samchain/econo-pairs-v1 huggingface dataset:
They should develop specific risk mitigation policies for sectors posing higher environmental risks and support the transition of riskier customers and investee companies towards sustainable business practices. They should disclose their approach to managing environmental risks and the impact of these risks on their financial performance. Disclosure should reference internationally accepted reporting frameworks, such as those by the FSB Taskforce on Climate-related Financial Disclosures (TCFD). MAS will assess environmental risk in our supervision of financial institutions. This will include assessing how financial institutions integrate environmental risk management with their business operations. Within the next two years, MAS will incorporate climate-related scenarios in our annual stress tests for the financial industry. Disclosure of environmental risk applies as much to non-financial corporates. https://www.mas.gov.sg/news/speeches/2020/harnessing-the-power-of-finance-for-a-sustainable-future  6/13  14/10/2020  “Harnessing the Power of Finance for a Sustainable Future”- Keynote Speech by Mr Ravi Menon, Managing Director, MAS, at the Finan…  Only then can investors price climate-related risks and opportunities and asset managers construct and manage sustainable portfolios for their clients. The Singapore Exchange (SGX) requires listed companies to produce annual sustainability reports on a comply-or-explain basis. SGX will soon include the TCFD recommendations within its existing guidance to assist listed companies with their climate-related financial disclosures. As a central bank and financial regulator, MAS will practise what it preaches. MAS has begun to evaluate the resilience of its Oﬀicial Foreign Reserves under a range of short-term climate-related disruptions and longer-term climate scenarios.

It might be the case that, given the depth and severity of the crisis, some workers have remained in the labour force but have been without a job for so long that they have become virtually unemployable – that is, that they have become structurally unemployed. This would also have a negative effect on growth potential. The natural starting point to assess the magnitude of such effects is to consider estimates of the NAIRU. What we see here is that, in certain countries where unemployment rose sharply and where there was a strong sectoral dimension to the crisis, estimates of structural unemployment have indeed risen significantly. Current real-time estimates from a variety of international institutions, for example, suggest that Spanish structural unemployment increased by over three percentage points in the aftermath of the crisis, to around 17%. At face value, this would suggest that virtually all of the unemployment that we currently observe in Spain is of a structural nature – and that the crisis has left permanent and irreversible scars. And although current estimates do not suggest a notable increase in structural unemployment for the euro area as a whole, this was not true just a few years ago.
As you all know, the first lockdown led to an enormous drop in economic activity, of over 20%, during the first half of 2020. And despite a very sharp recovery in the summer, as the first lockdown was lifted, it’s likely that GDP in the fourth quarter of last year was around 10% lower than at the end of 2019. That would make it the sharpest decline, through any calendar year, at least since 1920 (as far back as quarterly estimates go). Yet, perhaps befitting a year of extraordinary events, last year’s downturn was very unusual not just in its size and speed, but in its shape as well. If you had only this correlation to go by, and knew what had happened to GDP, you’d also expect to have seen a steep decline in retail sales. The two series don’t always move in lockstep but, as you can see, they’ve been reasonably well correlated over the past. If that’s been a rule, however, then what we saw in 2020 was a very clear exception to it: GDP growth may have been the weakest on record but retail spending growth is just about the strongest. Chart 1: Weak GDP growth, strong retail sales  Chart 2: Big divergence across consumption  Sources: ONS and Bank calculations. Retail sales data have been adjusted for the switch to CPI deflation in 2001. The figure for 2020Q4 is based on data to November, GDP growth on the MPC’s November projection. Sources: ONS and Bank calculations.

On this occasion it happened in a matter of weeks. The idea that consumer spending would come back quite quickly once infection rates had begun significantly to decline – faster, in particular, than in the “average” economic recovery – was something built in to the MPC’s “scenario” last May, early on in the pandemic. At the time, there was quite a bit of scepticism about this and many judged it to be too optimistic. For my part I think there was every reason to expect a relatively sharp recovery – slower, perhaps than the precipitous drop but nonetheless faster than in a typical economic upswing. In the event spending came back even faster during the summer than we’d expected in May. The same was true in other countries. And the interesting thing about these simple simulations (to the extent one attaches any credence to them) is that they suggest that the initial downturn in aggregate spending may have been as sharp as it was precisely because it was likely to be short-lived. The role of the furlough schemes was obviously critical here. One of the reasons “normal” recoveries in consumption are more protracted is because drops in output feed through to household incomes, via hits to employment and wage growth. This feedback slows down the dynamics of the average cycle. The schemes helped to interrupt that loop.
All households who have previously paid more than SEK 4,500 a year in property tax will have lower monthly costs, according to this proposal. If households choose to use the sum they save on the abolished tax to take out larger loans, it is possible that this will lead to a slightly faster increase in prices than would otherwise have been the case. If the increased opportunities to borrow were to have a full impact on house prices, the reform could push up prices by around five per cent. The price increases would probably be highest in the parts of Sweden with the higher taxation values, where they have previously paid a relatively higher tax rate. However, there are a number of factors that imply that this calculation probably overestimates the effect on prices. Firstly, the Government has been indicating for some time that it intended to lower property tax. It is therefore possible that house prices have already been affected to some extent by the decision. Secondly, the price increases could be counteracted by the higher capital gains tax. Thirdly, if households believe that the property tax will in some way be increased in the future, it is not certain that they will be prepared to increase their borrowing. As I said, it is not easy to measure the overall effects of the changed taxes. This is a subject which I believe we will have reason to discuss further in the future.

The aim would be to provide a kind of “digital banknote", which would combine the security of banknotes issued by the central bank with the ease of use and innovation of dematerialised means of payment. The ECB and the Banque de France are working on all the associated challenges, and we have already conducted 9 experiments in Paris on an “interbank” digital currency. They will be continued in 2022, focusing on improving cross-border payments. Indeed, the euro is also a global success: no continent before us had managed to create and introduce a new currency in this way. In this respect, the euro has a political dimension, to consolidate European sovereignty – like the dollar for the United States. Our currency has proven its role in protecting European economies from the turbulence of Covid, and has preserved favourable financing conditions for all economic players, households, SMEs and companies, and states. 1/2  BIS central bankers' speeches  But for the trimaran of the euro to be fully operational, its central hull – the ECB and the single monetary policy – needs to be completed with two floats. A public float with a permanent common fiscal capacity (which does not mean that an additional annual budget is needed), to better cope with macroeconomic shocks. And a private float to promote a better allocation of capital in the euro area. The latter has abundant savings: the surplus of domestic savings over investment structurally exceeds EUR 300 billion.
Carlos da Silva Costa: Reviving markets in high quality securitisation in Europe Address by Mr Carlos da Silva Costa, Governor of Banco de Portugal, at the European Investment Bank/International Monetary Fund Meeting, Brussels, 23 October 2014. *  *  *  Let me start by congratulating the EIB and the IMF for this initiative. It is very important to assure that the topics chosen for this workshop (SME Securitization and Distressed assets) be at the forefront of policy makers’ and regulators’ concerns. A more healthy European financial system requires progress in these areas. Six years since the onset of the financial crisis in 2008, output levels in the EU are below those observed before the crisis. The same is true for employment and investment. Some countries have fared much worse than this average while adjusting their balance sheets and external accounts; that has been accompanied by deleveraging in all sectors, along with changes in relative prices vis-à-vis the rest of Europe in a low inflation environment. All this is taking place at the zero lower bound on the nominal interest rate, where active monetary policy can only be unconventional. The role of financial markets is crucial in this story. But the distinction of the direction of causality is difficult: is the economy weak because of financial markets or are financial markets weak because of the economy? The question is often put as: is the problem supply or demand for, say, credit?

On the methodological side, it is quite obvious that imposing caps in ratings based on the sovereign is equivalent to constraining the results of whatever quantitative models rating agencies use. This is arbitrary and reduces the information conveyed by the ratings while leading to severe pricing distortions in assets across countries. Investors in capped securities will require a premium over similar but higher-rated securities while other investors are limited by regulation in their incentives to buy poorly rated securities. Additionally, it should be mentioned that ABS originated in countries under stress have performed considerably well even during the crisis. Indeed, ABS default rates have remained low in these countries and at levels comparable to non‐stressed jurisdictions (including the US). Thus, unless clients and regulators have (also) access to ratings without the cap, there should be minimal regulatory reliance on the ratings. In any case, additional transparency on loans, the existence of reliable credit registers or credit score systems should be mentioned as instruments to help market participants understanding better the  BIS central bankers’ speeches  3  European ABS risk profile. Additionally, such information could even support entrants into the business of assessing credit risk, which currently lacks competition. Whereas the policy conclusions are often hard to come about, one thing seems clear: Europe must avoid ending up with zombie banks as well as with zombie firms. Zombie banks and zombie firms have never been a characterization of a well-functioning financial system and economy.
6  BIS Review 11/2005  Let me just take this opportunity to note that my impression is that there has been a convergence process within the central bank world. Countries that have conducted a more ”pragmatic” policy like that in the United States, which is less governed by clearly-described principles have been working on making more information publicly available and establishing a clearer framework for their policy. At the same time, inflation-targeting countries have been discussing in greater depth the various problems that sometimes prevent policy from following the simplest principles. The Riksbank’s approach to new monetary policy issues or problems is, as has been pointed out earlier, that we keep to a relatively well-specified framework. This is our starting point when considering the monetary policy stance to be taken. If, for instance, we wish to deviate from the usual policy rule, we can do so, but we then make the requirement of ourselves that we can motivate this on the basis of the framework we use and the flexibility we apply. It is difficult to see any reason to change this system. In my opinion, it has served us well and forced us to improve our thinking with regard to tackling the various problems that arise. The new analysis and forecasting methods do not change the framework for our monetary policy. We still have the same target, the same ambition to achieve this target in two years and the same arguments for taking real developments into account when deciding the details of the policy.

Further, non-standard measures – most recently, the Outright Monetary Transactions (OMTs) – have significantly contributed to an improved euro area financing environment, mainly stemming from an improvement in financial market sentiment and an alleviation of vulnerabilities affecting the supply of bank credit to firms and households. In addition, the OMTs announcement has helped to narrow sovereign spreads and to restore investor confidence. However, the ECB’s (non-standard) measures can only be temporary solutions. Most importantly, market participants have to continue their efforts to facilitate the transition to a less central-bank reliant, more market-based financial system, for which the ECB’s measures, as well as the recent progress concerning the Single Supervisory Mechanism, have hopefully laid the foundations. One market segment that suffered considerably during the financial crisis was the market for asset-backed securities (ABSs), the revival of which I consider essential for the provision of finance to the corporate sector. Given the restricted funding sources and elevated bank funding needs, a trend towards more disintermediation from larger corporate issuers has been observed in recent years, and this trend will most likely continue. By contrast, small and medium-sized enterprises (SMEs) are more dependent on their respective domestic banking sectors and are subject to tighter credit conditions than larger firms that have greater access to global financial markets. The question arises as to how these restrictions could be overcome. A reopening of the ABS market may be one way of enhancing funding conditions for SMEs.
), and to move over to a type of regulation based on the roles performed by different players in the stability of the system (liquidity provision, deposit-taking, market making, etc). Lastly, the G20 has set out a road map to improve accounting standards. Agreement on this point is not as broad as on the previous ones. The members of the G20 have sometimes divergent views about the role of accounting rules. In particular, one of the controversial  2  BIS Review 75/2009  points relates to mark-to-market and the scope of application of fair value accounting. Nonetheless, I observe that the G20, by asking that the accounting standard setters take greater account of financial stability constraints, implicitly acknowledges that the impact of accounting choices on the latter are not neutral. In any event, the countries agreed on three objectives: reducing the complexity of accounting standards, increasing the harmonisation of standards internationally and introducing a more forward-looking system of provisioning. The discussions at the G20 summit find a strong echo in Europe. In fact, it is no exaggeration to say that the Europeans are a driving force in the international projects I have just described. In regional terms, the report by the high level group chaired by Jacques de Larosière is a cornerstone for the new financial regulation and supervision that will emerge in Europe after the crisis. These recommendations appear highly relevant to me. They reconcile efficiency and pragmatism.

Figure 2 GDP and final demand (annual change, percent) 20  20  15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15  -15 04  05  06 GDP  07 08 09 Domestic demand  10  11 12 Final demand  13  Source: Central Bank of Chile. BIS central bankers’ speeches  7  Figure 3 Inflation indicators (annual change, percent) 10  10  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6 06  07  08  09  10  11  CPI  12  13  CPIEFE  Source: National Statistics Institute (INE). Figure 4 Real exchange rate (*) (index, 1986=100) 120  120  110  110  100  100  90  90  80  80  70  70  ( )  88 g  90y  92  94  RER  96  98  00  02  1998-2012 average  04  06  08  10  12  1993-2012 average  (*) Includes information up to 27 August. Source: Central Bank of Chile.
In the second part of my address, I will look back to see briefly how we arrived at the current monetary policy setting, characterised, inter alia, by a historically large Eurosystem balance sheet. Against this background, I will analyse then the sequencing of our expected monetary policy normalisation process, with the focus on the potential impact of reducing the size of our balance sheet. I will end by touching on the how the monetary -fiscal policy mix should work in the current context. Recent ECB monetary policy decisions Over these months we have observed that both the scale and the persistence of the inflationary shock have been unusually high. According to the flash estimate, euro area HICP inflation surprised us again on the upside in October, reaching a historical high of 10.7%. A significant part of the shocks that are driving inflation up in Europe are on the supply side. They are the consequence of the sharp rise in energy and food commodity prices and of supply constraints that have contributed to manufacturing bottlenecks. What is more, the pass-through of these supply shocks to prices has been faster and stronger than in the past. Indeed, according to Banco de España estimates, close to 75% of the current inflation rate in the euro area is due to the direct and indirect effect of higher energy and food prices. But there is also a pent-up demand component from the post-pandemic recovery that, while weakening, is still driving up prices, especially in the services sector.

I trust that by sharing with you my views on our monetary policy normalisation path I have reassured you about our commitment to stopping high inflation from becoming entrenched. The more confident our fellow euro area citizens are that inflation will return to 2% in a timely manner, the smoother the adjustment process will be. Thank you. 16  Fo r instance, Banco de España staff have co nducted a mo del-based exercise to assess the impact o n euro area inflatio n of a non-targeted, permanent public expenditure sho ck of 1% of GDP. The results sho w that fo r each 1% of GDP expenditure, inflatio n increases by 0.2 pp three years later. This relatio nship might be stro nger depending o n the co mpo sition o f expenditure and against a backdro p o f supply-side co nstraints. 9
Overall conditions in the markets for capital have improved greatly from the autumn 2008 paralysis. The functioning of money markets is now comparable with the conditions that prevailed in the third quarter of 2007. Money market spreads are close to levels that are reasonable to view as normal after the equilibrium re-pricing of risk that was needed and is likely to have taken place since then. Term lending has resumed on a satisfactory scale. The funding ability of banks is not a restraining factor for lending, as it was the case for some time after October 2008. Since the second half of last year, it appears to support bank profitability. Corporate and bond spreads have also declined steadily across the quality spectrum. Currently, these considerations are what motivate and guide a gradual phasing-out process. We started to phase out our enhanced credit-support measures in December 2009, in an environment of improving financial market conditions and emerging signs of recovery. On 4 March we came to the conclusion that the current pace of phasing-out is appropriate. With the resumption of longer-term loans in the private market, we have started to adapt the conditions of our longer-term credit to banks. The first step was to announce a discontinuation of one-year and six-month longer-term refinancing operations. One-year refinancing now pays an interest rate indexed to the average rate that will be applied in our weekly main refinancing operations over its 12-month life. The pricing will be the same in our upcoming and last 6-month refinancing operation.

Jean-Pierre Roth: Prospects for the Swiss franc in the heart of the euro area Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Associazione Carlo Cattaneo, Lugano, 9 March 2005. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The launch of the euro in January 1999 fundamentally transformed the international monetary order. Switzerland, a small country that strongly depends on exports and capital transactions, suddenly found itself surrounded by a market with almost 300 million people sharing a single currency. What were the monetary consequences of this development, and what are the prospects for the Swiss franc, which is traditionally considered a "success product"? The role of the Swiss franc in commercial and financial transactions has certainly diminished. Although the euro is only rarely used as a means of payment in the Swiss market, billing within the euro area is increasingly taking place in the single currency only – a fact to which Swiss companies have to adjust. In the financial markets, the euro now acts as a counterweight to the dollar. The Swiss franc has thus lost some of its significance as a safe-haven currency and has performed more in line with its fundamentals. The introduction of the euro has, however, not affected our monetary autonomy or the Swiss interest rate advantage. The Swiss National Bank has been able to respond with flexibility and determination to the recent economic slowdown.