samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  1  need to create stronger linkages in the vital areas of trade and investment, business as well as financial linkages. There are several ways to achieve this: 6. Firstly, the Asian Development Bank (ADB) has identified growing South-South economic linkages via trade and investment as a potential driver of global growth and emphasized the need for policymakers to further reduce barriers to trade and investment4. Trade between Asia, Middle East, Africa and Latin America has developed over the past two decades but still remains a relatively small 17% proportion of world trade. Asia’s share of total trade with the GCC grew from just 10% in 1980 to 36% in 20095. Having identified this as a priority area, ASEAN and GCC foreign ministers met in Singapore last year and agreed upon a Plan of Action to boost cooperation in trade and investment, among other areas. Islamic finance can potentially play a part in facilitating more trade between Asia and the Middle East with the involvement of more global and Islamic banks from both regions. 7. Secondly, the high level of savings and wealth accumulation in the GCC and Asia should also be mobilized by the financial sector and channeled towards more productive economic uses in both regions, especially to meet the demand for national infrastructure such as power plants, hospitals, roads and rail networks. The ADB Institute estimated that Asia will need $ trillion in infrastructure investment between 2010 and 2020.

This theory, which Rey formulated with emerging markets in mind, could very well also be correct and relevant for more developed economies, like Sweden. My interpretation of such arguments is that monetary policy in Sweden then cannot deviate too far from monetary policy in the United States and the euro area without giving rise to an unjustified appreciation of the krona.23 Misinterpreted: Inflation is also low in countries with more expansionary monetary policy Inflation is also falling now in countries and currency areas where the central banks have conducted a more, sometimes much more, expansionary monetary policy than the Riksbank. I have sometimes heard these observations put forward as arguments proving that a more expansionary monetary policy would not have much impact. This is not a very convincing conclusion. To begin with, it is only a year or so ago that there was much international discussion as to why inflation was so surprisingly high.24 The background to this discussion was that the weak economic developments in many parts of the world did not appear to have any great effect on inflation. Despite the low demand in the economy and high unemployment, inflation remained at levels that did not appear compatible with historical patterns. 25 To some extent, one can probably say that monetary policy abroad was more successful in stabilising inflation than economic activity, at least for a period of time. Without the powerful monetary policy stimulus, inflation would probably have been much lower.
6 I shall not go further into this, but merely wish to point out once again how important it is to analyse the driving forces behind inflation to be able to explain the monetary policy conducted. This means that we from time to time highlight different measures of inflation. In the current stage it is thus important to distinguish the effects of our own measures which we have implemented to alleviate the effects of the financial crisis on international growth and thus on growth in Sweden. 5  For a detailed discussion of this, see “Should monetary policy stabilise resource utilisation?” Economic Commentary No. 1 2008, Sveriges Riksbank. 6  Inflation measured in terms of the CPIF, which disregards changes in mortgage rates, is around 1.6 per cent on average in 2009. If one also excludes energy costs, the average for 2009 is 2.2 per cent. BIS Review 38/2009  5  Monetary policy is dependent on a functioning transmission mechanism Inflation is affected by the Riksbank’s changes in the repo rate through what is usually known as the transmission mechanism. This influence goes through several different channels, such as short and long real interest rates, the exchange rate and the supply of credit. The impact occurs with different degrees of delay. The repo rate is the interest rate the banks pay when they borrow from or deposit money in the Riksbank for one week against collateral.

Thomas Jordan: Monetary policy in the financial markets crisis Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at an event for banks and pension funds, Berne, 2 April 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The origin of the turbulence on the international financial markets which has persisted since August 2007 is mainly to be found in the US housing market. On the one hand, a long period of low USD interest rates had boosted the demand for residential real estate in the US. On the other hand, the structure of the US mortgage market with the associated rapid increase in mortgage debtors with poor credit ratings, and the subsequent securitisation of their mortgages, had proved to be problematic. Between 2001 and 2006, residential real estate prices in the US doubled. At the end of 2006, there was a reversal in the price trend which triggered crises in both the real estate and mortgage markets. The substantial expansion in sub-prime and Alt-A mortgages, and a deterioration in the credit ratings of debtors within these segments, led to a rise in the level of overdue payments and defaults. As a result, even securities that gave the appearance of being gilt-edged, but were backed by US sub-prime mortgages, lost considerable ground.
While this divergence does not seem to have, as of yet, a substantial impact on 2/5  BIS central bankers' speeches  lending, if it deepens further it will jeopardise the performance of credit and the pace of economic growth. In this light, I would like to underline that a series of studies, both at home and abroad, emphasise the fact that the Albanian economy would benefit from credit growth, for as long as and provided that such growth is based on firm structural and institutional premises. It is our common duty not to let this opportunity pass. This conclusion leads me naturally to the precondition I mentioned earlier. The Albanian economy offers positive business prospects, coupled with a high crediting potential and reduced credit risk. This reality dictates the need and the possibility for a bolder approach toward crediting. I have had the opportunity to elaborate – on a continuous basis – our standpoint on the economic development perspective. I would like, however, to bring today to your attention again that, in cooperation with the Albanian Association of Banks and the Government of Albania, we are implementing an ambitious plan of measures for reducing non-performing loans. From a strategic point of view, the objective of this plan was not only to simply clean banks’ balance sheets, but also to provide for a qualitative improvement of the crediting environment in Albania.

But since 1995, the gap has started to widen again as ICT investment has boosted productivity growth in the United States. The empirical evidence suggests that one of the most successful ways to speed up convergence in productivity is to promote international trade and investment, and openness more generally. Within manufacturing, the rate at which the productivity gap between Britain and the US closed during the 1980s and early 1990s was greater in the more open than the less open sectors. Against that background, let me suggest three areas for questions: First, why is the gap in the level of productivity between the US and the UK so persistent? And what are the obstacles that prevent the gap from narrowing - are they in the fields of trade, technology transfer, or flows of investment? What are the respective roles of business and government in removing them? Second, can the UK benefit as much as the US from the IT revolution? Is it a question of the speed with which business adapts? Or is it the need to fund our research-based universities on the scale of the best elsewhere in order to exploit our comparative advantage in the English language and regain Britain’s place at the frontiers of knowledge? Or is it a matter of raising standards of education in schools to enable the workforce as a whole to use the new technology?
Second, the objective of the IMF should be to find ways of making the least costly fiscal adjustment in terms of growth, while strengthening its recommendations on the prevention of this type of shock. This brings me to focus on the second type of objectives: the objectives of prevention and better resilience to terms of trade shocks. The first priority to improve prevention and resilience is to create sufficient countercyclical fiscal leeway, by limiting public debt, or even by accumulating budgetary reserves. In this regard, controlling the public payroll, which is the most dynamic item of expenditure in times of growth in many poor and vulnerable countries, as well as improving the efficiency of public spending, are essential. Consideration should also be given to setting up fiscal rules on the basis of deficits excluding commodity-related receipts, adopting stricter debt ceilings for the public sector and creating an adequate savings buffer for countercyclical purposes, taking into account the scale and length of commodity price cycles. In countries exporting non-renewable commodities, in particular oil, this savings buffer must be even more substantial since it must aim to cover not only the decline in the value of receipts but also part of the decline in the value of reserves. The second priority concerns the diversification of the economy. Industrial policies based on sectoral subsidies or tax expenditures are not viable in the event of a fall in commodity prices and make the policy of diversification pro cyclical.

Miguel Fernández Ordóñez: Financial integration and stability in Europe Opening remarks by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Conference on "Financial Integration and Stability in Europe", organised by the Bank of Spain, the European Central Bank and the Center for Financial Studies, Madrid, 30 November 2006. *  *  *  Good morning ladies and gentleman. First of all, allow me to welcome you. We are really delighted to host this conference at the Banco de España in Madrid. Some of you are perhaps too young to remember, but it was here in Madrid, in 1989, that the European Council decided to embark on the first stage of Economic and Monetary Union, as envisaged in the Delors Report which was the catalyst for the EMU process. I would like to start my intervention today with a quote from the Delors Report; a quote that refers to financial integration. Simplifying, it said the following: The objective of a single financial area, in which all monetary and financial instruments circulate freely, and banking, securities and insurance services are offered uniformly throughout the area, would be fully implemented through the approval and enforcement of the necessary Community directives. You can appreciate the appealing simplicity of its definition of an integrated financial market: one where all monetary and financial instruments circulate freely, and where banking, securities and insurance services are offered uniformly.
Expressed in terms of GDP, the budget indicators are presented at approximate levels as those of year 2003, where one can distinguish the unchanged figure of budget deficit, of 4.9 percent. State budget income grew by 10.4 percent over 2004, reaching 23.7 percent of GDP. Also, budget expenses recorded an annual growth rate of 10.7 percent, reaching 28.6 percent of GDP. These indicators remained, however, below the projected levels in the 2004 budget, imposing the necessity for a more cautious follow-up of the budget in its two principal phases: the design and implementation. Also, performance of capital expenses still remains a problem, which deserves more attention in the future, given the particular importance it has for the development of infrastructure capacities of the country. External sector of the economy The favourable economic situation in the country was also reflected in the field of foreign transactions. The current deficit marked a significant decline over 2004, reaching 5.3 percent of GDP and marking a significant decrease compared to the last two years. This development resulted to be a consequence of trade deficit improvement, which lowered to 21 percent of GDP in 2004, from 23.4 percent of GDP it was in 2003. Exports of goods marked a higher growth rate than imports, while the positive balance of current transfers increased in parallel with trade deficit, thus impeding the deepening of current deficit. The coverage of imports by exports of goods reached 27.5 percent, marking rather an improvement relative to year 2003 when this ratio was 25 percent.

During this long period of consumer retrenchment, only one form of consumer borrowing – student loans – consistently grew, and educational debt has now become the largest form of consumer debt, after mortgages. Student loans are widely held – roughly 39 million people have student loans, including a third of people in their 20s and 30s. For many of these families, educational debt is the tool that allows them to obtain higher education in spite of its large up-front cost. And higher education is, of course, the key to higher wages and a better standard of living. Nonetheless, student loans are not well measured or widely understood. BIS central bankers’ speeches  3  In the second presentation Donghoon Lee will describe the latest trends in the continuing growth in student loan debt and delinquencies, and their implications. Thank you. I will now ask Wilbert to give an overview of developments in household debt and credit conditions. 4  BIS central bankers’ speeches
Naturally, it will take time for these efforts to bear fruit. But developments in recent months have by no means wiped out the achievements of past decades. On the contrary, the region’s longer term fundamentals -- including its high domestic saving rates, strong fiscal positions, dynamic private sectors, and recent gains in competitiveness -- remain favorable. Moreover, all of these countries still have a long way to go to catch up with advanced economies. Thus, with sound policies, they should be able to sustain high rates of growth for another two decades or more. In the less distant future, growth can be expected to rebound strongly after a relatively short, but sharp, weakening of economic activity, especially in Thailand, and a rapid narrowing of external deficits. In fact, we are already seeing improvements in exports, even though recent exchange rate changes have not had much opportunity yet to generate their effects. And as these adjustments take place, each of these countries will have seized the opportunity to strengthen their economies in fundamental ways. This leads me to agree with those in the region who see this crisis not as a blight on the future, but as a blessing in disguise. Indeed, after this period of adjustment, these economies will emerge stronger than before. BIS Review 111/1997  -4-  In the meantime, I hope that some perspective about the benefits of global markets will be maintained.

First, we must give credit where credit is due: the capital provided by global markets has been a key factor in Southeast Asia’s exceptional growth rates and its ability to lift so many out of poverty. Certainly, there are risks in tapping global markets to which no country is immune. At times, markets can be slow to react to changes in economic conditions and then react sharply; and in some instances, herd instinct seems to prevail. But let us not forget that markets also provide tremendous opportunities to accelerate growth and development, as Southeast Asia itself so vividly shows. Thus, the lesson to be drawn from recent developments is not about the risks of global markets, but rather about the importance of approaching markets in a responsible manner -- with strong macroeconomic fundamentals and sound structural policies that give markets confidence and therefore encourage long-term investment; with respect for the signals that markets provide; and with transparent and market-friendly policies that allow markets to allocate resources efficiently. IV. Perspectives for stronger regional cooperation Spillover and contagion effects can be so rapid, so costly, to countries with basically sound policies, that every country has an obligation to keep its own house in order. No country should run the risk of becoming the tinder for a wider conflagration. At the same time, there is also much that can be done on a regional and multilateral basis to bolster the efforts of individual countries seeking to manage their economies well.
I welcome the proposal to strengthen the role of CBIs. It would reinforce coordinated supervision, while reflecting the responsibilities of the ECB – as a CBI – within the supervisory framework. The role of the central bank of issue Background and rationale for the ECB recommendation However, although EU legislators can incorporate a role for CBIs into the processes for supervising CCPs, the regulation cannot go so far as to confer on the ECB the sort of binding instruments this enhanced role requires, which the ECB thought it had until challenged in court by the United Kingdom. In 2015, the General Court held that the ECB does not have the competence to regulate the activity of securities clearing systems, including CCPs. Moreover, the Court stated that the ECB would need to request an amendment to Article 22 of the Statute of the ESCB and of the ECB, which already enables the ECB to make regulations for clearing and payment systems, if it considers this necessary for the proper performance of its tasks under the Treaties2. 2/5  BIS central bankers' speeches  The ECB’s Governing Council therefore unanimously adopted a recommendation to amend Article 223 to extend it to cover derivatives, give legal effect to the ECB’s role under EMIR, and give the ECB the flexibility and autonomy to act outside EMIR where clearing would pose a severe threat to the stability of the euro. Amending Article 22 of the Statute – procedure Let me briefly explain the procedure for amending the Statute.

Yves Mersch: Euro clearing - the open race Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Frankfurt Finance Summit, Frankfurt am Main, 29 May 2018. * * * During the 2008 financial crisis, counterparty risks became infamous. Obviously, every finance textbook deals with the risk that, when you enter into a financial contract, the other party may not fulfil their part of the agreement and may even default on their obligation. But the failure of Lehman Brothers and the large losses suffered by AIG in over-the-counter derivatives markets revealed that there were counterparty risks throughout the entire financial system. This was due to the domino effect of counterparty defaults in leveraged products. As a response, G20 leaders agreed at the 2009 summit in Pittsburgh to move all standardised derivatives contracts to clearing through central counterparties (or CCPs). CCPs address the weaknesses exposed during the crisis by insulating counterparties from each other’s default risk. They specialise in managing counterparty credit risk, and by doing so they reduce the risk of defaults spreading across the financial system. But CCPs can only make the financial system safer if they are safe themselves. In the European Union, they are subject to a comprehensive regulatory framework. The European Market Infrastructure Regulation (or EMIR) ensures that they hold robust resources to deal with financial distress.
There is a risk that unemployment will become entrenched, perhaps particularly in Europe. It appears that the upturn in advanced economies will only be moderate. The economies of many countries will continue to be marked by considerable spare output capacity. Spare capacity and high unemployment will contribute to low inflation among trading partners in the coming years. Oil prices are just below USD 80 per barrel. Our projections are based on an oil price in line futures prices. Futures prices indicate that oil prices will rise ahead. Emerging market economies are making a growing contribution to global oil demand. These economies are expected to continue to record solid growth. In addition, OPEC is steadily gaining market power because growth in oil supply from non-OPEC countries is gradually stagnating. Oil prices may nevertheless edge down if the recovery in the world economy loses momentum, particularly since OECD oil stocks are still at elevated levels and OPEC spare production capacity is relatively high. Gas prices are under pressure owing to increased availability of shale gas in the US, a higher supply of LNG and low demand in Europe. Futures prices indicate some rise in other commodity prices. Metal prices have risen as a result of improved global growth prospects, but they are still somewhat lower than in summer 2008. Key rates are close to zero in many countries. A number of central banks have signalled that key rates will be kept low for an extended period, and key rate expectations abroad fell through autumn and winter.

Behind recent trends, in fact, lies the emergence of countries like China and India, who have doubled their share of global output over the past twenty years and are now also competing in markets for high technology products. China alone manufactures half of the world’s cameras and its share of world exports of computers increased tenfold, to almost 20 per cent, in the ten years to 2003! We, too, must find a way to participate actively in globalization and gain from it. ... compounded by a sharply higher oil price ... The second challenge derives from the sharp increase in oil prices. There is a silver lining to this dark cloud in the sense that the price rise is not expected to have a significant effect on world output. The IMF, for example, anticipates global growth to average 4.3 per cent both in 2005 and 2006. This is mainly because it is due to an expansion in demand that is underpinned by economic growth, particularly in Asia. It is still the case, however, that a massive redistribution of wealth is underway from countries which consume oil to those which produce it. Malta is inevitably on the losing side of this process. The estimated increase in the fuel bill for 2006 arising from the production of electricity and the consumption of liquid fuels is not far from the expansion in nominal GDP forecast for 2005.