samchain/econo-pairs-v1 huggingface dataset:
Growth and employment will be stronger in Europe if we combine more reforms where they are needed, such as in France and Italy, and more fiscal support in those countries with room for manoeuvre, such as Germany. In practice, for such a collective economic strategy to exist, the euro area needs an institution that fosters confidence: it could consist of a euro area “Finance Minister”. The third step, in the longer term, would be a European fiscal capacity. It comes at the end as it requires more convergence and more confidence. A genuine euro budget would be a stabilisation tool and could include, for example, a euro area-wide unemployment insurance scheme. It could also be used to finance certain “European public goods” such as digital technology, the energy transition or the integration of refugees. And in the long term, it could directly issue common debt and even raise taxes. Let me sum up. Since the beginning of the crisis, Europe has been able to strengthen itself and to build a set of instruments and mechanisms that have significantly increased its resilience (Banking Union, the ESM, the enhanced SGP, etc.). It is now a matter of continuing this progress and not seeing Brexit as a shock to the euro area but rather as an opportunity to pursue, in a structured way, the setting-up of a better Economic Union. And at the core of Europe, France has made progress, which needs to be accelerated.

But in an uncertain world, France appears as a rather stable country, seen from the resilience of its economy, the strength of its financial sector, as well as the solidity of its political institutions. 3/3  BIS central bankers' speeches
By contrast, in terms of the leverage ratio, that is, when banks’ assets are not risk-weighted, the relative position of the Spanish banking system is more favourable, standing somewhat above the European average and above that of the main European banking systems. Spanish bank profitability since the start of the crisis The profitability of the Spanish banking system contracted sharply during the last economic crisis and more severely than in other jurisdictions: in 2012 return on equity reached a negative level of -21% and return on assets a negative level of -1.2%, according to the consolidated statement information which reflect not only business in Spain but also international exposures. The main determinant of this performance was the increase in loan losses associated with the significant increase in non-performing loans, in particular in construction and the real estate sector to which banks were over-exposed. Despite the drop in aggregate profit levels in the first half of this year, in recent years the profitability of the Spanish banking system has tended to recover, essentially underpinned by the decline in impairment losses which reflects the improvement in the quality of the credit portfolio. The reduction in non-productive assets – non-performing loans and foreclosed assets – has played a fundamental part. Specifically, the ratio of non-performing loans to the resident private sector in Spain has fallen from 14% in December 2013 to 5.3% in June 2019, and the volume of foreclosed assets has decreased from almost € billion in December 2013 to € billion in June 2019.

I want to underline today that you are an important partner in our efforts and when we join forces guaranteeing the welfare of future generations becomes an easier task. Dear guests, We have constantly emphasised that financial education and research are an integral and significant part of the activity of the Bank of Albania. They are a precondition and source for the social-economic development and welfare of the citizens of Albania. In this regard, I would like now to turn your attention to what has now become a tradition, the ceremony for the Governor’s Award for the Best Diploma. 1/2  BIS central bankers' speeches  This is the 13th year that the Bank of Albania has selected and awarded three diploma theses. Over the years, we have found that the quality of research work has been improving, to the point that it has become actually difficult to distinguish the work presented by a recently graduated student from that of a researcher at the Bank of Albania. The selected topics present great interest, as they focus on critical issues related to the economic and financial reality in Albania and beyond. As in previous years, Albanian students from domestic or foreign universities have applied and presented their best research work. We are happy to note that participation and interest from students and universities has been significantly on the rise, revealing the recognition, reliability and reputation this Award has achieved.
These tests are designed to assess the adequacy of internal analyses and ensure firms have forward-looking, institution-specific, risktailored planning processes that provide a level of assurance that you can survive a prolonged period of financial distress. 5. Data and Technology: When an industry sees changes of the magnitude experienced in the financial sector over the past seven years, it is inevitable that the data and technology capabilities need to evolve to meet the new environment. With the range of new mandates around capital stress testing and liquidity (to name a few) and the associated reporting requirements, firms will need to ensure that application development and system changes are well controlled and that data quality is paramount. Data will need to be shared across jurisdictions, so firms will need to focus on verifying the consistency, quality and availability of data, regardless of the format requested. 6. Project Management: With the range of changes required under the new rule, most firms will need to invest in a strong project management program. Deliberate and robust coordination across a range of issues, including structure, business strategy, booking model, financial reporting, capital and liquidity, and data management, to name a few of the key work streams that must be effectively managed and executed to meet the new standards. And, given the other changes that firms must go through to meet home country rules (or other host jurisdiction requirements), project management needs strong connections across the global organization. 7.

But, I’d like to start today by delving a little deeper into an overriding theme that heightens my concerns – and that is the challenge of operating in a “global” business and regulatory environment, while at the same time navigating an increasingly “local” business and regulatory environment. Global vs. local The evolution of financial services over the past several decades has resulted in a truly global financial system. Advances in information technology and data management, as well as the development of robust capital markets, greater competition among financial firms and international trade, among other things, have contributed to a faster, more highly interconnected, and more available financial marketplace. The financial crisis confirmed that what was once a fragmented and siloed system was now truly global: failures in one jurisdiction quickly transmitted disruption to other jurisdictions. During the crisis, we clearly saw the interconnectedness of firms, the complexity of the international financial system, and the global impact of bank failures. Through this experience, we identified gaps and weaknesses, both globally and locally, and supervisors, regulators and lawmakers from around the world all set out to put a system in place to avoid a repeat of one of the most economically devastating periods in our history. There has been substantial effort on the part of global regulatory and supervisory bodies to address the weaknesses identified in the financial crisis.
The nontradable goods sector will require more domestic resources. 2/6  BIS central bankers' speeches  Graph: Labour market in a three-sector model As a result of higher labour demand from the non-tradable sector, the general wage level will increase, and the non-tradeable sector will expand at the expense of the two tradable sectors. Graph: “Spending effect” But this is only half of the story. The second part is the resource movement effect. Also the oil related-sector will demand more labour. As a result, wages will move up further, and the manufacturing sector will shrink even more. Graph: “Resource movement effect” This crowding-out of manufacturing is unavoidable if the benefits of the oil resources are to be enjoyed. But the process may go too far. The economy may find itself in a difficult situation when resources are exhausted. The structural changes in the economy have to be reversed. Workers who become unemployed must find new jobs in manufacturing. This could be quite challenging. It is at this stage you can really assess whether a resource economy has escaped the “Dutch disease” or not. Gagnon (2018) argues that the necessary adjustment costs will be minimised if spending follows the permanent income principle, i.e. the expected real return of the resource wealth should be spent every year. On this background he claims that Norway has saved too much and that spending should rather have been based on a modified version of the permanent income principle.

Trade was roughly in balance. The oil price has rebounded somewhat recently, but is not expected to reach the levels we saw a few years ago. Thus, the high Norwegian current account surpluses may belong to the past. Given the uncertainties related to petroleum wealth, a spending rule more cautious than the permanent income rule seems to be a reasonable strategy. Political feasibility Allow me to round off this discussion with some reflections concerning practical policy. My point is that fiscal guidelines must be politically acceptable and understandable to the wider public. Simplicity and robustness are important concerns. Rules that are not adopted by policymakers carry little value. The Norwegian fiscal rule was introduced in 2001, exactly 30 years after the first oil was extracted from the Norwegian continental shelf. This illustrates that it was not straightforward to arrive at a strategy for how our natural resource wealth was going to be spent. The need to decouple current spending from current revenues was underscored early on, and potential mechanisms were discussed, but these concerns were not reflected in actual policy. In periods, all the oil and gas revenues and more were spent. The fund mechanism was established in 1990, during Norway’s deepest recession in the postwar period. At the time, it was not obvious that the fund would gain much value. The government ran budget deficits in the following years. A first deposit was made in 1996, reflecting a net fiscal surplus. From then on, the value of the fund started to increase quite rapidly.
Capacity utilisation according to Statistics Sweden and the National Institute of Economic Research, is still at a high level but is moving downwards. The downswing in the  BIS Review 113/2008  3  Swedish economy has come sooner and been more pronounced than was expected only a few months ago. It covers the manufacturing industry as well as the retail and service industries. Households have clearly become more pessimistic, not least with regard to the national economy and the labour market. For example, the survey conducted by the National Institute of Economic Research at the end of 2007 showed that an excess amount of 40 per cent of the households believed that unemployment would be lower in a year's time. Now, however, an excess amount of 50 per cent of the households believes that unemployment will be higher one year ahead. This deterioration in general sentiment has been accompanied by a fall-off in private consumption. This applies mainly to capital goods, which is common at the beginning of an economic downswing. But it is not only private consumption that has declined; investments and exports have also weakened. GDP growth has been revised downwards for both 2008 and 2009, although the forecast predicts a recovery in 2009 in line with developments abroad and it is believed that Sweden's exports will be an import driving force in this context. However, I am far from sure that such an upswing in economic activity will actually take place.

In the few cases where counterparties have defaulted, for instance in the case of a subsidiary of Lehman Brothers, the Eurosystem was able to fully cover its exposure by seizing the posted collateral. At the same time, the collateral framework ensured that banks were able to obtain sufficient amounts of central bank liquidity throughout the crisis. This became most visible in the context of the two Very Long Term Refinancing Operations that the ECB conducted in 2011 and 2012. In these operations banks obtained collateralised central bank liquidity in the order of EUR 524 billion within only 10 weeks. This basic set-up of the collateral framework has remained the same since the beginning of monetary union; the three constituent parts of the Eurosystem collateral framework, i.e. (i) the counterparty framework, (ii) the basic eligibility criteria for underlying assets and (iii) the risk control measures, have remained largely unchanged. The Eurosystem maintains a broad counterparty framework and its eligibility criteria are still based on the same principles as at the beginning. This shows that the design of the Eurosystem collateral framework is in general very robust. However, some changes were necessary to guarantee a smooth implementation of monetary policy at times of financial market stress that led to a general reduction in access to market funding.
In parallel, this process should be treated at its roots, to establish a transparent and stable mechanism that addresses factors, which contribute to the increase of public sector liabilities toward private companies, and avoids their increase in the future. Furthermore, the Bank of Albania will amend the regulatory framework to urge banks to support borrowers’ request for credit restructuring, from the moment the credit is considered as good. If the banks realise this in an effective manner, they will have a lower cost as regards requirements for credit risk provisioning. This element would enable banks to address more prudently and proactively their best clients, who may be showing their first signs of credit repayment problems due to factors that are beyond their control. As an element to keep this action in check, the regulatory framework will envisage that this loan stay temporarily under this category (or in the substandard category), and will immediately fall in a lower category, if the loan quality deteriorates after restructuring. After broad consultations with the banks, the Bank of Albania has drafted the relevant instructions that will guide them in the debt restructuring process. BIS central bankers’ speeches  5  Similarly, the Bank of Albania finds that a part of the non-performing loans, mainly the loss loans, remain in the balance sheets of the banks owing to different interpretation by the banking industry and the tax authorities about the commencement and completion of the legal proceedings against a debtor.

About the financial situation of companies, their aggregate debt decreased in recent quarters, to 113% of GDP as of the third quarter of this year (figure 10). In one year it diminished 0.9% in real terms, explained mainly by the exchange rate effect in the valuation of the external component. This trajectory owes largely to the fact that the increases in corporate bond issuances observed since mid-2016 have not translated into more borrowing. On the contrary, the low cash flow assigned to investment suggests that these funds have been oriented to the refinancing of liabilities, consistently with the lower interest rates. On the other hand, delinquency indicators, while still low, show a marginal deterioration with respect to the previous FSR. In the case of services, this increase has concentrated in some real-estate firms. As for the productive sectors, marginal rises are observed in several industries such as construction, transport and telecommunications, and electricity, gas, and water. Meanwhile, in others such as mining, trade, and manufacturing, the declines identified in the last FSR continue. Residential market figures have shown more stability in recent quarters. After the adjustment process described in previous Reports, the sale of new homes in Santiago has remained stable for several quarters. At the same time, in the second quarter this year, the various home price 8  indicators —in the Metropolitan Region and nationwide— show positive but modest growth. Residential building activity remains weak and different sources of information see no recovery anytime soon.
By contrast with extrinsic drivers of persistence, greater intrinsic inflation persistence is something that monetary policy can – and should – address. Drivers of inflation persistence At this point, I will focus on one specific inflationary shock that we have recently faced, namely the significant rise in imported energy prices stemming from Russia’s invasion of Ukraine and its implications for European wholesale natural gas prices. [12] Once we focus on intrinsic inflation persistence, by nature we have to focus on a specific shock. It is the change of economic responses to that shock – in particular, changes in price and wage setting behaviour – that determine how the intrinsic persistence of headline inflation will evolve. Drawing on a previous talk,[13] let me first establish four relevant features of the shock. (1) It came as a genuine surprise to monetary policy makers, in the sense that it was neither anticipated nor anticipatable at anything other than a short horizon. [14] (2) The resulting rise in European wholesale gas prices was transmitted to UK CPI inflation (via both direct effects on household energy bills and indirect channels through the energy costs of producers of goods and services) in the course of a few months, and thus substantially more quickly than the typical 12-24 month lag in monetary policy transmission. [15] (3) The shock was very large by historical standards.

These challenges deserve further research – although it is naïve to believe that there are easy solutions to such formidable analytical problems. And – in particular, from today’s perspective – we should recognise that persistent deviations of inflation from target, even if stemming from what are fundamentally a series of transitory inflation shocks, might prompt changes in behaviour that generate more long lasting inflationary dynamics. For example, we might see a shift in long-term inflation expectations or the emergence of ‘second round effects’ in price setting behaviour that threaten to create momentum in inflation even after the original impulse has receded. [11] This naturally leads to what I label intrinsic persistence in headline inflation. Rather than being driven by a series of external shocks, greater intrinsic inflation persistence emerges when the economy’s response to the same fundamental inflationary shock changes in a way that implies headline inflation takes longer to return to target. In taking monetary policy decisions, the MPC needs to form a judgement about whether and, if so, how intrinsic inflation persistence is evolving. In other words, it unavoidably needs to assess  Page 6  whether economic behaviour has changed in a way that either makes the response of headline inflation to a specific shock last longer and/or whether it diminishes the impact of monetary policy measures in containing inflation. On my reading, at least in principle, greater intrinsic persistence of inflation would justify a stronger tightening of monetary policy.
ASEAN policymakers have also been complementing monetary policy actions with macroprudential measures aimed at managing the inflationary effects of strong inflows of short-term capital. Indonesia has increased the holding period for its short-term debt, while Thailand has imposed a withholding tax on interest and capital gains earned by foreign investors on Thai bonds. Singapore has also implemented a series of macroprudential measures to curb speculative activity and to ensure a stable and sustainable property market. 19. Most ASEAN-5 economies, including Singapore, have also scaled back the expansionary fiscal policies introduced during the crisis. 20. In short, ASEAN policymakers have been proactive in addressing inflationary pressures but will need to remain vigilant because the risks are not over yet. Inflation is expected to peak this year and moderate going into 2012. The ASEAN economies’ hard-won macroeconomic stability will give them the resilience to ride a challenging external environment. Integration: towards a single market 21. Even as they build up their resilience, the ASEAN countries have been working steadily towards greater economic integration. ASEAN has committed to building by 2015 the ASEAN Economic Community (“AEC”), a single market and production base. This will allow goods, services, investments and capital to flow more seamlessly across the ASEAN region. More importantly, it will give ASEAN an economic heft and relevance that corresponds to that of China and India. 22. The different levels of development within ASEAN has been often cited as a reason why integration will not work in ASEAN.

This is a remarkably favorable picture; and yet there is growing concern about the long-term challenges for the U.S. economy and their implications for future prosperity. In parts of the business community, there is growing anxiety about a perceived shift in the locus of dynamism and growth away from the United States toward Asia and other parts of the world. Public opinion surveys report increased concern among Americans about economic security; about the prospects for future income growth and economic mobility; and about the implications of the long-term increase in income inequality. And there we can see growing concern among the general public and in the business community about the struggle to find a political consensus to support reforms to help us meet these challenges. The United States has long been one of the most open of the major economies. This basic policy choice, along with a range of other actions that have made our economy relatively flexible, has allowed us to be a substantial beneficiary of the rapid increase in global economic integration and in the growing economic success of the rest of the world. Globalization has brought challenges as well as benefits, however. The combined forces of technological change, immigration, and the rapid integration of China, India, and other economies into the world economy are altering the dynamics of competitive pressures on U.S. companies. The pace of change seems to be increasing, and more things we produce, and more of our services, are becoming tradable.