samchain/econo-pairs-v1 huggingface dataset:
This means that a single European scheme is not an essential component of Banking Union in the short term. Key features of the SSM Finally, there is of course the Single Supervisory Mechanism, or SSM. As you know, progress here is already well advanced: the Regulation setting up the SSM has already been approved by Council and is now being discussed by the European Parliament. So what are its key features? Above all, the SSM will be one system. Some commentators have claimed that, because the SSM is decentralised, nothing will change and supervision will remain essentially national. This is not correct. The ECB will be the legally competent supervisor for all banks in  BIS central bankers’ speeches  3  participating countries. It will have direct supervisory powers over large, systemic banks, which we estimate to number around 140. We will not directly supervise the thousands of remaining smaller banks, because this would be inefficient when national supervisors are already in place with the necessary knowledge and technical skills. But the ECB and the national supervisors will act as a single system. To ensure cohesiveness, all the components of the system will have to act in accordance with guidelines, ECB specific regulations and manuals of supervisory practices that will be approved by the Supervisory Board. Moreover, the ECB will receive supervisory data on all banks in the SSM allowing it to keep track of developments across the system.

With this in mind, the European Commission is reviewing the European fiscal rule framework. In my view the framework needs to be simplified, by establishing an expenditure growth rule and a debt-to-GDP ratio anchor, and countries’ capacity to build up fiscal buffers in good times for use in crises needs to be reinforced. In the case of Spain, shoring up the sustainability of public finances calls for a medium-term fiscal policy strategy. This should involve immediately setting out a multi-year fiscal consolidation plan for implementation once the economic impact of the pandemic and of the war in Ukraine has been overcome. The plan should have broad political consensus and be accompanied by an efficiency review of public spending and the tax system, including all tiers of general government. In addition to the medium and long-term benefits of such a strategy, defining the plan early on would generate greater certainty and trust in public policies, which is particularly important against the backdrop of the monetary policy normalisation I have described. In any event, the course of the war in Ukraine and the subsequent sanctions and retaliatory measures have laid bare the EU’s vulnerabilities and dependencies in key sectors, such as energy, as well as the disparities between Member States in their exposure to such tensions. A challenge of this magnitude underlines the importance of a joint response to common risks. The response to the war in Ukraine must, once again, be more Europe.
Around two-thirds of the rise in Chinese savings since the early 1990s derives from the corporate sector. 4 This reflects two things. First, rapidly rising corporate profitability, against a backdrop of strong growth and rising productivity (Ma and Yi (2010)). Since 2000, profits among Chinese industrial companies have risen around 30% per year. Second, more significantly still, most of these profits have been retained within Chinese companies rather than distributed to shareholders (Qiao and Song (2009)). These differences in US/Chinese corporate savings behaviour show up dramatically in dividend payouts. The average dividend payout ratio among US corporations in 2009 was 40%, with less than a quarter of companies failing to pay a dividend. The average dividend payout ratio among listed Chinese corporations in 2009 was around 18%. Among these, more than half paid no dividend whatsoever. 3  Among the 45 countries, Germany ranked as the most patient (almost 90% of students waited), Nigeria the least patient (less than 10%). 4  Using firm-level data, Bayoumi, Tong and Wei (2010) argue that Chinese listed firms’ corporate savings rates are neither especially high compared to listed firms in other countries and the gross savings rate for a typical listed Chinese firm has declined, albeit insignificantly, between 2002–2007. BIS Review 174/2010  5  Charts 10 and 11 consider the distribution of changes in dividend payout ratios among global and Chinese companies. Among global companies, payout ratios rarely fall. More than half of the time they increase.

The New York Fed The New York Fed has important and unique responsibilities in supporting liquid and wellfunctioning financial markets. Working alongside our colleagues in the Federal Reserve and other agencies, we are taking rapid and significant actions to supply liquidity and to stabilize critical parts of our financial system. We are conducting large-scale repo operations to assure ample liquidity in money markets.3 In addition, at the direction of the FOMC, we are purchasing sizable quantities of U.S. Treasury securities and agency residential and commercial mortgagebacked securities to improve functioning in these critical markets.4 To put the current situation in context, we are running more open market operations, for greater sums, than at any time in our history.5 The Federal Reserve is also making liquidity available to key intermediaries to support market functioning and to keep credit flowing. These actions include offering term loans to depository institutions through the traditional discount window, and the establishment of the Primary Dealer Credit Facility and the Money Market Mutual Fund Liquidity Facility.6 These strong and timely actions averted a potential shutdown in the flow of credit and are providing funding and stability at a time of extraordinary volatility in markets. Although stresses in financial markets will not entirely abate until the pandemic is behind us, we have seen material improvements in measures of liquidity and market functioning in key parts of the U.S. financial system. Our work is not done.
The Riksbank's forecast, like that of other analysts, was that the international recovery would be slower and more prolonged. There were several reasons for this, including geopolitical unease and increased caution among households and firms in the wake of the stock market fall. The conditions for a clear recovery in the euro area were perceived as poorer than we had earlier believed, which made a recovery in other countries, including Sweden, more difficult. The more negative economic outlook, with inflation prospects below the target of 2 per cent, meant that we decided to cut the repo rate during the summer by a total of 0.75 percentage points. The rate is currently at 2.75 per cent. Minor changes in outlook for economic activity So far, international developments have been largely in line with our assessments from the summer. The expansionary policy now appears to be taking effect in certain areas, particularly the United States, where signs of a recovery are becoming more apparent and the risks of a setback appear more slight. The Asian economies are also developing relatively strongly. On the other hand, the prospects for the euro area still appear to be gloomy. In time, the expected upturn in the United States is expected to support a gradual upturn in Europe. All in all, the Riksbank's assessment is that GDP growth in the OECD area will be 1.9 per cent this year, 2.8 per cent in 2004 and 2.6 per cent in 2005.

Annual overall inflation is projected to remain above 8.0% during the first quarter of 2011, mainly due to the following factors:   Seasonal increase in some food prices: During the first quarter of the year, there is seasonal low supply of selected food items including fish, fresh vegetables and  BIS central bankers’ speeches  7    Lagged effects of money supply growth in 2010: During the second half of 2010 there was a rapid increase in broad money by over 15.0%, largely due to lending to government for the purpose of purchasing maize following the bumper harvest. 57. However, the Bank of Zambia will continue to monitor developments and undertake appropriate monetary policy actions to ensure that monetary targets are achieved. To contain growth of money supply within the programmed path, Bank of Zambia will continue to employ open market operations and auctioning of Government securities. This is expected to be complemented by prudent fiscal operations. 8  BIS central bankers’ speeches
To end that session, the paper by Benjamín García, Mario Giarda, and Carlos Lizama , will show us the current state of a HANK model developed for Chile and will analyze the average and the distributional effects of fiscal transfers on consumption in the presence of household heterogeneity. On the second day, we will continue the study of the role of heterogeneity in policy design in the session "heterogeneity and economic policy". The paper by Felipe Alves and Gianluca Violante sheds light on different monetary policy rules that focus on different parts of wealth distribution, with an emphasis on the unequal costs of inflation. On the other hand, the paper by Valerie Ramey, Jacob Orchard, and Johannes Wieland will offer an alternative perspective on the role of household heterogeneity in macroeconomics, arguing that the consumption responses estimated at the micro level are not necessarily consistent with the macroeconomic responses of consumption in the US during the Great Recession. The last academic session of the conference named "financial markets and monetary policy" focuses on the role of financial markets, firm-level and bank-level heterogeneity in shaping the transmission channels of monetary policy. The work by Boragan Aruoba , Andres Fernández, Bernabe Lopez-Martin, Will Lu, and Felipe Saffie studies the financial channel of monetary policy, showing that the response of firm-level employment and investment to monetary policy shocks heavily depends on firms' financial conditions.

For example, the work by Benjamín García, Mario Giarda, and Carlos Lizama that will be presented in this Conference combines location-based microdata on credit and debit card transactions with income surveys to show that fiscal policy programs that focused  2/5  BIS - Central bankers' speeches  on lower-income regions are associated with larger consumption responses, as predicted by models of heterogeneous agents with liquidity constraints. These theoretical and empirical advances in the literature were complemented by the improvement of computational capabilities. These gave rise to the recent development of the so-called Heterogeneous Agents New Keynesian Model or HANK model, which incorporated important features that improved the standard New-Keynesian-Model' fit to the data and introduced new transmission mechanisms of monetary policy. One of the main lessons from these models is that the direct effects of monetary policy on consumption, the so-called intertemporal substitution channel, can be very small compared to its indirect effects on income, which are shaped by general equilibrium forces that depend on the characteristics and behavior of households. Another important recent theoretical development is the model of heterogeneous firms and financial frictions, which alters the way we think about the transmission of monetary policy. While the empirical evidence suggests small effects of monetary policy on aggregate investment, the use of disaggregated data allowed us to observe that investment of firms with "good" financial conditions reacts strongly to monetary policy but not so the investment of financially constrained firms.
2/4  BIS central bankers' speeches  While this could be in itself regarded as a lesson, I will go further and add that the recent views expressed by policymakers in Hungary and Poland appear to favour the idea that euro area membership contains the room for growth. A number of public statements are relevant in this respect. The Hungarian Prime Minister, Viktor Orbán, said in April 2013 that “Hungary cannot seriously consider joining the euro zone until the country’s average economic development reaches 90 percent of the level of euro states”. Poland’s former central bank governor Marek Belka stated in 2015: “You shouldn’t rush when there is still smoke coming from a house that was burning… As long as the eurozone has problems with some of its own members, don’t expect us to be enthusiastic about joining”. His successor at the helm of the monetary authority in Poland, Adam Glapiński, said that – and I quote – “We will not give up on the zloty (currency), because it will dramatically limit growth opportunities for the Polish economy”. Back in 2001, Leszek Balcerowicz noted that structural reforms are those that harmonise nominal and real convergence, as there are also unavoidable tensions between the two. The more comprehensive the structural reforms, the less costly the disinflation and the more robust the economic growth over the long term.

These challenges exist for all participants in these markets: for the institutions that underwrite, structure and distribute these risks; for those who trade or hold them; and for third parties, like the rating agencies. These challenges of complexity are significant as well because they can exacerbate the problem of dealing with classic principal-agent problems. You can see this in the subprime mortgage market where, for example, a person may be rewarded for generating new mortgages on the basis of volume, without being directly exposed to the consequences of default; but these problems exist wherever incentives diverge and contracting is imperfect. Financial institutions typically maintain a range of different checks and balances to deal with the risk of misaligned incentives: for example, between a trader and the principal whose resources are at risk, or between the mortgage broker or underwriter and the firm that ultimately ends up holding the risk. But these checks and balances depend in part on the capacity of risk managers to observe and understand the underlying economic risk in these instruments. Where that is harder because of this combination of complexity, imbedded leverage, and short loss history, then market discipline will be weaker. A third issue relates to the dynamics of failure and the infrastructure that supports these markets. The dramatic growth in the volume of over-the-counter derivatives and the growth in the number and size of leveraged funds inevitably complicate the resolution of the failure of a large financial institution that is active in these markets.
And so during the summer of last year we received a severe buffeting from attacks against our currency and financial markets, threatening a financial meltdown. We fought off these attacks in August 1998 with a dramatic and controversial operation in the stock and futures markets. We accumulated Hong Kong stocks to the value – at that time – of around $ 15 billion. Since then, the value of that portfolio has increased to $ 26 bn, a reflection of the greatly improved financial environment and, even for many of our critics, a vindication of our operation. I should stress that making huge profits was not our primary purpose in this operation. But we are not complaining. The 70% return so far represents a bonus to our reserves: too bad there are no bonuses for those responsible for acquiring the portfolio. It has been a very productive investment for the people of Hong Kong. And we now have even more resources to safeguard the stability of our currency. But this large holding of Hong Kong stocks is arguably excessive, having regard to the traditional lack of involvement of Government in business, and to the potential conflict of interest in its dual role as regulator and shareholder. Towards the end of this presentation I shall briefly return to the question of how we intend to set about disposing of this portfolio.

Mr Yam comments on Hong Kong: from crisis to recovery  Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, at the HKMA Luncheon on the occasion of the opening of the HKMA Representative Office in London on 28 September 1999. * * * It is a great pleasure to be speaking here in London again, and to do so at this large and expert gathering. Some of you may have been present at my last speaking engagement here, in June last year at the 11th Dragon Boat Dinner, which now seems like a very, very long time ago. In that speech I described Hong Kong, against the background of the financial turmoil in Asia, variedly as a pillar of stability, the eye of the storm and the typhoon shelter of Asia. My message then was that Hong Kong, with prudent policies and robust financial structures, had been the last and the least to be affected by the storm. Since that time, as you all know well, the tail of the storm has swept through Hong Kong and it has not been so gentle after all. The painful downward adjustment in the internal cost/price structure under a fixed exchange rate system eventually and inevitably came. This was reflected in plummeting asset prices, declining GDP and rising unemployment. Although the fundamentals of the Hong Kong economy remained sound, these events provided an attractive environment for the launch of speculative attacks.
What I can say, though, is that as many other countries are already in recovery, Iceland’s is now only expected to begin in the second half of this year. But there are already several indications that Iceland is on the right path to recovery. We are on an IMF programme with three key elements: exchange rate stability, sustainable fiscal position, and rebuilding the financial sector. The exchange rate has been stable since last summer and has appreciated lately, with the support of capital controls but without supporting intervention by the Central Bank since early November. The fiscal consolidation programme has been progressing as planned. The functioning domestic banking system has been resurrected, and the final steps in the financial restructuring of the savings banks are being taken. With the Second Review of the IMF programme just finished, Iceland will gain access to foreign currency loans in sufficient amounts to dispel any concerns that it will be able to refinance large foreign currency sovereign debt payments coming due in 2011 and 2012. Furthermore, with the dust settling after the collapse, it seems that Iceland’s net foreign debt will be below 80% of GDP, including the estimated Icesave debt. This is similar to GDP in 2005; it is sustainable, and it is not on the top of the international debt league table. In short, Iceland does not face a sovereign debt crisis. It faced a foreign liquidity crisis and lack of access to foreign capital markets.

Már Guðmundsson: The Icelandic pension system and the financial crisis Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the opening dinner of the European Pension Convention 2010, Reykjavík, 2 May 2010. *  *  *  Chairman, ladies and gentlemen, It gives me great pleasure to address you here tonight, and I would like to thank the organisers for inviting me to do so. This is due not least to my past interest in and work on the Icelandic pension system and, more generally, my interest in the optimal design of pension systems. During my tenure as Chief Economist of the Central Bank of Iceland from 1994–2004, I was convinced that the pension system that had developed in Iceland, partly by historical accident, was one of the strengths of Iceland’s economy. This conviction had taken root earlier, when I was involved with pension reform and served for a while as the chairman of the board of a pension fund that has long been among the top ten in Iceland in terms of size. However, this view was reinforced around the turn of the century, when I made an in-depth study of the Icelandic pension system and tried to analyse its effects on the economy and the financial sector. 1 I subsequently tried to propagate the virtues of the system abroad.
Older workers tend to suffer larger earnings losses, and often face more difficult transitions. Displaced workers may not have the appropriate skills to find good jobs in other areas of the economy, including in growing export sectors. When the affected industry represents a large share of the local economy, the damage is often magnified. In this case, the burden can become more widespread as the level of wages across the community is negatively affected. And, this doesn’t begin to capture the full human toll— 3/8  BIS central bankers' speeches  including the impact on workers who have lost confidence in the future and the poorer health outcomes that occur because of increased stress. Research on Brazil has found that workers employed in regions facing larger tariff cuts experienced declines in formal sector employment.6 They also generally did not migrate to more favorable regions. Instead, they either became unemployed, moved into the informal sector of the economy, or—when more fortunate—moved into another sector within the same region. We should find better ways to help communities that are struggling because of the effects of free trade. In the United States, we have historically experienced a high degree of geographic labor mobility—much higher than in other advanced economies. The ability to move in search of better opportunities, when possible, has helped to mitigate some of the adverse effects of trade. But, mobility has declined in the United States in recent years, implying that the adjustment costs to trade may have increased.

Under the auspices of the Basel Committee on Banking Supervision of the BIS, a wide-ranging set of reforms has been introduced progressively, including the recent finalization of the Basel III reforms.11 Tighter regulation of international banks must be complemented by effective supervision, and much progress has been made in improving home/host supervisory cooperation. In a local context, cross-border supervisory coordination has taken on increased importance as Brazilian banks have expanded internationally in recent years. Still, greater clarity around how large global banks will be resolved is required if we are to successfully end “too big to fail.” Finally, it is increasingly clear to me that we also need to develop a better shared understanding of the proper role of exchange rate policies and reserve accumulation in a healthy and fair global trading system. To be sure, in a world of volatile capital flows, experience has shown that having adequate reserve cushions has helped many emerging market economies ward off costly instability. Indeed, Brazil’s large stock of foreign exchange reserves has been a key pillar of stability through turbulent periods. But, reserves are a relatively expensive form of insurance, and excessive reserve accumulation can undermine global adjustment, shift burdens onto trading partners, and erode political support for continued trade openness.