samchain/econo-pairs-v1 huggingface dataset:
The provision is designed to promote the provisioning of the foreseeable losses generated by credit risk at the time this risk is assumed, and not when, years later, such losses begin to emerge, frequently on the downward track of the cycle when activity is lower and the profit and loss account is weakened. I shall conclude this section with a reference to the position in 2001 of Spanish securities markets. Apart from the decline in equity indices and trading in favour of fixed income, I might mention the significant headway made in market integration, which crystallised in the creation of a holding company grouping all existing secondary and derivatives markets, together with all the securities clearing and settlement systems. This process of vertical integration will enable the unquestionable economies of scale and scope offered by the securities industry in Spain to be harnessed, thereby enhancing their efficiency and strengthening their competitive position on the international stage. Banking supervision I shall commence the final part of my address, dedicated to banking supervision, with a summary of events last year in both the international and the Spanish financial system. Given the speed of change in the financial environment, supervision requires an ongoing effort to improve and adapt itself to changing circumstances. This means proving equal to market innovations, developments and trends, but also involves being more attentive and sensitive to the changes that arise in the demands society makes of the financial system and its supervisors.

The advantages stemming from price stability, budgetary discipline and the reforms undertaken are enabling the phase of lacklustre growth to be overcome without halting progress in real convergence. The pattern has differed from previous cycles, where the imbalances incubated in expansionary phases would inescapably result in periods of recession and job destruction. In this first part of my address, I shall give an overview of world economic developments last year and discuss the response of the euro area economy to the new international setting, paying particular attention to the performance of the Spanish economy. In the second part, I shall refer to matters relating to financial stability, banking supervision and the role of the Banco de España in these areas. The world economy The slowdown in the world economy in 2001 was more short-lived and milder than expected, despite the emergence of several adverse shocks which it was thought, at the time, would have a strongly negative impact. First, there was the correction of the speculative bubble in the industries most closely related to new technologies and telecommunications. This prompted a substantial decline in these companies' earnings and their share prices on the stock market, and a rapid adjustment to the overinvestment that had built up. Next were the repercussions of dearer oil prices in 2000, which were partly corrected in 2001 but which have rebounded again this year.
As new liquidity-providers enter the market, execution certainty and price efficiency might be expected to improve. Inventory and information risk would thereby fall and, with it, bid-ask spreads. Some of the early empirical fingerprints suggest just such a pattern. For example, Brogaard (2010) analyses the effects of HFT on 26 NASDAQ-listed stocks. HFT is estimated to have reduced the price impact of a 100-share trade by $ For a 1000-share trade, the price impact is reduced by $ In other words, HFT boosts the market’s absorptive capacity. Consistent with that, Hendershott et al (2010) and Hasbrouck and Saar (2011) find evidence of algorithmic trading and HFT having narrowed bid-ask spreads. Chart 8 plots a measure of bid-ask spreads on UK equities over the past decade, normalising them by a measure of market volatility to strip out volatility spikes. It confirms the pattern from earlier studies. Bid-ask spreads have fallen by an order of magnitude since 2004, from around 0.023 to 0.002 percentage points. On this metric, market liquidity and efficiency appear to have improved. HFT has greased the wheels of modern finance. But bid-ask spreads can sometimes conceal as much as they reveal. For example, by normalising on volatility, Chart 8 air-brushes out what might be most interesting: normalising volatility might normalise abnormality. It risks falling foul of what sociologists call “normalisation of deviance” – that is, ignoring small changes which might later culminate in an extreme event. 8 So is there any evidence of increasing abnormality in market prices over the past few years?

And so I see a number of challenges which underline the need for further work: To the extent that climate change makes the distribution of future shocks nastier, that could imply higher capital requirements, all else equal. So a key judgement will be: are current capital levels sufficiently high to guard against unexpected shocks during the transition? Even if capital levels are appropriate in aggregate, that does not mean that the capital is held in the right places. As we have seen, some of these risks are highly concentrated in particular  Page 8  sectors. A second key judgement will therefore be: does the framework of capital requirements capture climate risk at a sufficiently granular level? We also need to ensure firms have the right incentives to continue to improve their capabilities, and meet our expectations. The CBES results show that while progress has been made, there is still much to do. From the point of view of capital, this suggests a third key judgement: are we satisfied that firms are building the capabilities they need – and if not, do we need to introduce more incentives? Most fundamentally, the CBES results are a snapshot – based on current data and modelling capabilities, and focused on a specific set of scenarios and risks. I have highlighted the significant uncertainty as well as the gaps that underlie these results.
However, the indications are that overdue payments pose a huge problem for businesses in general and in particular for VSEs: at end-2014, outstanding payment claims amounted to EUR 600 billion, of which some EUR 420 billion were owed by private sector firms… and the remainder by the public sector. This requirement should of course apply equally to the public sector, both at national and local level. Various surveys and qualitative assessments show that the situation has stopped improving in the past few months, and that payment times are no longer falling, and in some cases may even be increasing again. Long payment times are not just a financial problem for VSEs, they also place a brake on their expansion, as they spend too much time chasing up overdue invoices, time that could better be devoted to growing the business and investing. The government is acutely aware of this issue and, in conjunction with the Observatory for Payment Times, is taking decisive action to resolve it. The Banque de France intends to help reduce these difficulties by drawing attention to all the solutions available to help small businesses. It will work actively with the Observatory for Business Financing, as well as through its day-to-day contacts with credit institutions and financing companies, to help develop financial products that can better reduce this obstacle to VSE growth. The determined efforts that the Banque de France intends to undertake or to participate in, will of course benefit greatly from your input here today at this symposium.

Ardian Fullani: South East Europe – pre-requisites for reform Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the high-level seminar “South East Europe: pre-requisites for reform”, hosted by the Bank of Albania in collaboration with the University of Oxford, Tirana, 14 June 2012. *  *  *  Dear Mr. Minister, Dear Governors, Dear Ladies and Gentlemen, I would like to thank you all for your participation and interest in sharing opinions on an extremely important issue to all of us: economic reforms and policies the countries of the region need to undertake against a background of an unclear situation in Europe, our main trading partner. I would like to thank in particular the representatives of the University of Oxford and the European Bank for Reconstruction and Development, who have worked closely with the Bank of Albania in hosting this Conference. This activity today is a follow-up of our joint study work with the University of Oxford dedicated to the competitiveness of the Albanian economy in a regional and global context, attraction of foreign investment and macro-financial stability of our economy. Dear guests, The year 2011 and the first part of the current year evidenced that euro area crisis has plunged into its most acute phase. Right at the centre of this crisis, the sovereign debt risk, the curtailed ability of the financial system to absorb this risk and the continuous economic activity slowdown are spinning in a vicious circle.
An increase of repurchase rate (14 days) from 1.5% to 2.5%, with the aim to correct the distorted structure of local interest rates, did help to reduce the gap between local interest rate and LIBOR, making it less attractive for capital outflow. More important is the emphasis on the managed float concept to limit short-term volatility of Baht exchange rate which did help to lessen the fear that Baht would depreciate further. Whenever Baht swings to the weak position, such fear would lead to the prepayment of $ loans by private sector or even by states enterprises which were really prepared to do so before I stepped in. It is noteworthy that Baht had stabilized as well as strengthened, which made it possible to stabilize exchange rate as well as accumulating $ into official reserves. On this point I would like to further clarify our monetary policy. Some analysts interpreted that the BOT has changed from inflation targeting framework to exchange rate targeting. This is very wrong. If we would target our exchange rate to maintain fixed relation to any currency or group of currencies, we would stand a good chance of losing our official reserves which is really against my firm belief that while global economy as well as our economy are slowing down, healthy international reserves must be maintained to avoid another crisis. Obstacles and challenges Ladies and Gentlemen, I can safely say that we have now a credible framework for our monetary policy.

How will the terrorist attack affect this fragile state of mind? US business investment during the past 4-5 years expanded at the rate of 8-9 % per year. It slowed to only 1.7% in the first half of this year. How will the tragic event that occurred slow this down even further? The price of Dubai crude, which is the reference price of Thai import cost, before the attack was at the $ 24-25 per barrel level. After the attack, it briefly touched $ 29 before turning back. How much will the volatile oil price cool down the world economy? 2  BIS Review 81/2001  These are very difficult questions to answer. They are difficult questions to answer under normal circumstances. But when you take into account the fact that the United States soon will undertake operations against the terrorists, and what events may unfold out of that, these questions become many times much more difficult to answer. I am comforted, however, by the quick actions of financial authorities in all the major countries to try to shore up the situation. The Federal Reserve acted quickly to set up $ 90 billion swap facilities with many central banks to facilitate market transactions. Ample liquidity was provided by all countries to market participants. Swift interest rate cuts were implemented in both the USA and Europe. In Thailand, what can we do in the face of these uncertainties?
23.06.2020  The main post-pandemic challenges for the Spanish economy Appearance before the Parliamentary Committee for the Economic and Social Reconstruction of Spain after COVID-19 – Congress of Deputies Pablo Hernández de Cos Governor  1. Introduction Ladies and gentlemen, I appear before this Committee to set out what should be the guiding principles, in the opinion of the Banco de España, of Spain’s economic policy strategic priorities at present. Before elaborating on these priorities, allow me to convey my praise and gratitude to Spanish citizens for their exemplary behaviour in the especially difficult circumstances we have faced in recent months. Naturally, my support also goes out to all those who have lost loved ones as a result of the pandemic. The crisis has disrupted economic activity on a massive scale. To such an extent that, on all available forecasts, this year will see the biggest declines in GDP recorded in peacetime. As I argued in my appearance last May before the Parliamentary Economic Committee, the severity, temporariness and global nature of this shock initially warrants forceful economic policy measures that are time-limited and internationally coordinated. The goals of this shock therapy should be to lessen the effects of the pandemic in the short term and provide for an exit from the lockdown of the past few months with the least economic harm possible. Broadly, the response of the authorities - with measures I described and assessed in the aforementioned appearance - has been significant.

The Banco de España projections include a third scenario, in which the materialisation of some of these risks might give rise to a decline in GDP for this year of 15%. 3. Economic policy in the second phase of the crisis The key magnitudes of these forecasts illustrate the challenges we face and the need to formulate a forceful economic policy response. I shall now turn to detailing the main elements which, in my view, this response should include. As earlier stated, in this second phase of the crisis economic policy should combine two objectives: to support the recovery and provide for the structural adjustment of the economy. First, I shall broach the policies relating to the monetary and financial areas. As part of the European Central Bank (ECB), the Banco de España contributes to such policy decisions at the European level. Here the priority should continue to be to support the recovery and maintain financial stability. As mentioned in my previous testimony to the Economic Committee, I believe we should all share the goal of preventing the current crisis from being  3  accompanied by a generalised tightening of financing conditions or from seriously harming our financial system. In this connection, and in relation to monetary policy, we have on the ECB Governing Council reiterated our commitment to doing everything needed to support euro area citizens in these extremely difficult times.
We also hope that you will also have the opportunity to experience Malaysia during your time here. On that note, I thank you for your attention. BIS central bankers’ speeches  3

In its role as a bank supervisor, the Federal Reserve has the responsibility to see to it that this credit support does not dry up at critical times. One of our primary tasks is to be certain that nothing interferes with the credit intermediation process of banks. This is why bank soundness is so important to us. The events of last August illustrate what can go wrong with financial markets and why we were so concerned when the global credit markets seemed to seize up following the announcement by the Russian government of an effective devaluation of the ruble and a debt moratorium. These actions were so unexpected that they shocked investors all over the world. In the United States, the correction of stock prices in the wake of Russia’s announcements was not of exceptional size or concern, and had even been anticipated by some astute observers. But the abrupt and simultaneous widening of credit spreads globally for both corporate and emerging market sovereign debt was an extraordinary event beyond the expectations of investors and financial intermediaries. The abrupt shift in investor behavior, in fact, served to intensify price movements and to undermine confidence in market dynamics. It was not just the rebalancing of portfolios that was of concern in the days and weeks following the Russian government’s announcements, but also the rush away from risk altogether. In short, it was this seizing up of the credit intermediation process that was of most fundamental concern to us as central bankers.
The key to such jointly-agreed inflation expectations is that the inflation target of two per cent is seen as credible, which is to say that all parties expect that the Riksbank will be able to hold inflation close to the target in the period ahead. 2  BIS central bankers’ speeches  Inflation expectations were losing their stable footing at two per cent Unfortunately, one of the unusual circumstances prevailing at the start of 2015 was that longterm inflation expectations were losing their stable footing around the target of two per cent. Of course, there are no perfect measures of inflation expectations and it is not obvious whose expectations are most important, but we carefully monitor the survey-based measures of expectations provided by Prospera. The decrease in inflation expectations five years ahead that took place in the period up to the end of 2014 was worrying (see Figure 3). Pricing on the bond market gave the same view of falling long-term inflation expectations. If this meant that doubts were now starting to arise about the two per cent target, this was perhaps not so strange, considering that inflation at this point had been low for an extended period of time. There was certainly reason to believe that this was at least partly the result of temporary factors. The Riksbank’s own analyses pointed to the strengthening of the krona exchange rate between 2009 and 2013, the weak level of economic activity abroad and falling energy prices.

The conflict in Ukraine and the sanctions levied on Russia had consequences for the Russian economy but also created unease over the political and economic development of eastern and central Europe in general. We saw drastically reduced demand from the global growth engine of recent years, China. This gave new fuel to concerns over an imminent hard landing of the economy there. The severe conflicts in the Middle East started to make themselves increasingly felt via a heavy increase in the numbers of people seeking safety in Europe. The possible effects of the central banks acting out of step – after a number of years of crisis policies – also led to a degree of concern. There is always uncertainty but, nevertheless, my impression is that it has been unusually high over the past year. Uncertainty in itself can cause problems as it can lead households and companies to hold off consumption and investment, and can reduce companies’ willingness to raise their prices. Everything else being equal, a higher degree of uncertainty therefore argues for a more expansionary monetary policy. In addition, greater uncertainty over international developments also entails a greater risk that the Swedish economy will be exposed to such strong negative pressure that we will end up in a really serious situation with persistently falling prices and employment. A desire to lower the chances of such a situation may, in itself, argue for a more expansionary monetary policy.
All in all, the prospects for inflation from the demand side look a bit better than they did when the repo rate was last raised. Another positive sign is that the wage agreements that have been concluded so far in 1998 indicate a rate of wage increases that is somewhat lower than in the main scenario described in December. However the recent weakening of the krona is a cause for concern. If it turns out to be permanent, it could affect inflation prospects. In the Riksbank we are now finalising the next Inflation Report, in which we will present an inflation forecast reaching into the first quarter of the year 2000. There, factors such as the Asian crisis, the wage negotiations and the exchange rate developments will be weighed and put into a larger context. The view of the inflation prospects that will result from this process will form the basis for future monetary policy.

Table 2: Baseline results on CET1 ratios (column 1) and lending (columns 2-4)  (1)  Mortgage lending flows (%) (2)  Credit card lending flows (%) (3)  0.066  -1.290  -2.530**  -14.310*  (0.867) Yes Yes Yes 794 0.324  (0.481) Yes Yes Yes 212 0.081  (0.013) Yes No Yes 75 0.336  (0.070) Yes Yes Yes 228 0.084  CET1 ratio (%)  Post-Covid x Dummy if below bottom quartile effective surplus Bank controls Bank FE Time FE No. of observations R2 (Within)  Non govt. guaranteed PNFC lending flows (%) (4)  Notes: ***/**/* indicate significance at the 1%, 5%, and 10% level respectively. P-values reported in brackets are based on bank clustered standard errors. All columns contain bank and time fixed effects, except column (3) which contains only time fixed effects  14  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  14
This phase is characterized by weak recovery in the advanced economies which prompted loose monetary policy and extraordinary monetary measures such as QE2 in the US that have resulted in artificially low interest rates in the advanced economies. These record-low interest rates encouraged investors to seek out higher return in risky emerging market assets, particularly here in Asia. In addition to the push factor of low interest rates and weak recovery in the US and Euro area, strong economic fundamentals in Asia, as reflected in growth and eventual currency gain, served as a pull factor. As a result, capital became more “fluid” – constantly in search of yield and therefore very sensitive to news and rumors. Such search for risky yield resulted in capital inflows into EME assets last year, as you all know. These inflows contributed to the large appreciation of the Thai baht last year, and indeed other emerging markets. Here I want to emphasize that the inflows was due to a reallocation in global portfolio, or a change in portfolio choice, if you will. There is a misperception that the additional inflow of “fluid” capital stemmed from excess global liquidity. Global liquidity had not significantly increased. As a simplification, think of global liquidity as an ocean. The amount of water is finite. But unusual weather can stir otherwise calm waters into a storm. Metaphorically speaking, the new global environment of loose monetary policy and uneven recovery had caused large waves of liquidity to travel from the advanced economies to our shores.

In my view, also shared with many others’, monetary policy should be poised, pre-emptive and perceptive taking into account the central scenario, let me say more concretely what this means. First, on poise. Last year was the year of transition as the Thai economy moved out of crisis toward recovery. This year is the year of regaining poise as the balance of risks shift to inflation amid a selfsustaining recovery. A self-sustaining recovery means robust and broad-based growth. Indeed, we have seen expansion across consumption, investment, and exports. Economic performance beat expectations throughout last year. For 2011, we project 3–5 percent growth as the economy returns to its long-term average growth. The surge in oil and commodity prices is projected not to weigh on the growth prospects of the Thai economy, due to falling oil intensity and strong and broad-based growth. The oil price spike this time round is also not as severe as previous episodes. On the recent and unfortunate Japan crisis, we believe it will have a limited impact on the Thai economy. As a share of Thai exports, the Japanese market accounts for only about 10 percent. But of course, there is a risk of a protracted nuclear crisis dampening economic activity with adverse implications for global growth. In such an economy with strong growth prospects, there is less need for policy to accommodate growth going forward but more need to be concerned about inflation.