samchain/econo-pairs-v1 huggingface dataset:
It should also be remembered that households still have the possibility of borrowing large amounts to finance housing purchases. I consider that it is therefore somewhat misleading to claim that certain groups have been completely ‘excluded’ from the housing market due to the amortisation requirements. As far as newly built homes go, these are exempt from the amortisation requirements and it is up to individual banks to decide whether their customer’s credit  23 European Commission (2019). 24  Finansinspektionen (2019). 25 See also Cunliffe (2019) for similar results in the United Kingdom. 8 [13]  rating makes additional amortisation necessary. Consequently, the amortisation requirements, at present, should benefit newly built tenant-owned apartments. The aim of the macroprudential policy measures is to strengthen households’ long-term resilience in two ways: by ensuring that they do not borrow excessive amounts in relation to their incomes or the value of their homes, and to encourage households to create buffers by gradually amortising their loans. High stress rates in the calculations made by the banks to estimate households’ ability to repay loans are, in turn, aimed at ensuring that the households will be able to cope with a significantly higher level of interest rates than prevails at present. 26 If a household fails the credit assessment, it is conceivable that the household will have to increase the proportion of capital it invests, borrow less and/or purchase a cheaper home.

With regard to the latter measure, I would like to point out that such initiatives from the banks are of course welcome and praiseworthy. But it is also essential that the banks follow up what is happening and that the authorities monitor to what extent the recommendations are actually followed. Moreover, awareness that rising indebtedness and housing prices could entail problems has gradually increased among both lenders and borrowers. The situation on the housing market is now discussed regularly in the media. I would like to believe that this is at least partly because the Riksbank has long been pointing out the risks involved here. However, it remains to be seen whether these measures and the increased general awareness will be enough to slow down developments and bring us onto a less risky course. Very recently there have been signs that developments in both lending to households and housing prices have entered a calmer phase. We are of course following developments very closely. Continued vigilance necessary Despite the calmer situation, there are nevertheless strong reasons to remain vigilant. If it turns out that this was not a break in the trend, but merely a temporary slowdown, and that housing prices and the build-up of debts among households accelerate again, we and others must be prepared to take action. We therefore cannot just twiddle our thumbs; the Riksbank and others must ensure that we have an effective toolbox of measures that can be quickly and smoothly put into operation. I will return to this shortly.
6 Today, digitalisation and improvements in communication technology are pushing up demand for payments to be instantaneous and available round the clock. This demand is largely being driven by the proliferation of mobile payment apps. Instant payments are increasingly becoming the new standard around the world. 7 They will help to improve the efficiency of the payment system and enable synergies with new technologies and business models. The SNB is committed to instant payments. Last year, it helped launch the SIC5 project. SIC5 will introduce improved functionalities, such as a new settlement algorithm and higher processing performance. It will also include a new instant payments module to help make instant customer payments the new normal. To this end, the SNB has decided that participants with a high number of customer payments must be able to receive instant payments in SIC5. The SNB has thereby created the necessary framework conditions for ensuring that the cashless payment system in Switzerland remains efficient, secure and ‘future-proof’. 6 7  Cf. SNB press release of 11 January 2019, ‘Swiss National Bank sets criteria for fintech companies’ access to Swiss Interbank Clearing’. BIS, ‘Shaping the future of payments’, available at www.bis.org/statistics/payment_stats/commentary1911.htm. Page 6/10  Ultimately, however, the specific retail payment solutions will have to come from the private sector. To be genuinely effective, instant payment solutions must be implemented all the way to the end customer. Offering such solutions often requires significant adjustments to banks’ internal payment processes.

However, the estimated scale seems to be much exaggerated. One problematic issue is related to the  BIS Review 6/2007  1  fact that before the eurozone, we did not have examples of currency unions between developed countries. So the Rose study was based on data on currency unions involving poor and/ or small countries. As noted by Micco, Stein and Ordonez (2003), “one does not need to be a eurosceptic to wonder whether such findings are directly applicable to Europe’s single currency”. Follow-up studies (e.g. Rose and Wincoop (2001), Kenen (2002), Persson (2001)) attempted to correct the Rose estimates but arrived, rather inconclusively, at anything between a 50% and 150% growth of bilateral trade. Recently, the first studies based on euro area data emerged. These show that the trade creation effect of the euro was substantial, although (until now) by an order of magnitude smaller that the original Rose estimate (e.g. Micco, Stein and Ordonez (2003)). Our knowledge about trade creation effects of the euro is still far from complete and we will probably have to wait another 10+ years to have enough data to draw firm conclusions about its magnitude in the eurozone. Now let me move to the cost side. As already noted in contrast to the benefits, some costs have a contingent character. They are tail-events – rather unlikely but with a possibly high impact if they happen. Let me concentrate on two issues: -  asymmetric shocks,  -  arising micro- and macroeconomic imbalances.
Figure 1 World growth (annualized q-o-q change, percent) 10  10  5  5  0  0  -5  -5  -10  -10  -15  -15  -20  -20  07  II  III  Chile  U.S.A.  IV  08  Eurozone  II Japan  III  IV  09  Trading partners  Sources: Central Bank of Chile based on sample of investment banks, Consensus Forecasts, Bloomberg and IMF. In recent weeks, news from abroad has ceased to be mostly negative. Various agents’ projections for world growth have stabilized, and some have even risen marginally (table 1). Still, this is not enough to be seen as a significant external boost for our economy, because world growth remains at low rates. BIS Review 93/2009  1  Table 1 World growth (*) (annual growth, percentage)  World World at market ER US Euro Area Japan China Rest of Asia Latin America Commodity exporters Trade partners  Prom. 90-99  Prom.

The much more flexible monetary and fiscal policies of today have also avoided the intrusion of protectionist distorting measures that so prolonged the crisis of the 1930s, amplifying its costs and deeply hurting the later economic development in several regions of the world, including our country. Still, it is likely that returning to domestic demand levels like the ones we had before the crisis takes a while, especially in the United States. Active fiscal policy actions have taken up the room left by the shrinkage of private spending. However, it cannot be sustained for long. The natural, sustainable solution will come via net exports from the US and, to a lesser extent, from Europe. How it will happen is an open question, because it is also yet to be seen which economies will, as counterparts, have to reduce their own net exports to create the  2  BIS Review 93/2009  necessary space for such an adjustment. Furthermore, this may call for major parity adjustments in the main economic areas. Beyond this last point, currently floating foreign exchange regimes have played a stabilizing role, providing every degree of freedom needed by monetary policy and by liquidity provision measures to tackle the cycle and the financial stability objective. This element was nowhere to be seen in the 1930s, when the main central banks struggled hard, but ineffectively, to defend the gold standard, severely magnifying tensions in the banking systems.
Toyota’s worldwide car sales have also increased by some 20 per cent to 8.9 million units. As a result of the economic policies being implemented by the government of Prime Minister Shinzo Abe, we may increasingly see some spillover effects on ASEAN and other Asian economies. ASEAN, however, is unlikely to be too negatively affected and may instead benefit from a weaker yen given its role as a “downstream producer” for Japan. For example, countries that serve as a production hub for Japanese companies are likely to benefit from Japan’s increased export competitiveness. Overall, stronger Japanese growth is expected to stimulate its imports from ASEAN. In contrast, economies with a high degree of export similarity to Japan, such as Korea, and to some extent Taiwan, could face greater competition in the short run due to the negative substitution effect favouring relatively cheaper Japanese goods. We may also see increased capital inflows into the region, as Japanese institutions are increasingly hard-pressed to secure adequate returns at home. As long-term interest rates decline further in Japan due to the Bank of Japan’s new asset purchase programme, we can expect more “search for yield” activities. As interest rates are already very low in the region and asset price inflation is becoming a concern in many economies, ASEAN policy makers need to remain vigilant against a build-up of domestic financial and asset market excesses.

As a matter of fact, we become more and more European and the EU looks more and more Helvetic! Indeed, the EU has almost caught up with Switzerland in many respects. We have 26 Cantons and you have now 25 Member States! But in all seriousness, while the European integration of Switzerland proceeds, I see no reason, now, for artificially speeding up monetary adjustments by linking the franc to the euro. We would give up our low interest rates without gaining more stability: an unattractive deal in the present circumstances. In monetary affairs we remain indeed an island in Euroland! BIS Review 32/2004  5
Notes: Line thickness is proportional to total goods trade between regions. Circle size is proportional to regions’ total goods trade with the other regions shown in the chart. Data based on nominal US dollars. These concerns about global trade, output and asset prices have had significant knock-on effects to global financial conditions. Expectations of short-term interest rates in the major advanced economies have fallen by around 60 basis points, and global bond yields by around 70 basis points, since the start of the year.27 This leaves global financial conditions 0.9 standard deviations looser than at the end of last year (Chart 29). 27  Global taken as simple average of UK, US and euro-area 3-year and 10-year forward rates, respectively. 26  All speeches are available online at www.bankofengland.co.uk/speeches  26  Chart 29: Global financial conditions index  Standard deviations from average 2.5 2 1.5 1 0.5 0 -0.5 -1 -1.5 2011  2013  2015  2017  2019  Sources: Bloomberg Finance L.P., Eikon by Refinitiv and Bank calculations. Notes: Financial conditions indices (FCIs) estimated for 43 economies using principal component analysis. The FCIs summarise information from the following financial series: term spreads, interbank spreads, corporate spreads, sovereign spreads, long-term interest rates, equity price returns, equity return volatility and relative financial market capitalisation. An increase in the index indicates a tightening in conditions. Series shows the average of all country FCIs, weighted according to their shares in world GDP using the IMF’s purchasing power parity (PPP) weights.

This implies a lower and abating severity of related restrictions, including in many European countries. As always, NBR will continue to use all policy tools to control inflation and to be supportive of the recovery of economic activity. By doing the work on our side, with a “balancing act” we also hope to support improvements in firms’ sentiment with positive effects on longer term economic development. With these in mind, I would like to invite our honored guests and audience to have a fruitful 2/3  BIS central bankers' speeches  discussion. I hope that we will be able to see each other in person at next year’s edition. As for now, I trust that this virtual environment proves to be an adequate opportunity for promoting productive debates and exchanges of ideas. Please allow me to invite Vice-President Thomsen to take the floor. Thank you for your attention. 3/3  BIS central bankers' speeches
Another dominant paradigm which came under scrutiny in recent years is that of the superiority of foreign-owned banks vis-à-vis domestically-owned banks, both in times of sustained growth and in times of crisis. The arguments for this view are well-known and they have to do with improved efficiency, better expertise, alleviation of the shortage of domestic capital, and increased competition. Also, some authors (for instance, Haas and Lelyveld in 2009) claim that the presence of international banking groups on local markets has a positive effect in mitigating the consequences of a crisis. Before making my own remarks on this matter, let me introduce some caveats: first, nobody disputes the superiority of foreign-owned private banks with respect to domestically-owned state banks in newly emerged market economies. The comparison needs to be made between foreign-owned private banks and domestically-owned private banks. In this respect, it is worth mentioning that Central and Eastern Europe is the only region in the world where foreign-owned banks dominate as a share of total assets, whereas in the developed markets, Latin America or Asia, domestic private banks are prevalent. Second, this dominance is a relatively new phenomenon: the share of foreign-owned banks became prevalent as late as the first years of this century, even in Central and Eastern Europe. In other words, it has been possible to verify the paradigm in practice only in the last few years. It is fair to say that foreign-owned banking prevalence in Central and Eastern European countries has happened more by default than by design.

Judging by the fact that controls are more efficient provided they are in place before the resumption in large capital inflows, should we use them from the very start  1  A recent classification of control instruments is provided in Qureshi, M., Ostry, J., Ghosh, A., Chamon, M. (2011). BIS central bankers’ speeches  5  of a wave of capital inflows, before resorting to macroeconomic policies? I don’t think so. And what would be the best choice for emerging countries that are members of economic areas based on free capital movement, such as the European Union? Any scheme indicating where controls should be positioned in the policy toolkit of emerging countries needs to be based on a clear-cut distinction between risks associated with large capital inflows and the actual quantities (flows). Controls have a direct impact on quantities. But macroeconomic policies can have an indirect influence on quantities. Once the exchange rate has appreciated enough to near its equilibrium level and foreign reserves have reached a point beyond which any further purchases are suboptimal, changes in macroeconomic policies may go on. We may move from a deficit position to public budget surplus. The lesson that can be drawn from recent experience is that policymakers’ hesitations in this regard may prove costly. Monetary policy has room to lower interest rates just as long as this does not jeopardize the inflation target objectives. From that point on, fiscal policy is the only macroeconomic policy left in the fight against capital inflows.
First, we often talk about how much we don’t know, but this doesn’t do justice to how much work has been done. We know that today three quarters of our emissions come from surface transport, heating our buildings, manufacturing goods, the food we eat, and producing electricity [figure 4]. By 2050 these emissions will have to be almost completely eliminated. Any remaining emissions, mainly from aviation and animal methane, where there are currently no viable alternatives, would need to be offset by increasing the lungs of the earth. For example, through planting more trees, sequestering carbon in soils and biomass crops. Although there are many differences across models, the key building blocks of the transition are pretty clear [figure 5]. Eliminating emissions from fossil fuels will require an increase in the share of renewables in the energy mix, greater electrification, improving energy efficiency, finding substitute fuels (like hydrogen or synthetic fuels) for use in heavy industry and transport, and capturing and storing emissions where it is most feasible or necessary to do so. Eliminating emissions from land-use requires us urgently to prevent deforestation and implement more sustainable agricultural processes related to tillage, crop cover, fertilizer use and animal-related emissions. A number of different types of policy measures can take us there.

There are a number of reasons that a financial conditions framework is likely to be useful when evaluating the economic outlook and the conduct of monetary policy. Most important, monetary policy works its magic through its effect on financial conditions; it does not operate directly on real economic variables. That is because the level of the federal funds rate influences other financial market variables such as money market rates, long-term interest rates, credit spreads, stock prices and the value of the dollar, and it is these variables that influence real economic activity. 1 This means that if the linkage between the fed funds rate and this broader constellation of financial indicators is not stable or completely predictable, then knowing what is happening to the fed funds rate is not sufficient to predict economic activity. The instability of the linkage between the fed funds rate and financial conditions indicators means that these indicators provide additional information about real activity and also are relevant in deciding the appropriate fed funds rate target. In contrast, if the transmission mechanism from the fed funds rate to financial conditions and onward to real economic activity were completely predictable, then there would be no need to focus on financial conditions as an intermediate target variable. The level and path of the fed funds rate matters, but it also matters how this gets transmitted to the real economy through the financial sector.
So, Chairman, although Howard took with him responsibility for banking supervision, and some 20% of our staff, to the FSA, the Bank’s essential concern with, and responsibility for, the stability of the financial system as a whole - and its role in promoting the efficiency and effectiveness of the financial sector, including the promotion of the City - remain much as they were. What has more clearly changed over the past few years is the external environment within which we pursue these tasks. And in my remaining remarks I should like to comment on three particular developments - the introduction of the euro, the impact of information technology, and continuing broader financial globalisation which have increasingly preoccupied the Bank in our work in these areas. First, the euro. Whether the UK is in or out of the euro, the Bank has a keen interest in its success as a widely used trading and investment currency - for the contribution that can make to financial stability, to financial sector efficiency, and to financial activity here in the City. Well before its introduction, the Bank played an active role in coordinating the City’s technical preparation for the euro, and in encouraging the City’s professional institutions to work with the European Commission and the ECB in developing the necessary legal and technical framework. The City’s contribution to the successful introduction of the euro is widely acknowledged on the  BIS Review 49/2000  2  Continent.

Figure 11: In the August MPR GDP was projected to continue to recover…  Stylised representation of the MPC’s views on uncertainty and risks around the central projection for GDP  GDP projection based on market interest rate expectations, other policy measures as announced  Figure 12: … unemployment to peak in Q4 then decline gradually …  Figure 13: … and inflation to return to target in the medium term. Unemployment projection based on market interest rate expectations, other policy measures as announced  CPI inflation projection based on market interest rate expectations, other policy measures as announced  10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10
Non-energy industrial goods inflation fell to 6.2 per cent in April, from 6.6 per cent in March, when it declined for the first time in several months. But services inflation increased to 5.2 per cent in April, from 5.1 per cent in March. Inflation is still being pushed up by the gradual pass-through of past energy cost increases and supply bottlenecks. In services, especially, it is still being pushed higher also by pent-up demand from the reopening of the economy and by rising wages. The information available up to March suggests that indicators of underlying inflation remain high. Wage pressures have strengthened further as employees, in a context of a robust labour market, recoup some of the purchasing power they have lost as a result of high inflation. Moreover, in some sectors firms have been able to increase their profit margins on the back of mismatches between supply and demand and the uncertainty created by high and volatile inflation. Although most measures of longer-term inflation expectations currently stand at around two per cent, some indicators have edged up and warrant continued monitoring. Risk assessment Renewed financial market tensions, if persistent, would pose a downside risk to the outlook for growth as they could tighten broader credit conditions more strongly than  2/4  BIS - Central bankers' speeches  expected and dampen confidence. Russia's war against Ukraine also continues to be a significant downside risk to the economy.

Christine Lagarde: ECB press conference - introductory statement Introductory statement by Ms Christine Lagarde, President of the European Central Bank, and Mr Luis de Guindos, Vice-President of the European Central Bank, Frankfurt am Main, 4 May 2023. *** Good afternoon, the Vice-President and I welcome you to our press conference. The inflation outlook continues to be too high for too long. In light of the ongoing high inflation pressures, the Governing Council today decided to raise the three key ECB interest rates by 25 basis points. Overall, the incoming information broadly supports the assessment of the medium-term inflation outlook that we formed at our previous meeting. Headline inflation has declined over recent months, but underlying price pressures remain strong. At the same time, our past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain. Our future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our two per cent medium-term target and will be kept at those levels for as long as necessary. We will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, our policy rate decisions will continue to be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission.