samchain/econo-pairs-v1 huggingface dataset:
Balance of payments and tourism Our balance of payments performance in the past three years has been very favourable: from running a heavy deficit, with a negative current account balance up to 10% of GDP in 2007, we are now in a different position, with few, but brief precedents in Spanish economic history, marked by a current account surplus against a background of significant GDP growth and job creation. In the first nine months of this year (the figures for September were published today), the Spanish economy’s net lending (i.e. the cumulative surplus on the current account balance and the capital account balance) stood at € billion, compared with a surplus of € billion in the same period of 2014; that is to say, it has more than doubled thanks to the reduction in net foreign interest payments. The widening of the surplus on capital account and the increase in the positive balance on goods and services, as a result of the improvement in the energy balance and, to a lesser extent, in the surplus on non-tourist services, were also a contributing factor. 2  BIS central bankers’ speeches  The tourism balance has contributed positively to the improvement in the current account balance. In the January-September period, the tourism surplus was € billion, a very similar figure to that recorded in the same period in 2014.

In its latest report the International Monetary Fund lowered its estimate for world growth for 2015 by 0.3 pp to 3.1%, with the developed and emerging economies expected to perform differently. The pick-up in activity continues in the advanced economies, underpinned by favourable financing conditions and low commodities prices, while inflation is running at very low rates. In most of the emerging economies, activity continues to fall, owing not only to conjunctural reasons in the international environment, but also to more structural factors, such as lower productivity gains and demographic factors. Activity continued to slow in the emerging Asian economies, while in Latin America it is stabilising at very low rates, albeit with notable differences from country to country; in turn, in some cases, inflation stands above the authorities’ targets, due partly to the depreciation of their currencies. Of particular significance for the world economy are the developments in China, which posted an annualised rate of GDP growth of 6.9% in the third quarter. That entails a slowdown, but one milder than anticipated. However, uncertainty over its medium-term growth rate persists bearing in mind the authorities’ intention to lead the Chinese economy towards a more sustainable and more domestic consumption-led model. The consequences of the slowdown on the world economy, mainly via the effect of the decline in commodities prices on exporting countries’ economies, are so far projected to be limited.
16  14 12 10 8 6 4 2 0 -2 -4  50 55 60 65 70 75 80 85 90 95 00 05 10 15  Source: Bureau of Labor Statistics  In November 1974, when the rate of inflation according to the consumer price index amounted to more than 12 per cent in the United States, Milton Friedman wrote the following in Newsweek: 5 That monetary expansion on the average could be expected to produce an inflation of something like 6 per cent a year, not of 12 per cent. The difference is attributable to nonmonetary factors, mostly transitory, and so constitutes something of a bubble on the underlying inflation trend. In the past, when such bubbles have broken, the rate of inflation has declined precipitously. For example, in the Korean War bubble, the rate of inflation of consumer prices fell from 10 per cent to 2 per cent in nine months. One now began to use different filtered measures in the econometric research literature. Gordon (1975b) calculates an equation where the aggregate selling prices exclude energy and food prices. He motivated his choice by saying that variations in food and energy prices, particularly in the beginning of the 1970s, were due to other factors than domestic supply and demand. 6 7  5 See Newsweek, 4 November 1974, p. 84. 6 See Gordon (1975b), s 622 “But the magnitude and timing of the 1973-74 explosion in energy prices can only be regarded as noneconomic and exogenous”.

3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5  11  12  13  14  15  16  17  18  19  CPIF Sources: Statistics Sweden and the Riksbank  A simple way of getting rid of the white noise and clarifying the actual trend is to calculate a twelve-month moving average for the series. 14 Figure 3 shows the results of such a calculation. Now the white noise has been removed and the underlying development is shown more clearly. But it must be emphasised that this is the underlying development given the method I have chosen. 14 First I have calculated the level for a twelve-month moving average for the CPIF. Then I have calculated the twelve-month change for the moving average. 6 [19]  Figure 3. CPIF inflation, twelve-month moving average Annual percentage change. 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5  11  12  13  14  15  16  17  18  19  CPIF, twelve-month moving average Sources: Statistics Sweden and the Riksbank  The second common method of calculating underlying inflation is, as we said, to exclude certain predetermined prices or groups of prices. Perhaps the most common measure used internationally is inflation excluding energy and food prices. Energy prices contribute to more temporary and short-term price movements, the same applies to food prices. One reason for these price movements is temporary variations in demand. Unusual weather can also temporarily affect prices of, for instance, electricity, cereals, fruit and vegetables.
12  See the Bank of England’s Policy Statement 3/18, ‘International banks: the Prudential Regulation Authority’s approach to branch authorisation and supervision’. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  The pillars underpin the government’s new Global Financial Partnerships Strategy. The Bank of England will be particularly engaged in deepening our supervisory cooperation with major emerging economies and will continue to develop the infrastructure to support cross-border capital flows in their currencies. With respect to the European Union, the Bank remains of the view that an ambitious future financial services relationship, founded on commitments to achieving equivalent outcomes and supervisory cooperation, remains both feasible and in the interests of the UK, Europe and the world. The future economic and security partnership with the EU is for the government to negotiate and Parliament to approve. The Bank’s role is to manage risks associated with the Brexit process and to provide technical support to the government as needed. In this context, HM Treasury and the Bank are aligned on the importance of maintaining the high regulatory standards required by the world’s most important and complex international financial centre. And we are both committed to responsible openness because it allows capital to move freely, efficiently and sustainably between jurisdictions and that supports trade, investment and jobs in the UK, Europe and the rest of the world. More broadly, building on the progress already made, financial services could serve as a template for broader services trade liberalisation.

My second point concerns the mitigation of moral hazard. We absolutely have to avoid situations in which the payment of taxes or levies is understood as a de facto bailout policy insurance. In this respect, the allocation of the tax to a resolution fund or to the general budget does not enable public authorities to totally remove such a risk. Against this background, I think that an adequate, median way would be to extend the mandate of National Deposit Guarantee Schemes to early intervention tools and resolution powers. Moreover, we should build on the experience gained from ex ante risk-sensitive premiums, which seem to be very important for mitigating moral hazard. Most of these remarks have focused on the major and vital incentive to enhance financial regulation. Let me conclude by looking into the future. A macro-prudential policy framework could provide further room for manoeuvre. Indeed, the crisis has illustrated the necessity to have a wider spectrum when designing financial regulation. We should also not forget that financial intermediaries are primarily tools to promote a stable financing for the economy. That said, in practice, developing a well-articulated macro-prudential policy framework raises some challenges. I trust that the benefits of addressing them are worth the impressive hard work currently underway. Thank you for your attention. 4  BIS Review 57/2010
Figure 1 is a good basis when one wants to illustrate different questions regarding monetary policy and central bank operations that have arisen due to the crisis and are now being discussed both internationally and in the debate here in Sweden. The perception prior to the crisis could be described, in a rather simplified, but not misleading, manner as central banks in principle being able to disregard the credit cycle and focus solely on the economic cycle. It was assumed that those cases in which the credit cycle pulls down the economic cycle, which were presumed to be fairly rare, would be relatively easy to manage. Correspondingly, the current international discussion on how central banks should act from now on – the question I began with – can essentially be about how one should take the credit cycle into account in a good way and incorporate it into the economic analysis and into practical policymaking. As the origin of the economic recession is the earlier excessive credit boom, much of the focus is on the question of how one can best ensure that this increase in credit becomes more balanced and that the credit boom thus does not go wrong. It is not merely a question of avoiding crises.

Something one should always bear in mind, but which I do not intend to discuss further here, is that decisions we make regarding conditions in Sweden must also be incorporated into a broader, European context. There are also a number of questions, particularly with regard to the interplay between macroprudential policy and monetary policy, that sooner or later may need to be dealt with in practice and it would be wise to have thought them through. Coordination... Some of the research into macroprudential policy – which is in general still in its infancy – tries to analyse the importance of coordinating macroprudential policy and monetary policy. The idea is roughly as follows: Monetary policy and macroprudential policy act through largely the same channels. Both the policy rate and most macroprudential tools affect, for instance, credit growth in the economy and developments in various asset prices. This also means that the two policy areas affect one another’s objectives. Monetary policy affects the credit cycle – which was the whole point of “leaning against the wind”, and macroprudential policy has effects on the business cycle. It is therefore desirable to find the right policy mix – the combination of policy rate and macroprudential tools that give the best overall outcome for the economy. The conditions for finding the right mix are normally improved if the two types of policy are coordinated, rather than determined separately. 14 The importance of coordination is also pointed out in more practical economic policy contexts.
The Governing Council of the ECB is the central decision-making body in charge of monetary policy for the euro area. The Treaty on European Union – the Maastricht Treaty – assigns the ESCB the primary objective of maintaining price stability in the euro area. The implementation of monetary policy decisions taken centrally by the Governing Council rests with the Eurosystem, comprising the ECB and the national central banks (NCBs) of the member states which have adopted the euro in stage three of economic and monetary union. The respective operational tasks are to a large extent carried out in a decentralised manner by the NCBs. For the euro to become a success story as the single currency for around 300 million people, the confidence of European citizens in the stability of the new currency and in the Eurosystem is crucial. You would probably agree that the Eurosystem has already achieved a lot in terms of building up credibility and gaining a sound reputation in financial markets for its monetary policy in its early days. This will certainly facilitate the establishment of a stability culture throughout Europe. The foundation of this stability culture is a broad consensus among Europeans that the maintenance of price stability is of the utmost importance and is conducive to the achievement of other objectives such as high employment. Monetary policy and other policy areas By maintaining price stability in the euro area, we will ensure that the single monetary policy contributes as much as possible to economic growth and high employment.

Mr Noyer reviews first experiences with the euro Speech delivered by the Vice-President of the European Central Bank, Mr Christian Noyer, at the conference organised by Swedback in Stockholm on 26 May 1999. I should like to start by thanking you for your kind invitation to speak here on the occasion of this conference organised by Swedbank. It is some five months now since the euro was launched. The introduction of the euro has been accomplished successfully and the enormous technical and logistical challenges arising during the early days of monetary union have been overcome. The first months of the euro have been successful in both political and operational terms. With the introduction of the euro, European integration has taken a large step forward as the new millennium approaches. The euro plays an important role in the euro area and beyond. Just after its launch in January, the euro already featured on all major financial markets around the globe. Currency trading is regularly carried out in euro and shares are denominated in euro on most European stock exchanges. Moreover, the euro has attracted new international bond issues as the currency of denomination. In some ways, the introduction of the euro may justify expectations of large overall efficiency gains. For citizens living in the euro area, two obvious gains will be the reduction of transaction costs and increased transparency across countries, as price comparisons between goods sold in different countries are made easier.
and other international financial creditors. This explains, in part, the huge external debt the country is overburdened with today. (ii)  By 1964, most of Zambia’s neighbours, such as Mozambique, Zimbabwe, Namibia, and Angola, were at the height of their liberation struggles and Zambia had no option but to offer refuge and logistical support to the liberation movements like, FRELIMO, ZANU, ZAPU, SWAPO, UNITA, and MPLA. This meant that Zambia had to sacrifice some of its scarce developmental resources for the sake of assisting these liberation movements to gain their independence, and in some instances, Zambia had to borrow to finance this expenditure. (iii)  As a result of the liberation wars in the neighbouring countries, Zambia had to arm herself, militarily, against possible foreign aggression by procuring weapons and other military hardware from friendly countries such as Russia, China, etc. This again explains why Zambia today has a huge debt with Russia. Military expenditure was unavoidable as the colonial regimes used to attack Zambia directly. In this regard, one can mention the bombing of Lusaka as well as the destruction of Luangwa bridge. Ladies and Gentlemen I have endeavoured to include these seemingly simple but critical factors so that we understand the historical context of some of the policies implemented during the last 40 years and their impact on national development. Therefore, to contain the deteriorating macroeconomic situation, the Government introduced a myriad of economic policies including price controls because the economic shocks were considered transitory and, thus, the Government would easily balance its budget.

The Eurosystem has provided – and is still providing – support to those national banking systems which face liquidity needs. I would like to underline that the key precondition for such a support is that the country concerned sticks to the EU/IMF adjustment programme and are on track. In other words, the responsibility for ensuring the conditions for the Eurosystem to support the banking system of the countries under stress is with the authorities of the countries themselves. There should be no doubt about it. 5  For further details, see Trichet, J-C. (2009). “The ECB’s enhanced credit support”, address at the University of Munich, http://www.ecb.europa.eu/press/key/date/2009/html/sp090713.en.html. 4  BIS central bankers’ speeches  The support provided to the banking system has been substantial. It is reflected in financing conditions at the euro area level, which have become more favourable of late, amid an ongoing gradual normalisation. Recent euro area bank lending surveys show signs of improvement in credit conditions compared with the peaks recorded during the apex of the financial crisis. While in most euro area Member States we have seen broadly unchanged or slightly loosened credit standards over the past few quarters, in a few others the bank lending surveys point to constraints remaining in the supply of bank loans to firms and households.
As a result, real convergence continued apace last year and Spanish per capita GDP vis-à-vis the former EU-15 stood at 87.4%, one point up on 2002. Relative to the enlarged 25-member EU, this percentage rises to 94.4%, due to the lower level of development of the new members. The buoyancy of the economy in 2003 and in early 2004 continued to be underpinned by the same foundations as in previous years, following a similar pattern. Firstly, as earlier mentioned, highly favourable financing conditions have remained in place. These have been characterised by low interest rates (which were cut further to historical lows), high rates of credit expansion and a notable rise in the value of non-financial assets, adding to which in 2003 was the rally on stock markets. Secondly, budgetary discipline has provided the necessary counterpoint to the stimuli stemming from monetary and financial conditions, giving soundness and firmness to the environment of macroeconomic stability. The resolve with which fiscal consolidation has been pursued in Spain was manifest in 2003 in a general government surplus of 0.3% of GDP and in a fresh reduction in the public debt ratio, which stood at 50.8% of GDP, far below the European average and the reference value set in the Treaty on European Union. Any overview of the bases underpinning economic growth should also highlight, albeit in third place, the continuing support provided by strong employment generation.

At the same time, banks are required to build additional capital buffers, which further constrain their pay-out ratio. So dividend prospects are doubly affected and that explains why share prices are reacting to negative news on growth. This movement has been more pronounced for French banks which are suffering from two specific vulnerabilities, one real, one exaggerated. The real vulnerability is their dependence on dollar funding, due to the scale of their international activities, which they may have been initially too slow to address effectively. It is currently being dealt with through a combination of deleveraging and consolidation. In the meantime, in order to ease this transition, the Eurosystem, together with other central banks across the world, has decided to conduct US dollar liquidity-providing operations with a maturity of three months. A more exaggerated concern about French banks is their exposure to sovereign risk. Let me just point out some facts: total exposure of major French banks to the sovereign risk of socalled “peripheral countries” amounts to € To take an extreme – and from my view point – totally unrealistic scenario – a 50% haircut on Greece and 25% haircut on Italy and Spain would result in a 12% loss of core Tier One capital. In terms of liquidity, the Eurosystem refinancing policy provides for an unlimited provision on an extended period and the collateral held by French banks in eligible assets is much above their present needs.
Meanwhile, nominal rates have been also influenced by higher observed inflation. Growth rates of monetary and credit aggregates have moderated but are still high. Despite these changes in the margin, financial conditions are still positive. Favorable terms of trade and a fiscal policy where government spending is tied to the Central Government’s permanent income have helped avoid a major real appreciation and, at the same time, have permitted to accumulate public resources to guarantee that future expansion of public spending will be less dependent of commodity price cycles. In fact, despite the enormous terms-of-trade gain of the last four years, the actual real exchange rate is today slightly higher than the average of the past 15 years. Because monetary policy operates with a lag, in a monetary policy system such as the inflation targeting regime adopted by the Central Bank of Chile, it has to ground itself in economic prospects 24 months ahead and their implications on projected inflation. Within this context, persistently high economic growth signals a future additional narrowing of output gaps that, in a context of supply shocks on the prices of foods and fuels, and a monetary policy rate below the neutral interest rate by any estimation anticipates that, in the most likely scenario, it will be necessary to reduce the monetary stimulus in coming months to drive annual inflation projected over the policy horizon to 3%.

I am sure you will all agree with me when I say, in today’s integrated markets when any country catches a cold there will be many others sneezing. In such an environment we are now increasingly aware of contagion risk. Financial security and financial stability… Within this framework, I would like to emphasize the close linkage between financial security and financial stability. In my opinion, financial security can be enhanced by the existence of a smoothly operating infrastructure. This actually is a comprehensive concept and includes the payment system, the technological infrastructure, as well as the regulatory and supervisory framework. Overseeing the payments system is an essential duty of the central banks. In this respect, a basic continuing responsibility of any central bank is to assure stable and smoothly functioning payment  2  BIS Review 76/2007  systems. Linked to this is the lender of last resort function of the central banks. Emergency liquidity assistance, perhaps the most traditional function for dealing with financial instability, is a way out provided by central banks. Central banks can have a calming influence on markets in case of a market disruption simply by standing ready to provide liquidity assistance if necessary. It includes both the provision of liquidity to the financial system as a whole through market operations, as well as emergency lending to individual banks. Altogether these two important functions facilitate the security in the system. Technological infrastructure is another component to secure financial operations.