samchain/econo-pairs-v1 huggingface dataset:
Benoît Coeuré: Adjustment and growth in the euro area economies Speech by Mr Benoît Coeuré, Member of the Executive Board of the European Central Bank, at the Nova School of Business and Economics and the Bank of Portugal, Lisbon, 22 February 2013. *  *  *  Introduction1 Dear Governor Costa, Ladies and Gentlemen, It is a great pleasure to be here today and share with you my thoughts on the adjustment under way in the euro area. This is a challenging issue, especially here in Lisbon, as Portugal is at the heart of this process. Taking the Lehman collapse as a starting point, the economic and financial crisis has now lasted four and a half years, almost one-third the age of the euro. For the stressed countries, this has been a tough time. It saw a sharp decline in GDP and a sharp rise in unemployment, with young people particularly affected. People’s daily lives have not yet visibly improved. This is why it is important to focus on the progress made during the past five years and on why and how reforms can create income and jobs. I have in mind three questions: (i) How much adjustment is still needed? (ii) Why have the costs been so high? (iii) Are conditions in place to restore growth? The public would probably formulate these questions differently: can we hope that things will get better? Will the policies work? And will we see an improvement in our daily lives?

For  2  BIS central bankers’ speeches  instance, it provided banks with all the liquidity they were seeking by adopting fixed rate tender procedures with full allotment, against an expanded list of eligible collateral, and for extended periods. This helped to stabilise the funding situations of banks in Greece, Ireland and Portugal, and later on in Spain and Italy2. According to the Banco de Portugal, the ECB’s liquidity provision to Portuguese banks reached € billion in June 2012, representing more than a third of the country’s GDP. In August last year the ECB announced the Outright Monetary Transactions programme to counteract unjustified speculation about a euro break-up and to rectify the resulting distortions in the transmission mechanism of monetary policy. As a result of these actions, and against the background of a renewed commitment by governments to ensure the integrity of the euro area, financial conditions have substantially improved over time and across market segments. Banks have been able to decrease their reliance on ECB funding, including by repaying (parts of the) amounts received under its longer-term refinancing operations. In Portugal, central bank funding is now back to around € billion, more than 15 percent below its peak. Euro area financial markets are gradually returning to normal. [Slide 3] So to what extent have the imbalances been corrected? The current account balances clearly show a strong correction. In the three programme countries the current account balances in percent of GDP improved by more than 9 percentage points between 2008 and 2012.
But some of this capacity is in sectors which will not be future engines of growth – such as commercial real estate in some of the stressed countries. What we need is investment in new business models that will raise total factor productivity and provide the sources of future growth. Politicians are not the best placed to decide what these business models will be. The market economy will take care of that. The important thing is that we create an environment that encourages innovation and entrepreneurship so that new models can emerge, and capital and labour can be reallocated to a more efficient use. This is in the best interests of the people of Europe, both as workers and as savers, beginning with those who have been hit hardest by the crisis. It nevertheless implies changes at both national and European levels. At national level, we need to prioritise public spending towards productivity-enhancing investment, ensure that labour and goods market are flexible, cultivate a supportive regulatory, judicial and educational environment, and open our economies to spur competition and encourage the emergence of new actors. Opaqueness and vested interests17 are not only defining features of developing economies. Successful reform in European economies hinges on efforts to curb rent-seeking behaviours. For example, doesn’t the Single Supervisory Mechanism have the objective of freeing bank supervision from national politics? 16  See European Commission (2013). Long term financing of the European economy, Green Paper, March.

14  2020 (f) Mar.19 Report  Dec.18 Report  2021 (f) Mar.19 Report  Mar.19 Report  3.25-4.25  3.0-4.0  2.75-3.75  3.0-4.0  2.75-3.75  3.8 3.9 6.0 3.3 4.1 5.0 -2.7 20.9 22.6  3.7 3.9 6.2 3.3 3.6 4.5 -2.9 20.1 21.8  3.3 3.6 3.9 3.5 2.8 3.0 -2.8 20.8 22.8  3.5 3.7 4.3 3.5 2.9 2.9 -2.7 20.3 22.0  3.3 3.5 3.9 3.4 2.9 2.6 -2.7 20.4 22.2  Fig 12 CPI inflation forecast (1) (2) (3)  CPIEFE inflation forecast (1) (2) (3)  (annual change, percent)  (annual change, percent)  6  6 6  6  5  5 5  5  IPoM Dec.18  4 3  IPoM Mar.19  2  4 4  3  2 2  2  1 1  0  0 0 16  17  18  19  20  4  3 3  1  15  IPoM Dec.18  21  IPoM Mar.19  0 15  16  17  18  19  20  21  (1) As from January 2019 the new indexes with 2018=100 annual base are used, so they are not strictly comparable with past figures. (2) Gray area, as from first quarter of 2019, shows forecast.
I know that the subject is a sensitive one in Italy... but I would like to say this as a friend: you should agree to examine and discuss the substance of these proposals, before worrying about the very principle of Franco-German discussions, which are often necessary but never sufficient. Rest assured, we very much want Italy to join us at the negotiating table, and you will, I think, find it in your interest to increase public and private solidarity. 1/ The first priority is to increase private risk-sharing. Our starting point here should be the real needs of the economy, and especially those of firms and entrepreneurs. In order to invest and innovate, for example in the digital economy or the energy transition, firms must to be able to take greater risks. This means more equity financing, which has a longer-term horizon, as opposed to debt financing. The euro area is already lagging far behind in this respect: equity financing was equivalent to just 77% of GDP in France in mid-2018, compared with 124% in the United States. And yet we have abundant resources: a savings surplus of around EUR 350 billion in the euro area. [slide] We therefore need to build a “Financing Union for Investment and Innovation” in order to channel these resources to where they are needed. This Union would be a combination of two existing initiatives, first of all the Banking Union, which must at last be finalised.

GROUND BREAKING CEREMONY OF THE NEW BARCLAYS BANK ZAMBIA PLC HEAD OFFICE  SPEECH BY DR. DENNY H. KALYALYA GOVERNOR – BANK OF ZAMBIA  THURSDAY, JUNE 6, 2019 LUSAKA, ZAMBIA  GROUND BREAKING CEREMONY OF THE NEW BARCLAYS BANK ZAMBIA PLC HEAD OFFICE FUNDED BY THE ABSA GROUP LIMITED, SPEECH BY DR. DENNY H. KALYALYA, GOVERNOR – BANK OF ZAMBIA – 6 JUNE 2019  The Absa Group CEO, Mr Rene van Wyk; The Director, Bank Supervision Department, BoZ, Ms. Gladys Mposha; The Director, Economics Department, BoZ, Dr. Francis Chipimo; The Deputy Group CEO and CEO Absa Regional Operations, Mr Peter Matlare; Deputy CEO, Absa Regional Operations & Chief Operating Officer Absa CIB, Mr Temi Ofong; The Barclays Bank Zambia Board Chairperson, Ms Chishala Kateka; The Barclays Bank Zambia Managing Director, Mrs Mizinga Melu; Executives from Absa Group; Representatives from Sunshare; Staff from BoZ; Management and Staff of Barclays Bank Zambia Plc; Distinguished Invited Guests; and Members of the press. It is my great pleasure to officiate at this ground-breaking event of Barclays Bank Zambia Plc New Head office. Distinguished Guests, the construction of the new Head office for Barclays Bank Zambia Plc, which will be rebranded as Absa Bank Zambia from next year, is a demonstration of the efforts and commitment by Absa Group Limited to become a Pan-African organisation, that is interested in the sustainable development of the financial sector and the economies of the countries they operate in.
The place to be So what’s the point of the banking union? Why did policymakers feel the need to take banking supervision and resolution from the national to the European level? What benefits does it offer to its members? Well, the easy answer is that it allows us to gather some of the high-hanging fruits – fruits that are out of reach from the national level. Let me give you an example. In politics they say: he who knows only one country knows no country. The same can be said about banks. The more banks a supervisor covers, the more they can learn about each of them and, thus, about all of them. They can compare, and they can benchmark. 1/7  BIS central bankers' speeches  And European banking supervision does cover a lot of banks, many more than any national supervisor. Instead of covering just one global systemically important bank, for instance, we cover eight of them. This helps us to understand much better how these gigantic banks work, what standards and best practices they apply for different business lines and where special risks might be hidden. We do this, for example, by comparing how they set up their risk management and their governance to deal with cross-border issues. The same applies to banks with unusual business models such as specialised lenders. All in all, our broader comparative reach helps us to know and assess all the banks better and thus supervise them better.

But even if the Governing Council does object, it cannot change the decision, but has to send it back to the Supervisory Board, which can either change the decision or call upon a mediation panel to resolve the difference of opinion. I can see that countries which join the banking union from outside the euro area might have some concerns. While they would have their seat on the Supervisory Board, they would not have a seat in the Governing Council. So, would they lose control over decisions that might directly affect their banks? Well, that would certainly not be in the spirit of the banking union. There are thus safeguards to avoid just that. Let me give you an example. If the Supervisory Board drafts a decision which affects a member from outside the euro area, and if that member disagrees with the decision, it can formally state its objection. Thus, the Governing Council is made aware that there are diverging views and has to take them fully into account. Now, what if the Governing Council objects to a draft decision, and the affected country does not agree with the objection? In such a case it could, for instance, call upon the mediation panel to resolve the issue. What I want to say is this: if a country from outside the euro area were to join the banking union, its voice would be heard at all stages of the decision-making process.
Furthermore, the exit policy especially of the major economies could spill additional risks to the ongoing global recovery. Their timing and speed will be crucial. The action that is either too early when the economy is not sufficiently robust, or too late when inflationary pressure and/or economic imbalances have already been formed will have important implication on recovery, price and financial stability. Second, emerging economies, Thailand included, face the challenge of sizeable and volatile flows of capital due to their better growth prospect and sooner policy normalization vis-à-vis G3 countries. These flows could lead to volatility in foreign exchange markets and might potentially create financial imbalances. From the data thus far, we have seen sizable inflow  2  BIS Review 41/2010  of capital into some of the Asian countries such as Korea, Taiwan, India, and China since the second half of 2009. And in the last couple weeks, this money started to flow into Thailand. Third on domestic front, as you are well aware, Thailand also faces two major uncertainties: the problem of Map Ta Phut and the on-going political unrest. I believe the “Map Ta Phut” problem is of the most interest to Japanese investors, and therefore I would like to say a few words. At present, the authorities have put all efforts to achieve the resolution of the problem, given its implications on the country’s future investment prospect, industrial practice, and economic recovery.

So far, the processes of the EIA, HIA, and public hearing processes have been formalized and the government is now in the process of establishing independent agencies which will be responsible for evaluating all of the proposed investment projects. It will take some more time, but progresses are being steadily made. In my view, the “Map Ta Phut” problem is only a temporary hiccup in Thailand’s long record of investment-friendly climate and rapid industrial development. It can be seen as part of a growing pain that developing countries such as Thailand experienced as it becomes more developed. On the positive side, it should provide opportunity to forge a closer coordination among related parties and establish a clear process in achieving sustainability of industrial development. As for the second issue, I think, it is too early at this point to put out an exact estimate of its negative impact on the recovery process. Should the problem takes time to resolve itself, the negative impact on the economy will become more visible especially on the tourist industry and private consumption. These, together with the severe drought that we have been experiencing thus far, may somewhat dampen the robust economic momentum that we carry forward from the fourth quarter of last year. Ladies and Gentlemen, I would like to turn to my last topic: Thailand’s economic policies going forward, starting with our monetary policy strategies in 2010.
This means that periods in which ex ante saving exceeds desired investment might lead to periods of persistent unemployment. In this respect, the financial system plays an important role. Financial intermediaries match borrowers and savers. If the financial system is under stress and lending standards are being tightened, ex ante investment is likely to decline relative to saving, all else being equal. The financial intermediation process and the creation of credit is the primary channel through which monetary policy affects the economy. By influencing the volume of credit creation, monetary policy strives to keep ex ante saving and investment – alternatively, aggregate demand and aggregate supply – in rough balance. Too rapid a pace of credit creation would overstimulate investment relative to saving, potentially increasing the rate of inflation and this, in turn, could damage the economy’s long-run performance. Too slow of a pace of credit creation would likely lead to an ex ante shortfall of investment relative to saving, causing unemployment to increase. This analytical framework also applies to the global economy, but with an added level of complexity. At the global level, income equals output and saving equals investment on an ex post basis. However, for an individual country, saving can exceed investment or, alternatively, production can exceed domestic demand to the extent that a country’s exports exceed its imports. This requires that, for some other economy or group of economies, investment must exceed saving, or alternatively, domestic demand must exceed production and imports must exceed exports.

The early stages of past recoveries have been led by consumer spending, particularly for durable goods and residential investment. For example, in the first year of recovery following the deep recessions of 1973–1975 and 1981–1982, real consumer spending increased an average of 6.5 percent and residential investment rose an average of 38 percent. It is unlikely that we will experience this type of strength this time. Households have suffered unusually large shocks to both income and wealth and many remain highly leveraged (Chart 18). Although the household debt to net worth ratio has declined considerably from its peak, it is still around 26 percent, well above the already elevated average of the past decade (Chart 19). Moreover, even if consumers wanted to borrow, credit availability is still constrained and underwriting standards remain relatively tight. Real consumer spending increased at a 2.25 percent annual rate over the second half of 2009 and looks to be growing at about that rate in the first quarter of 2010. Given that the personal saving rate is still relatively low, it will be hard for consumer spending to grow more quickly without large increases in real labor income. But big increases in real labor income won’t be possible without a much stronger recovery in output. And a much stronger recovery in output is unlikely without stronger consumption. Residential investment did increase over the second half of 2009, boosted by relatively low mortgage interest rates, lower home prices and the first-time home buyer tax credit.
Before the crisis, the National Bank had repeatedly drawn attention to the high leverage of the big banks and warned that their ability to absorb losses was not adequate. These caveats did not result in any voluntary change in behaviour. For this reason, it is essential that our set of preventative instruments for financial stability be improved in three areas; namely, improved access to information, closer involvement in regulatory procedures with regard to financial stability issues, and direct macroprudential decision-making powers. I would now like to take a closer look at these. First, it is crucial that we have all the necessary information quickly to hand in order to identify the build-up of risks in the financial system at an early stage. While the SNB’s statutory authority to compile statistical data is both necessary and helpful, the latest crisis clearly demonstrated that the National Bank must be able to request additional information. With this I mean, for example, quantitative, non-standardised data on banks’ risk exposure. BIS Review 173/2010  1  Unlike FINMA, Switzerland’s financial market supervisory authority, the SNB’s stance is primarily a macroeconomic or systemic one. This is why we must be able to act independently in certain situations when gathering information. At the same time, we also want to keep our access to information to an absolute minimum and avoid a duplication of activities with FINMA. Second, clarification of the SNB’s participation rights and obligations is needed in the area of regulation essential for financial stability.

It is too early to say whether this will eventually affect the distribution of profit to the Confederation and the cantons. There is no need for action at this stage. The profit distribution agreement between the Federal Department of Finance and the SNB sets out clearly defined threshold values for a review. The current agreement – which runs until the end of 2017 – will be reviewed at the latest with regard to the distribution for the 2013 financial year. Should the distribution reserve, which has been built up over the last few years, be depleted before then, the agreement calls for an immediate review. BIS Review 173/2010  3  It is currently too early to say anything definite about the outcome of the review. Seen from the current perspective, it would come as no surprise, however, if the annual distribution had to be reduced somewhat. We have repeatedly emphasised that an annual distribution of CHF 2.5 billion cannot be guaranteed in the long term. 4  BIS Review 173/2010
For mature economies, the LTCM investment fund crisis in 1998 illustrated not only the risks of the spill-over of crises in emerging areas but also the fragility created by the advent of new players and the development of financial derivative instruments. This fragility was further underscored by the failure of Enron in 2001. What are the prudential issues at stake in the recent developments in financial markets, particularly in the greater interdependence of national markets, the emergence of new instruments and new categories of economic operators in a context of increasing trading volumes? To find answers to some of these questions, the last session will take the form of a round table bringing together speakers from mature and emerging economies at different stages of integration into international trade, be they central bankers and/or from the private sector. It will afford an opportunity to discuss the consequences of the increasing global imbalances on international financial stability. Stanley Fischer will then provide a summary of the day’s work. It remains for me, Ladies and Gentlemen, to express my wish for this symposium to enable the further development and convergence of assessments of the current state of affairs and of economic policies. I wish you a fruitful day of discussions and now give the floor to President Jean-Claude Trichet. BIS Review 80/2005  3

Page 2/4  Berne, 13 December 2018 Thomas Jordan  News conference  Swiss economic outlook  I shall now turn to the economic outlook for Switzerland. According to initial estimates, Swiss GDP fell by an annualised rate of 0.9% in the third quarter. Despite this decline, GDP was still 2.4% higher year-on-year thanks to the strong expansion in the previous quarters. How are we to assess this development? First, a slowdown in momentum was to be expected after several very strong quarters. Second, the decline in GDP is also attributable to a number of temporary factors. These include the absence of the contribution made by major international sporting events and the weather-related production losses at hydroelectric power plants. An analysis of all the available economic indicators points to momentum weakening slightly but remaining positive. The favourable development on the labour market also continued. Employment increased strongly in the third quarter. The unemployment rate declined again through to November and now stands at 2.4%. The companies surveyed by our delegates in October and November expect staff numbers to rise in the coming months. They also report increasing difficulties in finding specialist employees. We are now anticipating slightly lower GDP growth of around 2.5% for 2018 as a whole. As in other countries, economic momentum in Switzerland is likely to weaken somewhat in 2019. We are expecting a rise of around 1.5% in GDP for the coming year. Overall, capacity utilisation in the Swiss economy should remain high.