samchain/econo-pairs-v1 huggingface dataset:
In short, as the EU institutions, the ECB and the IMF have acknowledged, we are overcoming the banking crisis, although risks and uncertainties persist which mean that we certainly cannot consider the crisis resolved. That said, it needs to be reiterated that there is no better way of normalising credit flows than completing this task. 6  BIS central bankers’ speeches  Regulatory changes Sixth and finally, before discussing the progress made in the Banking Union project, I would like to refer, very briefly, to the most important changes in 2012 in financial regulation which are directly related to the handling of the banking crisis. The most significant legal change in the financial area was Law 9/2012 of 14 November 2012 on the restructuring and resolution of credit institutions which strengthens the FROB’s role and anticipates the future directive which will regulate these processes in Europe. Royal Decree 1559/2012 subsequently regulated asset management companies and, in particular, the regime applicable to the SAREB. Finally, in the area of bank customer protection, mention should be made of Royal DecreeLaw 6/2012 of 9 March 2012 which established various measures to protect those mortgage borrowers in most difficulty, which included the Code of Good Practices, to which virtually all Spanish banking institutions adhered. And, second, Banco de España Circular 5/2012 of 27 June 2012 completed the new legislation in this area, developing the concept of “responsible lending” and enhancing the information system applicable to banking products.

8  BIS central bankers’ speeches
29  All speeches are available online at www.bankofengland.co.uk/speeches  29  Chart 17: Firm level productivity distribution over time  (a) Levels  (b) Index GVA per person, £  GVA per person, Index 2002 =100 180  140 10th percentile 50th percentile 90th percentile  25th percentile 75th percentile  10th percentile 50th percentile 90th percentile  120  25th percentile 75th percentile  160  140  100  120  80  100  60  80 60  40  40 20  2002  2004  2006  2008  2010  2012  0 2014  20 2002  2004  2006  2008  2010  2012  0 2014  Source: ONS Research Database and Bank calculations. Notes: Productivity per worker. Chart 18: Productivity among Frontier and Non-Frontier companies  Source: ONS Research Database and Bank calculations. Notes: Frontier defined as top 5% of firms by GVA per worker in a given year and sector as defined by 2-digit SIC 2007 industrial classification. 30  All speeches are available online at www.bankofengland.co.uk/speeches  30  Chart 19: Contribution of frontier and other firms to productivity growth  Source: ONS Research Database and Bank calculations. Notes: Frontier as defined in Chart 18. Chart 20: Productivity dispersion*  (a) Services (Levels)  (b) Manufacturing (Levels)  (a) Services (Index)  (b) Manufacturing (Index)  Source: OECD and Berlingieri, Blanchenay and Criscuolo (2017, forthcoming); ONS Research Database and Bank calculations.

After the COVID19 outbreak disrupted our usual ways of communication and in-person contacts, this may be among the first international conferences on financial and economic history to take place physically again. To be more precise – almost entirely physically – since some of our speakers have had to deal with last-minute unforeseen circumstances and will present their research remotely. Thus, today we will have the opportunity to appreciate a series of papers and presentations, 1/2  BIS central bankers' speeches  commencing with the keynote speech by Thomas Mayer. He will lay ground by pairing the two main functions of money. On the one hand, money is a means of transaction that stores value over time and space while being a standardised unit of account to record this exchange. On the other hand, the printing or minting of money has been a potent funding instrument and a symbol of the state. Therefore, we expect to hear what motivates sovereign states to choose to adopt a common currency in a monetary union. We have seen in history how newly established states are eager to reaffirm independence in their internal political discourse by creating a national currency, but then resort to pegging to global currencies if, for example, in need to rein inflation or gain overall policy credibility. Sometimes they even adopt a foreign currency as their own unilaterally, as demonstrated by recent examples in close parts of Europe (Kosovo and Montenegro).
We know that some banks are making commendable progress in thinking about ways to estimate the value of diversification. Nonetheless, we remain concerned about the degree of confidence one might have in those estimates, given the relative lack of data available on which to base them and the consequent difficulties third parties would have to validate any estimates at this stage. Likewise, we have not yet seen evidence that there is a critical mass of banks that today would consistently meet the “use” test spelled out in the New Accord. For example, we are not certain whether banks today consistently take into account in their valuations each asset’s contribution to diversification as part of their daily monitoring and risk management practices, or use diversification estimates as part of their credit approval and review process. Many members of the industry have accepted our decision as prudent for now. But you have also stressed the need to develop a treatment for credit risk that is more consistent with the existing treatment of market risk and the emerging practices for operational risk. That’s why the work that so many of you do is so important to the future of banking: by finding ways to capture and measure risk in a manner that is increasingly comprehensive, accurate, and elegant in form, you are laying out a map for us to consider as we all traverse the landscape of risk management.

That said, low bank profitability is not an inevitable consequence of negative rates. ECB analysis finds that the best-performing banks in the euro area in terms of return on equity between 2009 and 2017 share three key features: they have been able to significantly reduce their cost-to-income ratios; they have embarked on large-scale investments in information technology; and they have been able to diversify their revenue sources in a low interest rate environment.17 At its last meeting, the Governing Council decided, based on the weaker outlook for inflation, to extend the date-based leg of our rate guidance “at least through the end of 2019”. That in turn implies that we will continue to keep the very sizeable stock of assets bought under the asset purchase programme unchanged for even longer. The Governing Council also decided to launch a new series of targeted longer-term refinancing operations (TLTRO-III) in order to preserve favourable bank lending conditions and maintain the efficient bank-based transmission of our policy. These decisions ensure that our policy stance remains accommodative in the face of a weaker growth outlook. And the calibration of the remaining parameters of the TLTRO-III will reflect the evolving macroeconomic conditions. Our current reaction function is well designed to respond to further delays in inflation convergence. In such a situation, just as we did at our March meeting, we would ensure that monetary policy continues to accompany the economy by adjusting our rate forward guidance to reflect the new inflation outlook.
Consistent with this, in the last year we have applied a very significant increase in the monetary policy rate (MPR), which already has brought it closer to the levels we estimate are necessary for inflation to return to the 3% target over the policy horizon, that is, within the next two years. A rising MPR is certainly not an innocuous event for an economy. It has impacts in many areas. Indeed, our projections anticipate that activity will contract for several quarters, an outcome that is in part the necessary response of the economy to adjust the overspending seen last year to levels that are sustainable with our productive potential. As complex as it may seem at the moment, not carrying out this adjustment will only increase the costs of higher inflation. First, because it will continue to stimulate spending growth beyond what the economy can afford, intensifying pressures on inflation. Second, because it could severely damage the confidence that individuals and businesses have in the authorities' control of inflation, causing price decisions and expectations to lose their long-standing anchor. Controlling inflation requires that people and businesses are confident that high inflation is a temporary problem. This confidence is only possible if there is an unrestricted commitment 9  by the Central Bank to achieve the inflation target, in our case, 3% within two years. This timeframe's logic is important to remember.

This is consistent with both lower terms of trade for Chile and tighter financial conditions, given the expected monetary policy response in the major economies. In addition, the projections consider a slowdown in the growth of our main trading partners (table 1). In the central scenario, the narrowing of the activity gap that began early this year will last for several quarters. Thus, GDP will see annual change between 1.5% and 2.25% this year, between zero and -1.0% in 2023, and between 2.25% and 3.25% in 2024. Regarding fiscal policy, for this three-year period, the projection envisages a spending path consistent with that reported in the last Public Finances Report (table 2). The Board estimates that, following the hike agreed at the June monetary policy meeting, further smaller adjustments in the MPR will be needed to ensure the convergence of inflation to 3% over the two-year horizon. Still, risks are still high, especially considering the level that inflation has reached and its long-lasting persistence. Risks surrounding the evolution of the macroeconomic scenario remain significant. The upper part of the MPR corridor reflects sensitivity scenarios where inflation could prove more persistent than expected. This could occur if private consumption continues to show no significant adjustment in the coming quarters.
Measured against Norway’s trading partners, the cost level is almost 20 per cent higher than the average for Norway’s oil age. Norwegian enterprises will often lose contracts abroad with the current high level of spare capacity in other countries. During the upturn, Norwegian enterprises fared well in spite of high costs because they increased efficiency and because sales were strong and prices high. Norwegian labour has been very costly, but nevertheless fully employed. Market conditions will become more demanding ahead. Even with a floating exchange rate, we cannot expect any substantial decline in Norway’s relatively high cost level as economic conditions are even weaker in other countries in our region. The industry structure in Norway is different from that of other advanced economies. We benefit from growth in Asian countries because of our sizeable commodity exports and freight industry. We are vulnerable to a slowdown in growth in Asia, which could lead to a fall in commodity prices and deterioration in our terms of trade. Norway’s high cost level may at the same time make it difficult for the business sector to shift to new markets. The economic geography of Norway will change over the next 10–15 years. The domestic cost level and low growth in Europe will bring pressure to bear on jobs and businesses in manufacturing communities. Job losses will have the most pronounced effects in areas where manufacturing has the highest concentration. Entire manufacturing sectors may be lost. BIS Review 69/2010  11  6. Conclusion  Let me conclude.

Thank you.
By purchasing assets in a targeted way, the Bank can aid liquidity in these markets and so improve the availability of corporate credit. The Bank has been purchasing commercial paper for over a month now. It made its first purchases of corporate bonds this week. And we are reviewing the case for intervention in other corporate credit markets. Importantly, the objective of the Bank’s operations within corporate credit markets is not to purchase a specific quantity of assets; rather it is to improve the functioning of those markets. The scale of purchases required to improve market liquidity may in fact be relatively small: the very knowledge that the Bank stands ready to purchase assets may be as beneficial as the actual asset purchases themselves. Moreover, the required scale of purchases is likely to diminish over time as liquidity improves and private investors return to the market. It is important not to judge the potential significance of this channel by the scale of asset purchases. How can we monitor the effectiveness of the purchases? It is much too soon to come to a firm judgement about whether this programme of asset purchases is having its desired effect. In particular, the impact on the growth of broad money and credit will not begin to be discernible for several months yet. There are, however, some encouraging signs. Since the MPC’s announcement, yields on gilts have fallen by 40-60bp at the horizons at which the Bank is making purchases.

With a clear view of the important role that insurers have in serving and supporting the economy, there is every potential for this to be realised. 4  BIS central bankers’ speeches
Almost without exception, countries favour criteria for representation that boost their own influence. This is normal when these kind of issues are discussed, but makes progress difficult. In the eyes of many it is Europe that is overrepresented. But it is enough to read the book ‘An Uncertain World', by the former US Secretary of the Treasury Robert Rubin, to realise that it is not Europe that has the real power - it is the United States that essentially calls the shots. This simple example illustrates that there is a big difference between the formal and actual power. Personally, I come to a number of different conclusions from this discussion. The world has changed since the fall of communism and as a consequence of the positive development in a large number of emerging markets. That gives cause to modify countries’ formal influence in the IMF by updating  BIS Review 43/2005  3  quotas to better reflect recent changes in world economy. Such changes should be implemented step by step, and with as broad support as possible. Some argues that the criteria used for determining countries’ influence should be modified. I am not convinced that this is the right way to move forward. There is much symbolism in this issue, which makes it a difficult one. For obvious reasons, it is also difficult to find criteria that balances the need for both borrowing countries and creditors to get reasonable influence, and, at the same time assures that the organisation functions well.

Many countries do not seriously consider the recommendations given to them by the IMF and/or blame the Fund for its own problems. Other countries want to avoid that the consequences of their own policy actions, for the rest of the world, are discussed within the IMF or prefer to discuss them elsewhere. •  To increase the legitimacy of the IMF, there are reasons to consider the formal governance issues, (i.e. the QVR-issues). A consensus has to be built, step by step, on how to deal with this. However, to increase the efficiency of the Fund, a number of other reforms could be implemented that are as important as the QVR-issue. In these areas it is possible start moving forward at once. Thank you. BIS Review 43/2005  5
This is why I particularly want to thank Emilio Ontiveros for his dedication, not only in today’s book, to popularising these subjects among those not necessarily expert in the matter. b. Re-designing national policies Yet to attain their maximum effectiveness, improvements in global governance should be matched by national economic policies conducive to ensuring the benefits of globalisation reach all citizens. Indeed, while globalisation has general equilibrium aggregate effects that are admittedly positive, it may also have an adverse impact – as Professor Ontiveros states in his latest work – on specific sectors and groups. It is important to attempt to minimise these effects. Improvements in education and active employment policies providing for the readier redeployment of the unemployed are an essential element in this challenge. The impact of population ageing should also be prioritised by the authorities. Specifically, social insurance systems will have to progressively adapt so as to make sufficiency and intergenerational equity compatible, and for the sake of their own financial sustainability. Broadly, in the setting described, the greatest challenge facing public policies is the proper selection of instruments that may effectively attain the goals set and minimise the potential adverse effects. In this respect, public policies designed on the basis of the evidence available on their effects coupled with arrangements to regularly assess these policies will be crucial. Further, many national policies should be designed with international coordination mechanisms, if they are truly to be effective.

It is now high time that these other aspects of banking union are also completed. Otherwise, we would make the same mistake that was made when the euro was introduced. Back then the consequences of having a single currency were not fully reflected in the Union’s institutional design. Internal inconsistencies made our union much more vulnerable than it needed to be when an external shock hit it. If the SSM is of great importance to the singleness of money, it is also greatly important to the singleness of the market. The single market is, as the euro, a central and irrevocable creation of the European Union. But, as is the case for the euro, its irrevocability, to remain unquestionable, needs being buttressed by appropriate and credible institutions. BIS central bankers’ speeches  1  The SSM is one such institution. And that is why it was – and remains – open to participation by countries which are not in the euro area. Before the crisis, the free passporting of banking services across borders relied on the principle of home supervision, host recognition. This principle, however, requires equal standards of supervision across borders, and mutual trust in the quality of supervision. That trust did not always stand the test of the crisis. A single supervisor, applying homogenous methodology across institutions, internalises mutual trust. Its establishment was thus one answer, and certainly an effective answer to this challenge.
When the interest rate falls, it is less profitable for households to save, and they will therefore make purchases now rather than wait until later. Borrowing also becomes less costly, and investment also rises. Higher demand in turn leads to a higher rise in prices and wages. Lower interest rates make it less attractive to invest in the Norwegian krone and for Norwegian enterprises and households to raise loans in foreign currency. Therefore, lower interest rates will normally lead to reduced capital inflows and a depreciation of the krone. This makes imported goods more expensive. In addition, a weaker krone increases activity, profitability and the capacity to pay in the internationally exposed sector. Activity in the economy moves in waves. For the Norwegian economy, the 1980s was a period of relatively wide fluctuations in activity, with periods of high inflation. The mid-1990s represents a period of stable and solid growth. In contrast to the situation in the previous decade, inflation was low and stable. At the beginning of the 1990s, the Norwegian economy was in a deep recession. Production was far below capacity. When growth in the economy picked up, capacity utilisation increased. The output gap shows the difference between actual GDP and the level indicated by trend growth - estimated at close to 2½ per cent in Norway. Around 1996, there was full capacity utilisation, and the output gap, as we normally measure it, closed.

Jarle Bergo: Monetary policy and business cycles Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at Kunnskapsparken Bodø, 25 September 2003. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 17 September and on previous speeches. The Charts in pdf can also be found on the website of the Norges Bank. *  *  *  The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The inflation target provides economic agents with an anchor for their decisions concerning saving, investment, budgets and wages. The inflation target also provides a framework for monetary policy’s contribution to stabilising output and employment. This intention is also expressed in the Regulation on Monetary Policy. High demand for goods and services and labour shortages normally point to higher inflation. When interest rates are increased, demand falls and inflation is kept at bay. When demand is low and unemployment rises, inflation will tend to slow. Interest rates will then be reduced. Norges Bank sets the interest rate so that future inflation will be equal to the inflation target of 2½ per cent. The interest rate has been reduced since December last year in response to the change in the inflation outlook.