samchain/econo-pairs-v1 huggingface dataset:
A first characteristic of contagion is that the spread of instability would usually not happen without an initial trigger event – which often appears to be a relatively contained event. A second characteristic is that the transmission of instability is in some way abnormal, for example, in terms of its speed, strength or scope. Though spillovers are to be expected in an interconnected financial system, contagion is distinct in that it often reflects a market failure and a dangerously amplified transmission of instability. The underlying market failure consists of the fact that contagion often involves externalities.3 As a result, the private costs of the initial financial market failure, that is the costs to the actor triggering contagion, are lower than the social costs. In the specific case of the sovereign debt crisis in Europe, the trigger could, for example, be that a country in a precarious fiscal situation does not seriously implement the necessary fiscal consolidation measures. This could lead interest rates on this particular country’s government debt to rise and could in turn also constrain economic growth in that country. This is what I call the “private costs” of such behaviour. Although in this case the lack of fiscal discipline is something which is strictly related to one country, this circumstance may still lead volatile financial markets to also lower their expectations about fiscal consolidation efforts in other countries. As a result, those other countries also begin to face costs in terms of significantly increased interest rates on their government debt.

The referendum was an event very specific to Greece. Indeed, the fact that this day was a public holiday in parts of Europe implies that the news flow on that day was more limited than usual. In response to the announcement yields on Greek government bonds and Greek sovereign CDS premia soared even further. The transmission of this shock to some other euro area sovereigns and euro area banks, in particular, appears to have been rapid, large and persistent. The CDS premia of France, Germany, Italy and Spain exhibited the largest oneday increase of the year. But whereas the CDS premia of France and Germany quickly receded to their previous levels, those of Italy and Spain further rose in subsequent days. Movements in bond yields were comparatively muted, although Germany benefited from strong safe haven flows.5 The above observations offer quite a compelling case for contagion, but such narratives are still subject to the question of whether alternative interpretations of these events are possible. It therefore makes sense to have a more systematic look at the data using empirical models of contagion. For this purpose, ECB staff has developed and is extending an analytical toolkit of models, which is “state of the art” in this area. Generally speaking, the results from these multiple analyses tend to support the notion that contagion is indeed a driving force behind the trends in the data.
For example, output growth could be hindered by a number of factors: a setback in global recovery, further delays in the energyintensive industrial projects that have been on the drawing board, or cutbacks in household consumption resulting from consumers’ deciding to save more and improve their net asset position more quickly than in the baseline scenario. The negative effects of the last of these will subside over time, however, and in a small, open economy like Iceland’s, the longterm effect should be positive. On the other hand, output could grow more than in the baseline forecast, particularly if risk premia on Icelandic financial assets decline significantly in the near future, foreign credit markets open up to Iceland again, foreign direct investment increases, and overall business investment becomes stronger. But these are big “ifs.” The roughly 3% output growth currently forecast for 2012 and 2013 is quite acceptable in the average economic climate. But projected growth for 2011 and 2012 is weak in view of the sizeable slack in the Icelandic economy. Furthermore, the foundations are not strong enough, as the contribution of external trade to output growth is negative and investment will be far below the historical average, even if it increases significantly from current levels. According to the forecast, exports of goods and services will increase by a scant 1% in 2011, followed by 2% annual growth in 2012 and 2013, even though the real exchange rate will be notably below its historical average throughout the period.

Digital publishing and distribution has fundamentally changed this market. Both the books and the shelves are now electronic. Authors can now format books for e-readers in a couple of hours. Sales platforms like Amazon Kindle Direct give access to a worldwide audience with essentially no upfront costs. Supply can close to perfectly match demand as the marginal cost of creating and delivering an eBook is effectively zero. This digital revolution has caused barriers to entry to plummet while simultaneously raising returns to author entry: they now receive as much as 85% of the royalties from an eBook, compared to as little as 10% from a physical book. Previously unpublished authors now sell millions of books. The incumbent middle men – book publishers, distributors and retailers – have found their lunch devoured in one sitting. In effect, they have been disintermediated by technology and (in a delicious irony) a common language. This pattern has been replicated in the music industry. For half a century or more, the music supply chain was unchanged. New acts were discovered by large record labels who distributed physical goods (vinyl, tapes or CDs) to retailers for sale to the public. Over the past decade, the costs of copying and distributing music have fallen to close to zero. As in publishing, barriers to new artist entry have plummeted. The middle-men – music production companies and distributors – have seen their piece of the pie eaten. And as a direct result of this industrial transformation, the pie itself appears to have grown.
It is the cost of long-term (seven, and ten-year) OFZs that banks price in their interest rates on long-term loans — investment loans and mortgage loans. Those are the types of loans that shore up growth, and in the case of mortgage lending, they are of great social importance, too. I also have to say that the opposite is true: rising inflation makes both short and long-term loans more expensive, while people become poorer as inflation erodes their incomes and savings. Economic history provides numerous examples when a late withdrawal from anti-crisis measures or prolonged accommodative monetary policy propelled a strong rise in inflation, higher yields of government bonds and higher interest rates on loans. It did not matter whether the central bank maintained a low policy rate: high inflation drove loan rates up. That occurred because the central bank rate was unreasonably low, and excessively stimulating. In those cases, central banks are often forced to raise their interest rates and switch to monetary tightening, and they have to do that in a more drastic manner, and for a longer period. Such a course of action is dictated by inflation, inflation expectations, and early signs of bubbles signalling risks to financial stability. Ultimately, inflation rates become unacceptable to either society or the economy, and credit is unaffordable. There are such examples today. Statistical data for some developing countries already suggest double-digit growth in inflation, with no signs of a slowdown in store (we will provide the data later).

6  BIS Review 67/2009  Table 2: Monetary Policy Committee (MPC) Decisions in 2008 and 2009 MPC Meeting Dates  Decision on Interest Interest Rate Rates (Percentage points)  17 January 2008 14 February 2008 19 March 2008 17 April 2008 15 May 2008 16 June 2008 17 July 2008 14 August 2008 18 September 2008 22 October 2008 19 November 2008 18 December 2008 15 January 2009 19 February 2009 16 April 2009  -0.25 -0.25 No change No change +0.50 +0.50 +0.50 No change No change No change -0.50 -1.25 -2.00 -1.50 -0.75  15.50 15.25 15.25 15.25 15.75 16.25 16.75 16.75 16.75 16.75 16.25 15.00 13.00 11.50 9.75  Source: CBT. Benchmark bond rates came down significantly driven by the policy rate cuts and the partially easing tensions in global financial markets (Figure 10). Moreover, the signal given by the Central Bank for possible necessity of maintaining downward flexibility for a long period of time coupled with moderate recovery in risk perceptions contributed to the decline in market interest rates. Figure 10: Interest Rate Developments (Percent) 27  ISE Bills and Bonds Market Interest Rate (Benchmark, Compounded)  25 CBRT Overnight Interest Rate (Compounded) 23 21 19 17 15 13 11 9 05 07  07 07  09 07  11 07  01 08  03 08  05 08  07 08  09 08  11 08  01 09  03 09  Source: ISE, CBT.
6 There are several key factors to the improved prospects for the rest of the year. 7 First, the external environment remains generally favourable, with both major engines of global growth intact. •  In the US, recent data indicate continued economic expansion. Both manufacturing and services PMIs are up. The labour market continues to improve. There is also a modest rise in business spending, which is a key driver of growth in the US. •  In China, growth should come within the consensus range of 7–7.5%. There are some headwinds from ongoing structural reforms but targeted policy measures will provide support to the economy. 8 Second, sectors dependent on regional demand – such as financial intermediation services, business services, and chemicals – should do well. They will benefit from higher regional incomes as the pick up in exports bolsters domestic demand in Asia. 9 Third, domestic oriented sectors should stay resilient. The construction industry is supported by a pipeline of infrastructure projects while domestic corporate and consumer spending will lend support to the info-communications and other essential services such as healthcare and education. 10 However, there are downside risks to the growth outlook. This year, geopolitical risks are larger than macroeconomic risks. The MAS is closely monitoring the ongoing conflicts in the Middle East and Ukraine. Should the conflicts intensify or drag on, they could adversely impact confidence, generate financial market volatility, and increase global oil prices.

Considering these figures, it is clear that Europe has the resources to face a manageable financing gap in some parts of the region. And yet, it is in turmoil. The answer to this paradox can be found by considering the true nature of the crisis. Most observers would simply see the fiscal imbalances in peripheral economies. These may have been the trigger. But we are now looking at a true financial crisis – that is a broad-based disruption in financial markets. To understand what is going on, it is necessary to take a step back. Europe is the most financially integrated area in the world. There is full capital mobility inside the EU. Financial regulation is almost totally harmonized, financial infrastructures and payment systems are closely interconnected. Europe is truly a single financial market and, more importantly, a truly single financial system. The single capital market has brought significant benefits to Europe. Capital has been flowing to peripheral countries, triggering investment and growth. Financial integration has supported and underpinned the broader process of trade and economic convergence. At the same time, capital mobility has been used to postpone fiscal adjustment. Capital inflows have fueled credit and asset booms. Current account deficits have been financed through fragile sources of funding. The easy access to financing has created insensitivity to current account imbalances which, in turn, have weakened the incentives for preserving or improving competitiveness. An integrated financial system may be efficient, but not necessarily robust.
Advocators of a “wait-and-see” approach in the face of supply shocks are not clear on the question of when the supply shock ends and when demand-driven price increases take its place, in an environment where inflation keeps rising. If this issue is not clarified, any above-target inflation figure or any upward revision in inflation forecasts can easily be attributed to supply-side factors. Clear lines should be drawn as to which economic data would refute this discourse and what would constitute a limit to supply shocks from a central banker’s point of view. Dear Guests, In the last part of my speech, I would like to discuss recent developments in the Turkish economy and the monetary policy implemented in this period. In early 2008 the supply side shocks in food and energy prices started to exert significant inflationary pressures, as they reached unprecedented levels above and beyond expectations. For instance, October 2007 Inflation Report, based on forecasts of international agencies, had foreseen oil prices around USD 70 per barrel in 2008 and a gradual correction in food prices. In other words, it was assumed that supply side shocks would be temporary and that they would lose impact after a while. These forecasts were in line with pricing in  BIS Review 109/2008  3  forward and futures markets. However, these expectations did not materialize. Both crude oil prices and agricultural commodity prices continued to rise. The adverse impacts of supply shocks reached unprecedented levels during the first half of 2008.

Public expenditures, as you can see on the slide, restricted the fall in domestic demand with a contribution of approximately 1.2 points to growth (Figure 23). Figure 22: Contribution to Growth from Figure 23: Contribution to Growth Production Expenditures (Percentage Points)  from  -4 -5 -6  -5.0  Source: TURKSTAT. BIS Review 103/2009  -5.6  -6.6 -8.3  -7.1 Net Exports  -1.9  -3  Change in Stocks  -1.1  -2  0.6  Public Investment  -0.1  0.5  Public Consumption  -1  7.0  Private Investment  0  8 6 4 2 0 -2 -4 -6 -8 -10  Private Consumption  Net Vergi  Services  Construction  Industry  Agriculture  (Percentage Points)  Source: TURKSTAT. 13  Uncertainties in demand conditions driven by the global turmoil lead firms to adopt a cautious approach regarding production activities. In this context, the low capacity utilization rates and the weak course of propensity to invest continue to limit employment conditions. In the first quarter of 2009, with the accelerating slowdown in economic activity, the negative course of the labor market intensified in comparison with the previous quarter, and the increase in unemployment rates continued, also due to the increase in labor force participation rates (Figure 24).
Le respect de l’objectif à moyen terme de “ finances publiques proches de l’équilibre ou en excédent ” — il signifie que nul ne doit céder à la tentation du déficit budgétaire individuel — est essentiel si l’Union veut pouvoir faire face collectivement à des périodes de difficultés économiques et si chaque pays veut pouvoir surmonter des phases de détérioration de la conjoncture qui n’affecteraient que lui. C’est l’attachement de l’ensemble des gouvernements européens au Pacte de stabilité et de croissance qui a permis à la BCE et aux banques centrales nationales de décider récemment de ramener les taux d’intérêt à 3 % — une baisse des taux qui ne peut manquer de soutenir la croissance. 5  BIS Review 22/1999  - En troisième lieu, tous les pays européens doivent résolument s’engager à entreprendre des réformes structurelles. L’Europe continentale connaît un chômage élevé, même si celui-ci a enregistré une légère décrue dans la plupart des économies concernées. Selon le FMI et l’OCDE, ce chômage est, à concurrence de près 80 %, de nature structurelle, c’est-à-dire qu’il est créé par le poids de nos propres règles et règlements. Le Conseil de la politique monétaire de la Banque de France partage cette analyse. Certains observateurs extérieurs reprochaient à l’Europe, tout récemment encore, de se focaliser sur l’euro au lieu de se consacrer à la tâche, plus urgente à leurs yeux, de mettre en œuvre les réformes structurelles indispensables à une création plus dynamique d’emplois.

Key agencies such as MGTC and Sustainable Energy Development Authority (SEDA) have been established to provide the required support and incentives to promote the industry. On the financing side, Bank Negara Malaysia has worked closely with the Ministry of Finance and the Ministry of Energy, Green Technology and Water to establish the Green Technology Financing Scheme (GTFS). The scheme is expected to benefit over 140 companies. With an initial allocation of RM1.5 billion, it was recently increased with an additional RM2.0 billion. The scheme was structured to reduce the financial risk borne by financial institutions, as the government guarantees 60% of the financing amount via Credit Guarantee Corporation Malaysia Berhad (CGC) and bears 2% of the total interest or profit rate. This financing framework aims to improve the preconditions for financial institutions to finance viable and innovative green technology companies. It provides avenues that help bridge information gaps between financiers and businesses, and introduces credit enhancements and financial incentives to address any market short comings in meeting a legitimate economic need. Efforts are also being carried out to strengthen the capacity of financial institutions to provide advisory support to businesses. The certification process that verifies the businesses which qualify for the GTFS is central to these efforts, as it not only verifies the technical capabilities of the businesses, but also assists in assessing its commercial viability. Since the introduction of the GTFS in 2010, the growth of green technology financing in Malaysia is beginning to gain traction amongst financial institutions.
This alliance marks a new era in the global consolidation of financial markets, with its stocks traded continuously for 13 hours a day on two continents and offering corporate issuers and international investors the opportunity to deal in two of the world's major currencies, the US dollar and the euro. French banks today have a leading position in equity derivatives markets, with more than 25% of the worldwide market. New opportunities have arisen in this sector, with the development of the Asian instruments, which are still at an early stage, as well as products related to environmental and sustainable development issues. The French expertise in these markets is based on a strong education in mathematics and finance that leads to excellence in financial fields and a large pool of academic talent. In this chain of services, French banks are able to propose an end-to-end secured service based also on their leadership in post-trade and securities services. 2  BIS Review 51/2007  These market-driven services are reinforced by a strong and innovative “buyside” coming from the good position of the French asset management industry. Quality of services in the asset management industry is another key opportunity for international investors. Assets under management have tripled over the past ten years and consequently the French asset managers have built up a strong and global network and position Five of the largest French firms now rank among the top 25 asset management companies in the world, operating worldwide including in new fast-growing markets in Asia.

Between 2011 and 2015, the number of cheques issued had reduced by 27%, from 205 million cheques in 2011 to 148 million cheques in 2015. At the same, the number of IBG transactions had increased by 147% from 60 million transactions in 2011 to 149 million transactions in 2015. This is a key milestone as the number of IBG transactions surpassed the number of cheques cleared for the first time. The IBFT transactions had also increased significantly by almost eight-fold from 5.8 million transactions in 2011 to 47 million transactions in 2015. This signifies greater public confidence in the use of e-payments. Such achievement is also indicative of how effective collaboration and coordinated efforts by the various stakeholders in the payment value chain could produce the intended outcomes. We should put in more effort to sustain the cheque reduction whilst promoting greater adoption of e-payments in areas where the usage of cheques is still relatively high. These areas include interbank card and loan repayment, over-the-counter cheque payments to government agencies and cheques usage in the takaful and insurance industry. Intensified efforts needed in the displacement of cash Our progress in promoting the use of debit cards as an alternative to cash however, has been modest. For the period between 2011 and 2015, there was only a marginal increase from 1 to 3 debit card transactions per capita and from 7 to 9 payment card terminals per 1,000 inhabitants.
Indeed, the latest information shows that economic activity is expected to have continued worsening in recent months. This is evident in the manufacturing Purchasing Managers’ Index (PMI), which has since the start of the year stood below 50, a level indicative of a contraction in activity. The reduction in the last few months in the global service sector PMI, which had held firmer to date, in expansionary territory, suggests an increased risk of a greater slowdown in global activity. This downturn in activity has also been accompanied by more marked divergences across geographical areas. Among the advanced economies, activity has remained relatively robust in the United States, underpinned by the fiscal expansion and the soundness of private demand. However, the gradual tailing off of the effects on activity of tax cuts, the signs of a global slowdown and the absence of clear inflationary signals have already prompted a shift in the Federal Reserve’s monetary policy. This has taken the form of the announced conclusion of the balance sheet reduction process as from September and, last July, the first interest rate cut since 2008. Moreover, the financial markets anticipate further cuts in rates in the rest of 2019 and in 2020. In other geographical areas, GDP growth has been increasingly weak. This has been the case in the European economy, to which I will refer later.

BIS Review 98/2008  7  Market-driven financial market developments need the support of critical infrastructure, namely: (1) Information that allows efficient decision making and pricing on various asset markets, financial as well as related markets such as real estate market, which are still very lacking in many emerging markets, and may be an area of public support. (2) Legal reforms to ensure an enabling environment for innovation in products and business models for the financial system. And (3) Human resource with proper competency in modern financial and risk management are scarce and is becoming a bottleneck for development. The authority may need to step in to facilitate training and accredition of professional standards, if it has external benefits. Notwithstanding these challenges, however, notable progress has been made by emerging markets in the past decade, much of which is catalysed by comprehensive economic reform in which market-oriented economic and financial liberalization have been the main features. For East Asia, despite the progress made, significant gap still exists in diversification, efficiency and robustness when compared to the role played by financial markets in developed economies. Looking ahead, in addition to the pressure from globalization, the shift in demographic structure will also be an additional pressure. This is to say some smaller emerging markets will face an aging population and the increase in demand for wealth management, while the supply of local products are limited for diversification. This will pose challenges for inter-temporal allocation of resource and risk.