samchain/econo-pairs-v1 huggingface dataset:
The outlook is also bleak, for example in Germany, judging from reports in the last few days. The European Central Bank has reviewed its growth forecast for the euro region as a whole and now expects 1% GDP growth. According to this, growth will be zero in Germany, because it will be higher in various peripheral regions of Europe. Thus the economic policy tasks that need to be tackled in Iceland and the euro region have been different, and still are at the moment. On the other hand, central bank interest rates in Norway are 5.5% to cite a close industrialised neighbour. The Central Bank’s policy rate is now 2¾% in real terms, which is somewhat below the current assessment of the equilibrium interest rate. The Central Bank’s interest rates therefore act as a stimulus on the economy, being at their lowest level in real terms since spring 1996. It should also be borne in mind that interest rate changes affect demand and inflation with a considerable lag. Thus the impact of the extensive interest rate cuts in recent months is still being felt. The credit institutions’ required reserve with the Central Bank has been another of its monetary instruments, although the importance of this has diminished over the years. In recent years the Bank has been aiming to create operating conditions for credit institutions comparable to those in most other European countries, insofar as conditions permit. To this end, the Central Bank has been amending its rules in the past few years.

23.10.2019  The Banking Union: a key building block of the EU project Opening remarks at roundtable “Banking Union – Five years in the making” Banco de España Margarita Delgado Deputy Governor  Dear chairs of the Single Supervisory Mechanism and the European Banking Authority, president of the European Banking Federation, ladies and gentlemen, good morning. Let me start by welcoming you to Banco de España for this roundtable. Over the next couple of hours we intend to discuss both the achievements and pending elements of the Banking Union (BU) on its fifth anniversary. We are honoured to be accompanied by such distinguished panelists, so thank you for accepting our invitation and for being here today. But before getting down to the discussion, I would like to share with you a few general thoughts on the European Union project and the role the Banking Union (BU) plays as part of this collective endeavour. In my remarks today I will point out what the BU has meant in terms of greater integration for the euro area banking sector, and I will also refer briefly to those developments that, in my view, may still be missing if we are to achieve a truly integrated and cross-border banking sector. The EU project has certainly improved the life of millions of people in Europe since its creation, not only in economic terms, but also regarding rights and living standards across the whole Union.
This rapid swing—a reduction of more than $ billion on an annual basis—in the resources available for household consumption was associated with a sharp and prolonged slump in personal consumption expenditures during the Great Recession. Typically, consumption growth slows but remains positive during a recession. In contrast, consumption actually contracted by over $ billion during the Great Recession. Between 2009 and 2012, households continued paying down debt of all kinds—with the exception of student loans, which behave differently from most other forms of consumer borrowing. Ultimately, housing prices stabilized and began to increase again in 2012. 2/5  BIS central bankers' speeches  However, since that turning point in home prices over five years ago, something surprising has happened. Nationally, home values have risen over 40 percent since 2012, and are now very close to their pre-crisis levels on average—just 4 percent below their all-time peak reached in early 2006. Most other kinds of debt—first auto, and now, credit card debt—have joined student debt by starting to rise again, resuming their traditional role in financing consumption. The surprising development is that housing debt has stayed virtually flat. The previous behavior of using housing debt to finance other kinds of consumption seems to have completely disappeared. Instead, people are apparently leaving the wealth generated by rising home prices “locked up” in their homes. The implications of this development have been quite significant for the retail sector.

Interestingly, these forms of housing debt have been paid down even more aggressively than first mortgages. So, the fluctuation in the level of mortgage rates also does not explain the change in household behavior. A final factor that may be reducing the demand for home equity extraction is a change in the distribution of housing equity in the population. Even though aggregate home equity is back to pre-crisis levels, the data indicate that the growth in equity since 2012 has gone disproportionately to older, wealthier households. Presumably, these households have less demand for credit to fund their consumption plans. In contrast, those who would like to convert housing wealth into retail purchases have not yet seen their housing equity restored to its earlier levels—reflecting, in part, slower rates of mortgage balance paydown. In addition, younger and less credit-worthy households also experienced higher relative declines in homeownership rates. While some of these demand-side factors seem to be playing a role in reducing home equity extraction, there is undoubtedly a strong supply-side effect in operation as well. Our consumer credit data indicate that lenders’ adoption of minimum credit scores for mortgage lending and their considerably more rigorous underwriting standards for HELOCs have played a very important role in limiting consumers’ ability to convert home equity into new consumption.
It may be time to pay some attention to communication with the general public…In the end, it is the general public that gives central banks their democratic legitimacy, and hence their independence.” 37  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  might spread between people. For example, the recent work of George Akerlof and Robert Shiller has emphasised the role of “popular narratives” in shaping the public’s expectations and decisions. 39  Story-telling is the ultimate communications device. History is no more than a sequence of stories. These stories spread word by word, mail by mail, Tweet by Tweet. They obey the same laws of motion as epidemics, with viral spread beyond a tipping point. And in a world of modern media, these popular narrative epidemics are probably spreading further and faster than ever previously. This matters for individuals’ feelings and decisions and, potentially, for macro-economic behaviour. Pessimistic popular narratives have been used to explain the sharp contraction of spending at the time of the Great Depression and the Great Recession. 40  With popular narratives more virulent than in the past,  tracking their source and spread may be increasingly important for understanding the economy. This poses risks to policymakers. But it also presents opportunities if they are able to shape and shepherd these narratives through adroit communications.

Collectively, the award recipients and all other financial institutions have helped in making CGC a stronger SME-support institution. This is so as their active participation opened a new window of opportunities not only for the SMEs but also for the CGC in reaching out to a wider cross section of the SME community throughout the country. In 2007, CGC provided credit guarantees totalling RM4.6 billion to more than 13,000 SMEs through our main schemes, the programmed lending schemes as well as the securitisation of SME loans. There was actually remarkable growth with the number of loans and amount guaranteed growing by 73% and 53% respectively. This could be attributable to the strong support given by participating financial institutions that have been robust in serving the SME market in the recent years. I particularly note with interest that the seven recipients today collectively contributed more than 80% of the total loans guaranteed by CGC in 2007. In view of the changing facets of SME financing, CGC undertook several initiatives to further reach out to SMEs that are in need of financing. This includes the introduction of innovative products and services as well as widening the scope of guarantee beneficiaries by forging alliances with strategic partners. In the last two years, CGC has entered into strategic partnership with many local and international institutions with the aim both of expanding its SME outreach as well as to better equip itself with the expertise and knowledge to take it to a higher service delivering platform.
Likewise, the impulse by the fiscal sector is expected to be lower than in the past year. Under these circumstances, the growth speed and rate of the economy at home will be determined largely by the performance of private domestic demand components: consumption and investments. Our analyses reveal the existence of room for higher growth in the future. This growth will be supported also by stimulating monetary and financial conditions, in response to the monetary policy of the Bank of Albania. *** Taking into account the above overview, the Supervisory Council of the Bank of Albania deemed that the inflationary pressures remain subdued over the monetary policy horizon. The output gap will continue to be negative in the period ahead, materialising in low inflationary pressures originating from domestic demand. Moreover, inflationary pressures from developments in the global economy are expected to be downward, whereas inflation expectations remain anchored. 2  BIS central bankers’ speeches  The expected performance of real and monetary indicators is reflected in projections for the inflation, which is expected to range within the target of the Bank of Albania for the period ahead. At the conclusion of discussions, the Supervisory Council decided to keep the key interest rate unchanged at 4.50%. This decision serves to comply with our medium-term inflation target and provides the appropriate monetary conditions to stimulate Albania’s economic activity. The Bank of Albania remains heedful to future economic and financial developments at home and abroad as well as diligent to accomplish its mandate. BIS central bankers’ speeches  3

The issuances of 12 Shariah Standards set clear Shariah parameters to facilitate innovation beyond credit-based products. There are more than 100 competitive financial products ─ ranging from basic financial services to wealth management; corporate finance; and investment banking. Meanwhile, investment accounts have spurred greater investment intermediation activities. Since its inception two years ago, investment accounts have grown to account for 12% of total Islamic deposits and investment accounts in 2016. Its offering has been further intensified through the operationalisation of the Investment Account Platform which has the potential to mobilise capital to various productive ventures effectively. The development of the Islamic finance sector is seen not only in the headline numbers, but more importantly in addressing social and environmental concerns. Islamic finance has taken the lead in the space of ethical finance where concepts, such as Sustainable, Responsible, Impact Investing (SRI), have been embraced in pursuit of values beyond financial motivation. An important pioneering example in the Islamic capital market is the issuance of SRI sukuk by 1/4  BIS central bankers' speeches  Khazanah that brings greater social impact through the promotion of quality education. Just last month, the first Green Sukuk has also been issued in the country to promote clean and sustainable power supply. While we have come a long way, now we need to think of ‘what’s next’?
The Riksbank’s intellectual framework According to the textbook model of macro economics, there is a level of production (GDP) that keeps the economy in balance, i.e. actual and expected inflation are in line with the target level, profit shares and wages are stable, etc. This level of production is often called the potential or long-term sustainable level of production. Despite the fact that the economy is balanced, the potential production level does not remain constant; it normally grows over time. The reason is, quite simply, that technical developments enable a higher production level to be achieved with the same amount of production factors, and that the production factors themselves often show an increase trend. The actual inflation rate can deviate from the target rate (and the expected rate) if the production level of the economy, for some reason, deviates from the potential level. It is often said that there is a positive or a negative production gap. A positive production gap means that the actual production is higher than the potential level. In this case, of course, the resource situation is strained; bottlenecks begin to arise in the economy. The reverse applies with a negative production gap. As the production gap is usually seen as a measure of the demand pressure in the economy and the demand pressure in turn affects inflation, monetary policy is in many respects a case of choosing a steering interest rate that will lead to the smallest possible production gap.

The assessment made by the Riksbank so far is that average working hours will show a tentative rise when economic activity improves. To summarise, there is reason for considerable concern regarding the future labour supply. If there is reason to be slightly more optimistic over productivity growth, the opposite applies to the labour supply. A number of factors, such as demographic developments, absence due to illness and the proposal for shorter working hours all indicate a decline in the labour supply over the coming decade, unless there is a change in policy. 4  BIS Review 16/2003  Future potential growth What does all this mean for the assessment of the economy's potential growth capacity right now and in the coming years? If we uncritically assume the simple model I outlined earlier, we could calculate an estimate of potential growth by simply adding together the trend values I showed in the diagram on productivity growth and the number of hours worked. I have done this in my next diagram (Figure 9). Measured in this way, potential growth was just over 1.5 per cent up to around 1992. Since then it has risen gradually to approximately 3 per cent in 2001. However, my discussion of the causes of the decline in actual growth in recent years showed that there are good reasons to believe that 3 per cent is an overestimate of the growth potential in the Swedish economy today.
Andrew G Haldane: Control rights (and wrongs) Text of the Wincott Annual Memorial Lecture by Mr Andrew G Haldane, Executive Director, Financial Stability, of the Bank of England, Westminster, London, 24 October 2011. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Evangelos Benos, Fergus Cumming, Jonathan Grant, Sam Harrington, John Lane, Iryna Kaminska, Priya Kothari, Fiona Mann, Vasileios Madouros, Roland Meeks, Joseph Noss, Peter Richardson, Victoria Saporta, Rhiannon Sowerbutts, Mervyn Tang, Matthew Willison and Peter Zimmerman for comments and contributions. Introduction It is a great pleasure and privilege to be presenting this year’s Wincott lecture. Banks are special. That has long been recognised in the design of their ownership, governance and regulation. This special status can have strange consequences. The historical distribution of risks and returns in banking is one. For a century, both risks and returns have been high. But while the risks have typically been borne by wider society, the returns have been harvested by bank shareholders and managers. The experience of the past two decades illustrates well this imbalance. In 1989, the CEOs of the seven largest banks in the United States earned on average $ million. That was almost 100 times the median US household income. By 2007, at the height of the boom, CEO compensation among the largest US banks had risen almost tenfold to $ million.

(c) The dotted black line is a suggested trigger level for contingent capital calibrated by minimising a loss function which takes into account both Type I and Type II errors. Type I error is the probability that conversion occurs despite capital not being required. Type II error is the event that conversion does not occur despite capital being required. The loss function places greater weight on Type II errors. Note that the loss function takes into account the full range of banks, not just the average score for each set. (d) 30-day moving average of market capitalisation. 24  BIS central bankers’ speeches  Table 1: Estimated subsidy for UK and global banks $  Contingent claims / Kou(a)  Ratings(b)  2007  2008  2009  2010  2007– 2010 average  2007  2008  2009  2010  2007– 2010 average  UK  134  354  622  250  340  9  51  178  58  74  Global  496  1,308  2,294  924  1,256  33  211  528  197  242  a) Calculated using an extension to the Merton (1977) model developed by Kou (2002). It models changes in banks’ assets as being normally distributed with upward and downward “jumps” designed to reflect the possibility of extreme movements in asset values, and “fatten the tails” of the resulting distribution. This model is fitted to the prices of options written on the four largest UK banks’ equities.
BIS Review 35/2002  1  This sequence affects different categories of assets (commercial property, residential property, equity), whose impact on the real economy and transmission channels differ. Commercial property seems particularly linked to the business cycle, while residential property has a larger impact on consumption. Equity prices are intertwined with business profits and investment but are also related to spending through wealth effects, depending on the role equity plays in the determination of financial wealth. This interaction between credit cycles and asset price bubbles poses a number of challenges for the authorities and regulators, both in the monetary policy and financial stability domains. In the upswing, inflationary pressures related to excessive credit growth are compounded by financial imbalances resulting from unwarranted optimism on the part of corporations and households and excessive risktaking on the part of financial institutions. In the downturn, recessionary and deflationary forces are aggravated by credit contraction as a result of excessive risk aversion by lenders. The possible explanatory factors of this potential amplification of the cycle in the financial sector are many-faceted and complex. First, heightened competition in the banking sector and in financial markets leads in an upturn to riskier strategies that are only corrected when the rise in bad debts becomes evident in the downturn. Second, there seems to be a tendency for economic agents to overreact to changes in their environment, leading to over-optimism in times of plenty and over-pessimism in bad times. Third, herding usually reinforces existing trends and causes overshooting.

(b) Assumes that 50% of bonuses are paid as CoCos and retained. Bonuses are assumed to equal 20% of total staff costs. (c) Contingent capital is assumed to be included in Tier 1 capital. (d) Assumes that 50% of dividends are paid as CoCos and retained. Chart 12: Cumulative amount of Tier 1 capital for major UK banks £ bn 300  Including dividends paid as cocos Including bonuses paid as cocos  250  Actual Tier 1 capital  200 150 100 50 2000 2001 2002 2003 2004 2005 2006 2007 Sources: Annual accounts and Bank calculations Footnotes as per chart 11  BIS central bankers’ speeches  17  Table 1: Type I and Type II errors for Basel Regulatory Ratios and market-based capital measures Type I  Type II  Basel Regulatory ratios  50%  43%  Market capitalisation to book-value of total assets  21%  5%  Market capitalisation to book-value of debt  20%  11%  Market capitalisation to book-value of equity  10%  11%  Sources: Capital IQ and Bank calculations (a) A Type I error occurs when a bank’s ratio falls below the trigger level (calculated according to a loss function as described in charts 5–8) and capital is not required (defined as that bank not suffering a “crisis” over the next 365 days). The number in this column is the proportion of days when a Type I error occurs.
2  The General Council of the Riksbank's comments 1997-02-06  BIS Review 9/2002  3  With regard to the labour market, it should be clear that the functioning of the labour market and the high level of unemployment no longer comprise as strong a restriction as they did in the mid-1990s. Unemployment in Sweden has fallen. Several factors have played a role in the decline. One of these is probably the fact that the wage formation system has been changed in a way that contributes to better concordance between productivity and wage growth. Nevertheless, there are clear signs that the labour market still comprises a problem area. A clear majority of the EU member states has now joined the monetary union, which was not evident when the Calmfors Commission made its assessment. The political cost of remaining outside of EMU has thus become greater, and public opinion has become more positive towards membership. I personally think that there are also new arguments that should be considered with regard to the costs of remaining outside the union. For instance, the economists Andrew Rose and Torsten Persson have made in-depth analyses of the effects on trade of a monetary union. There could be reason to believe that the positive effects are slightly greater than was assumed in connection with the Calmfors Commission's report.

If Sweden is accepted as a member, there would then be a negotiation regarding the Swedish transition process; when membership would occur, what rate the SEK/EUR exchange rate would be fixed at, how long the transition and currency changeover periods would be, etc. To enable a rapid entry process, the Swedish parliament decided back in 1997 that Sweden should maintain the highest possible level of preparedness by continuing technical and practical preparations. The Riksbank has therefore been working together with the financial sector for the past five years on preparing for a possible future membership. This work is led by the SIFS Group (Consultation and Information within the Financial Sector) and the seventh situation report was completed in the autumn and is available for perusal on our website. 4  BIS Review 9/2002  We can conclude that since the euro was introduced as an electronic currency in the euro zone on 1 January 1999, the Swedish financial sector has offered a number of services in euro, e.g. payments, deposit and lending services as well as share trading. However, considerable efforts are still required to prepare the sector for a possible membership. These include extensive work to change over data and accounting systems that are currently set to kronor as the reference currency to euro. This is in order to achieve a properly functioning financial infrastructure in euro from the first day of EMU membership. The most recent situation report describes two transition scenarios; one gradual scenario and one that is termed Big Bang.