samchain/econo-pairs-v1 huggingface dataset:
High fiscal deficits and rapidly increasing debt levels in most advanced economies are both a consequence of the crisis and of the policy response to it, as Governments tried to make up for the sharp collapse in private sector activity and to support their financial sectors, in a context of rapidly shrinking public revenues. Given the deep concerns about public debt sustainability brought about by these developments, a key policy challenge in most advanced economies is to achieve fiscal consolidation, even at a time of expected lasting weakness in domestic demand. European economies have been acting resolutely in the pursuit of fiscal consolidation. In particular, Spain is undergoing an intense adjustment process which has halved the current account deficit (from 9,6% in 2007 to around 5% this year). The Government is implementing an ambitious fiscal consolidation plan, combining some tax increases with sizable spending cuts and, more importantly, adjustments to long-term expenditures, in particular to the pension system, all of which will have a strong positive impact on the long-term sustainability of public finances. But the success of the adjustment will depend first and foremost on achieving a solid and sustainable growth rate. This goal requires implementing the necessary structural reforms to increase productivity and the efficiency of the economy, and establishing a more balanced and stable pattern of growth. The most important of these reforms have already begun to be introduced, in particular those bearing on the labour market and the financial sector, but continuous progress is needed.

These are often fast moving so we need to monitor them on a daily or weekly basis so we can ascertain how businesses are performing and to identify product or risk management vulnerabilities. Good practice examples of the data we typically receive where a strong and cooperative relationship exists with home state supervisors and firms, are set out in the statement. They include:  a. daily or weekly profit and loss figures covering global and local business lines; b. weekly or monthly group market risk reports; c.  the outputs from reviews e.g. the Supervisory Review and Evaluation Processes;  d. information on stress tests and how these affect the UK entity; e. group liquidity information regularly in normal time and more frequently once there is a period of market stress; f.  any material change in the operational resilience of the firm or group, for example, cyberattacks that may affect the group systems and are used by the UK business or which threaten the survival of the firm or group; and  g. material findings from internal risk or audit functions, or external audit reviews (particularly where there are common group wide systems and controls). I would stress that, where we ask for Group information, we are not duplicating the work of the Home Authority. Rather we are looking at the information through our host lens - focused on how developments at Group could influence and impact the local entities we supervise, and how local management are responding.
For money to be truly one, it has to be truly fungible independent of its form and independent of its location. In particular, deposits, which are the most widespread form of money, have to inspire the same level of confidence wherever they are located. To ensure that deposits are truly as safe everywhere across the euro area, the likelihood that a bank fails has to be independent of the jurisdiction where it is established. Resolution has to follow the same process in the event that a bank fails. And, when push comes to shove, depositors must be afforded similar protection wherever they are located. Fundamentally, this was and remains the agenda of Banking Union. And it is why Banking Union was conceived with three pillars: a single supervisory mechanism, a single resolution mechanism, and a uniform deposit insurance scheme, which remains to be specified. For money to be truly one, we need all three. Supervision had to come first, not because it was the easiest to establish, but because it was the necessary condition to proceed with the other pillars of Banking Union. That the SSM was established at the ECB owes much to circumstances. There are benefits in the current set-up, but that was not of vital importance. What was of absolutely vital importance, however, is that the SSM was established. In a fiat money system with fractional reserves, sound and uniform supervision is essential to there being a sound and single money.

The second block relates to synchronising the BNB supervisory practices with those of the ECB. This includes an enormous amount of activities, among which supervisory regulations, statistics, and IT systems. The BNB’s efforts in this area are a logical development of the banking sector reforms launched in 2015. The third work block is linked to organising and conducting the asset quality review and the stress test, which is a widely discussed topic. The preparatory phase in this respect has been completed. The banks that will be covered by the review and stress test have been designated, as well as the auditors, methodologies and macroeconomic scenarios used for the stress test purposes. The results are expected to be announced in July, Mr. Radev said. Work on the Single Resolution Mechanism has been organised in very much the same way. An essential element in the first work block in this area – amendments to the legal framework – is the preparation of a Draft Law amending and supplementing the Law on the Recovery and Resolution of Credit Institutions and Investment Firms. The part involving the BNB was finalised at the end of last year and is due for submission to the National Assembly with legal amendments likely to get adopted by the end of this quarter.
However, this does not have a great deal to do with the liquidity problems in US dollars and my thoughts on this subject will thus have to wait for a later occasion. 8  BIS central bankers’ speeches  So, to summarise: not all borrowing in foreign currency is linked to a direct liquidity risk. This primarily affects short-term borrowing, which largely takes place in US dollars. And not all dollar borrowing gives rise to a liquidity risk, but primarily that used for lending to customers. A rough estimate suggests a volume of around SEK 450 billion in the four major banks, but the level of uncertainty is high. Two questions It is apparent that the banks faced problems in their dollar funding during the crisis. Why else would they have borrowed as much as USD 30 billion via the Riksbank? However, one question that is always asked in this connection is why the banks necessarily had to borrow dollars. Couldn’t they instead have borrowed in kronor and then exchanged this into dollars on the foreign exchange market? This would have removed the problem of the shortage of dollars. There is no lack of kronor, as the Riksbank can create these in the quantities needed. For ordinary people like us and for most companies, the foreign exchange market worked faultlessly during the entire crisis. If you had kronor, you could exchange them for dollars. It was the Swedish banks that provided this service – they were the counterparties in these transactions.

The second corner of the triangle is related to the exit from our exceptional measures. The time to exit has not yet arrived. We will continue PEPP net asset purchases “until at least the end of March 2022 and, in any case, until [we] judge that the coronavirus crisis phase is over” v. We still have ample time to judge and decide; nevertheless in our present baseline scenario this crisis phase will be over by March 2022. But the possible end of net purchases under PEPP by that date would not imply an abrupt tightening of our monetary policy. Reinvestments under PEPP would remain significant, net purchases would continue under the APP, possibly somewhat adapted. Hence we could still play the full “quartet” of our  Page 6 sur 9 accommodative monetary policy instruments, adding negative rates, liquidity provision, and forward guidance. The third corner of this triangle could indeed be an enhancement of our forward guidance consistent with the symmetry of our inflation objective. Rather than flexible average inflation targeting, which leaves many questions unanswered, my preferred option would be the use of a strengthened and non-linear forward guidance, mentioning explicitly our tolerance for inflation overshooting, with reference to past inflation shortfalls. It is the combination of these three levers that should be used as the foundations of the “equilibrium triangle” of our monetary policy in this next phase of the Covid crisis. II. Wider expectations are emerging Let us return to the question of broadening public expectations of central banks.
A negative pay gap in this table indicates that ethnic minorities earn less than their white counterparts, whereas a positive pay gap indicates that ethnic minorities earn more than their white counterparts. 29  All speeches are available online at www.bankofengland.co.uk/speeches  29  We can extend these specifications by considering interaction effects between gender and ethnicity. This is achieved by adding two dummy variables to the original specification (5):  (8) ln  ∝  Where  ∗  ∗  h  =  h  1 0  ∗  ∗  h  ∗  person does not belong to white ethnic group person belongs to white ethnic group  As shown in Table 4, we find that the conditional gender wage gap (for white women) remains around -15%. For female ethnic minorities this becomes larger at around -18%, suggesting an additional “pay bias”. This resolves another puzzle in the unconditional pay data. By contrast, ethnic minority men suffer no such additional bias. Indeed, at around -10 percentage points, their pay gap is smaller than for white women.

By occupation, consistent with qualifications, the gender pay gap is smaller for professional and administrative occupations than for skilled trades, customer service and plant operatives (Chart 9). For almost all occupations, the gender pay gap is higher outside London. In 2018, the gender pay gap outside London remained higher for managers, skilled trades and elementary occupations. For the rest of the occupations, the pay gap in London overtook the respective gap outside London. Broadly speaking, occupations with median hourly pay of more than £ (managers, professional, and associate occupations) have lower gender pay gaps than occupations where the median hourly pay is less than £ (sales and customer services, and elementary occupations). Relatedly, there is a clear inverse relationship between the gender pay gap and female-dominated professions. Occupations with a lower share of females tend to be characterised by higher gender pay gaps and vice versa, consistent with increased female representation shrinking gender pay gaps cross-sectionally, if not always over time. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Chart 9: Median gender pay gap by occupation, sample average Gender pay gap, per cent 35  London  Other  30  25  20  15  10  5  0 Managers  Professional  Associate Administrative Skilled trades professionals  Male male  Personal service  Sales and customer  Process and plants  Elementary  Female female  Source: ONS Labour Force Survey and Bank of England calculations.
Benjamin Franklin is the very example of what was known at the time as an “honest man”. Benjamin Franklin showed a marked interest in Europe from a very early age. He started learning French, Italian and Spanish (in addition to Latin) in 1733. He journeyed abroad and lived both in France and England. I would like to stress his interest in France by pointing out that he was elected Associé Etranger of the French Academy in 1772 and became Plenipotentiary Minister in Paris in 1779. When referring to Benjamin Franklin, one often has in mind the great inventor, the philosopher, the essayist or the polemicist but one often forgets to mention that he also published a number of economic essays and studies. It is worth mentioning the book “Way to Wealth”, which some people consider as “the first American book on personal finance” or as “the best and the wisest money book ever written… ”. As you can probably imagine, Benjamin Franklin’s philosophy has crossed the Atlantic and still guides decision-makers today, including at the European Central Bank. In that regard, I would like to touch on a few ideas drawn from his autobiography. I need not remind you of his great fondness for quotations, especially in Poor Richard’s Almanack. In his autobiography, Benjamin Franklin defined a number of virtues that he believed to be cardinal. They included temperance, silence, order, resolution, frugality, industry, sincerity, justice, etc. I find his interpretation of these terms interesting.

Looking at the main trend, the degree of dispersion in real GDP growth rates across the 12 euro area countries declined somewhat in 2004 (in annual average terms) to a historically low level (1.4% as measured by the unweighted standard deviation), while it had been fluctuating around 2% since the 1970s. By comparison, the dispersion of real growth rates across the eight US statistical regions fluctuated around an average of 1.5 % between 1990 and 2002. This is not surprising since some stabilisation channels are at work in a currency area: in particular, a credible monetary policy should bring about a convergence of expected inflation towards the definition of price stability, leading progressively to the convergence of ex ante real rates across the area; moreover, lower inflation relative to other trading partners increases price competitiveness, which in turn counteracts the initial effect of higher real interest rates. 3. Appropriateness of the monetary policy stance Has the monetary policy stance been appropriate? To try answering that delicate question, the literature of central bank watchers or observers has mainly focused on Taylor-type rules as a usual benchmark. Despite numerous caveats, such an approach can be very informative as it addresses several relevant issues such as: is the monetary policy decision process rule-based or rather discretionary? To what extent is the central bank too focused on price stability at the expense of, say, growth and employment? Is the central bank forward-looking or rather “behind the curve”?
And the global nature of the economic downturn further highlighted the need for a rebalancing of trade flows between countries with large current account surpluses and deficits. Both adjustments are likely to occur only gradually and each has the potential to derail the recovery. I want to spend a little time today considering a third factor that will shape the recovery: the extent to which households need to rebuild their balance sheets following the big increase in household debt. Spend, spend, spend? Much has been said about the increase in household debt, both in terms of its role in the build up to the financial crisis and the extent to which it may dampen the recovery. The theme of much of this comment is that our current economic difficulties are a payback for past excesses. Households, it is said, were seduced by easy credit and rising asset prices, leading to a debt fuelled spending boom. As a result, we now face a period of retrenchment as we make amends for our former spendthrift ways. Like much conventional wisdom, these views contain a kernel of truth. But their repetition has led to exaggeration and distortion. Separating fact from fiction is vital when forming a view on the economic outlook. Consumer spending accounts for two-thirds of total demand in our economy; decisions made by consumers up and down the country will be critical in determining the strength and sustainability of the recovery.

If this big run up in debt was not used to finance a surge in spending, where did it all go? The answer to this question lies in developments within the housing market. House prices trebled in the ten years to 2007. And mortgage debts were accumulated to pay for the housing that had become so much more expensive. The conventional wisdom that the sharp increase in household debt was associated with the house price boom of the past decade is well founded. But what is less often appreciated is that much of that rise in household debt was matched by a comparable increase in the value of financial assets held by households. The value of housing assets purchased by households did increase, through additions and improvements to the housing stock. But the main counterpart to the rise in borrowing was increased saving. To make this point more concretely: while households accumulated an additional £ of debt between 2000 and 2008, they also acquired over £ billion of financial assets over the same period. 2 What was going on? To caricature things only a little, older households (or rather those trading down within the housing market) benefited from selling homes at much higher values. They were the winners. The big losers were younger households (or those trading up), paying more for those houses and accumulating higher debts. The money borrowed by young families ended up in the bank accounts of older households. That money wasn’t used to fuel a spending boom.
We look to further concerted actions by deal parties to warrant smooth oil price dynamics over the forecast horizon. Based on their actual movements since the year start, we have upgraded the average annual Urals crude price in our baseline scenario from $ to $ per barrel in 2019 and from $ to $ per barrel in 2020. We retain our conservative assumptions for 2021 whereby the oil price is expected to reach $ per barrel. Key balance of payments figures in the baseline scenario have also been adjusted to oil price movements and the expected dynamics of the global economy. This year’s current account balance is estimated to total $ billion (approx. 6% of GDP) and drop subsequently to $ billion (approx. 3% of GDP) in 2021. This is attributed to downward oil price trends and expanding imports as economic growth accelerates. The private sector’s financial account balance in 2019 is set to amount to approx. $ billion (3% of GDP). Financial transactions of private sector balance already reached $ billion in the first five months of the year. We expect it to drop substantially in the second half of the year 2/3  BIS central bankers' speeches  compared to both the past year’s last six months and the first six months of this year. The main reasons behind this outlook are as follows. First, it comes as a reflection of the seasonality which is typical of balance of payments figures.

Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 14 June 2019. * * * Today, the Bank of Russia has decided to cut its key rate to 7.50 % per annum. We also revised our end-2019 inflation forecast downwards by 0.5 pp, to 4.2-4.7%. Should our baseline forecast materialise, we hold open the possibility of a further rate cut at one of the upcoming Board meetings. We assume that we may shift to neutral monetary policy before mid-2020. I will now highlight the factors we considered while making today’s decision. First. There is a stable trend towards inflation slowdown. It is attributed to the Bank of Russia’s key rate decisions including the preemptive hike in the second half of last year. We passed the inflation peak of 5.3%, slightly lower than we expected, in March. Inflation slowing down from this lower peak is overall in line with our forecast. In the February-May period, prices rose by approximately 0.3-0.4% a month, seasonally adjusted. That means that the monthly growth pace has returned to the lowest readings since last August and stands near 4% in annual terms. Annual inflation fell to 5.1% in May, and came in at 5% precisely as at the beginning of this week. This dynamics is attributed to the following factors. The effect of the VAT increase on inflation has run its course.
Findings on Important Business Services identification On IBS, our current view is that firms have generally made positive progress against our expectations for identifying these services. This is good to see and reflects well on the sector as a whole. We also know that firms have taken a wide variety of approaches to the granularity with which they have identified their IBS. To illustrate this I will use a couple of examples of different approaches we have seen. These represent only a small subset of the IBS that firms’ submitted but I think illustrate the point. So, taking payment services as one example, we saw that some firms have identified all types of payments as a single business service, whilst others have split out different types of payment (for example payments made via individual systems including BACS, CHAPS and Faster Payments). Others have gone in a different direction, for example differentiating services for credit card payments versus debit card transactions. We have seen similar themes in other areas, such as services to do with lending. Here some firms have taken a granular approach – for example listing services such as “obtaining a loan” and separating different types of loan – while other firms have kept their IBS at a higher level or gone in different directions by identifying different types of products and/or the split between preand post-trade execution.

1 PS6/21 | CP29/19 | DP1/18 Operational Resilience: Impact tolerances for important business services 2 SS2/21 Outsourcing and third party risk management 3 Operational resilience – outcomes in practice - speech by Lyndon Nelson | Bank of England 4 Examples of frameworks and tools include but are not limited to: • OCIR catalogues (); • Operational Risk  Management Framework (ORMF) assessment triggers; • ICAAPs ()); • Firms’ incident management; and • Risk and Control Self-Assessments (RCSAs). 5 Prudential Regulation Authority statement on the 2022 cyber stress test: Retail payment system 6 Financial Policy Summary and Record of the Financial Policy Committee meetings on 9 and 18 March  2022Opens in a new window (bankofengland.co.uk)  6/6  BIS central bankers' speeches