samchain/econo-pairs-v1 huggingface dataset:
Such a system is a strength of the Spanish economy which should be preserved so that, once the crisis is behind us, a sustainable growth path underpinned by the efficient allocation of all resources, including financial ones, may be resumed. This central role of a financial intermediation system explains why the State has, in addition to other support measures I have previously discussed, shown its readiness, like other governments, to provide capital to viable credit institutions that need it. These contributions, or any other assistance, must nevertheless be conditional upon the restructuring of the institutions that receive these public funds, so as to seek both the lowest cost for taxpayers and maximum efficiency. This approach squares fully with the common principles agreed upon in the international fora of which Spain is a member, and which have been backed expressly by Parliament with a broad consensus. Hopefully, these principles and this spirit of cooperation in matters relating to the stability and resilience of our financial system may soon result in a series of legal provisions that reinforce the ability to deal with potential problems, in line with the tradition of the Banco de España and in keeping with the specific nature of the tensions we are currently experiencing. Cooperation, in this case among international authorities, will also be necessary to further the design of the new, globally applicable guiding principles for the working of markets and financial – banking and non-banking alike – intermediaries. Earlier I referred briefly to the significant challenges emerging in this area.

Thus, from December 2013, when the deterioration in bank balance sheets was at its worst, to June 2018 the volume of non-performing loans in transactions with the resident private sector has declined by 60%. And the amount of foreclosures has done so by 40% since its 2012 peak. The consolidated return on equity, which in 2012 stood at around -25%, has gradually picked up to levels of 7% on data as at June 2018, and the overall capital ratio has risen from 11.4% in 2012 to 15.1%. Despite this notable improvement in its financial position, the Spanish banking industry continues to face significant challenges. These are largely shared by other banking systems in the euro area, and include i) the reduction in assets impaired by the crisis, ii) the recovery in profitability, such that Spanish banks may draw closer to the solvency levels of other euro area banks, iii) adaptation to the new regulatory framework and, iv) the configuration of a new competitive setting characterised by the emergence of new technologies and competitors. I shall now focus on describing each of these challenges, beginning with that of the reduction in assets impaired by the crisis. As stated, the volume of non-performing loans has diminished significantly from its 2013 peak. This reduction has been assisted by the economic recovery, insofar as it has favourably impacted debtors’ ability to pay, and also by the disposal of impaired portfolios.
In the euro area and the United States, R* is estimated to have fallen by between 150 and 200 basis points over the past 15 years. Page 3 of 14  The scale of this variation can only be explained by structural factors. Slower growth in the working population and in total factor productivity have led to a slowdown in the trend rate of GDP growth, and this is estimated to account for roughly a quarter of the decline.iv  Source: Bergeaud, Cette, Lecat, 2016  The other three quarters are estimated to stem from the increase in the supply of savings coupled with reduced investment demand. The global savings glut is being fuelled by increased life expectancies, rising inequality – older and wealthier individuals tend to save more – and the accumulation of foreign exchange reserves in emerging economies. Page 4 of 14  Source: IMF  Conversely, the decline in investment demand can be attributed to the rise in the non-material economy, which requires more human capital than physical investment, and no doubt to lower confidence in the future. The euro area in particular has seen a rise in its saving ratio and a marked weakness in its investment ratio since the financial crisis. Source : Refinitiv Datastream  These trends, which can be observed the world over and have been going on for a long time, are not, therefore, attributable to monetary policy: I shall nonetheless turn now to the role of central banks.

It is better to keep all options open – you never know what window of opportunity may arise at some point in time. After all, an emerging society – with niches still to be exploited and transformations to be implemented – provides more opportunities both for entrepreneurs and for top professionals when compared to a more developed society, which has already settled on a stable structure. It is precisely these opportunities, along with all guarantees implied by EU and NATO membership that make Romania an interesting place to work and live in, even sometime it may not appear to be so. I guess that the things you hear about Romania most often, covered in everyday news, sometimes show discouraging situations, yet many things are moving in the right direction. To better understand this, it helps to think of the Romanian society in the late 19th and early 20th centuries. Ion Luca Caragiale, who lived those times, tells us in his brilliant literary work that corruption, lack of meritocracy and a general disregard for rules were part of everyday life. Taking a step back from day-to-day reality (influenced by its mostly negative coverage in the media) and putting things into perspective, one realises that those times represented in fact one of the most successful periods in our country’s development. I believe that things are pretty much the same nowadays.
I have already outlined the broad changes that are being considered. It is, however, important to emphasize that for the emerging and developing economies, particularly those in SSA, these measures to reform the international financial architecture need to be carefully considered to ensure that they build on the strong foundation for economic growth that has been laid over the past decade. I thank you for your attention. BIS Review 63/2010  5

I should of course start by re-iterating the firm HKSARG policy of keeping our exchange rate to the US dollar within the range of 7.75 to 7.85 through the linked exchange rate system, characterised by currency board arrangements that require our monetary base, and any changes in it, to be 100% backed by US dollars. With the weakening US dollar and the strengthening renminbi; with the local inflation rate, excluding the temporary effects of tax relief, edging higher; with an “asset bubble” on the lips of many commentators; with the exchange rate hitting the strong side Convertibility Undertaking late last month, requiring our passive and un-sterilised foreign exchange intervention, injecting quite a lot of Hong Kong dollar liquidity into the inter-bank market; and with current US monetary policy possibly becoming inappropriate for Hong Kong; questions have understandably been raised on the appropriateness of the system. Let me provide answers to these questions. First, the appropriateness of the linked exchange rate system should be judged by its ability to deliver monetary and financial stability in Hong Kong through economic cycles, and should not be judged by the short-term cyclical conditions of the economy relative to that of the US economy. The linked exchange rate system has served Hong Kong extremely well since its establishment.
Thirdly, the importance of the ECB’s flexibility as regards the recalibration and use of instruments should be highlighted. By way of illustration, the evolution of the economic crisis caused by the pandemic required an increase in the PEPP in June of € billion, and of € billion in December, up to a total of € trillion. The net purchase horizon was also extended until at least end-March 2022 and the maturing securities reinvestment horizon until at least end-2023. 4  In December we also decided to recalibrate the conditions of the TLTROs. We extended by 12 months, until June 2022, the period during which the reduced interest rate for banks meeting the lending target will be applicable, scheduling three additional quarterly operations between June and December 2021, and increasing the borrowing allowance of TLTRO funds each bank can obtain from 50% to 55% of its eligible loans. Another of our decisions was to extend until June 2022 the aforementioned collateral framework flexibility measures. But apart from this flexibility in the response over time, there is a key difference in the PEPP compared with the previous asset purchase programme (APP). Whereas the APP retains a relatively rigid structure regarding the distribution of asset purchases both over time and across jurisdictions, the PEPP afforded itself from the outset the possibility of concentrating these purchases in the most critical months of the crisis and in the countries which, at each point in time, have been subject to tighter financing conditions.

Dear ladies and gentlemen, Safe and efficient fulfilment of the economy’s need for money, in terms of value and structure, and guaranteeing the confidence of the public in our currency, which is one of our main responsibilities, have been at the core of our efforts in preparing this new series. Therefore, I am very honoured to unveil today, for the first time, for the eyes of the public, this new series of banknotes. As the Governor of the Bank of Albania, through this symbolic signing, I open the doors for the first two banknotes of the new series to start their journey and circulate in the Albanian economy. In the hope that the new banknotes will be welcomed by the public, let me now present to you their design. I would also like to call on the public to handle banknotes with due care, in order to preserve their durability, quality and integrity. From 30 September 2019, the banknotes of the new series 200 lek and 5000 lek will be legal tender in the Republic of Albania and will be used as means of payment, alongside the existing banknotes. 2/2  BIS central bankers' speeches
On the contrary, the economic upturn accelerated in 2004 and growth was even stronger than expected. Last year the economy also continued to grow at a good rate. To understand the low inflation it is necessary to find other explanations than weak demand in the economy. The reasons should mainly be sought in the positive changes on the supply side of the economy, which I have already mentioned, namely high productivity growth and low import prices. High productivity growth has held down cost pressures in the economy more than expected. Production has been able to increase without any particularly high increase in companies’ labour costs per unit produced (diagram 7). During 2003 and 2004 unit labour costs in the business sector actually fell. At the beginning of an economic upturn it is normal to have a period when production increases at a more rapid rate through companies using existing labour force more intensively rather than through new recruitment. However, even taking into account the business cycle, productivity growth has been high in recent years. 4  BIS Review 12/2006  This indicates that productivity growth has increased in a more lasting manner. The Riksbank has also gradually increased its forecast for the productivity growth trend in recent years. Despite this, productivity has continued to be higher than forecast up to 2005. One difficulty in the forecasting work is that productivity growth usually fluctuates considerably even taking into account changes in economic activity. For instance, productivity growth fell heavily in 2001.

It has been used, for example, to explain and sometimes justify rapidly rising share prices for companies in the domain of information technology, known for short as IT companies. It has also featured, however, in the view that the economic laws under which we live have ceased to apply, leaving our economies in a state of bliss. Constantly accelerating productivity growth should lead to an unending boom, so that we central bank governors can sit back and stop worrying about the tensions that strong growth usually generates between supply and demand, with the risk of rising inflation. Reality, however, does not seem to have kept pace with these notions. Share prices for IT companies have fallen steeply. In the course of last year the average value of the Nasdaq exchange, perhaps the prime indicator of the aggregate value of international IT companies, was almost halved. IT shares have also fallen markedly on the Stockholm exchange as well as elsewhere. Moreover, a number of new companies in this sector have collapsed. Developments in the U.S. economy are a reminder that time-honoured relationships do still apply, even in a phase of rapid transformation with major technical innovations. An economy that is expanding rapidly will ultimately generate imbalances and rising prices. That was why the Federal Reserve had to tighten the monetary stance so that the high growth in the United States would be subdued. My attitude to talk about a ‘new economy’ or a ‘new economic era’ has been sceptical for a number of reasons.
With the recognition that similar risks are being run in different subsidiaries (for example a Japanese bank might have exposure to US interest rate risk from its activities both in London and New York), there has been a move to consolidate these homogeneous risks and manage them centrally within a group. This means control lines which transcend or cross the entity structures and a matrix management structure. It means that the head office can exercise much stronger control over the volume of a particular type of risk being run across the group. For example, for some UK banks, the management of their global foreign exchange book will be managed in London during London office hours, then it will switch to the US operation but under strict limits set by London; after the US close it will move again, to the Far East, but still under the control of limits set by London. The increasing development of whole book value at risk models has also encouraged this centralisation of control. In the foreign exchange example, the value at risk model used by the group will be maintained and run in London. So the riskiness of positions across the world wide group will be assessed according to the London model. But centralisation of controls goes even further. Oversight of credit and key credit risk decisions may well also be centralised. Oversight of FX settlement risk is sometimes centralised in London as well as control of the position risk.

The greater degree of consistency across banks embodied in the new approach will allow the Bank to be more focused in performing its supervision. The tools of supervision, such as Review Team Visits and Reporting Accountants Reports on internal controls, will be targeted at the areas of greater risk and concern in individual banks. We shall very shortly be issuing a consultation paper setting out how we plan to implement the model in practice. That paper will show that we have tried to model parts of our approach on best practice in the US. The City of London may not always have been a preferred habitat for camels, but you may well see some genetically modified examples on the streets there quite soon. A better understanding of the risk profile of each supervised institution will assist the Bank in setting risk asset ratios. As you all know, Basle sets a minimum capital ratio of 8 percent of risk weighted assets. The 8 percent ratio is sometimes interpreted as a ‘one-size-fitsall’ standard. The Bank, however, sets the trigger capital ratio for each authorised bank at, or above, the 8 percent floor and considers an adjustment to that trigger ratio whenever we see a substantial change in that bank’s risk profile. Where does this all leave us in comparison with other regulators? I suggested earlier that our flexible, judgmental approach is somewhat distinctive. But we are no longer, if indeed we ever were, outliers on the supervisory spectrum.
First, we announced the implementation of the Pandemic Emergency Purchase Programme (PEPP). This programme, with an initial envelope of € billion, which was subsequently increased to € trillion until June 2021, permits the ECB to purchase government and private sector bonds, as well as other debt instruments. The ECB already had a purchase programme, the APP, which increased in volume at the onset of the crisis. Why did it then need a second programme? The APP has a relatively rigid structure regarding the distribution of asset purchases both over time and by jurisdiction. 3  In the latter case, APP purchases are distributed under the so-called “capital key”, a concept referring to the percentage of the ECB’s capital held by each national central bank, which is linked to the weight of each country’s economy and population. However, faced with an emergency such as that in March, the ECB had to be able to buy proportionally more bonds from some countries than others so that it could concentrate those purchases on countries whose financing conditions, at any given time, were subject to a greater degree of tightening. The PEPP was designed precisely with that degree of flexibility in the distribution of asset purchases over time and by geographical area, although the capital key continued to act as a guide for the latter.

Under this scenario, economic policymakers would not only observe the long-term benefit for general prosperity that credibly committing to evidence-based policies can provide; they would also appreciate the potential short-term political return of incorporating the results of these evaluations into their decision-making. Yet as I have previously stated, Spain’s starting position is not a good one. Once again, resorting to an example close to home to illustrate the point, it is telling that over 40% of the Spanish population does not properly understand the meaning of inflation.4 We are aware what this means about citizens’ actual capacity to understand and assess the performance of institutions – such as the European Central Bank and the national central banks – whose mandate precisely includes price stability. The Banco de España, together with the National Securities Market Commission (CNMV), is promoting a Financial Education Plan. We will be joined next year by the Ministry of Economic Affairs and Digital Transformation and, with the participation of a wide number of public and 4/6  BIS central bankers' speeches  private partners, including the Spanish General Council of Economists, the aim is to increase the economic and financial knowledge of the population at large. To achieve this, I believe it will be important to further embed economic and financial knowledge in both the primary and secondary education syllabus, as recommended by international institutions.
This mix of exaggerated confidence and low real interest rates encouraged investors into riskier assets and banks into riskier lending, epitomised by the US sub-prime housing market. That was compounded by a lack of incentive for care in extending loans, if they were then packaged up and sold on to others. In August 2007, the economic weather turned distinctly autumnal. Falling US house prices and rising sub-prime defaults led to nervousness about the value of assets backed by those mortgages. Moreover, losses associated with sub-prime loans began appearing in places noone had anticipated, revealing how opaque many financial instruments were. The markets for these assets closed and their prices plummeted, putting pressure on the balance sheets of the financial institutions holding them, while wholesale funding dried up. And the wide dispersal of the suspect assets meant these balance sheet pressures were quickly transmitted internationally. In the United Kingdom, banks became increasingly cautious in lending, adding to downward pressure on housing and commercial property prices, and slowing growth. But at that stage, it was still possible to envisage a relatively modest slowdown, with financial intermediaries making the necessary balance sheet adjustments in an orderly fashion. However, the turmoil in credit markets was not the only factor the Bank’s Monetary Policy Committee had to contend with. Oil prices, already high at the start of 2008, hit $ a barrel in July, while a broad range of other commodity prices rose sharply.

In the moving year ending in the second quarter of 2022, the current account accumulated a deficit of 8.5% of GDP, a figure in which the savings-spending imbalance of the government played a preponderant role, due to the income-support measures adopted in 2021. Households also showed a significant imbalance, given the liquidation of savings involved in the withdrawal of pension funds to finance higher levels of private consumption (figure 7). Although the impact of these phenomena has been receding, this will only begin to show up in the current account in the second half of this year. On the external front, the sharp rise in inflation and the response of central banks has led to tighter financial conditions, which has reduced global growth prospects and increased the risk of a global recession happening in 2023. Inflation numbers not seen in several decades 3  have been reached in several economies. Given inflation’s higher persistence and expectations, most central banks have maintained and/or accelerated their interest rate hikes, where worth singling out are the unexpected magnitude of the hikes and the more restrictive message from the Fed. The worsening of financial conditions has begun to impact on the activity and expectations of different agents, in addition to the uncertainty surrounding the unfolding of the Russia-Ukraine war, Europe's gas supply disruptions, and the weakness of the Chinese real-estate sector and overall economy (figure 8). Commodity prices have fallen across the board, driven mainly by lower expected demand and an appreciated dollar.