samchain/econo-pairs-v1 huggingface dataset:
There is a summary of the results of the survey for the participating Spanish banks in Menéndez-Pujadas, Á. and M. Mulino (2020), “October 2020 Bank Lending Survey”, Analytical Articles, Economic Bulletin, 4/2020, Banco de España. 3  Secondly, the comprehensive nature of the monetary policy response has also been very important. It should be borne in mind that the COVID-19 outbreak in the euro area came about against a background of: low inflation and extensive monetary stimulus, with benchmark interest rates at a record low of -0.5%; net asset purchases under the asset purchase programme (APP); and a set timetable for the TLTROs. In this setting, the ECB measures have run along two main axes: the purchase of financial assets and the provision of liquidity to commercial banks, covering the euro area economy’s main financing channels. As regards asset purchases, I have already referred to the approval of the PEPP. The main aim of this programme is to ease financing conditions and ensure the smooth transmission of the common monetary policy to all euro area countries. As to liquidity provision, we should recall that, in the euro area, banks are the main source of financing for households, the self-employed and firms. It was therefore vital to head off a severe contraction in the flow of credit to the real economy.

In such instances, we need to have a close co-operation between the FIUs in order to ensure that we are able to be ahead of those with criminal intent. Further, I was particularly impressed that all of you are hoping to have an action plan to be implemented thereafter. 2  BIS Review 133/2008  My dear friends, it goes without saying that we need to come out strongly in our efforts to deal with all these matters. We have seen world economic frameworks being threatened, and being under tremendous pressure during the past one month or so. We have seen unprecedented chaos and turbulence. Nevertheless, we have been able to come through because of the diligent work that we have done. In our own country, there were times when we were encouraged to deregulate, deregulate and deregulate. Fortunately, we did not deregulate as much as we were advised to, by certain quarters. Because of that, we had a few fences around our economy; and those fences today are the important buffers that are protecting us when the unparallel financial tsunami is hitting the entire world. When you have fences, it is difficult for outsiders to come in. At the same time, however, when an external disaster strikes, the fences come in handy, because the fences protect you. So, in a way, we have been protected by some of the safeguards that we had installed in our systems. Even when we opened out our economy, we were careful, and we opened out slowly.
I am worried that households do not realise that the factors that previously justified a high level of indebtedness may change and that what was a rational behaviour before, may not be so in the coming period. Mortgage rates and the return on the equity market and mortgage market are not constant over time; they change. One conclusion of the results of this study is that it is important to create the right incentives via, for instance, the tax system. The current situation has advantages and disadvantages I have now painted a picture of how we arrived at our current situation, with a global and complex financial system and high level of household indebtedness. There is no doubt that the financial system we have now has created considerable welfare gains. Households have been able to invest their savings in mutual funds instead of traditional savings accounts and have in this way been able to spread the risk in their saving and thus gain a higher return. For the banks, the greater degree of market funding has similarly entailed greater opportunity to spread risk between different funding sources. The possibility to obtain funding on the international capital markets has also meant that access to capital has increased and that the banks have thus been able to fund Swedish mortgages more easily and more cheaply. This in turn has meant that a larger number of households have been able to borrow and probably also at a lower interest rate than would otherwise have been the case.

However, the condition for these welfare gains is that there has been considerable confidence in the Swedish state, Swedish banks and the Swedish housing and mortgage markets. Today a large percentage of the market agents investing in Swedish bonds are outside of Sweden. This means that the Swedish financial system is also dependent on how other countries assess the Swedish mortgage and housing markets. It is important that these markets function well so that we can continue to enjoy a high level of confidence on the financial markets. We therefore have a major responsibility to ensure that the vulnerabilities are limited and that confidence remains strong. This is particularly important given the weaknesses that have emerged as a result of the structure of the financial system. The good access to capital and the large increase in mortgages has also meant that the Swedish banking system has grown, and become one of the largest banking systems in Europe. Moreover, the Swedish banking system consists of a few large banks that are closely interlinked. This means that problems at one bank can easily spread to other banks. All this means that the costs to society could be substantial if we were to suffer a financial crisis. 7  See T, Jansson (2014), Households’ amortisation decisions, The analysis group’s memorandums on household indebtedness, No. 4, Sveriges Riksbank. www.riksbank.se. 6  BIS central bankers’ speeches  How do we attain a better balance?
(2017)) and Gourio, Kashyap and Sim (2018) and Caballero and Simsek (2019) find reasons for monetary policy to do so. 9 Adrian and Liang (2018) also find that more research is required to clarify the role monetary policy should have when it comes to counteracting the build-up of financial imbalances. 10 See, for instance, Yellen (2014), Brainard (2017) and Quarles (2019). 11 https://www.norges-bank.no/en/topics/Monetary-policy/Mandate-monetary-policy/ 12 See, for instance, Ingves (2012) and Jansson (2013). For a rebuttal of the criticism that the Riksbank “leaned against the wind” very substantially and was the main reason why the Riksbank increased the interest rate in 2010-2011 in the first place, see, for instance, Jansson (2014). 13 Ingves (2007). See also Nyberg (2005), and Heikensten (2008). Heikensten (2008), writes: “With house prices increasing drastically, risks for the real economy have been perceived to be bigger. On a few occasions in 200405 the Riksbank did for that reason not follow a strict inflation-targeting rule. We “leaned against the wind”, in 8  4 [21]  So what happened and why did we stop “leaning against the wind”? A few years after the financial crisis, it was clear that inflation had not risen in the way the Riksbank had anticipated, but instead was surprisingly low. During the first half of 2013, for example, the average of Swedish forecasters expected inflation to reach around 1.5 per cent in 2014. The outcome was almost one percentage point lower, that is, one and a half percentage points below the target.

21 The new Instrument of Government in 1809, which also gave the government and the Riksdag a greater role in relation to the Crown, therefore stated that the Riksdag would have the sole right to issue banknotes as legal tender via the Riksbank. About one hundred years later, in 1904, the so-called banknote monopoly came into force, which led (again) to the Riksbank obtaining the sole right to issue cash. The competition this time came from the savings and commercial banks that emerged during the 1800s and that had begun issuing their own banknotes. 22 The banknote monopoly can be seen as an expression of the fact that banks and the Riksbank started to refine their roles at this time. The Riksbank ceded regular banking operations to the emerging banking sector, and started itself to take on  19 The reasoning below strictly applies only to banknotes. The right to manufacture and issue coins was transferred from the government to the Riksbank as late as in 1986. 20 1809 was also a critical year in Sweden for many other reasons. The King had been deposed in a coup d’etat, the country was involved in three wars and had just lost the eastern part of its kingdom, Finland, to Russia. It was important to install a new monarch and have a new Instrument of Government in place as quickly as possible, not least in order to be able to negotiate urgent peace agreements.
Although national authorities must be at the frontline of macroprudential policy, it is important to stress that these efforts cannot be conducted in isolation, particularly in the European Union and the euro area where our economies and their financing are closely intertwined. II. The euro area needs to continue strengthening its financial integration Euro area countries are already closely integrated on an economic level, and their financial integration should not be left half-finished. However, deeper integration will not happen spontaneously – it requires strong and determined political action. It means completing the Banking Union, supplementing it with an action plan to develop other financing channels, and creating deeper and more integrated European financial markets. a. Why do we need to increase the euro area’s financial integration? We tend to talk of the euro, which has just celebrated its 20th anniversary, as an eminently political project. Clearly, this is true: the single currency stands as a daily reminder of our shared European identity. As with other “European successes” such as the free movement of people, we often forget that its achievement was not a foregone conclusion. But the euro is also an economic necessity: it was born in part from the obvious difficulties that emerged in the 1980s and 1990s in managing a single market with national currencies. Indeed economic union called for monetary union.

For the SSM, this vigilance requirement has led to the establishment of three supervisory priorities for 2019: first priority is, given the continuing high level of outstanding non-performing loans, to monitor the euro area banking industry’s credit risk by providing further strong incentives to lower exposures – efforts which have already resulted in a substantial reduction; second priority is to ensure that institutions manage their risks appropriately, including behavioural aspects such as customer protection and the prevention of money laundering, the significance of which has become abundantly clear in recent years; third priority is to manage multidimensional risks, the most pressing of which being Brexit. The SSM’s priority in this respect is clearly to ensure that euro area banks operating in the United Kingdom and vice versa have drawn up contingency plans to cope with the loss of European passporting rights after Brexit. c. What role can macroprudential policy play? Macroprudential policy can play a complementary role alongside microprudential supervision by following a more preventive approach that addresses the financial system as a whole. Macroprudential policy can play a preventive role with regard to debt trends and to the financial cycle: the current phase of the cycle is conducive to greater risk-taking, and the French macroprudential authority, the Haut Conseil de stabilité financière, has taken steps to limit this and/or prevent negative consequences in the event of a financial shock. The HCSF therefore keeps a close eye on markets or activities where exuberance is more likely to emerge.
With due respect for all the forecasting difficulties at present, the Riksbank counts on demand in the industrialised countries turning upwards during the second half of next year. GDP growth in the OECD area is calculated to be 1 per cent this year, followed by 1,5 per cent in 2002. Under present circumstances the uncertainty around our main scenario is, of course, considerable. BIS Review 86/2001  3  We count on GDP growth in Sweden in the coming years being lower than we assumed earlier. The combined economic effect of interest rates and the exchange rate is therefor stimulatory. As the Committee is no doubt well aware, in the years ahead both increased transfers and tax cuts will also contribute to a rapid increase in household disposable income. Given a gradual recovery in the rest of the world, this appreciable overall stimulus from economic policy will lead to a gradual upturn in Sweden’s economy. GDP growth is expected to be 1.3 per cent this year, followed in 2002 and 2003 by rates of 2.2 and 2.8 per cent, respectively. The lower GDP growth — particularly this year — compared with our earlier assessment implies lower resource utilisation. At the same time, the recovery towards the end of the forecast period means that resource utilisation will then be rising again. Monetary policy is currently formulated on the basis of an assessment of inflation excluding transitory effects from indirect taxes, subsidies and house mortgage interest expenditure (UND1X).

Another consideration is that notwithstanding the low growth of demand, inflation has been surprisingly high. These forces have acted with varying strength on the Riksbank’s inflation forecasts in recent months. Roughly speaking, when economic activity is slowing — with a given potential growth rate — after a time inflation falls back. A weak exchange rate pulls in the opposite direction, however, and can lead to higher price increases: directly through rising import prices and indirectly by stimulating production for export. In addition, abrupt exchange rate movements are liable to affect inflation expectations, a problem that is accentuated when inflation is springing unpleasant surprises. The krona’s weakening in the early summer, after the Riksbank had presented this year’s second Inflation Report, probably had to do with a combination of slackening export activity and portfolio adjustments. Moreover, inflation outcomes in the late spring had been surprisingly high. If higher inflation expectations are allowed to take root and also show up in time in a currency depreciation, public confidence in monetary policy’s systematic commitment to a rate of inflation in line with the 2 per cent target may be shaken. The weakening of the exchange rate in that period was an isolated Swedish phenomenon, which made it particularly serious. The krona also weakened in the aftermath of the terrorist attacks on 11 September but the circumstances then warranted a different interpretation. General uncertainty in the financial markets was accompanied by extensive portfolio adjustments after the terrorist attacks.
The idea was that a fixed exchange rate for the krona would mean that inflation in Sweden was adapted in the long term to inflation in the countries with currencies to which the krona was pegged. Confidence in the fixed exchange rate would mean that the expectations of inflation in Sweden would largely be the same as the expectations in the countries to which we were thus linked. But in Sweden, as in many other countries, it proved impossible to prevent inflation soaring with a fixed exchange rate regime. Other countries which tried to control inflation by means of targets for the money supply also faced problems. The Riksbank announced its inflation target in January 1993, after the krona had been allowed to float earlier in the autumn with a great hullabaloo. The Bank then announced that the target for monetary policy would be to hold the annual change in the consumer price index at 2 per cent. The target would formally apply with effect from 1995. In this way Sweden became one of the first countries to choose to formulate its monetary policy in terms of an explicit inflation target. BIS Review 2/2008  1  Despite being aware that it would be difficult to attain the target exactly, the Riksbank chose to formulate the target with a specific figure for inflation. One of the most important reasons for this was to try to create an anchor around which inflation expectations could be stabilised.

Antonio Afonso, Ludger Schuknecht and Vito Tanzi, Public Sector Efficiency: Evidence for New EU Member Sates and Emerging Markets. ECB Working Paper No 581 (2006). 2  BIS Review 113/2006  result, the 6% of GDP allocated to capital spending had to be funded almost entirely by additional borrowing, which gives rise to further debt-servicing costs. Repeated year after year, this pattern pushed the debt/GDP ratio steadily upwards to a peak of 75% in 2004. This tendency for recurrent revenue to be matched by recurrent expenditure in the context of fiscal retrenchment has had a crowding-out effect on investment, and partly explains why the country’s investment/GDP ratio has been static at best in recent years. A more telling indicator of the relatively small investment in productivity-enhancing activities is the share of GDP devoted to R&D, 0.6% in 2004, compared with an average EU ratio of about 2%. It is doubtful whether the existing pattern of resource allocation is conducive to the desired improvement in Malta’s international competitiveness. The latter can only be achieved by increasing the size, flexibility and skill level of the labour force, while simultaneously creating an institutional and physical infrastructure more likely to attract high value-added foreign direct investment. And since the State must play a leading role in this effort, the question of financing arises spontaneously. Now in the context of a fiscal consolidation process that has not yet run its full course, increasing recurrent spending beyond the natural creep caused by existing commitments such as pensions is clearly not an option.
Chart: Changes in employment So far, however, it is only in the tourist industry where a weaker krone has led to clearly higher activity. Since oil prices started falling in autumn 2014, employment has shown solid growth in the hotel and restaurant industry, but otherwise almost two in three new jobs have come in the public sector and the construction industry. Growth in those sectors has offset the decline in oilrelated industries, where one in five jobs has been lost. The strong growth in jobs in the construction industry reflects the economic policy pursued. Public investment has increased, and low interest rates have fuelled house price inflation and led to a sharp rise in housing construction. In 2016, housing starts came to almost 37 000, the highest number recorded since the early 1980s. In the present situation, it has been sensible to pursue a potent countercyclical policy. Many countries have experienced that a sharp fall in output and employment can have long-lasting adverse effects. It must be recognised, however, that the longer-term challenges facing the Norwegian economy cannot be resolved by spending more oil revenues and keeping the interest rate low. Chart: Norway’s trade and current account balance As a small open economy, much of our welfare is based on trade with other countries, providing us with access to goods and services others are better able to produce. But we also have to offer something in return. High oil and gas prices have over the years generated large current account surpluses.

These surpluses have declined in the past few years. Oil and gas production passed its peak more than a decade ago. We may find once again that these resources have been underestimated. But the oil price collapse and developments in the Norwegian economy in the past few years have reminded us of an inescapable fact; we must drive forward a larger non-oil tradable sector. We need more legs to stand on. The needed structural adjustments in the Norwegian economy will have to be dealt with against the backdrop of more global challenges. Demographic changes and sagging productivity growth may point towards persistently low growth in advanced economies. Protectionist tendencies and reduced trade in goods and services could put an additional drag on growth. We must also make changes to consumption and production methods in order to reduce greenhouse gas emissions. This evening I will take a closer look at these challenges. Is low growth here to stay in advanced economies? In the long term, there are two factors that determine how quickly an economy can grow: the 2/9  BIS central bankers' speeches  supply of labour and labour productivity. Chart: Working age population The decline in the working age population is weighing on the growth outlook for many countries. The large post-war cohorts are leaving the labour force, and the consequences of a long period of low fertility rates are becoming increasingly clear. At the same time, the proportion of the population who are employed remains low in many countries.
And we will in this way manage to make the financial sector contribute actively and efficiently to the sustainable transformation of our economy. I trust the following discussions will prove interesting for you. We will talk about the important work by European institutions under way, about how financial institutions are adapting and about the way in which the adverse effects the energy transition may exert should be accommodated, in what has come to be known as the “fair transition” debate. Thank you. 5/5

As the SMR starts to bed in, there are encouraging signs that it is making a difference. For firms, the SMR is clarifying and improving governance, accountability and decision-making. For supervisors, the regime is helping identify weaknesses in governance and accountability, and it is helping them to encourage the necessary changes. Adoption is spreading. Some international firms are voluntarily adopting elements of the SMR’s certification requirements to strengthen their global operations. A number of jurisdictions are applying the principles and features of the SMR. 5  And elements of the regime are included as examples in the FSB’s recently published  toolkit on governance frameworks. 6  While we cannot eliminate misconduct, these measures should reduce its scale and frequency, and they will broaden the sanctions for bad behaviour. All of this will help restore trust in financial markets so that they can work as effectively and efficiently as possible to serve the real economy. Markets Forum 2018 Today marks an inflection point, when we can celebrate what has been achieved but then look ahead to future challenges. The spirit and intention behind FEMR is that continual focus is required because markets continually evolve. 4  The Government has legislated to extend the SM&CR to all other FSMA authorised financial services firms. As a first step, the Government will extend the Regime to insurance firms from 10 December 2018 and will confirm when the Regime will be extended to firms regulated solely by the FCA in due course.