samchain/econo-pairs-v1 huggingface dataset:
Supply and demand for funds, in turn, are determined by fundamental economic factors such as the time preference of households to consume today relative to consuming tomorrow, as well as the productivity of capital and demographic factors which determine future growth prospects. To arrive at market-quoted nominal interest rates, one must add to the real rate an inflation premium, which compensates the investor for the potential loss in the purchasing power of money over the term of the security. BIS central bankers’ speeches  1  So, to shed light on the movement towards lower nominal interest rates since the 1980s, let us examine how these two components – the real interest rate and the inflation premium – have changed over that period. A secular downward shift A considerable part of the secular decline in nominal rates is the result of lower and more stable inflation rates in advanced economies, translating into reduced inflation expectations and a lower inflation premium (chart 2). Reduced volatility of inflation rates since the mid1980s – a development associated with the “Great Moderation” – has probably contributed to this.1 This reduction in the inflation premium and in volatility can, at least partly, be attributed to the success of central banks’ policies and their credible commitment to low and stable inflation, a commitment which has become the hallmark of modern central banking.

Realised real rates – calculated as observed nominal rates minus the realised inflation rates – have also declined, and have been substantially lower in the 2000s than in the 1980s (chart 3). There are several potential explanations for this development. A first explanation is the “global savings glut” hypothesis, which states that the decline in real interest rates was the result of an increase in savings from emerging economies and oilproducing economies. It is argued that this increase was driven by, among other things, an accumulation of foreign exchange reserves, elevated oil prices and precautionary savings (chart 4).2 But the decline in real rates could also result from a decrease in growth prospects – itself caused, for instance, by a decline in the growth of productivity or population, or by demographic shifts, particularly a reduction in the working population relative to the nonworking population (charts 5 and 6).3 None of these possible explanations for the reduction in real interest rates has been fully confirmed, and therefore they do not constitute a sound basis for forecasting future interest rate developments. But the discussion highlights the fact that, in order to understand longerterm trends in real interest rates, we have to rely on low frequency changes in fundamental economic factors, while monetary policy does not play a primary role here. The cyclical downturn Let us now turn to more recent interest rate developments. As mentioned, since the financial crisis and the global economic slump that followed, we have seen a further fall in rates to very low levels.
A number of avenues need to be explored. • First, if this exercise is necessary per se, its full potential will be delivered only if all lessons are properly drawn. Some guiding key principles, or “Fundamental elements”, to be designed in the wake of the G7 exercise, will help achieve this objective. • Second, we must leverage on this G7 exercise: the regular practice of coordinated crisis management exercises should be encouraged in order to enhance the resilience of the financial system. • Third, an enlargement beyond the remit of G7 countries should be considered with some other jurisdictions and/or with BIS involvement, and possibly beyond the sole financial sector actors. In future exercises, the current format will require cooperation arrangements on a wider scale. ** Regulation and supervision, information, and preparation: these are the areas where we clearly need to improve our coordination. I would like to conclude with a last imperative: action. We all share the principles, but there was today in this conference a sense of urgency, of concrete urgency. This is where the French presidency of the G7 intends to be useful: • First, by giving greater visibility and support to the CEG work, which is going to deliver important papers on cross-sector coordination and on the assessment of vulnerabilities.

I must therefore, commend APEC for this initiative in bringing together bank supervisors across countries within the Asia and the Pacific region to learn and to share views and wisdom on this very important topic. It is my hope that all of you would take this opportunity to learn as much as possible from our highly experienced and knowledgeable speakers as well as from one another on the key issues relating to credit risks, but most importantly to reinforce supervision standards in order to enhance financial stability under your jurisdiction. Ladies and gentlemen, I am pleased to declare open the APEC Financial Regulators Training Initiative Regional Program on Credit Risk Analysis. I wish you every success and a pleasant stay in Bangkok. Thank you. BIS Review 50/2002  1
As to the most discussed and absolutely essential correction, that of the budget deficit, I will simply say that progress has been made under very difficult conditions, amid a recession: this year, 2013, we will run a surplus on the structural primary balance which will be maintained and widened, we believe, in 2014. But as well as budget deficit achievements, we should highlight the correction of the external deficit, the adjustment of competitiveness, the reallocation of resources from construction to other industries, and headway in deleveraging. The buoyancy of exports, along with the sluggishness of purchases from the rest of the world, in line with the fall-off in national demand, has allowed the contribution of the external sector to activity to reach an unprecedented scale. In 2013, Spanish export penetration in foreign markets increased notably in all geographical areas, markedly so in the emerging and developing economies. At the end of 2013 the Spanish economy will have a net external financing position of over 2% of GDP, above the related 1986 figure, which was the peak recorded to date in our external sector statistics. As to our main customers and suppliers, namely the euro area members, the recovery in competitiveness has been achieved through the direct containment of costs and margins, and not, evidently, through the nominal depreciation mechanism. This route is more difficult and slower, but the gains in competitiveness thus obtained are more structural, i.e. more durable. Wage moderation has played a very important role here.

We routinely run the general equilibrium model and the inflation targeting model as well as Market Implied Models or MIME, a technical word that is used for trying to find things out from people’s normal actions that could be captured in a data system. We also, of course, do single equation estimates as well as pure intuition from graphs and tables and such things. Our staff is generally of the opinion that increased expenditure and tax reduction of moderate amounts will not destabilise the economy. This is predominantly because the economy is still very docile with a capacity utilisation stable for quite a while now at 58%. Cost push inflation from the exchange rate and the oil prices are now substantially absorbed or have been passed on, so cost push also is not presently much of a factor. The important thing though is how to make expenditure useful and constructive in the long run without too much leakage. The important thing is how to make tax cuts reasonable and directed towards the areas where people benefiting from the cuts could utilise it for a spate of new investment. If this were to happen the debt to GDP ratio might not increase significantly due to the resulting increase in GDP over the long term. With abundant liquidity and low interest rates, this is not just a time for a general tax cut for its own sake, but a program must be designed for it to be directed to where investment could best be made.
To some degree, this likely reflects the anchoring exerted by stable inflation expectations. But some of the price pressures can be attributed to other, more temporary, factors:   Higher oil and gasoline prices and their pass-through into the costs of other goods and services.   Upward pressure on imputed homeowners rents due to increased demand for rental housing.   Higher import prices for goods, such as apparel. This reflects many factors including commodity prices pressures and higher wage inflation in countries such as China. Some of these upward pressures on inflation appear to be fading. Oil and gasoline prices have fallen in recent months. Apparel price inflation should gradually ease, given the sharp drop seen in cotton prices. Owners’ equivalent rent should also eventually stabilize as multi-family construction picks up and programs that shift real estate owned by banks to investors so they can be rented gear up. More generally, there are several reasons to think that inflation will remain moderate and close to our objective. First, and most obviously, the economy continues to operate with significant slack. Second, measures of underlying inflation show little upward pressure. In fact, one – the Federal Reserve Bank of New York’s Underlying Inflation Gauge – is turning down. This measure uses a very wide set of variables to forecast the underlying inflation trend (Figure 6). Third, it is hard to be very concerned about inflation risks when the growth rate of nominal labor compensation is so low and stable.

Only a highly professional and independent institution can successfully deal with the hart times, which are not rare here. The latest example of this is the COVID-19 pandemic, which although a struggle for human health and life, is also a struggle for policymakers to maintain macroeconomic stability and reduce the impact on the economy. Therefore, I would like to express my gratitude to all current and former colleagues and collaborators, who with their contribution have contributed to what we are today – a modern central bank that operates in accordance with the latest and highest international standards and best international practices and stands out as a positive example in the central banking community. 1/2  BIS central bankers' speeches  Congratulations on the 29th anniversary of the monetary independence! 2/2  BIS central bankers' speeches
Source: Bank of England 2017 Q2 Credit Conditions Survey (CCS). (a) A positive balance indicates that the changes in the factors described have served to increase credit availability. (b) Question: ‘How have the following factors affected overall secured credit availability to households over the latest three months relative to the previous three months?’ The chart shows responses to the option 'market share objectives'. (c) Net percentage balances are calculated by weighting together the responses of those lenders who answered the question by their market shares. Chart 17. Proportion of new mortgages with (a) no fees  Chart 18. Loan to income distribution of new (a) mortgage lending  Per cent  Proportion of £ fee new mortgages  50 45 40 35  30 25 20 15 10 5 0 2011  12  13  14  15  16  17  Sources: Moneyfacts and Bank calculations. (a) The proportion of £ fee products in each year is calculated relative to the total number of new mortgages offered during the year. The proportion in 2017 is calculated based on data from January to April 2017. Sources: FCA Product Sales Database and Bank calculations. (a) The Product Sales Database includes regulated mortgages only. 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Chart 19. Major UK banks’ capital ratios  Chart 20.

With stronger banks, credit is flowing again, helping businesses with new ideas and families looking for a home. In the past 2 years, lending by banks has grown in line with the economy: credit supply looks neither too cold - as it was after the crisis - nor too hot - as it was in the build-up to the crisis (Chart 1). 2  Carney (2017) ‘FSB Chair letter to G20 Leaders – building a safer, simpler and fairer financial system’, 3 July. http://www.fsb.org/wpcontent/uploads/P030717-1.pdf  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Sadly we can never declare ‘mission accomplished’. Vigilance is needed because too much credit – the flipside of which is of course too much debt – poses economic dangers. The financial system has a habit of creating too much of it. And even when the overall temperature is just right, there can be pockets of debt that are too hot. The economic dangers of debt Household debt – like most things that are good in moderation – can be dangerous in excess. Dangerous to borrowers, lenders and, most importantly from our perspective, everyone else in the economy. Let’s begin with mortgage debt. It doesn’t take a genius to know that households with big mortgages are more vulnerable to the unexpected. In Britain, they do everything they can to pay their mortgage debts through thick and thin. That is why banks did not take large losses on mortgages in the crisis.
Thriving and surviving in this world has demanded a new generation of leadership – forward looking leaders that are able to succeed and bring teams, organisations and countries, to new successes, to new frontiers and having the ability to sustain such performance in this new and more challenging environment. A further phenomenon that has intensified the demand for a new generation of leadership is the trend towards the relentless pursuit of instant results and the attainment of short-term goals. Additionally, the complexities of the world has also had the unintended effect of blurring our lens to focus on immediate challenges and problems. The scourge of shorttermism has defined a world where success is measured by short term results because the criteria for success and the incentive structures have promoted such behaviours. Such successes can however be only fleeting. The world needs leaders who offer a compelling vision with ambitious goals, where the outcomes will genuinely add value and make a difference, and with results that are sustainable. In this new environment of increased interconnectivity and increased inter-linkages, the role of leaders is also about galvanising and bringing together highly diverse entities and providing solutions to problems that have multi-facetted dimensions. It is also about managing diverse relationships that are often conflicting. While this is not new, what has changed is the intensity and the scale of the interconnectedness of businesses and of the goals that need to be achieved.

Zeti Akhtar Aziz: New leaders with energy and optimal performance Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the ICLIF Leadership Energy Summit Asia 2014, Kuala Lumpur, 1 October 2014. *  *  *  It is with great pleasure that I welcome you to this year’s Leadership Energy Summit organised by the ICLIF Leadership and Governance Centre. While I am not able to be here in person, most certainly I am here in commitment to the leadership development agenda and to this Leadership Energy Summit Asia. We are also most pleased to host this Summit at Sasana Kijang. Let me also take this opportunity to express our gratitude to the distinguished speakers that have come from different parts of the world to share with us their knowledge and experience on the subject of Leadership Energy. In this current and future environment, leadership has become even more important than ever before. The global economic and financial environment in this recent two decades has now become dramatically transformed, to become more interconnected, more complex and more competitive. The world has also become more unstable and less predictable with frequent shocks and crisis that requires for their effective management. These challenges transcend corporations, nations and cuts across industries, institutions and jurisdictions.
Estimated effect on GDP after three years.1) Percent 0.2 Approved measures  Discussed measures  0.2 Gradual global tariff increases  0  0  –0.2  –0.2  –0.4  –0.4  –0.6  –0.6  –0.8  –0.8  –1  –1  –1.2  –1.2 –1.4  –1.4 US  China  Euro area  Globally  1) The effects are based on model estimates from the IMF and Norges Bank. Approved measures are described in the box “Trade conflicts create uncertainty” in Monetary Policy Report 3/18. Discussed measures include a 25 percent tariff on all US imports from China and a 25 percent tariff on US imports of cars and car parts, in addition to retaliatory measures by countries affected. Gradual global tariff increases imply a 1 percentage point annual increase in tariffs on all imported goods in all countries over the coming years. Sources: IMF and Norges Bank  Protectionism means reduced growth capacity, putting at risk the gains brought about by open borders. If the world enters a new period of rising trade barriers, a prime engine of growth and development may lose its momentum. The most serious consequences of new tariff barriers will be faced by developing countries. The WTO has more than 160 member countries. Many of the new countries have experienced rapid growth. Living standards have improved for large population groups. But not everyone has reaped the gains associated with globalisation and trade. Some have lost. Income gaps have widened.

But we must be prepared for a time when the industry is no longer expanding, but gradually declining, and we will need growth in other industries. Businesses must drive structural change and innovation, but the authorities can provide favourable operating conditions to promote an innovative and sustainable business sector. Norway ranks high on the ease of doing business index4, supported by solid institutions, a high degree of confidence and a solid welfare system. History has shown that Norwegian business and industry have a strong capacity to adapt. Many of today’s oil service operators had a long history in other industries before moving into the oil sector. A prime example is the shipbuilding industry, which faced a sharp drop in demand for ships in the 1970s. The industry had resources and skills that could be reoriented to production of platforms and other inputs in the oil industry. In hindsight, this was a fortunate stroke of serendipity. Companies in other industries have also seen the opportunities afforded by new technology or changes in operating conditions. One example is Borregaard. The company has existed through several industrial revolutions. An abundant supply of timber and hydropower from the Sarpsfossen waterfall was a good starting point. Through the years, new technology was adopted – from water-driven sawmills in the 1600s to waterfall power at the end of the 1800s, and to today’s fully automated activities.
This partly concerns the tools enabling supervisory or other authorities to step in early to handle a crisis in an individual bank. But it is also valid outside crisis management – this is also a matter of the tools that authorities can use to address and counter systemic risks. Unfortunately, I think most European countries currently lack an appropriate set of tools in both these respects. But even with the best toolbox imaginable, you also need timely information of high quality to exercise judgement and act vigorously. Having an accounting system that recognises losses early and fully is a prerequisite. Not all would agree with me on that. Some believe that not recognizing losses or delaying their recognition is better. To me, that is more like closing your eyes and hoping the problem disappears. Normally, it does not. And when you open your eyes again, the problem will probably have grown even larger. Principle 3: Be economically savvy When it is too late to prevent the crisis, you are left with two principal options for each failing bank. The first one is rather uncomplicated – you let the bank fail and wind it down using ordinary bankruptcy procedures. But while this option is uncomplicated, its consequences may not be – if you let a bank fail, you run the risk of unsettling the financial system. The second option – intervening to save the bank in part or as a whole – takes a little more cunning.

Therefore, to handle a crisis effectively and minimise its detrimental effects on the overall economy, you need to stick to three basic principles: firstly, cooperate; secondly, act swiftly; and thirdly, be economically savvy. This holds true regardless of what caused the crisis, and regardless of the solution. Let me explain to you in more detail, starting with the first principle. Principle 1: Cooperate Without cooperation between central banks, supervisory authorities and finance ministries, there is no such thing as effective crisis management. There are several examples of  BIS Review 50/2010  1  situations in which inadequate or failed cooperation has resulted in a deepened and prolonged crisis. In fact, we recently experienced such a cooperation failure in my country, with the situation concerning Swedish banks operating in the Baltic countries. We, at the central bank, saw the build up of risk as problematic and believed that remedial measures should be applied. We also pointed to these problems in our Financial Stability Report. In retrospect, we should have been clearer, especially regarding the potential consequences of these problems. But more importantly, we failed to reach agreement on this with the authorities in the Baltic countries and with our own Swedish supervisory authority (as you may know, we have a separate supervisory authority – in contrast to Spain, where supervision is undertaken under the umbrella of the central bank). I am not pointing a finger at any particular authority in any particular country – let me be clear about that.