samchain/econo-pairs-v1 huggingface dataset:
Secondly, the major problem so far has been the financing of the banks’ operations, while the problem last time was credit losses linked to falling property prices. The positive element here is that the current problems are not due to poor profitability or large credit losses. The negative element is that even a country with a profitable bank system with large buffers can experience problems. Iceland is one example of how a small country with an open economy and its own currency can be affected by a financial crisis. I pointed out on several occasions at the monetary policy meetings held last year that there is a considerable risk that the crisis will be both more profound and more prolonged than we assume in our forecasts. I would like to take this opportunity to develop my reasons. Kenneth Rogoff is another of the advisers to the Executive Board of the Riksbank. Together with Carmen Reinhart he has made a number of studies of financial crises. They consider the Swedish bank crisis of the 1990s to be one of the most serious financial crises, “the big five”.3 One of their studies shows that the financial crises that have occurred in industrial nations in recent decades have been followed by long periods of weak growth.4 Seen as an average of the 18 crises reported, this concerns a period of three years of low growth and for the "big five" an average of three years of negative growth.

When the crisis materialized and firms began to experience material distress or even fail, US law did not have a framework for achieving an orderly resolution of a systemically important institution at the corporate level. It had tools that have proved highly effective in managing corporate restructuring and depository institution receiverships, but none tailored for a major financial group. Instead, when large financial groups began to fail, policymakers relied on ad hoc interventions. Some of the immediate interventions involved use of the Federal Reserve’s “lender of last resort” functions. It was at this point that “Section 13(3)” entered the lexicon of modern central banking. For those few who are unaware, Section 13(3) was added to the Federal Reserve Act during the Great Depression. It gave the Board of Governors broad authority to permit a Reserve Bank to lend in exigent and unusual circumstances provided that the Reserve Bank was secured to its satisfaction. Prior to the crisis, Section 13(3) loans had last been made during the Depression, to such enterprises as a typewriter manufacturer and a vegetable grower. 4 Fed policy makers and their advisors pulled Section 13(3) back off the shelf, perhaps brushing some metaphorical dust off its cover. In 2008, loans made pursuant to Section 13(3) facilitated JPMorgan Chase’s purchase of Bear Stearns. Loans under 13(3) also prevented the potentially catastrophic failure of American International Group (AIG). Innovations under 13(3) also underpinned many of the Fed’s broad-based facilities to provide market liquidity.
A krone that is stable - but too strong - also entails costs to the economy in the form of low activity. Similarly, a krone that is stable - but weak - is a source of high inflation. 2  Trend growth is used as a rough estimate of potential output. Potential output is the level of output that is consistent with stable inflation over time. BIS Review 25/2004  3  Petroleum revenues generally provide substantial, but uneven currency inflows into Norway. The currency flows might have led to a strong and volatile krone. This tendency is countered when the annual use of petroleum revenues over the central government budget is predictable and independent of annual revenue flows, and the remainder is invested abroad. The capital outflow through the Petroleum Fund contributes to both curbing the appreciation of the krone and maintaining its stability. Norges Bank has not defined an exchange rate target. Nevertheless, developments in the krone are of considerable importance to interest-rate setting because exchange rate developments have an impact on inflation and output. When there are prospects of moderate economic activity, low wage growth and low inflation, Norges Bank will reduce the interest rate. This will normally result in a depreciation of the krone. Prices for imported goods and services will increase. A weaker krone strengthens the competitiveness of Norwegian enterprises and indirectly leads to higher output, employment and inflation. Themes in foreign exchange markets shift. In periods, investor focus on stock returns feeds through to exchange rate movements.

Trade with the Baltic countries, which used to be minimal, has increased sharply. Petroleum wealth and the krone exchange rate Let me conclude by referring to an analysis that can shed light on long-term developments in the real krone exchange rate. 6  BIS Review 25/2004  In the long term, the exchange rate tends to adjust so that there will be a balance both in the domestic economy and balance in the current account. Petroleum wealth, defined as the value of oil and gas under the seabed and the value of the Government Petroleum Fund, provides the basis for substantial foreign exchange revenues in the years ahead. These revenues will decline as the economy grows. The share of imports that can be financed by foreign exchange revenues from petroleum wealth will be reduced. Export earnings other than petroleum revenues will then be necessary. A substantial improvement in competitiveness will be required over time. Norway’s history as an oil nation goes back to the end of the 1960s. Rough estimates suggest that a real exchange rate that ensures balance in the balance of payments when petroleum wealth no longer has the same significant role in the economy is more in line with the real exchange rate prevailing in Norway prior to the discovery of oil. This is shown in the chart, where the real exchange rate in 60 years’ time, after a sharp appreciation while we phase in petroleum wealth into the economy, will have reverted to the level prevailing before petroleum extraction began.
Because of a high household debt burden, the effect of an interest rate rise will likely be stronger than earlier. Chart: Policy rate The monetary policy assessments through 2018 attached weight to the fact that the monetary stance is expansionary. The policy rate increase is intended to prevent a rise in pressures in the economy that would trigger an acceleration in price and wage inflation. A higher interest rate also mitigates the risk of a renewed, rapid rise in property prices and debt. High price and wage inflation and a further build-up of financial imbalances would increase the risk of a sharp economic downturn further out. The plan is to move gradually to a more normal interest rate level. Our assessment in March was that capacity utilisation was slightly above a normal level. At the same time, underlying inflation was a little higher than the inflation target of 2 percent. Our projections implied that the policy rate would be raised in the course of the next half-year. There were also prospects that the policy rate would rise to 1.75 percent by the end of 2022. This means that the average residential mortgage rate could increase from 2.6 percent in March to 3.5 percent in the course of the same period. We therefore believe that interest rates will not be as high as in previous upturns. With that path for the policy rate, inflation is projected to be close to target in the years ahead, at the same time as unemployment remains low.

Despite the rise in oil prices, the Norwegian krone has been fairly weak since 2014. A weak krone has a positive influence on exporting companies. At the same time, prices for imported goods and services increase. A weaker krone therefore leads to higher inflation. Measured by the import-weighted exchange rate index (I-44), the krone appreciated somewhat in the period to autumn 2018, but depreciated again towards year-end. The depreciation coincided with a fall in oil prices and heightened uncertainty in global financial markets. Chart: Growth mainland Norway Growth in the Norwegian economy has been solid since autumn 2016. At the same time, labour market conditions have improved considerably. The number of employed has increased by more than 100 000, and unemployment has declined. Solid global growth, higher oil prices and low interest rates have contributed to lifting growth. The enterprises in Norges Bank’s Regional Network reported rising output growth through 2018, particularly for oil service providers thanks to the rebound in petroleum investment on the Norwegian shelf following several years of decline. There was also a pick-up in exports from oil service companies. Chart: Employment as a share of the population After some years of solid growth, spare capacity has gradually diminished. At the end of 2018, capacity utilisation appeared to be close to what we regard as a normal level. Employment also appears to have returned to a more normal level.
François Villeroy de Galhau: The challenges of the euro area at the dawn of 2019 Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at a seminar at the Bank of Portugal, Lisbon, 22 February 2019. * * * Acccompanying slides of the speech. Ladies and Gentlemen, [meus caros amigos], It is a real pleasure to be with you in Lisbon – Cidade da Luz e Rainha do Mar [City of light and Queen of the Sea] – the first bridge between Europe and Asia thanks to the audacity of your descobridores [explorers]. And still today, your country is an inspiring example of economic recovery thanks to its courageous reforms. I wish to express my warmest thanks to my friend and colleague, Governor Carlos Costa, for his invitation. Before focusing on our challenges for 2019, let me start my speech on a more positive note, as this same year marks the 20th anniversary of the euro, and elaborate a bit on its success. I. The euro’s success was built on three principles that are now more vital than ever As to whether the euro has been a success, there are few among us today who would have any doubts. It is more interesting to look back on the reasons for this success, which, to my mind, was built on three founding principles: the Eurosystem’s mandate of maintaining price stability; the means employed to carry out this mandate, i.e. independence; and the spirit that drives its action – general European interest. 1.

And in the US, there is a divergence between weaker soft data like the ISM manufacturing survey index and still rising hard data on industrial production. Hence, restoring confidence should be the priority and it is the responsibility of political leaders: the best antidote to the current slowdown is to reduce geopolitical risks, more than changing economic policies. The French economy has been slowing down but less than in some other European countries, due to increasing purchasing power and resilient domestic demand. In 2019, French growth is expected to be higher than that of Germany and close to the euro area average. Beyond internal demand, the second pillar of European resilience should be the extension of domestic reforms. I would like here to take the example of the Portuguese recovery since 2014, after a severe crisis and courageous adjustment efforts: GDP is now growing at 2.1% in 2018. Ambitious reforms have improved cost competitiveness, boosted export performance and led to a sharp fall in the employment rate, which has more than halved since 2013. This clearly demonstrates that, in Europe, reforms do have a positive impact. 2. Our monetary policy is able to combine clarity and flexibility. Let me turn to the consequences for our monetary policy: to deal with uncertainty, we have to combine clarity and flexibility, as we did in our December’s chained guidance. I will come back to this. In the present context, we should favour state-dependent analysis over time-dependent variables.
The one fresh wrinkle is that with estimates of the neutral real interest rate much lower than those that prevailed 20 years ago, the ZLB is likely to be an even more powerful force than was imagined in 1999.17 In approaching this question today, we should take lessons from the conference held in Woodstock 20 years ago: Bring together leading researchers and policymakers, draw out the best and most creative thinking, and take a long-run view of how we can navigate the environment before us. I am happy to say that this process is already in train, with the Fed’s framework review incorporating perspectives from a wide range of stakeholders, culminating in an academic conference next week in Chicago. Conclusion In closing, I want to add a personal thanks to Ken West for all he has done to promote outstanding research that is both innovative and relevant to the real-world problems that central banks face. And my best wishes for the JMCB, which I hope may continue its illustrious record for the next 50 years. As a researcher and policymaker, the one thing I am certain about is that fostering an open and active dialogue between researchers and policymakers is the best way for us to succeed in our work. Thank you. 1 For references to the early literature, see James Clouse, Dale Henderson, Athanasios Orphanides, David H.  Small, and P. A. Tinsley, Monetary Policy When the Nominal Short-Term Interest Rate Is Zero, The B.E. Journal of Macroeconomics, De Gruyter, Volume 3, Issue 1, pp.

16 John C. Williams, Lessons from the Financial Crisis for Unconventional Monetary Policy, Presentation at  National Bureau of Economic Research Conference, Cambridge, Mass., October 18, 2013; John C. Williams, Monetary Policy at the Zero Lower Bound: Putting Theory into Practice, The Hutchins Center on Fiscal and Monetary Policy, The Brookings Institution, January 16, 2014. 17 Thomas Laubach and John C. Williams, Measuring the Natural Rate of Interest Redux, Business Economics,  Volume 51, No. 2, pp. 57-67, April 2016. 4/4  BIS central bankers' speeches
10  BIS Review 103/2009  Figure 16: Risk Premium Indicators Change in 5-year CDS rates since Aug 2008 (1 Aug 2008 =1) Turkey Brazil 5.5 South Africa Hungary 4.5 South Korea 3.5  900 800  EMBI+ Türkiye EMBI+ Turkey EMBI+ EMBI+  700 600 500 400  2.5  300  1.5  200 0609  0109  0808  0308  1007  0609  0409  0209  1208  1008  0808  0507  100  0.5  Source: Bloomberg, CBRT. In terms of changes in currency values, the Turkish lira did not significantly differ from other emerging market currencies. However, the relative fall in the volatility of the Turkish lira, which had historically high volatility and extreme sensitivity to the global risk appetite, has become more evident in 2009, when countries’ own experiences began to unfold following the worst period of the crisis (Figure 17). Figure 17: Exchange Rate Developments 1000  0.025  1.7  500  0.02  400  0.015  1.6  0609  0409  0209  1208  1008  0808  0608  0408  0  0208  100 1207  1.4 1007  0.005  0807  0.01  200 0607  300  1.5  0609  600  0309  0.03  1.8  1208  0.035  700  0908  800  0608  EMBI+Türkiye (sağ eksen)  Kur Oynaklığı* Brezilya Çek Cum.

Should global conditions and consequently domestic economic activity further deteriorate, the CBRT would consider another cycle of rate cuts, and then maintain policy rates at low single digits for an extended period of time. Another possible scenario is a surge in capital inflows to emerging markets owing to the relative improvement in creditworthiness of these countries. In this context, receding risk premia and appreciating currencies would present downside risks regarding inflation prospects. These circumstances could also trigger acceleration in rate cuts, or another easing cycle, which could then bring policy rates which hover around low single digits for a prolonged period of time. Increasing budget deficits worldwide continue to pose risks on inflation expectations and thus on global interest rates in the long term. The medium-term forecasts presented above envisage that the slow recovery in global economic activity and rising saving rates will keep global interest rates at low levels for an extended period. However, the lack of a clear exit strategy from global fiscal stimulus packages creates upside risks regarding global inflation rates and therefore longer-term global interest rates. Counter-cyclical fiscal policies to curb the contractionary effect of the crisis on economic activity, which have also been introduced in Turkey in line with global trends, have accelerated the rise in budget deficit. The relatively low level of public sector indebtedness in Turkey compared to other countries implies that we have a broad fiscal space.
Thereupon these countries have been increasingly affected by the crisis. According to IMF, the emerging countries of Eastern Europe are estimated to incur a contraction of about 5 percent during this year. The Albanian economy, in the face of this unfavourable environment, has recorded a comparatively positive performance. There are few data on the real economy. The Bank of  BIS Review 94/2009  1  Albania estimates that a positive economic growth has characterised the first half of year. On the others hand, low growth of credit and money supply, deteriorated business and consumer confidence indicators, slow-down of budget revenues and specific indicators of certain economy sectors, suggest that the economic growth rate has decelerated. It is still early to draw conclusions on the economic performance over the course of 2009 and onward. The Bank of Albania deems that the premises to keep positive economic growth rates in the country are present, among which the macroeconomic and financial stability of the country is of primary importance. Economic activity at home is carried out under the presence of favourable consumer price stability. It is sustained by a soothing tendency of monetary conditions and by an expansionist fiscal policy over this period. The Bank of Albania cut the base interest rate in January and undertook liquidity-injecting operations, raising its quantity in the market.

Simultaneously, we have prolonged the maturity span of injecting operations to smooth down the upward slope of interest rate curve and we have expanded the base of eligible collateral to facilitate the access of financial institution in liquid funds. These operations of the Bank of Albania have helped control on interest rate level. Bank of Albania’s intervention has been more effective in controlling the short-term interest rates. The long-term interest rates of Government securities and loans revealed rising tendencies, owing to the Government’s demand for financing and the increased sensitiveness of the banking system towards liquidity indicators. In parallel, the depreciating exchange rate trends have complemented the easier monetary conditions framework, providing advantage to exports and trade deficit improvement. However, as we have constantly underscored in our statements, the Bank of Albania has been attentive to managing the momentary stimulus, aiming above all the achievement of its target for maintaining the macroeconomic stability, by preserving internal and external balances. Annual inflation in the first semester 2009 was 2.0 percent, recording a fall compared to inflation rates of the last year, but remaining within the Bank of Albania’s targeted band. Low inflation rates over the first semester of the current year are due to the weakening of inflationary pressures on the demand and supply side, consequent to raw materials price cut in the international market and the economic activity slowdown at home.
All of these elements need to be aligned with the desired culture. Through our supervisory process, we have seen that a number of firms have started this process by developing or refining employee surveys and 360 feedback processes to target issues of behavior and  2  BIS central bankers’ speeches  culture. Some firms are incorporating case study discussions into training programs to highlight ethical dilemmas and decision-making. Some are revamping senior level promotion criteria to reinforce what are the desired characteristics and behaviors of leaders. These efforts are at various stages in terms of their depth, breadth and maturity. Supervisors will need to see how these frameworks evolve, and more importantly, see evidence of how these efforts yield results in the form of more open and routine escalation of issues, consistent application of “should we” versus “could we” in business decisions, rigor in identifying and controlling of conduct risk, and how compliance breaches factor into compensation. Measurement and accountability for progress in developing a healthier culture across the industry is paramount to us as supervisors and central bankers. An important measurement of progress is employees’ assessment of their firm’s culture. To this end, we encourage the industry to harness the various individual efforts that have been initiated at a number of firms in order to develop a comprehensive culture survey. This anonymous survey would be fielded across firms each year by an independent third-party and the results shared with supervisors.

Earlier this year, most forecasters thought that the recovery was gaining traction and that economic activity would increase at a solid – though not spectacular – pace through 2012. The labor market was beginning to show some long-awaited improvement, and the financial repair process seemed to be making progress. Analysts thought that higher prices for energy and other commodities would weigh on output growth, as would supply-chain disruptions from the disaster in Japan. But these factors were expected to be transitory, and most forecasters thought growth would improve significantly once these influences had passed. Unfortunately, the news over the past several months has proved this forecast to be too optimistic. To use an automotive analogy, employment and growth are stuck in neutral. Job growth has been disappointing, and the unemployment rate just last month dipped below 9 percent. Revised data indicate that annualized real GDP growth in the first half of 2011 was only 1 percent and improved only modestly to a 2 percent pace in the third quarter. Consumer spending has been particularly sluggish. Furthermore, the weakness in GDP growth began before the bulk of the effects of higher energy prices hit the economy and before the disaster in Japan happened. This timing, along with the continued softness of most economic indicators into the early summer, indicates that the slowing in output growth was not all due to temporary factors. Even with slightly firmer economic data that have come out recently, the sense of building momentum seems absent.