samchain/econo-pairs-v1 huggingface dataset:
More encouraging is the principle of better late than never, and the important thing is that Spain initiated the process of bank restructuring, now nearing completion, in 2009, that significant measures to reduce the budget deficit began to be adopted in May 2010 and that an ambitious labour-market reform was introduced in February this year. Spain has proven itself capable of making adjustments and reforms and this is essential to restore long-lasting upswings and sustainable growth. But this reassurance must not lead to complacency. What we have done so far, despite its huge importance, is not sufficient. And some of us have the thankless task of pointing this out. For example, when each financial reform has been approved it has always been argued that the result will be more credit, but although bank restructuring is certainly an absolutely necessary condition, we have always seen that it is not sufficient by itself to make credit flow again. We have to restructure the financial system so that, as in any process of industrial adjustment, the resulting banks can generate a healthy profit and be sufficiently solid to meet demand when the adjustment process is complete. However, credit will not improve until solvent demand increases. Hence the importance of other economic reforms to boost consumer and investor confidence, such as reducing the budget deficit and reforms, such as the labour-market one, to increase the economy’s growth potential.

More important still, however, is the need for the Banco de España’s autonomy in the area of supervision to continue to be respected and for governments to continue to resist the temptation to interfere in its supervisory decisions, while continuing to design legal instruments and to defend the proper use of public resources. The Banco de España must continue to maintain a dialogue with governments, not only advising them but also listening to them (since nobody has a monopoly on good ideas), although supervisory decisions must continue to be based, as up until now, solely on a professional basis. 6  BIS central bankers’ speeches  I have been emphasising today what has been done during these years of crisis by Spain (that is to say, everyone), because until our country has regained the trust of the rest of the world, the attention of investors will continue to be focused on what all relevant parties have done and are doing to correct the imbalances of the Spanish economy. In particular, they will be monitoring and assessing the extent of cooperative behaviour to overcome the crisis. I’m going to conclude with a few words on Europe, as I believe our membership of the European Union and of the Monetary Union is another good reason for viewing optimistically our possibilities of overcoming the crisis. Some measures need no further explanation, as they clearly show how Europe has helped us and continues to help us during this crisis.
In this way, the Federal Reserve can drive up the rate at which banks are willing to lend to more risky borrowers, restraining the demand for credit and preventing credit from growing sufficiently rapidly to fuel an inflationary spiral. For this dynamic to work correctly, the Federal Reserve needs to set an IOER rate consistent with the amount of required reserves, money supply and credit outstanding needed to achieve its dual mandate of full employment and price stability. If the demand for credit were to exceed what was appropriate, the Federal Reserve would raise the IOER rate – pushing up the federal funds rate and other short term rates – to tighten broader financial conditions and reduce demand. 2 If the demand for credit were insufficient to push the economy to full employment, then the Federal Reserve would reduce the IOER rate – pushing down the fed funds rate and other short term rates – to ease financial conditions and support demand, recognizing that the IOER rate cannot fall below zero. While the mechanism is different, the basic approach is very similar to the way the Federal Reserve has behaved historically. Although our ability to pay interest on excess reserves is sufficient to retain control of monetary policy, it is not bad policy to have both a “belt and suspenders” in place. As a result, we have developed means of draining reserves to provide reassurance that we will not – under any circumstance – lose control of monetary policy.

Accordingly, much of the burgeoning fiscal deficit that emerged during the crisis is eminently structural. And correcting this means the unavoidable adoption of a far-reaching budgetary consolidation process that bears down precisely on the most permanent and inertial components of public spending. This process is all the more urgent given the seriousness of the repercussions of the Greek fiscal crisis and the pressing need to halt the deterioration in the perception of Spanish public finances. Indeed, the worsening of the fiscal crisis in Greece has substantially altered the conditions governing the design and execution of a fiscal consolidation programme. Systematic and substantive non-compliance with the commitments acquired by the Greek authorities in respect of public finances, added to a repeated lack of informative transparency, resulted in a strong loss of confidence by the markets in the Greek government’s capacity to meet its payment commitments. That gave rise to a completely new situation and, what has finally proved most telling, one not foreseen in the institutional arrangements underpinning the euro area: the perception of a potential risk of insolvency of one of its members. This lack of foresight translated into difficulties in promptly setting up a sufficiently forceful institutional response. These difficulties were clearly identified by the markets and meant that the specific risk of insolvency of a Member State rapidly turned into a systemic risk for the whole of the area.
When trying to assess the risk of an asymmetric shock, the risk is obviously smaller the more similar the countries within the area. Similarity in this context concerns the business structure and the co-variation of business cycles. If, for example, all regions within the area are dependent on poultry farming, the bird-flu is a shock, but it is not asymmetric. The difficulty in responding with a common monetary policy increases the smaller the share of regions that are dependent on poultry farming. In practice however, it is difficult to identify a pure asymmetric shock. A recurring common feature, admittedly in varying degrees, is some form of policy mistake that has amplified the asymmetric shock. Interestingly, the same can be said about the co-variation of business cycles. An example of the latter is the behaviour of the Swedish and euro area business cycles that differed in the decades preceding 1992. In my opinion, a non-negligible part of this difference was due to national policy mistakes and not necessarily different economic structures. It is worth noting that the above-mentioned discussion on costs implicitly assumes that no such mistakes are made. Put differently, a possible further gain coming from a common monetary policy is that it will lower the risk of such policy mistakes. As for the impact of an asymmetric shock, it varies with the possibility to absorb it; the more flexible the economy the smaller the impact. The prices of factors of production should preferably be flexible and the factors themselves should be mobile.

William C Dudley: Importance of the state and local public sector for the US economy Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, for the Chapter 9 and Alternatives for Distressed Municipalities and States Workshop, Federal Reserve Bank of New York, New York City, 14 April 2015. *  *  *  Andrew Haughwout and Joseph Tracy assisted in preparing these remarks. Good morning and welcome to the Federal Reserve Bank of New York. I am especially happy to welcome this group, with its focus on the finances of state and local governments. We at the New York Fed are committed to playing a role in ensuring the stability of this important sector. To this end, we supported the outstanding work of the Volcker-Ravitch state fiscal crisis taskforce. In addition, we conduct ongoing outreach activities with local officials and produce research on the subject of local fiscal conditions. We do these things because we recognize the critical role of state and local governments and their fiscal health to the overall well-being of the economy and its citizens. In my remarks today I will touch on the importance of the state and local public sector for the economy, its fiscal health and the need for proactive efforts to address the emerging fiscal stresses in the sector. As always, what I have to say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.
Yes, but we are employing fiscal policy as an additional instrument to the flexible structure of our market economy, whereas in Europe the danger would be of it being regarded more as a substitute, although I acknowledge that a significant part of budgetary spending there is nowadays directed towards achieving the necessary structural reforms. And in Hong Kong we are working from a position in which monetary policy is clearly quite tight and has to remain so for the moment (given our link to the US dollar), whereas euro monetary policy is not so rigidly constrained. In the broader sweep of history, a regime of fixed exchange rates is by no means an outlier. Remember that most of the world’s currencies were fixed on some sort of metallic standard until the first world war, and that the world enjoyed 25 years of virtually fixed rates after the second. Interestingly, I have seen it argued that one of the reasons (though certainly neither the only one nor the primary one) for it being impossible to sustain fixed rates in the inter-war period may have been the growing rigidity of labour markets as the century progressed. And one of the main reasons for the breakdown of the Bretton Woods arrangements at the beginning of the 1970s was the collapse of budgetary discipline of one member in particular the United States. There are no doubt lessons from history, even though the read-across to the present day may be subject to many qualifications.

Personally, I would expect the fiscal discipline of Maastricht to be retained and observed. And I am yet more confident that the European Central Bank will remain steadfast in its counterinflationary role. That combination will, as is widely acknowledged, transfer a considerable burden of adjustment onto structural and microeconomic policies. It is good that the focus should rest there and it will be even better when more progress is visible on that front - better not simply for Europe but for the world, which needs a strong European economy. And within Europe itself I feel that there is something of a political imperative for the impact of the euro to have been demonstrated as unequivocally beneficial by the time that the potentially rather emotional withdrawal of national banknotes takes place in 2002. The concerns over the apparent tensions in economic policy in consequence of the euro’s arrival have plainly had some adverse effect on sentiment towards the euro in foreign exchange markets, although we know that other factors, notably the conflict in the Balkans, 3  BIS Review 53/1999  have been important too. When you look at the ups and downs of the relationships between the world’s leading currencies over the years you will recognise that the depreciation in the euro since its inception is not all that exceptional, however much we may regret that movements of this sort may nowadays be regarded as within the definition of normal.
BIS Review 25/1997  - 10 -  Since then the Czech crown has been pegged firstly to a basket of the currencies of five major trading partners and since 1993, with a view to the development of the currency breakdown of foreign payments, to a two-currency basket (65 per cent Deutsche Mark and 35 per cent US dollar). The improvement in macroeconomic stability and relatively high foreign exchange reserves created good starting conditions for the gradual extension of the Czech crown’s convertibility. Some additional measures were taken in 1994 by means of an amendment in August 1994 to the Foreign Exchange Act. This amendment made it possible to export securities denominated in Czech currency; foreign exchange permits for direct investment outside the Czech Republic were provided to virtually all applicants and permit procedures for obtaining foreign exchange credits from abroad and for equity participation abroad were simplified. Effective October 1, 1995 the Czech currency became convertible in accordance with Article VIII of the IMF Articles of Agreement, and the country became a member of the OECD. Under the new Foreign Exchange Act the current account of the balance of payments was liberalised and the regulation of the capital account was substantially reduced. Only the establishment of accounts abroad by residents, the outright purchase of securities by residents, the provision of financial credits to non-residents and real estate purchases by non-residents continue to be subject to regulation.

Starting with the analysis under the first pillar of our monetary policy strategy, the three-month average of the annual growth rates of M3 stood at 8.0% in the period from November 2001 to January 2002, compared with 7.8% in the period from October to December 2001. The high level of the annual growth rates of M3 is very much related to portfolio shifts to liquid positions, most of which occurred in the autumn of 2001 in an economic and financial environment characterised by high uncertainty. While many investors still seemed to be "parking" some of their assets in M3 in early 2002, some moderation in the short-term dynamics of M3 could be observed around the turn of the year. The Governing Council continues to hold the view that the information from the first pillar thus far does not indicate risks to price stability, as the portfolio reallocations which drove M3 growth in 2001 should remain temporary. In addition, the slowdown in the rate of growth of loans to the private sector has been continuing over the past few months. However, we will need to analyse monetary developments closely in the coming months. As regards the second pillar, there are further signs that the trough in economic activity may have been reached at the end of last year. Coincident and forward-looking indicators increasingly point to improvements in economic conditions. A similar picture is reflected in financial market expectations, especially those embedded in bond yields.
A credible inflation target with a flexible exchange rate regime should help to avoid the problems we faced during the 1990s. Indeed, during the period of large capital inflows, no monetary policy in Latin America operated under a full-fledge inflation targeting regime, and most countries had some form of exchange rate rigidity. Despite having a flexible exchange rate and an inflation target in place, the effects on the exchange rate could reflect that domestic asset prices could be forming a bubble. In this case, sterilized intervention, without an explicit objective on the level of exchange rate, can also help. I already discussed some principles to guide sterilized intervention within an inflation targeting framework. A much debated proposal is the use of capital controls. The  5  In addition, a traditional concern is that with the same speed as capital flows in, capital may flow out, generating costly adjustment processes. See Cowan et al. (2007) for a review of sudden starts and sudden stops around the world. Sudden stops of inflows are as common in developed as in emerging countries, but in the former, the sudden stop tends to be offset by a return of domestic capital invested abroad, while in the latter it results in a severe squeeze in the capital account. Accumulation of reserves or another form of insurance should help to avoid large swings. BIS Review 113/2009  5  evidence on their effectiveness is elusive.

•  Banks in the region could face higher non-performing loans. They could also face reduced US Dollar funding if there are large capital outflows from ASEAN. •  But their liquidity and capital positions are generally sound and they should be able to weather this. ASEAN growth story still good Over the medium to long term, ASEAN is expected to remain among the fastest growing regions in the world. Last year, the combined GDP of ASEAN was close to $ trillion – larger than India. •  The ASEAN-4 – Indonesia, Malaysia, Thailand and the Philippines – are projected to grow by at least 4% per annum on average over the next five years. •  It could be as high as 6% if ASEAN becomes more integrated and these countries successfully implement structural reforms to raise productivity and competitiveness. For banks in ASEAN, it is not just the size and growth of the economies that matter. It is the composition of that growth and demand. Rising incomes and the agglomeration effects of urbanisation will significantly expand the ranks of the middle class in ASEAN. •  In 2010, ASEAN had a population of 600 million, with around a quarter making up the middle class. BIS central bankers’ speeches  1  •  In 2030, ASEAN will have a population of 700 million, with about two-thirds attaining middle class status. •  In other words, the size of the middle class will swell by as much as three times over two decades.
In the financial markets, this broadly positive outlook has been accompanied by a dramatic reduction in risk premia, leaving the price of insurance unusually low against a less favorable or more volatile environment. Whether this confidence is justified and whether the U.S. economy does as well in the future as it did over the past decade or so, will depend critically on how successful we are in meeting these challenges in the areas of fiscal sustainability, and over the longer terms in trade policy and education. BIS Review 4/2005  3

In this WG, key players will reflect on ways to provide access to private data while maintaining and promoting ethical principles. In fact, I consider there is a need to break the quasi-monopoly which some big techcompanies have on personal data, something which requires a co-ordinated international effort. The European data strategy announced by the European Commission a few months ago, aimed at public/private-sector collaboration in data-sharing, is a good example in this respect. It is also important to recall the usefulness of statistical information for public opinion. Central banks’ information is quite often of a very technical nature. But, at the same time, some variables –such as interest rates- have a strong impact on household finances and SMEs, whereas information about recent developments on key economic and financial variables are also very relevant for public opinion. Therefore, accessible (transparent, clear) statistics are also needed. 6  In our case, we are continuously striving to improve how statistics are conveyed to society and to adapt our communication to different types of users. A couple of years ago we conducted a survey of the users of our statistical information. The results offered a useful guidance about some key issues. Following the input from this survey, we have in recent years tried to exploit new technologies to display data, including more charts, interactive menus, dashboards, etc. And just a few days ago we launched an application which will allow users to have our statistical information readily available on their mobile devices.
Joseph Yam: Mortgage-backed securities programme in Hong Kong Speech by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the signing ceremony of the Bauhinia MBS Programme of the Hong Kong Mortgage Corporation Limited, Hong Kong, 30 October 2003. *  *  *  Ladies and gentlemen, let me first offer a very warm welcome to all of you to this signing ceremony to mark the successful conclusion of the second series of mortgage-backed securities issued under the Bauhinia MBS Programme of the Hong Kong Mortgage Corporation. The issue size this time is $ billion. It is the largest residential MBS issue in Hong Kong, so far. Ladies and gentlemen, as you are aware, the HKMC is committed to developing a deep and liquid MBS market in Hong Kong as an effective means for enhancing the availability of competitive mortgage finance in Hong Kong for homebuyers. The success of this initiative will also benefit both the financial market and the future development of the HKMC as a major financial institution. For the financial market, MBS provide an efficient channel for long-term funds from the capital market to supplement bank financing of long-term mortgage loans. They also help banks to better manage the liquidity and maturity mismatch risks inherent in their mortgage business. Development of an active MBS market will broaden the product range of the financial market and further develop Hong Kong’s role as an international financial centre.

Meanwhile, it became clear to us that the standardisation of mortgage origination documents would facilitate the securitisation of mortgages more efficiently, by removing the need for due diligence review of documentation by credit rating agencies and investors. The HKMC therefore spent considerable efforts in promoting such standardisation. With the generous support of the legal fraternity and the banking industry, the HKMC introduced, in July 2001, the Model Mortgage Deed and the Model Deed of Guarantee and Indemnity. Fourteen major mortgage lenders have since adopted these model documents. Further standardisation of mortgage origination documents is in progress. It was against this background that the HKMC found it able to embark on another MBS programme the Bauhinia MBS Programme. The first series of MBS under that programme was issued in March 2002 and amounted to $ billion. The paper issued was in the form of bonds that investors are familiar, with a secondary market of considerable liquidity. Great care has been taken to design the Programme in such a way as to provide a convenient, flexible and cost-efficient platform for the issue of MBS. Benefiting from the standardisation of product structure and legal documentation, the leadtime for arranging an issue has been shortened substantially, from six to nine months for a standalone issue, to a few weeks under the Bauhinia MBS Programme. The current issue of $ billion of MBS is the second series under the Bauhinia MBS Programme. We are grateful and greatly encouraged by the enthusiastic response of the underwriting banks and investors.