samchain/econo-pairs-v1 huggingface dataset:
Eddie George: The case for sustained macroeconomic stability in the United Kingdom  Speech by the Rt Hon Eddie George, Governor of the Bank of England, at the British Chamber of Commerce National Conference, held in London, on 4 April 2000. *  *  *  Ladies and Gentlemen, they say that in the monetary policy business one of the key elements to success lies in getting your timing right. Well, I have to admit that the timing of my appearances at your national conferences has been less than perfect. Central bankers are rarely popular with the business community when interest rates go up - even though I explain to them that rising interest rates are a reflection of a strong economy. Savers tend to be more understanding. They only complain when interest rates come down - even though I explain to them that that is a reflection of lower inflation which means that the value of their savings is being better maintained. But, in any event, in the run-up to my first visit to your conference, in May 1995 in Aberdeen, we’d raised interest rates in successive steps, by 1½%. In those days of course I could blame the Chancellor! But I should point out that our next move, in December 1995, following the conference was to begin cutting rates - though I wouldn’t suggest it was solely as a result of the conference.

We are among the most transparent central banks anywhere in the world. Our debate is informed by a huge input from our very able professional staff both in London and in our Agencies throughout the UK, and I’d frankly be surprised if you were able to identify any relevant issue that we have not considered in one way or another. Indeed I would very much hope that you would let me know if you did. I don’t plead ignorance; I plead intrinsic uncertainty. Monetary policy operates with a lag, having its full effects only after about a couple of years. Unlike some outside commentators apparently we know we don’t have a crystal ball. Our judgements are necessarily based upon a very careful assessment of the balance of risks at the time, continuously updated in the light of the constant flow of information of all kinds relevant to that assessment. That’s the nature of the process. Given that, I would not expect, and you would not reasonably expect me, to be able to demonstrate to you that we have precisely the “right” answer at any particular time. But I can promise that if the evidence changes in either direction so too will our assessments. You can of course question our processes, our interpretation of the data or the quality of our analysis - it’s there for all to see. But ultimately the proof of the pudding is in the eating, and it is only on average and over time that our policy decisions can sensibly be judged.
Chart 3, replicated from a speech I gave last year, shows estimates of the global trend component of the equilibrium real interest rate by Bank staff (in blue) along with other estimates from academic papers. We call this trend component Global R*. Chart 3: Empirical measures of Global R* have fallen in recent decades Estimates from panel of 31 countries from 1900-2015 (a)  (a) Source: ‘The economic landscape: structural change, global R* and the missing-investment puzzle – speech by Andrew Bailey’ (with references to academic papers); and ‘Structural change, global R* and the missing-investment puzzle’, Bank of England Staff Working Paper No. 997 (2022) by Andrew Bailey, Ambrogio Cesa-Bianchi, Marco Garofalo, Richard Harrison, Nick McLaren, Sophie Piton and Rana Sajedi. Bank of England  Page 7  There are wide error bands around the central estimate, but the direction of travel has been clear. Global R* has fallen markedly over recent decades. As we look deeper into the causes of this, two supply factors stand out: a slowdown in productivity growth and population ageing across advanced economies. While this is a global story, let me focus on the United Kingdom. Chart 4: UK productivity growth has slowed since the financial crisis Annual growth in output per hour for the whole economy and manufacturing sector (a)  (a) Sources: ONS and Bank calculations. Chart 4, reproduced from our latest Monetary Policy Report, shows that there has been a marked and sustained fall in productivity growth in the United Kingdom following the global financial crisis in particular.

Peter Pang: The role of SMEs in Asian development Statement by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority and Head of Delegation, Hong Kong, China, at the 41st Asian Development Bank Annual Meeting, Madrid, 5-6 May 2008. *  *  *  Let me first thank the Government of Spain and the people of Madrid for their warm hospitality. I welcome the successful conclusion of the ADF X negotiations ahead of this meeting, providing timely and critical resources to the ADB to further its work in poverty reduction in Asia. The remarkable development of the region over the past decade has significantly improved the lives of its people. Yet, eradicating poverty remains a huge challenge, and the rapid economic growth has brought about a new set of development issues. We therefore welcome the extensive review of the Bank’s Long-Term Strategic Framework over the past two years to identify the new challenges faced by the region and the launch of Strategy 2020 to guide the Bank’s work in the next decade. I am glad to see that Strategy 2020 correctly puts a greater focus on the sustainability aspects of growth as Asia enters the next stage of development. Among other priorities, I am also happy to note more emphasis being given to private sector development and private sector operations. Enabling the private sector with firms investing, creating jobs and improving productivity is crucial to sustaining the long-term economic growth and expanding opportunities for the poor.
Again, this is significantly lower than pre-crisis – annual growth in unsecured lending was around 12% in the decade before the crisis. But it has picked up quickly and advertised rates on some products are close to historical lows. Much of the increase has been non-credit card unsecured loans such as personal loans and car finance – the majority of car finance is provided by non-banks. And, not surprisingly, alongside the pick-up in secured lending and lower mortgage rates there has been an increase in the growth rate of house prices and a pick-up in housing market activity. After a lull in 2014, house prices are now growing at just under 6% a year – more than twice the rate of earnings growth. Mortgage approvals for house purchase have increased by 10% over the year to an average of 69,000. I do not think that the role of the macroprudential authority should be to control asset prices including house prices. But increases in house prices and housing market activity can give rise to macroprudential concerns. If they are debt financed this can in turn lead to vulnerabilities in bank balance sheets, excessive increases in aggregate debt to income ratios or adverse changes in the distribution of debt. It was this concern that led the FPC in June 2014 to limit the flow of high debt to income mortgages; those limits have not been reached but, as the housing market begins to heat up again it is prudent that they remain in place.

Stress tests provide an assessment of whether the capital buffers held by banks are sufficient to absorb losses in a stress. So they are well suited to guide the calibration of countercyclical capital buffers. The Bank of England is developing a countercyclical approach to annual stress testing of banks. Rather than applying a constant level of stress from year to year, the severity of the stress would vary with the cycle. It would increase as risks build up and decrease after they have abated or crystallised. The parameters of the scenario – falls in GDP, asset prices, employment etc – would be most severe during periods of exuberance when credit and asset prices were growing quickly and the financial system was least concerned with risk. The parameters would be less severe when exuberance had evaporated and prices had corrected, which is often the time when the system is most risk averse. We aim to develop this approach over the next three years, starting with the 2016 stress test. Along with a regular assessment of data and indicators it will be a key part of a forward looking, data driven approach to setting the UK’s countercyclical capital buffer for banks. We have set out more details in a recent Bank paper.2 As always, one issue will be assessing the costs and benefits through time in so far as that is practicable. Another is where to set the countercyclical capital buffer in different parts of the cycle to enable it to be relaxed at times of stress.
On average, it was 1.1% in this period, dropping 1.8 percentage points from the previous quarter. The rapid decline of annual inflation rates, which has started in the third quarter of the past year, is driven mainly by the slowdown of price rise in food items during this period, as well as the stability of prices of other consumer goods. Inflation performance has reflected the simultaneous action of supply and demand factors. On the supply side, slowdown of commodity prices in international markets and of inflation in our trade partners, combined with the stable exchange rate, have transmitted lower imported inflation rates to our economy. Likewise, contribution of administered prices has been lower. Inflation expectations have been anchored and production cost pressures contained. On the demand side, pressures remain low, conditioned by the continuation of the negative output gap. Reduction of factual inflation rates, shifting of the inflationary pressures balance to the down side and the increase of aggregate demand below its potential, under the conditions of a controlled fiscal policy, have created the space for further increase of the monetary stimulus to the economy during the first quarter of the year. The Bank of Albania has lowered the key interest rate twice, bringing it down to the historic low of 4.25%. Such a decision, besides being in line with maintaining price stability over the medium term, provides the appropriate conditions for boosting private demand at home.

Indirect data suggest that aggregate demand has carried forward positive growth rates, but growth remains significantly below the potential of the Albanian economy. Macroeconomic factors determining private consumption and investments, and a prudent fiscal policy sustain the assessment for contained growth of the domestic demand in the first quarter of the year. Moreover, in the absence of complete data and in real terms on developments in the external sector of the economy, assessments suggest that the contribution of foreign demand to economic growth will be lower than in the past year. Fiscal policy was subject to a consolidation nature over the first quarter of 2012, in line with its objectives to keep budget deficit and public debt in check. The contained fiscal approach has been reflected in minimum public expenditure in the first quarter of the year, with an annualised rate of 0.7%. Furthermore, low growth rates of fiscal revenues continued their trend, settling at 1.2% in this quarter. The budget deficit was ALL 11.5 billion, or about 2.5% down compared with the first quarter of a year earlier. Developments in foreign trade over the first two-month period of the year point to contracted trade exchange in annual terms. Value of exports in these two months dipped by 20.5% against the corresponding period of a year earlier, reflecting the moderation of foreign demand and price developments in global markets. On the imports side, their growth rates were significantly decelerated, reaching a nominal annual growth of 1.8% during this period.
In particular, the crisis has already generated an increase in the level of indebtedness of many firms. Thus, it would make sense to assess the possibility of actions to support firms that do not involve an increase in financial obligations, such as, for example, by means of direct assistance or, in some cases through temporary capital injections. 3  Furthermore, for companies that have difficulty meeting their financial obligations, streamlined debt restructuring procedures need to be available to avoid such difficulties leading to the disappearance of heavily indebted firms whose business model is nonetheless viable. And, in parallel, for firms with non-viable business models, an orderly market exit should be available, since this would result in a more efficient allocation of resources. Apart from these short-term actions, an ambitious structural reform agenda is urgently needed, to increase the economy’s potential growth, which was already low before this crisis. And this is also true for European policies. In this case, for example, it is crucial that the European fund be converted into a permanent, common fiscal stabilisation instrument for the euro area. This would allow a joint fiscal response to macroeconomic shocks and provide a larger supply of safe European assets, facilitating the general functioning of financial markets and the specific conduct of monetary policy. Completing the Banking Union is also a priority, with the approval of a fully pooled European Deposit Guarantee Scheme. Further, we must move towards lowering the barriers to a genuine Capital Markets Union.

The key difference with previous programmes is that purchases are now conducted in a flexible manner and fluctuations in their distribution will be allowed over time, among jurisdictions and across asset classes, with a view to preventing fragmentation in monetary policy transmission. 1  The volume of purchases initially announced under the PEPP was € billion for the whole of 2020. In June the term was extended up to at least June 2021, and the volume by a further € billion, making for a total of € trillion. The PEPP, together with the new purchases under the Asset Purchase Programme (APP), will increase the portfolio of the Eurosystem’s securities purchase programmes to around € trillion in June 2021. In early October 2020, net purchases of public and private sector assets under the PEPP had already reached € billion since its launch at the end of March, i.e. 42% of the current envelope. Today we can safely say that the PEPP has been clearly successful in curbing financial market deterioration in all euro area countries. This is particularly visible in sovereign yields, which are now close to their pre-crisis levels; but it may also be perceived in other market segments such as that for corporate debt. And, of course, this decline in the cost of sovereign debt has provided policy space for fiscal authorities in all euro area countries, enabling them to take unprecedented measures to sustain the income of households and firms.
The clause in the law dealing with the transfer to the Treasury makes some for provision for whether the Bank’s capital has reached a specified minimum relative to the size of the domestic credit system. The Central Bank Act states that an amount equal to two-thirds of the Central Bank’s profit shall be paid annually to the Treasury. However, the Bank pays only one-third of its profit to the Treasury if its capital is equivalent to less than of 2.25% of the amount of lending and domestic securities in the credit system. At present the Bank’s capital is still a long way short of this legal reference level, and its annual profit will not suffice to strengthen it markedly anyway. Growth has not only soared in the Icelandic credit system, but on an increasing scale each year has also been associated with foreign markets, where credit institutions’ activities have expanded enormously. These changes also give grounds for considering other terms of reference for foreign reserves than import levels alone. As the Prime Minister stated in his speech earlier, the government responded positively to the points raised by Central Bank and authorised it to borrow abroad in the name of the Treasury in order to strengthen its foreign reserve substantially, while the government was also mandated by parliament to strengthen the Bank’s capital position. The Board of Governors would like to thank the government for such a good, firm response.

One explanation for the increase may be that Icelandic companies have been undervalued by the markets, for example relative to comparable businesses in other countries, and another that bold and determined investment ventures have driven up their value. But risk and gain often go hand in hand. Sometimes the stakes may be raised too high. It has long been customary to pay a premium for attractive investment options. Such goodwill used to be depreciated in companies’ accounts over a long period and rarely affected their operations. The situation has changed whereby companies now need to make impairment tests of the goodwill they enter on the asset side of their balance sheets. If their original ventures fall flat, the goodwill must be depreciated accordingly. Thus there is a risk, if conditions deteriorate, that this rule could amplify a company’s negative results at the worst possible time. Goodwill totalling more than 500 b.kr. was entered in the financial statements for 2006 of companies listed on Iceland Stock Exchange, and at certain companies, goodwill and other intangibles account for more than half of the total assets on their books. This is a cause for some deliberation. Although the Central Bank’s main function on occasions such as this is to draw particular attention to causes for concern, it should of course take note, like everyone else, of the factors conducive to strengthening the long-term economic outlook. Iceland’s economy is advanced, transparent and vibrant.
Fatos Ibrahimi: Macroeconomic developments and the characteristics of the Albanian financial system Speech by Mr Fatos Ibrahimi, First Deputy Governor of the Bank of Albania, at the Crans Montana Forum “The Albanian banking system in front of the international financial crisis”, Tirana, 27 March 2009. *  *  *  Dear participants, Let me start by thanking the organizers of this meeting, for enabling this joint discussion regarding the status of our financial sectors and the measures which are necessary to sustain its resistance to the negative effects of this unprecedented global crisis. Indeed, what started as financial crisis in the US, has transformed itself into an economic crisis, that is having dire consequences in real sectors of the world economy. The hope is that, like earthquake bands, the magnitude of the crisis effects will fade out as it widens and is confronted with measures taken by countries to resist it. I will start by describing the main macroeconomic developments of our economy and the characteristics of our financial system. Then I will mention some of the related measures taken by Bank of Albania, in its role as the monetary and supervisory authority of the country, and our expectations for the foreseeable future. Our economy has been in a solid path of growth for the last decade, with an average annual growth of around 6 percent.

Chris Salmon: Remarks on the Sterling Monetary Framework (SMF) Annual Report Remarks by Mr Chris Salmon, Executive Director for Markets of the Bank of England, at the Money Markets Liaison Committee meeting, London, 13 July 2015. *  *  *  I would like to thank Eleanor Broughton, Ronnie Driver, Sarah John, Ben Martin and Ben Morley for their comments and contributions. The Bank will hold an Open Forum this autumn. The Forum will facilitate an open debate about the role of markets in society, and provide an opportunity to review how key financial markets are functioning. The Bank’s own mechanism for interacting with markets, when implementing monetary policy and providing liquidity insurance, is set out in the Sterling Monetary Framework (SMF). Markets work more effectively when participants are open and transparent about their activities, and the Bank aspires to meet that standard in relation to its own market operations, including through publishing an annual report on the effectiveness of the SMF. This Committee brings together key participants in sterling money markets and is a natural venue to discuss the operation of SMF. As such, today I want to summarise the key themes that were covered in our most recent annual reports and to sketch out some of the issues that the Bank is likely to confront in coming years. These are areas where your future feedback will be essential as we work to maintain the effectiveness of the SMF.
Furthermore, for the last several months, we have been experiencing an economic cooldown whose causes largely lie outside the euro area. According to the IMF, heightened trade tensions are expected to shave up to 0.8% off global GDP in 2020, primarily due to mounting political uncertainty and a resulting decline in business confidence. At 3% in 2019, global growth is expected to be at its lowest level since 2008/09. The euro area as a whole has been badly affected, principally due to the weight of Germany, whose growth at best is expected to amount to 0.5% this year. Our country is holding out far better with expected growth of 1.3% this year and the next. I would just like to add a few words about Brexit: even with a withdrawal agreement, all aspects of a possible trade agreement and its financial services component will still have to be negotiated in 2020. The uncertainty surrounding Brexit will therefore continue. Our monitoring of the implementation of contingency plans, however, gives us confidence for the future of the French insurance industry: for our part, we are ready, for every scenario. Given the context of prolonged uncertainty, we are compelled to pursue an accommodative monetary policy. It would go against all logic to raise interest rates now. When there are reasons for supporting demand, which is apparent in the excessively low inflation we see today, active monetary policies have to be maintained.

We are entering a consultation period that is absolutely critical and that will lead in June next year to the issuance of an opinion by EIOPA. This opinion, which will be reviewed by the Commission, will form the basis for the negotiations with the Council and Parliament that are scheduled to start in early 2021. Here again, we need to put the challenges posed by Solvency II into perspective. Let me remind you that this is the most ambitious reform ever undertaken in insurance. The new regulatory framework, based on an  Page 5 of 6  approach that takes into account all risks to which insurers are exposed, has undeniably strengthened the resilience of the European insurance market. However, and you yourselves see this every day, the prudential requirements imposed by Solvency II have a number of drawbacks, including being volatile and complex. To remedy this, let’s take advantage of the window of opportunity offered by the directive’s review, and push for four priorities that are essential for financial stability and for the sound financing of the economy: (i)  All things being equal, the revision must not lead to an increase in capital requirements for the European insurance industry. (ii)  It would be counterproductive to artificially lower the capital requirement by stopping equity investments. But despite the advances obtained in 2018, this asset class is still being penalised.