samchain/econo-pairs-v1 huggingface dataset:
Emerging markets and Mediterranean economies in the global economy Today we are celebrating the 50th anniversary of Bank Al-Maghrib. This is also an occasion to reflect on the role of the Mediterranean region, and on the role of emerging market economies in general in the global economy. The growing importance of these economies, including those in this area, has profound implications for the euro area and the rest of the world. I would like to share my thoughts with you on this phenomenon. The growing role of emerging market economies The global financial crisis is slowing the growth of the emerging market economies. Only a year ago, some observers were still saying that these economies were likely to decouple from the downturn stemming from the advanced economies. Today it is obvious that this has not happened. Most emerging markets are affected by the crisis through real or financial channels. Many sectors have been severely hit by the global turmoil, for instance, the automotive, textile, building and tourist industries. In addition, remittances which, for many emerging markets, are an important source of revenue, are vulnerable to the downturn in host countries, even though they tend to be a relatively stable source of income. It is too  4  BIS Review 66/2009  early to say when emerging market economies will bottom out of the global financial crisis, but some recent data, particularly for Asia, are somewhat encouraging.

Furthermore, cooperative efforts in promoting the practice of information sharing and capacity building will help strengthen competency of regional central banks to safeguard against external shocks and disturbances. Although the practice of information dissemination among the regional peers is nothing new, there is still room for improvement to facilitate a more structured approach and timely delivery. Ladies and gentlemen, these are just some food for thought to precede the more detailed discussions and lively debate to follow. I certainly look forward to hearing the views of Mr. Caruana, who has been among those at the centre of the challenges facing us. His perspectives will be valuable for our further discussions and deliberations. And we will learn more from Mr. Glenn Stevens, Governor of the Reserve Bank of Australia; Mr. Kiyohiko Nishimura, Deputy Governor of the Bank of Japan; and Mr. Heng Swee Keat, Managing Director of The Monetary Authority of Singapore, who will lead the discussions focusing on their respective country’s experiences. This will be in keeping with our tradition in learning from one another to further enhance SEANZA cooperation and promote greater stability in the region. In concluding my remarks, I would like to reiterate to you my warmest welcome, and may I also wish us all a successful and fruitful meeting, which would hopefully bring us on the right track towards weathering the storm in anticipation of sunnier days. Thank you. 2  BIS Review 120/2008
Moreover, even these estimates may overstate the future path of interest rates implied by financial markets. Market interest rates are probability-weighted averages of different possible interest rate paths – they are a mean. Model estimates of the modal – or most likely – path for interest rates are lower still (Chart 3). Estimates of the modal path of interest rates are drawn from estimated models, so are no more than illustrative. Nonetheless, the modal interest rate three years ahead in the US is  1  Expected lift-off here refers to a 25 basis point increase. 2  The path of forward interest rates will also be affected by term premia. See Shafik (2015). BIS central bankers’ speeches  1  only 1.1%. In the UK it is 0.8%, little changed from current levels. According to these estimates, the glue holding interest rates to the floor looks stronger still. There is an old English aphorism, due to Walter Bagehot in the 19th century: “John Bull can stand many things, but he cannot stand 2%”. Prior to 2009, the Bank of England had been careful to avoid the wrath of Mr Bull: Bank rate had never been below 2% in its then-315 year history. For the past six years the MPC has been testing the patience of Mr Bull, with the 2% threshold consistently breached. If financial markets are to be believed, Mr Bull, Mrs Bull, and their children are set to have their patience tested further: UK rates are not expected to reach 2% until 2019.

Residential construction of apartments in apartment blocks in relation to the population increase has been lowest in Stockholm county, followed by Skåne county and Västra Götaland county. One ray of hope is that the number of building permits granted for apartment blocks is continuing to increase, which indicated a continued increase in new production of apartment blocks. Factors such as regulated rents for rental properties, i.e. the utility value system, a lack of land with planning permission in growth regions, the construction of the municipal tax equalisation system, the imbalance between traffic situations and housing in growth regions and long planning processes probably all contribute to the relatively low level of residential construction, even in areas where demand is high. A further restriction is the lack of competition in the construction sector. This is demonstrated in the developments in prices and wages in the sector. Construction workers’ wages have increased more than those of industrial workers in recent years. Another example is that the costs of construction  2  BIS Review 2/2002  materials, which constitute approximately one-third of total construction costs, have shown price increases over and above other industrial products for some time now, with price rises even during periods of low demand. One important explanation for this is the fact that the construction trade is concentrated to a small number of large companies. In some markets, for instance, those for cement, reinforcement steel and plasterboard, one company accounts for more than 50 per cent of total sales.
This phenomenon has been supported by the progressive financial liberalisation, the development of domestic financial markets, the greater use of domestic currency to facilitate bilateral trade activities and the development of the payments and settlement systems. The economic and financial regional integration has also been reinforced by a higher level of regional cooperation. Earlier regional cooperation had focused mainly on trade, investment and development. This decade has seen the cooperation shift to efforts to address financial stability issues, including in surveillance, crisis management, liquidity support arrangements, financial supervision and financial market development. The approach in forging greater financial integration in Asia will be different from that adopted by Europe. The region does not have centralised institutions to coordinate financial integration but has leveraged on the existing intra-regional groupings and networks to forge greater cooperation and collaboration in areas of common interest. The region has its own monetary and financial stability committee that is supported by arrangements for regional surveillance to identify risks and vulnerabilities to the region. Also in place is an integrated crisis management framework that will be operationalised in the event of an imminent financial crisis in the region. Recently the region successfully organised two schemes for reserve pooling, the Asian Bond Fund and the ASEAN+3 Chiang Mai Multilateralised Swap arrangement as a liquidity support facility.

As economic and financial systems in Asia continue to transform and as the region becomes more integrated and cohesive, this has not only enhanced the potential for the region to contribute to global growth but also enhanced the resilience of the region and thus its role in contributing to global financial stability. These trends support the global efforts by the various international groupings and multilateral agencies in the search for solutions to achieve global financial stability and sustainable growth. The transition from G7 to G20 is recognised as a positive step forward that extends its reach beyond the developed world. But the representation in G20 is by virtue of the size of the  2  BIS Review 131/2010  economy and not by representation of specific groups of countries. Its outreach and inclusiveness is therefore limited, and small and medium sized emerging economies are not part of this process. The G20 is, nevertheless, an important global forum for considering global issues and will have an important role in setting the direction for global policies. Earlier, the cohesiveness, the sense of purpose and urgency of the G20 did indeed contribute to restoring confidence in the global financial system and the coordinated policy stimulus was an important catalyst for the economic recovery. In recent months, however, the momentum for this coordinated actions have dissipated and there have been differing positions on several important issues. At the same time, a number of the major crisis affected countries have implemented their own financial reform plans.
On Friday, March 14, 2008, the New York Fed received authority from the Board of Governors of the Federal Reserve to make a loan that enabled Bear Stearns to avoid a bankruptcy filing and to continue in operation through the weekend of March 15 and 16. During that weekend, the Federal Reserve and the United States Treasury Department facilitated an acquisition of Bear Stearns by J.P. Morgan Chase. The Federal Reserve also developed a new liquidity facility to lend cash directly to primary dealers, the Primary Dealer Credit Facility (PDCF). The PDCF became operational on Monday, March 17, 2008, and it was intended to provide a liquidity backstop for primary dealers who might face circumstances similar to Bear Stearns. Lehman Brothers was one of these dealers. It is impossible to know what would have happened to Lehman without the TSLF and the PDCF, but it is safe to say that these facilities calmed markets and allowed Lehman and others more time to examine available options and to seek potential solutions. As history shows, Lehman had six months from the date of the Bear Stearns transaction to find a longterm solution to its myriad problems. Of course Lehman’s challenges were very serious – it suffered from capital deficiency, liquidity drain and a low level of market confidence. Any of these three could potentially prove fatal to a publicly traded financial company, even in the healthiest of economies. Lehman had the misfortune of trying to solve all three at once.

Under the law, the New York Fed does not have the authority to provide what I would characterize as a “naked” guarantee – one that would be unsecured and not limited in amount, and would put the U.S. taxpayers at risk for the entirety of Lehman’s trading obligations. As Chairman Bernanke has observed, “the Federal Reserve has done, and will continue to do, everything possible within the limits of its authority to assist in restoring our nation to financial stability and economic prosperity….” 6 In this case, Lehman had no ability to pledge the amount of collateral required to satisfactorily secure a Fed guarantee, one large enough to credibly withstand a run by Lehman’s creditors and counterparties. As events subsequently played out, several weeks after Lehman weekend, on October 2, 2008, Congress passed the Emergency Economic Stabilization Act (EESA), which provides the U.S. Treasury Department with legal authority to issue a guarantee. 7 Again, the Federal Reserve did not then, and does not now, have such authority. Even if it had been legally possible, a Government guarantee would have also placed the taxpayer at enormous risk because it would have undermined deal certainty. It is important for the acquirer – and not a third party – to issue the guarantee because it gives the acquirer a strong incentive to close the deal and assume control of the target. For example, J.P. Morgan Chase, which proffered the guarantee needed to merge with Bear Stearns, negotiated a host of provisions from Bear Stearns that assured deal certainty.
François Villeroy de Galhau: What are the economic prospects for the euro area? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Conference at LUISS University, Rome, 29 November 2018. * * * Ladies and Gentlemen, I am delighted to be here with you this evening at LUISS University, in the magnificent ballroom of the Villa Blanc, and I would like to extend by warmest thanks to Vice President Paola Severino. LUISS University is renowned for the high standard of its teaching and one of your illustrious former presidents, Guido Carli, who gave his name to your university, was also a signatory to the Maastricht Treaty in 1992. I am here to speak to you today as a friend of Italy, a country which I hold very dear. For several years in my professional career, I made monthly visits to Rome and had the pleasure of learning your language. I am pleased to see my friend Governor Ignazio Visco here, as he is also my closest neighbour in Frankfurt: we sit next to each other on the Governing Council. I am also here as a committed European, one who is familiar both with Germany and Belgium. This commitment is also shared by Sylvie Goulard, who is here today in her capacity as Deputy Governor of the Banque de France.

Real GDP has still not returned to its pre-crisis level. As for real per capita GDP, it is lower now than it was in 2007. This weak growth is one of the main factors behind the high public debt ratio, which has been rising since 2008. Another consequence of feeble growth is the high unemployment rate, particularly among the young (32% in September 2018 for 15–24 year-olds). The tragedy of the scoraggiati, especially in the south, should be seen as our tragedy too. It is with this image in mind that I want to shed some light now, here in Rome, on the economic prospects for the euro area. I would like to share with you two firm beliefs: with regard to the challenges we face, the euro is one of the solutions, not one of the problems; but in order to build a more solidarity-based euro area, we need to have an Italy that is 1/5  BIS central bankers' speeches  committed. ** I. The euro is one of the solutions, not one of the problems. There is still a temptation to blame the euro for this weak rate of growth. Proponents of this idea see the single currency as a German-imposed straitjacket, managed by “Frankfurt” strictly for Germany’s benefit. It is always legitimate to have a debate, and we should not shy away from this one. But in reality the euro is one of the solutions, for four reasons.
Some market participants have become more inclined to engage in "short-termism", that is, they might be too preoccupied with their short-term results. This trend might result, in particular, from growing pressure to yield immediate financial results that are not necessarily sustainable. Marking-to-market all assets and liabilities has also contributed to this widespread focus on immediate financial performances. This focus on short-term performance can translate into additional volatility in the price discovery process: the shorter the investment horizon of market participants, the bigger the impact of any new information on prices. Mimetic behaviour is by no means a new phenomenon on financial markets. However, technological developments on markets may have gradually reinforced this type of behaviour. The spread of benchmarking, which allows fund managers and clients to measure performance against that of other funds, together with the growing competition within the sector, appears to have increased such mimetic behaviour. Some operators have come to the conclusion that it is better to be wrong along with everybody else, rather than take the risk of being right, or wrong, alone. A striking example of rational mimetic behaviour is the influence that hedge funds enjoyed, a few years ago, as "opinion leaders" and trend makers. By its nature, trend following amplifies the imbalance that may at some point affect a market, potentially leading to vicious circles of price adjustments and liquidation of positions.

On the other hand, hovering above past averages, the manufacturing industry capacity utilization rates indicate that the strong trend in investments will continue by encouraging companies to opt for capacity expansion. In this context, capacity increases are more pronounced in sectors that are composed of companies with high investment appetite. Survey data also show that as of July, investment expenditures of companies will rise further in the coming periods. This trend grew stronger with a spillover into all sectors, chiefly to those sectors producing investment goods as well as exporting ones. Given the January-May average, increases in the import quantity of investment goods accompanied by the rise in industrial production, with capital goods in the lead, confirm that the demand for fixed capital goods remains strong. The stable course of sustainable components such as investment and exports had a positive effect also in employment. While employment participation rates increase further, the trend of decline in the number of unemployed also continues. Thus, as of May, the total number of people employed reached a historical high with 30.8 million people. In addition, the relatively stationary course of the unemployment rate with 10.9% indicates that the employment gap is still high and the employment capacity will increase further in the upcoming period. 2/5  BIS - Central bankers' speeches  Employment developments in the Turkish economy are very promising.
6  What could be done to minimise the risks associated with these developments? Certainly, the build-up of debt across different sectors needs to be monitored. Also, the regulation and supervision of the non-bank financial sector needs to be revisited. Despite some recent improvements, it is fair to say that, compared to the banking sector, we do not have enough information about the activities of non-bank financial intermediaries, nor sufficient understanding of their interconnectedness with other market players. We also lack consistently tested macroprudential policy tools that could be used to address the risks that have been already identified in this market segment. Progress in this direction is of the utmost importance. “New” risks Of course, the risks to global financial stability originating from low profitability in the banking sector and the search for yield by different market participants should be carefully monitored and addressed going forward. Yet as I mentioned before, in a rapidly changing world and in an ever-evolving financial sector, regulators should likewise heed a set of emerging risks which could also be potentially dangerous for financial stability. And this because, in many cases, we do not have the data, or even the conceptual framework, to analyse their implications (especially when compared to the more traditional risks). -  Technology-related risks: cyber risks  I will launch the discussion on these “new” risks by referring to those associated with the adoption of new technologies. Clearly, new technologies are not just a risk, they are also an opportunity.

We are examining features that could make it easier to connect to the RTGS service, including a broader range of APIs, improved availability, with near 24/7 operation and synchronisation of the RTGS system with other ledgers including those using distributed ledger technology and tokenisation of assets[13]. At the same time, the Bank of England is working with the FCA and HMT to establish a sandbox to explore innovative forms of digital settlement of wholesale financial market transactions. We are also actively engaged with the work of the BIS Innovation Hub, including through its London Centre, at experiments to look at the potential for improved settlement. All of this work will proceed alongside the next phase of development of the retail digital pound. We envisage that much of the technical work in this phase will provide insights that will be of significant value to our work on the future digitalisation of wholesale financial markets. The further development of the digital pound will also benefit the Bank’s work on private sector stablecoins[14]. The Financial Services and Markets Bill (2023) provides powers for the Bank of England to regulate stablecoins used in systemic payment systems in the UK. As with wholesale CBDC, this is not a question of whether we have a digital pound issued by the Bank of England or private sector stablecoins issued by private sector firms. In a future payments landscape, there could be opportunities for privately issued stablecoins, regulated to the same standards as we regulate other forms of privately issued money.
In 2000, although the inflation targets that were envisaged in the program could not be reached, significant progress was made in the fight against inflation, which reached its lowest level ever in the last 14 years. In addition, the fiscal balance improved considerably, and the structural reforms were underway. Interest rates came substantially down in 2000 as a result of the decreased exchange rate risk and the improved foresight of public. Declining interest rates reduced the cost of the Treasury’s domestic borrowing. Rising domestic debt stock was put under control. After the recession in the economy in 1999, falling interest rates boosted the deferred consumer demand, particularly for durable goods. Moreover, increased demand for credit, driven by the banks’ favorable consumer loans, put the economy back on the growth track. Besides the decreasing tendency in interest rates, the stable exchange rates and the private sector’s renewal investments, directed to productivity increase, also contributed to the growth in the economy. As a result, the GNP grew by 6.1 percent in 2000. However, the economic expectations became confused in the second half of 2000. Starting from May 2000, the gap between the optimists and pessimists in the CBRT’s Business Tendency Survey began to decrease and in November, the pessimist expectations started to gain ground. It is observed in this survey that also the expectations for inflation, employment and exports began to deteriorate in the same period.

Süreyya Serdengeçti: Recent developments in the Turkish economy Speech by Süreyya Serdengeçti, Governor of the Central Bank of the Republic of Turkey, made at the 69th Shareholders' Ordinary General Meeting of the Central Bank, Ankara, 24 April 2001. *  *  *  Dear Shareholders, Distinguished Guests and Valuable Press Members; th  I would first like to welcome you to the 69 Shareholders’ Ordinary General Meeting of the Central Bank of the Republic of Turkey. As you know, the year 2000 differed widely from the previous years for the Central Bank of Turkey and for the Turkish economy as well. The Disinflation Program, which had been initiated in December 1999, was the most important element that shaped the economic developments in 2000. In the medium-term, the program had aimed to bring down inflation to single digits in three years, to reduce real interest rates to reasonable levels, to increase the growth potential of the economy, and to provide a more efficient resource allocation in the economy. The main pillars of the Program were; tight fiscal policy focusing on improving the primary surplus; speeding up the structural reforms and privatization efforts; an incomes policy geared to targeted inflation; and a pre-announced exchange rate basket. The specifics of the program and extensive analyses of economic developments of last year have been elaborated in our 2000 Annual Report.