samchain/econo-pairs-v1 huggingface dataset:
These observations are calling urgently for structural reforms, in particular all the reforms that would augment the flexibility of all markets – labour, goods and services and financial – in the euro area economy. The need for structural reforms Understanding the reasons of these developments is very important. As also stressed by the OECD 5 , the lack of sufficient structural reform in Europe is a major cause of the gap in economic growth between Europe and the US. I will therefore now turn to structural reforms that have the potential to increase both euro area labour productivity growth and labour utilisation and therefore the long run growth potential. The euro area economy is facing a number of important challenges, including rapid technological change, ageing populations as well as accelerating globalisation. Moreover, the long-term sustainability of public finances in the euro area should be improved pursuing pension as well as health care reforms. These challenges will require major efforts to increase the adjustment capacity of the euro area in general and of workers in particular. The adverse consequences arising from an ageing population could only be solved by an extension of the working life and/or substantial inward migration. Other challenges, such as globalisation and increased competition, are also accompanied by increased opportunities: globalisation provides incentives for firms and workers to excel in what they do best while outsourcing some goods and services at lower costs on a global scale, providing consumers with substantial benefits 6 .

Such is the case, for instance, with leveraged buy-outs (LBOs) and the socalled monolines, which specialise, as you know, in insuring the payment of numerous bonds, including those linked to the securitisation of US subprime mortgages. In these circumstances it is easy to understand why the profits reported by Spanish banks in 2007 have scarcely been affected by the financial turbulence and have continued to increase at a rate of around 19%, firmly underpinned by their improved efficiency ratios. Their profitability, both in terms of assets and in relation to capital, also grew compared with 2006. Indeed, the ROE stood at almost 20%. Profitability is obviously the first line of defence for Spanish banks against any adverse shock. But their resilience is also based on two other pillars: a significant volume of provisions, accumulated by the system during the period of strong credit growth thanks to the prudential mechanisms set in place by the Banco de España in the past; and a comfortable solvency position. To quantify these two aspects, loan loss provisions widely exceed doubtful assets, while the system’s solvency ratio, measured in accordance with the Basel regulatory standards, is 11.4%, 3.4 percentage points higher than required. These factors mean that Spanish credit institutions face the current situation from a position of soundness which, in the international context, is fairly unique. Soundness however is not a synonym for immunity and it would be imprudent, and not befitting a supervisor, to fail to consider thoroughly the potential risks.
The premise is that even if money has no systematic and immediate influence on prices, it can provide valuable and specific information on future inflation, at time horizons stretching beyond those usually adopted for the construction of central bank inflation projections. Because of the long-term relation between money growth and inflation, money has leading indicator properties on future price developments. Though it is fair to say that the apparent link between monetary developments and inflation has deteriorated over the recent years, there is still strong statistical evidence of a link between monetary growth and inflation at a low frequency. This relation holds for the euro area, but also for the US, the UK and large OECD countries, with monetary trends systematically leading inflation trends. 4 The implication referred to is the need to cross-check the information on inflationary pressures and risks to price stability; this cross-checking implies that we bring together and compare different analytical strategies and that we systematically use all the information relevant to decision making. The main issue is to ensure that risks to price stability over the medium term do not materialize and that medium to longer-term inflation expectations remain solidly anchored at levels consistent with the price stability objective. Such anchoring is a prerequisite for monetary policy to make an ongoing contribution towards supporting sustainable economic growth as well as job creation.

The Kingdom has maintained high sovereign credit ratings as assessed by global rating agencies for its financial solvency. The last rating was AA- awarded by Standard & Poor’s and Fitch for long-term credit rating in national and foreign currency, with a stable outlook . Confidence is still great and solid that strong growth and comprehensive development of the Saudi economy will continue under the wise leadership of the Custodian of the Two Holy Mosques. The Custodian of the Two Holy Mosques is well-known for his concern about his citizens, and he is determined to closely follow up their needs, including reduction of poverty, supporting Social Security, approving salaries increase & cost of living allowance, confirming wage earners, addressing the housing issue, supporting specialized development funds, etc. and other decisions aiming at improving citizen’s living conditions, which he deems as the objective and tool of the development process. We pray to Almighty Allah that there will be many happy returns of this dear national occasion for years and years for the citizens of this country, hoping that the Custodian of the Two Holy Mosques and his Crown Prince will continue to enjoy full health and wellbeing, with the Kingdom enjoying security and stability, to continue the development process, under our wise leadership. BIS central bankers’ speeches  1
I find this neither upsetting nor surprising. If regulation is to be effective, we must expect it to impact on behaviour and restrict action. This will solicit complaints. If it doesn’t, regulation would, by definition, be superfluous. 4. From Basel I to Basel II  For all these reasons, I strongly support bank capital regulation that puts a meaningful limit on banks’ leverage. But what is the best way to restrict leverage? In an ideal world, we would, of course, also want to take into account the riskiness of banks’ assets. 12 As you know, banks can increase their risk not only by increasing their leverage but also by increasing the riskiness of their assets. To compensate for differences in banks’ assets, we would ideally require banks with riskier assets to hold more capital. The Basel Committee on Banking Supervision has embraced precisely such a risk-weighted approach. More risk, more capital. If we lived in an ideal world, this simple principle would work well. By “ideal”, I mean a world in which risks can be observed by everybody and assessed precisely. What has become abundantly clear in recent months is that we do not live in an ideal world. Banks and the risks they incur are far from transparent. In fact, banks exist because of asymmetries of information. 13 A core function of banks is to “produce information”. For instance, banks screen potential borrowers. Furthermore, banks monitor ongoing lending relationships.

In terms of analysis by socio-demographic groups, the survey results show that the monetary value in “old lek” is more frequently used by: (i) males; (ii) old-aged people; (iii) persons with a low-education level; (iv) unemployed persons in labour market; and (v) individuals with a low level of family income. These groups identified in the survey will be the focus in the projects of this awareness campaign for bringing to an end the use of the wrong term “old lek”. Against this backdrop, the Bank of Albania is launching this awareness campaign, which will extend in time and will aim at being a comprehensive one, affecting various groups of interest. In a medium-term period, and through various channels, we aim at knocking at the doors of every Albanian to uproot the terms “new” or “old”, by avoiding the confusion in the communication of prices and enhancing the correct reading of economic and financial indicators. Lek is the national currency in Albania, and the face value of each coin or banknote is the one written on it. Nevertheless, the fact that this incorrect use is inherited in the day-to-day speaking and has been resistant for more than 55 years, illustrates that the sporadic and isolated efforts of a solely institution to rectify this phenomenon are insufficient. A joint and coordinated commitment among central institutions of the country, media and other relevant actors is crucial in this regard.
Global growth still looks solid, albeit a bit less rosy than it did before. The labour market is still robust. I expect GDP growth to resume at a steady but unspectacular pace (Chart 11), and demand to continue to rotate away from consumption and towards trade and investment. Of course all this is conditional on a smooth transition to the eventual post-Brexit arrangements. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Chart 11: May IR central GDP forecast 3.5  Per cent  3 2.5 2 1.5 1 0.5 0 -0.5 2013  2015  2017  2019  2021  Given our forecast for productivity growth, however, even this subdued pace of growth is enough to exceed the new, lower economic speed limit, which we estimate to be around 1½%. Unemployment falls to 4%, below our estimate of equilibrium, and a small margin of excess demand opens up. And so we expect wage growth and domestic inflationary pressures to continue the pickup we saw at the end of last year (Chart 12): wage growth eventually picks up to 3½% – which given our productivity growth forecast implies unit wage cost growth of 2¼%.

It is more important than ever that we make concrete headway, notably on harmonising bankruptcy regimes and strengthening the role of ESMA as a supervisory authority. More broadly, I can only express my regret that the reinforcement of the ESAs proposed by the Commission has been blocked by the Council. The Banking Union and Capital Markets Union are the key components for a genuine “Financing Union for Investment and Innovation”: I have put forward this idea as a way of better channelling our abundant resources – our EUR 350 billion private savings surplus – towards the concrete needs of the economy: the energy transition, SMEs or digital innovation. Jean-Claude Juncker’s investment plan was a first successful step towards this. With regard to the ESM, it’s not just about managing crises ex post, but about preventing them from happening in the first place by reinforcing our precautionary tools: the principle of ex ante criteria and the absence of an assistance programme are both welcome elements. However, we need to avoid having ex ante criteria that are so strict that in practice they prevent the ESM from being used preventively, as is the case today. Beyond these institutional reforms, and with the United States and China increasingly asserting their dominance, it is vital that the European Union be given genuine strategic autonomy. Our currency, the euro, already plays a significant role at the international level, and this could be expanded even further [slide 6].
Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 11 June 2021. * * * Today, we have decided to raise the key rate by 50 basis points to 5.50% per annum. As inflationary pressure has notably strengthened, we need to ensure price stability consistently and actively. We see the necessity of further increases in the key rate at upcoming meetings. Let me dwell on the factors behind the today’s decision. First. The Russian economy will return to its pre-crisis level during this quarter. Its H1 growth exceeds the pace we factored in in the April forecast. Leaving out restrictions on oil production and international passenger travel, it is clear that the output in most key industries has not only bounced back to the end-2019 level but outstripped it. Russia is among the group of countries that will be the first to reach the pre-pandemic level of output. It is typical of the current situation in many sectors of the economy that growth in demand is outpacing the potential to expand supply. Companies need time to roll out new capacities, and also hire and train staff. Demand is growing both domestically and abroad. The activation of external demand is underpinned by a faster-than-previously-anticipated rebound in the global economy and trade. The main reasons are abating epidemic risks, given vaccination rates, and extremely loose monetary and fiscal policies in major economies.

Likewise, the reforms of the regulation and supervision of the financial industry has taken us in the right direction, and much has been accomplished to make our banks safer. But still much needs to be done to feel the right degree of comfort. Some final words I would direct towards the threat of protectionism. An enormous risk for the global economy is the temptation to shed the commitment to multilateralism and embark on protectionism. Beggar thy neighbor policies are quite perilous, as history amply shows. It is true that trade needs to be both free and fair, that commitments made within the framework of the World Trade Organization and other fora need to be observed. Unless we defend open markets, we invite big commercial conflicts and a proliferation of lose-lose situations. Allow me to conclude my short address by pointing out that as a Romanian official I am confident that important steps have been already taken to ensure a more close cooperation in order to solve the afore mentioned issues. As you know, Romania holds at the moment the Presidency of the Council of European Union and good work has already been done by our team in Bucharest and Brussels. They held 15 working parties in the Council, negotiated in 18 trilogues with the European Parliament, attended over 30 technical meetings, among bilateral meetings, informal consultations with the Parliament and the Commission. They have concluded the work and agreed on two files (Risk Reduction measures – the Banking package and Pan-European Pension Product).
Prior to issuing a policy, its final draft is sent out for comments from stakeholders both in and outside the Bank of Thailand, especially the industry, to avoid the problem of impracticality and minimize the cost of compliance on the part of financial institutions. Regulation and guidelines are also subject to regular review and revision to make sure that they are  4  BIS Review 22/2004  up to date and in tune with technological changes and market developments. To ensure that our supervisors competently meet these challenges, we have undertaken steps to enhance their supervisory capacity. The School for Examiners was established to provide training programs ranging from basic concepts of bank supervision to how to lead a team in bank examination based on risk-based supervision. Specifically, we are working to enhance quantitative skills necessary for comprehensive implementation of Basel II and financial engineering skills to keep pace with the developments of new financial products and package risks. To maintain stability: The prime concern shared by regulators of financial institutions is a stable financial system that is resilient to shocks and supports efficient allocation of resources in the real economy. One of the pitfalls of the retail banking market in Thailand before the Asian crisis was information asymmetry whereby creditors only had partial knowledge of their debtors’ financial indebtedness, including history of repayment. To address this weakness, two credit bureaus were set up so that banks can accurately assess the risk profile and repayment ability of a debtor.

Let me go over quickly these points: In order to fulfill this inadequate access to financial services by under-served consumers, the Bank of Thailand initiated a pilot project on micro finance in collaboration with commercial banks. Against misconception that micro finance is an unprofitable segment, this project aims to demonstrate that the coexistence of profitability and satisfied customers is possible with a right business model. Late last year, we invited foreign speakers to share with senior management of Thai commercial banks their experience in successful conduct of retail business in their countries. Following this seminar, a number of banks already expressed their interests to participate in this pilot project. One social aspect that has clear benefits to all parties concerned is consumer education. It has two major dimensions, one on the cultivation of responsible use of credits and the other the introduction of new financial products and channels of distribution. While the former can improve the overall risk profile of financial institutions’ retail portfolio, and thus lower the lending rates, the latter can potentially stimulate more demands and lower the cost of service provision. It is therefore the responsibility of lending institutions to convey clearly the message of ‘no free lunch’. In other words, prudent lenders must ensure that borrowers are fully aware of the financial obligation of their debt burdens and legal consequence of default. Failure of either party could tarnish the healthy usage of retail credit.
Basel III is a complex set of measures that attempts to respond to the regulatory failings that the crisis highlighted. First, many banks found themselves at the start of the crisis with low levels of capital. Second, this same capital had an excessive proportion of hybrid instruments, with a limited or, at least, uncertain loss-absorption capacity. Third, and finally, the procyclicality of Basel II meant there was a trade-off between capital requirements and growth, which could push banks to lessen the risk they assume, with the subsequent adverse impact on credit and the economy. Basel III has increased the minimum level of core capital, the highest-quality capital, to 4.5% from 2% under Basel II. On top of this minimum, Basel III has added a capital conservation buffer of 2.5% and established a connection between banks’ dividend policy and compliance with this minimum capital level. Accordingly, to avoid any interference by the supervisor in their dividend policy, banks must at all times hold a minimum level of top-quality capital of 7%. For the first time, too, Basel III has added a macroprudential component to capital levels. The countercyclical capital buffer could entail an additional capital requirement of up to 2.5%. Building up a capital buffer in good times, with the aim of depleting it in not so prosperous times, is a macroprudential mechanism that will help reduce the contraction of credit when there is a recession, and temper the growth of credit in upturns. However, calibrating the buffer is no easy task.

As governor of the Banco de España, allow me to point out how, in its economic significance, this countercyclical buffer is close to the so-called “dynamic provisions” the Banco de España established more than 10 years ago — with, I should say, less success than, we now know,  2  BIS central bankers’ speeches  would have been optimal. We believe this countercyclical buffer is a good instrument and we advocate its use as a new macroprudential instrument. The fact that many ailing banks have been systemic banks has been another consideration influencing supervisors’ stance as to what the response to the crisis should be. Consequently, another significant change in banking regulation arrangements is to set in place a capital surcharge for global systemic important banks (GSIBs). A global important bank is not only a large bank. It is a major bank with significant cross-border activity, a complex bank in terms of its structure, and an interconnected bank that is not liable to be replaced in certain markets. Regarding global systemic important banks, I should also mention the so-called “recovery and resolution plans”. It is important to highlight the value of this instrument in reducing systemic risk and also a formula for taking into account differences between business models in regulation and supervision. One of the final components of Basel III is the leverage ratio, which should be seen as a complement to the risk-based regulatory framework.
This was no easy task, as the Committee received over 200 comment letters from the industry and the broader public on the Third Consultative Paper, or “CP3”. While we might have been somewhat surprised by the number of responses that we received, we were not surprised by the hard work that was evident in the letters. The quality of the responses shows that many banks and industry associations understand the deep significance of the proposals. On this note, I would like to offer the Committee’s appreciation to the RMA-related working groups and others who devoted considerable time and resources during the consultations. You shared important views through comment letters, gathered data for impact studies, and engaged in discussions like the ones that have taken place here. If you’ve been following our work since the first consultative paper was released in 1999, you know that the proposals have evolved and improved considerably thanks to the industry’s honest responses, candour, and letters such as those submitted by the RMA. At the Committee’s meeting, all members acknowledged our responsibility to consider carefully your concerns and those of the broader industry. At the same time, we recognised the need to resolve the open issues and release the New Accord as soon as humanly possible so that banks can continue to prepare for the new rules.

But the Bank is now actively working on these issues and I am hopeful that we will be able to release further details as early as the turn of the year. Second, the Bank has also started work to ensure there are no technical obstacles to our ability to accept equities as collateral should the need arise. At present, the Bank accepts a very broad range of collateral, including government bonds, asset backed securities and pools of “raw” loans. But the Bank can further bolster its flexibility by removing any technical obstacles to accepting equities as collateral, should the need arise. Given the complexities involved, the project will take some time to deliver, and we currently anticipate that work to remove technical obstacles will continue throughout 2015 and 2016. Finally, as noted in the Open Forum paper 1 published in June, the Bank stands ready in principle to support core markets directly through “Market Maker of Last Resort” (MMLR) actions. Such action would probably only be contemplated if the illiquidity in particular markets was judged to pose a threat to financial stability, or was judged to be important to the transmission mechanism of monetary policy. However, MMLR remains a relatively untested tool, and the Bank’s ability and willingness to act as a MMLR could be a fruitful topic to discuss at the forthcoming Open Forum. 1  2  Open Forum: Building Real Markets for the Good of the People.