samchain/econo-pairs-v1 huggingface dataset:
We have to: −  identify potential unfulfilled need for financial services in the medium term so that we can adequately accommodate needs of our consumers and corporate in the real sector. These include financing of small and medium-sized enterprises as well as long-term financing. −  determine problems, obstacles, and bottlenecks within our financial infrastructures as well as tax issues that will constraint us from achieving our full potential;  −  revisit the existing specified scopes of businesses for each types of financial institutions and determine appropriate structures for our financial conglomerates, taking into consideration the increasingly blurring of traditional lines that have previously separated commercial banking, investment banking, and insurance businesses from one another;  −  prioritize our aims and construct appropriate benchmarks to set clear targets of development and measure our performance;  −  and, of course, re-examine the current regulatory structure once the market reform is already underway. Ladies and Gentlemen You may ask how you can be involved? In the next nine months, our staff will conduct background studies, commission additional research papers, and take inputs from relevant stakeholders through market interviews and focus groups. We invite you to actively participate in our public consultation process and encourage you to take initiatives by making public submission on topics which you feel are critical for the development of our desired financial system.

•  Lastly, even if some regions of the country are experiencing a scarcity of housing, there is no evidence of a real estate bubble developing such as we saw at the end of the 1980s. The inflation outlook thus remains positive. We are projecting an inflation rate of about 0.5% this year and 1% next year. It is unlikely that, in the months ahead, we will again see inflation rates below zero, as we did last March. Negative inflation would require a steep fall in the price of oil. The debate over deflation, which was so topical barely a year ago, is by and large no longer one of our concerns and has disappeared from the discussions among central bankers. Our interest rate cut in March 2003 was intended to protect us against such a development. The goal has been achieved. The need for reforms Events in recent years have shown once again that there is no way we can make ourselves impervious to disturbances emanating from the world’s markets. Such disturbances will inevitably impact on the development of our economy. This does not mean, however, that we are completely at their mercy: for a small country such as Switzerland, the best defence against external shocks is an efficient and flexible economy, capable of standing up to competition and adapting swiftly to changes in the international environment. However, we must also ensure that the problems caused by our internal structures, which are sometimes not ideally suited to current challenges, do not gain the upper hand.
This relates first to the completion and implementation of the FSAP and its follow up. The FSAP should give rise to genuine common financial legislation and regulation for market players. The so-called Lamfalussy framework, which allows for flexible technical rules at the EU level complemented by enhanced co-operation as regards national implementation and enforcement, has for good reasons been extended from the securities field to banking, insurance and financial conglomerates. A second area of structural reform in capital markets is the further consolidation and integration of market infrastructure and the further harmonisation of the standards and conventions routinely used by market participants. There is a large variety of remaining obstacles to a fully integrated and efficient euro area market which still needs to be addressed by the relevant actors. A simple but telling example of the benefits that collective action can bring in this regard is the development of the EONIA overnight interest rate index by market participants organised within a trade association. This index has become the generally accepted reference in the euro overnight interest rate swap market, leading in turn to the impressive development of this particular market segment. Turning to labour markets, a number of structural reforms have been undertaken in recent years and efforts are still on-going in several Member States. Although unevenly implemented across countries, the positive impact of past reforms in the labour market has become visible.

As the economy continues to adjust to these changes, the situation is still uneven across different sectors. In addition to the above-mentioned oil industry, passenger transportation and international travel still remain below pre-pandemic levels as well. When restrictions were toughened, public catering and entertainment companies faced a decline in the demand for their services. Nonetheless, a lot of industries are demonstrating steadily higher output and sales than before the outbreak of the pandemic. Specifically, there has been a surge in the demand for durable goods (computers, telecommunication devices, and household appliances) and online trade and delivery services. The lockdown period boosted the demand for countryside housing and better housing conditions in general. These uneven trends across both industries and regions are also described in the Regional Economy report released by our regional branches before the quiet period. The situation in the labour market also evidences that the economy has not only recovered, but is generally returning to its pre-pandemic growth path. The number of vacant jobs is at its peaks. High demand for labour resources is demonstrated by companies in construction and transport, a whole range of manufacturing enterprises, and in trade. These are the industries that started to bounce back earlier and were recovering faster and where demand exceeds prepandemic levels. A further expansion of output is possible through a restoration of the inflow of labour migrants, but — first of all — through an increase in labour productivity.
This was all done in collaboration with the European Commission, the ECB, the IMF and the European Banking Authority, in the presence of independent consultants and auditors, and with the participation of the Banco de España supervisory and regulatory teams, which was technically very important for the performance of the exercise. The recapitalisation of our banks has been carried out through private access to markets; the injection of capital financed via the financial assistance programme agreed with the European authorities; the conversion of hybrid instruments into capital instruments; and the provision of funds by the FROB (Fund for the Orderly Restructuring of the Banking Sector) and the Deposit Guarantee Fund. From May 2009 to last September, the public assistance afforded to financial institutions to reconstitute their capital amounted to a somewhat over € billion (6% of our 2012 GDP), close to € billion of which were under the Financial Assistance Programme approved with the European authorities in July 2012. The essential aim of these recapitalisation operations using public funds has been none other than to preserve the deposits in the institutions in question (as is widely known, these are the only bank liabilities not to have undergone any loss throughout the process), providing for business continuity by these institutions’ own means or by their absorption by others. This is a crucial point I wish to highlight, as it is not always well-understood.

The latest projections by international agencies place GDP growth for the euro area countries as a whole at around 1% in 2014 and 1.5% in 2015, with this naturally against a background of price stability. With specific regard to the Spanish economy, two positive indicators have just been released. First, on the flash estimate available, GDP is expected to have grown by 0.1% in the third quarter compared with the second quarter. This is the first positive figure after nine consecutive quarters of contraction. The primary explanation for this figure lies in the contribution of the external sector, underpinned more by the export performance than by the containment of imports. As to the composition of domestic demand, some changes are appreciable: private consumption spending is estimated to have grown slightly, albeit still against a backdrop of great weakness, the result of the decline in disposable income, the loss of household wealth and high household debt. BIS central bankers’ speeches  1  The second positive indicator stems from the latest Labour Force Survey, with a reduction in the number of unemployed, an increase in numbers employed and a significant fall in the rate of increase of unemployment, at 2%, compared with 16% a year ago and almost 5% in the second quarter. These signs of a possible change for the better in our economy must be placed against the background of the correction of the serious imbalances built up during the previous expansion.
At the beginning of 2015, the average interest rate charged on all sight deposits held by the banking system was thus −0.25%, and not −0.75%, as would have been the case in a system without exemptions. We are aware that the exemption threshold affects banks differently, depending on their balance sheet structure.3 The exemption threshold need not be static and should reflect monetary policy needs. Since the introduction of negative interest on banks’ sight deposits, the exemption thresholds have been adjusted twice. The first adjustment went into effect on 1 November 2019. Our decision was guided by two goals. First, in order to take account of developments in banks’ balance sheets over time, we needed to switch from a static to a dynamic model in calculating banks’ exemption thresholds. 4 Second, we raised the exemption threshold to bring the interest burden placed on the banking system back to the minimum needed for the implementation of monetary policy. 5 The adjustment led to a roughly 40% increase in the aggregate exemption thresholds. This increase was appropriate, as the total amount of sight deposits held by banks had expanded significantly due to our interventions in the foreign exchange market in the almost five years since the introduction of negative interest on banks’ sight deposits. Starting in November 2019, that is, after the first adjustment, around two-thirds of total sight deposits were once again exempt from negative interest – a similar proportion as had prevailed at the beginning of 2015.

Given the importance of the exchange value of the franc for the Swiss economy and inflation, the SNB intervened in the foreign exchange market, particularly during periods of heightened uncertainty. A structural liquidity surplus arose in the banking systems of many countries, including Switzerland. The demand for liquidity from practically all banks in Switzerland was amply met, and there was therefore little reason to redistribute liquidity via the interbank money market. In a banking system with a structural liquidity surplus, the interest rate on sight deposits that commercial banks hold with the central bank takes on a critical role. The monetary base per se is no longer a deciding factor for establishing equilibrium in the money market. Instead, the interest rate on sight deposits acts as a floor, or lower bound, for interest rates in interbank transactions. This is because in such an environment, banks generally have no incentive to provide liquidity at an interest rate below the interest rate on sight deposits. And, because there is ample liquidity in the system, banks have little reason to take on additional liquidity if the market interest rate is above the interest rate on sight deposits. As a result, in an ample-liquidity regime the market interest rate is generally close to the interest rate on banks’ sight deposits at the central bank. This is shown in Chart 3.
Monetary policy’s effects on unemployment are minor in relation to those due to structural problems. The current situation in the labour market Let me before I finish briefly comment on how I viewed the current situation in the labour market in connection with the monetary policy meeting in May. A large number of central wage agreements are being renegotiated this year. There are several factors governing how high wage costs can be expected to be in future. One important aspect is to what extent the social partners take into account the labour market situation in their wage bargaining rounds. Another is how well the labour market functions with regard to matching the demand for and supply of labour. The wage bargaining rounds have so far resulted in wage increases that appear to be slightly above what we had estimated in the February Monetary Policy Report. We pointed this out at the monetary policy meeting on 3 May. The labour market situation has strengthened and it is therefore reasonable to assume in future that there will be slightly higher wage increases than we have been used to in recent years. The information that we had access to at our monetary policy meeting in May indicated that resource utilisation in the labour capacity was slightly more strained than we anticipated in the February report. There were signs that the labour shortage in the business sector has continued to increase.

Boris Vujčić: Macroeconomic developments and structural issues in CEE countries Speech by Mr Boris Vujčić, Governor of the Croatian National Bank, at the Roundtable on Macroeconomic Developments of the 16+1 Economies, Magyar Nemzeti Bank (the central bank of Hungary), Budapest, 9 November 2018. * * * Accompanying slides of the presentation. Economic expansion in the CEE region can be expected to continue in the near term supported by still favourable cyclical conditions. However, in many countries pace of growth might moderate, partly due to supply side constraints and maturing business cycles. Potential growth estimates indicate that in all countries output gaps are positive or have been closed, and unemployment rates are close or below pre-crisis levels, pushing-up the wage growth. While such a positive outlook for future growth is somewhat disturbed by rising risks to the global economy, such as escalation of trade tensions or tightening of financial conditions, CEE countries seem to be in a generally good shape to withstand the impact of negative shocks. Current account positions have improved and in many countries turned into surplus, while international liquidity positions are ample. Also, economic recovery coupled with efforts to push through fiscal adjustment programs led to improvement of general government balance and public debt was put on a declining path. Furthermore, financial systems in most countries remain robust and resilient, as attested by withstanding the shocks emanating from the global financial crisis and the European sovereign debt crisis.
The crucial task of valuing and disclosing the impact of losses on core banking institutions is still work in progress: important announcements are being made almost daily, and beyond them lies the equally important task of repairing banks’ balance sheets. The current shortage of liquidity makes the pricing of complex assets even more difficult. At the very least, this reinforces the need for transparency in providing estimates of losses, and descriptions of the best-efforts processes used to produce these estimates. The process of price discovery for many complex asset classes is unlikely to be completed quickly. For assets directly related to US sub-prime, this is unlikely to be before the US housing market stabilises. Other structured credit markets are likely to remain illiquid until confidence in the banking sector has been restored, and large financial institutions are willing to take more risk. Clearly the situation is still developing. And its impact on the wider economic outlook – global and domestic – will depend critically on what happens from now on. Here there are some major uncertainties.

So we are not required to raise  1  This estimate is taken from the Bank of England Financial Stability Report, October 2007, Box 1 (Mapping the financial system). It comprises the estimates of total global securities markets, less bank deposits. BIS Review 22/2008  3  interest rates sharply to counteract the rise in inflation which we expect over the next few months. We can decide what is appropriate in the light of all the circumstances. And the purpose of the Open Letter regime is to give us an opportunity to explain how we propose to use our discretion. Over the years the MPC has explained that it seeks to achieve its inflation objective in the medium term by varying interest rates to steer overall demand relative to supply. If price and wage setters do recognise that the imminent pick-up in inflation will be short-lived, then the implications of the spike for monetary policy, and for the necessary balance of demand versus supply, should be limited. But if price and wage setters start to expect higher inflation to persist, then the Committee will need to restrain demand, and so generate some slack in the economy, in order to bring inflation expectations, and inflation itself, back down. Clearly therefore it is a matter of intense interest to understand how people form and revise their expectations. Unfortunately our understanding is very incomplete.
The changes made to the NSFR compared with the original proposal primarily aim to ensure that the measure better captures the funding structures that proved to be weak during the crisis. For example, the requirements have been tightened for operations that are typically associated with investment banks. Another change is that also funding with a maturity of between six and 12 months may to a certain extent be included as part of a bank’s stable funding. However, the aim of the NSFR is still to ensure more stable funding at the banks. Other new regulations will also increase the safety margins In addition to the work with Basel III, the Basel Committee is devoting a lot of resources to completing the review of a number of other regulatory frameworks. These frameworks are not usually seen as a part of Basel III, but this work also began as a result of the financial crisis. For various reasons, these frameworks will perhaps have less direct impact in Sweden than Basel III. But they are important from the global point of view and will indirectly benefit Sweden by increasing the safety margins in the global financial system. For example, one element of this work concerns an updated framework for the capital requirements of the banks’ trading books. A similar review is also underway for the capital adequacy framework for securitised loans and other assets. Many major international banks have large trading books and considerable exposures to securitised assets.

There are above all three specific points I want to make. The first is that the regulatory frameworks that are now being finalised and that will be introduced in Sweden and globally will benefit everyone. Once they are introduced they will increase the safety margins in the global financial system. This will strengthen financial stability in Sweden and abroad. My second point is that many of the international reforms, and particularly Basel III, are aimed at reducing just those risks and problems that Swedish authorities have identified in Sweden and in Swedish banks. They will thus directly contribute to increasing resilience in the Swedish banking system. The third point I would like to emphasise is that the Basel regulations are minimum requirements. They will not be able to manage all of the risks irrespective of the country concerned. In my opinion, there are specific circumstances in Sweden, special structural vulnerabilities, that more than justify continuing to set stricter requirements for the Swedish banks. New regulations will strengthen the banks and reduce the risk of crises The origins of Basel III lie in the latest financial crisis, which revealed several weaknesses in the global financial system. Above all, it became clear that the banks had too little capital in relation to their risks and that the liquidity risk at the banks was too high.
And many countries, including the UK, now have a range of macro-prudential tools to cut excesses off at source, before they affect wider economic prospects. On the surface, global debt burdens are alarming. The outstanding stock of debt has almost doubled since the crisis. Public debt burdens across advanced economies have risen above 90% of GDP for the first time since WWII. Public sector debt is important for intergenerational equity, and high levels of public indebtedness tend to result in lower growth over the long run.13 But history suggests that high public debt is generally a chronic not an acute problem. Provided fiscal frameworks remain credible, public debt tends to be less informative for predicting recessions. Research at the Bank of England and elsewhere finds that private sector credit growth is amongst the best early warning indicators of a downturn.14 Over half of recessions are preceded by private sector credit booms. And within advanced economies, two-thirds of private credit booms have also ended in recessions.15 As borrowers take on more debt and devote a greater share of cash flows to servicing it, they become more vulnerable to shocks. And there will always be shocks. Debt may not be the proximate cause of the crisis, but it can be the vulnerability that turns shock into slump. At present, aggregate private financial imbalances in advanced economies do not appear large enough, on their own, to tip global activity from slowing to stalling.

In the structural aspect, we welcome reforms and initiatives that contribute to the country’s growth potential, through developing infrastructure, improving the legal framework, enhancing productivity and competitiveness of the Albanian economy, attracting foreign investments and maintaining and improving macroeconomic stability at home. The Bank of Albania is fully committed and engaged in the latter. Our key focus will continue to be: maintaining price stability and establishing pre-requisites to step-up financial stability. Therefore, we are convinced that we are providing a valuable service to long-term economic growth and welfare. 2  BIS central bankers’ speeches