified Taylor curve. There may be a repo rate path that would stabilise inflation and resource utilisation even better. Excluding this possibility requires a comparison with many more alternative scenarios. The second observation is that the position of the modified Taylor curve may vary considerably depending on the initial state of the economy. The situation in February 2008 was much more favourable than in February 2009.

By not aiming to bring inflation back to the target as quickly as possible, the central bank would help to stabilise the real economy. How long it should take to return inflation to the target depends, among other things, on the type, magnitude and duration of the shock that has occurred and the importance that the central bank attaches to real economic stability. A difference between the outcome and the target for inflation may thus be deliberate. It may be part of an appropriate compromise between stabilising inflation and stabilising the real economy. It is, therefore, simply not good enough to just compare outcomes and targets for inflation in an evaluation of monetary policy. What does flexible inflation targeting entail? Before I begin to discuss what evaluations of monetary policy should focus on, let me go into a little more detail about what characterises flexible inflation targeting. As I have already said, flexible inflation targeting entails the central bank striving to stabilise inflation around the inflation target and at the same time to stabilise the real economy. Stabilising the real economy may be more precisely described as stabilising resource utilisation at a normal level. There is an asymmetry between the impact of monetary policy on inflation and its impact on the real economy that it is very important to understand. Monetary policy can affect both the average level and the variability of inflation. Monetary policy can not, on the other hand, affect the average level of real quantities such as production, employment and resource utilisation.
John C Williams: The economic outlook and monetary policy Presentation by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, to the CFA Hawaii Seventh Annual Economic Forecast Dinner, Honolulu, 1 March 2012. *  *  *  I would like to thank John Fernald, Rob Valletta, and Sam Zuckerman for assistance in the preparation of these remarks. The economic outlook and monetary policy Thank you. It’s a pleasure to participate in this event and to enjoy the beauty and hospitality of the wonderful state of Hawaii. Sadly, this is my first visit here in 25 years. In fact, the last time I was here was back when I worked for a small business in the San Francisco Bay Area after I graduated from college. The business owner sent me on an all-expenses-paid, weeklong vacation as a reward for hard work. Throughout my career at the Federal Reserve, I’ve tried to convince my bosses of the productivity-enhancing benefits of such an enlightened management practice. Unfortunately, I never succeeded. Now, as President of the San Francisco Fed, it is my pleasant duty to visit all nine states in the 12th Federal Reserve District. I plan to be diligent in fulfilling that duty. So, I assure you, it won’t be another 25 years till I’m back.

That reduces the cost of borrowing across the board, from mortgages, to business loans, to corporate debt. Our securities purchases are an important reason why longer-term interest rates are at or near post-World War II lows. In addition, we’ve publicly announced that we expect to keep the federal funds rate exceptionally low at least through late 2014. This guidance tells investors that short-term interest rates are likely to stay low for a long time, which then gets passed through to longerterm rates. Of course, our statements are not an absolute commitment to keep rates near zero. It’s simply the FOMC’s current judgment about the best future course of policy. If the economic outlook changes, then the guidance could change too. Let me emphasize that the unusually stimulatory monetary policy now in place won’t last forever. Eventually we will cut back the size of our securities holdings and raise our unusually low interest rate target. We’ve thought hard and communicated frequently about how to exit from these special conditions.6 The key point is that the economy currently needs an  5  See Williams (2012) for a discussion of the Fed’s mandate and the implications for the conduct of monetary policy. 6  See the discussion of exit strategy in the minutes for the June 2011 FOMC meeting (Board of Governors 2011). 4  BIS central bankers’ speeches  extraordinarily supportive policy. But we’ll reverse course when the time comes to remove this support.
FORECASTS FOR THE SPANISH ECONOMY: BUDGET DEFICIT  CHART 4  GENERAL GOVERNMENT BALANCE  0  % of GDP  Projections  -1 -2 -3 -4 -5 2016  2017  2018  2019  SOURCES: IGAE and Banco de España. The projections report published in December also included a forecast of the Spanish general government deficit for 2019, consistent with the macroeconomic and financial picture I have just described, with the deficit then being estimated at 2.4% of GDP (see Chart 4). Nonetheless, as indicated in the report, this estimate was subject to greater than usual uncertainty, as a result of the indefiniteness surrounding the budgetary cycle at the information cut-off date for the exercise, in late November. In particular, at that time neither the Draft Budget for 2019 nor the plans for the creation of the new taxes announced in the October 2018 draft budgetary plan had been submitted to Parliament, meaning that uncertainty over the scope and details of the new measures persisted. Consequently, the assumptions for budgetary policy in 2019 did not include these new measures.

Given that the debt ratio stood at 98.3% of GDP in 2017, the latest year for which data are available, this rule would require an average annual reduction of 1.5 pp of GDP over the next decade. 2.4  Government debt in the Draft Budget  According to the Draft Budget, the general government debt ratio will fall by 1.5 pp as a percentage of GDP, from 96.9% estimated in the Draft Budget for 2018 to 95.4% in 2019, continuing along the path of gradual decline observed since 2014 (see Chart 11). This is a result of the expected favourable development of nominal economic growth. However, if the upside risks to the government deficit referred to earlier were to materialise, the reduction in the debt ratio would be more moderate. BANCO DE ESPAÑA  12	 TESTIMONY BY THE GOVERNOR OF THE BANCO DE ESPAÑA BEFORE PARLIAMENT IN RELATION TO THE DRAFT STATE AND SOCIAL SECURITY BUDGET FOR 2019  FUE  3  Fiscal policy challenges  The accounts presented should also be assessed from a more general standpoint. Accordingly, before ending, I will now refer to some of the challenges facing Spanish public finances. First, it is essential that we move towards lower public debt levels (see Chart 12). The empirical evidence shows that maintaining a very high level of public debt over a prolonged period may have negative effects on economic growth.
We now follow a “fixed rate full allotment” tender procedure and have significantly expanded the maturity of our operations. Banks have been granted access to essentially unlimited liquidity at our policy interest rate at maturities of, initially, up to six months. This is an exceptional mode of operation. In normal times we auction a given amount of central bank credit and let competition between the bidders determine the interest rate. This unusual mode of operation implies that we currently act as a surrogate for the market in terms of both liquidity allocation and price-setting. •  Our second building block is the long list of assets that we take as collateral. This list was already very long before the crisis, but we have extended it even further and now accept an even wider range of securities as collateral. •  The first two building blocks offer unlimited refinancing against a very wide range of collateral. But they can only reach the financial system if they are coupled with the third building block, namely the very large number of counterparties that have always been able to take part in our refinancing operations. Even before the financial crisis, this number was higher than for the other major central banks. Following the changes to our operational framework in October last year, this number rose further. All these non-standard measures have now been supplemented by further exceptional steps that the ECB’s Governing Council decided to take at its last meeting on 7 May.

In this context, I would like to underline that since the introduction of the euro in 1999, the ECB’s quantitative definition of price stability – an inflation rate of below, but close to, 2% in the euro area, over the medium term – has proved to be an invaluable asset. It has guarded against undesirably high inflation and against deflation. Long-term inflation expectations in the euro area, whether based on surveys or extracted from financial indicators, have been and continue to be firmly anchored at levels consistent with our definition of price stability. Inflation expectations have been exceptionally resistant to sudden upward short-term price changes, and we have ensured that is also the case with sharply falling inflation. Non-standard measures In addition to reducing interest rates, we have taken exceptional policy actions in response to the crisis – “non-standard” measures related to liquidity management. At the very start of the money market stress in August 2007, the ECB reacted within a few hours and temporarily provided additional liquidity to banks with immediate liquidity needs. We were in fact the first central bank to take non-standard measures. When in mid-September 2008 the crisis intensified and interbank trading came to a virtual halt, the ECB engaged in a new mode of liquidity provision. We started to provide refinancing well above the levels that banks had absorbed to fulfil their reserve requirements in normal times. Our approach comprises three main “building blocks”. •  We significantly adapted our regular refinancing operations.
Inflation averaged 2.6 percent over the past decade, or about half of the 5.1 percent average rate during the 1990s prior to the  BIS central bankers’ speeches  1  Asian Crisis1. Meanwhile, our unemployment rate has been low at around 1 percent. The banking sector, severely affected by the 1997 crisis, has been safe and sound, minimally affected by the global financial crisis ten years later as a result of strengthened risk management and governance. Despite ongoing net capital inflows into Thailand, there appears no sign of asset price bubble while the degrees of leverage in the corporate and household sector are still low. Overall, I believe that the Thai economic stability has strengthened continuously. This achievement has been attributable to sound fiscal and monetary policy, together with appropriate and market-friendly regulations, aimed at keeping the economy operating close to its potential. Suffice it to say that the Bank of Thailand has fulfilled our responsibility to help achieve the economic stability. Under the inflation-targeting framework, the policy interest rate is the main instrument used to influence saving and spending in the economy so that demand matches potential supply. This economic balance has, in turn, produced a low and stable inflation environment necessary for the sustainable growth. In addition to the interest rate tool, the central bank also has regulatory tools to prevent undesirable accumulation of financial imbalances. Indeed, the so-called “macro-prudential policy” has been used as a complementary policy tool to the interest rate policy long before the sub-prime crisis.

As you all know, foreign exchange markets were one area where it was clear that corrective action was needed. And that is why the BIS Governors took the 2  initiative to sponsor the development of the FX Global Code, which was launched in May of this year. 3  The Code’s objective is ‘to promote the integrity and effective functioning of the wholesale FX market’, where diverse participants can ‘confidently and effectively transact at competitive prices.’ This is no small task, and my main focus today is on what needs to occur over the next year or two to further this aim. But before doing so, let me recap where we have got to, drawing out how the complexity, diversity and dynamism of the FX market influenced the development of the Code we are looking to embed. That complexity arises both from its uniquely global nature and from the variety of ways in which participants can transact, with no single trading venue, or even single method of trading dominating. Participants range from corporates looking to hedge their trade flows, through to principal trading firms reacting to the most transitory of pricing anomalies. Some access the wholesale market directly, others indirectly through the sponsorship of their prime broker. And the market itself is constantly evolving, as service providers respond to the ever-changing requirements of market participants and the external environment in which they operate. That pace of change shows little sign of slowing; indeed one of the strengths of the FX market is its innate dynamism.