samchain/econo-pairs-v1 huggingface dataset:
In that context there has been a good BIS Review 88/1998  -7-  deal of talk about concerted interest rate cuts in Europe and the United States to stimulate domestic demand and offset the effects of recession elsewhere. And it is true that those effects - both lower world commodity prices and falling external demand - do mean that interest rates in the industrial countries generally can be lower than they would otherwise be, which in turn will help to sustain global demand. But we do not all start from the same point. Rates have in fact been cut in the United States and the United Kingdom, where underlying domestic demand growth also shows signs of slowing. In Continental Europe, on the other hand, domestic demand growth has, as I say, been picking up. But even here interest rates have already come down in some of the smaller countries and are likely to be generally lower than they would have been in the absence of the global slowdown. Markets are, in fact, now expecting rates to converge by the end of the year on German rates, where only a couple of months ago, they expected convergence at significantly higher rates. None of this, Mr. Chairman, it seems to me need affect the prospect for the euro - if anything it may reinforce the more recent firmer tone of the euro currencies.

Market scepticism has diminished with the growing realization that the European Central Bank will in fact be rigorous in pursuit of its mandate of maintaining effective price stability throughout the euro area as a whole - that the euro will in fact be soundly managed. And at the same time domestic demand growth and economic activity have started to pick up in the core European countries, causing the euro-currencies collectively to strengthen in the foreign exchange market and helpfully easing some of the cyclical tensions that might otherwise have complicated the move to a single monetary policy. All this is now overlaid by the successive financial shocks to the global economy from Asia, from Russia, and most recently from the need to rescue Long-Term Capital Management Fund (LTCM). In practice the euro currencies have been remarkably stable in relation to each other in the face of these shocks - demonstrating the market’s total conviction, in the words of one market participant recently that “the euro is a done deal”. The euro area has in fact been a zone of stability in turbulent currency markets - and that performance puts in proper perspective earlier excited talk about spectators waiting to rip the euro apart. That never was in my view a serious issue, given the political commitment to the process - the economic issue has, as I say, been about the sort of regional tensions that might subsequently emerge.
Interview with Eva Zamrazilová, CNB Deputy Governor: "Vtšina bankovní rady vidí riziko, které pichází z fiskální politiky a trhu práce" ["The majority of the Bank Board sees a risk coming from fiscal policy and the labour market"]. T24. Rajan, R. (2023). Less is more. Finance and Development Magazine, March 2023, 11– 14. Teplý, P. (2023, 2 March). Není to práv konzistentnost a transparentnost NB, co pispívá k tlumení inflace? [Is it not the CNB's consistency and transparency that is helping dampen inflation?] Hospodáské noviny. 7/7  BIS - Central bankers' speeches

With the US rate hike cycle drawing nearer, the window for the region to get prepared for a tightening in financial conditions is getting smaller. It is therefore important for policy makers to contain further build-up of leverage, and to ensure banks will properly manage interest rate and exchange rate risks, and can withstand any potential deterioration in loan quality. It is encouraging to see that policymakers in many economies in the region have taken pre-emptive policy actions to lower credit growth and slow house price inflation. The biggest challenge now is when and how to relax these measures when market conditions reverse. 6. Second, policymakers will need to have sufficient backstop to mitigate systemic risk in the financial system in the event of a disorderly exit of US monetary policy. In this regard, the ASEAN+3 Chiang Mai Initiative Multilateralisation Arrangement, the regional financial safety net, could help to mitigate the risk of financial contagion by providing financial resources to members in the event of short-term liquidity difficulties. BIS central bankers’ speeches  1  7. Third, structural reforms remain the best way to reduce vulnerabilities and achieve sustainable growth over the long-term. We have been moving forward on this front through a deepening of intraregional trade, strengthening private and public-sector balance sheets and improving market infrastructure. But a lot more needs to be done. There is still ample scope to tackle structural impediments to growth and stability such as further capital market development, product and labour market reforms and service-sector reforms.
The euro area has more policy room than others in the non-monetary domain, but under-uses it. Monetary policy can no longer be the only game in town. Central banks – including the ECB – cannot perform miracles. This paradox is either painful or promising…or both: the euro area has more leeway than the US or the UK, but until now has been much less inclined to use it. This has two dimensions [slide]. 1/ The euro area has a lower level of public debt (85%) than in the United-States (104 %) or the UK (87%), it has the lowest sovereign interest rates – even often negative –, but it uses fiscal stimulus significantly less. It should now exploit its fiscal leeway where available – especially in Germany – to support cyclical stabilisation, and long-term growth. There is also room to increase wages in countries which have full employment and external surpluses. And it is essential to choose quality expenditure, starting with investment. In this respect, I welcome the announced creation of a Dutch investment fund targeted to projects in infrastructure, digital, or climate transition. Its magnitude could be up to 7% of GDP: this is food for thought if we transpose this order of magnitude at the European level. Private debt – which stands at about 119% of GDP – is also significantly lower in the euro area compared to the US (148%), UK (152%) or Japan (152%). But of course, the “lower for longer” environment requires increased vigilance on financial stability.

Due to the escalation of trade tensions we are witnessing a significant slowdown in global trade [Slide]: in its latest World Economic Outlook, the IMF expects the slowest global growth since 2008–2009 [Slide]. The loss of global growth due to the trade war could reach up to 0.8% next year, due mainly to its indirect effects, beyond tariffs: fall in business confidence and investment, decrease in productivity. Similarly, the twists and turns of Brexit have created volatility in UK quarterly growth, and weighed on business investment. Despite this gloomy context, the French economy is resilient, with growth at 1.3% close to its potential. Purchasing power per capita should accelerate sharply in 2019 (2.3%), due to the strength of labour income – 1 million jobs have been created over the past four years – and the fiscal stimulus. But – as a whole – the euro area is acutely affected, primarily due to the weight of Germany – with growth of only 0.4% expected this year. Of course Germany is highly specialised in the manufacture of capital goods and “overexposed” to global trade – German exports account for around 50% of GDP. Combined with a radical upheaval of the car industry, these phenomenon nearly constitute an asymmetric shock for the German economy. II. The recent monetary policy controversy is of little interest for the future Over the past few years, monetary policy has played its full part in helping Europe weather the storm.
Disclosure of climate-related information should therefore become mandatory and more standardised under the revised Non-Financial Reporting Directive, while ensuring proportionality to avoid imposing an excessive burden on small and medium-sized companies. [9]  A role for central banks in fighting climate change? What then, if any, is the role of central banks, and monetary policy in particular, in supporting the transition towards a low-carbon economy? [10] The starting point for answering this question is the ECB’s primary objective: price stability. Climate change, if not addressed swiftly, can be expected to affect the economy in a way that poses material risks to price stability in the medium to long term. On the one hand, the longer the risks of global warming are ignored and policy action delayed, the higher the risks of very large and persistent shocks to output and inflation. So far, most central banks could afford to look through climate-related shocks, mainly because their most visible effects were largely local and temporary. The coronavirus pandemic demonstrates the challenges central banks are facing in countering large and persistent global shocks, while remaining faithful to their primary mandate. It is with this motivation that we are currently investigating how to integrate climate-related risks into our core macroeconomic models. On the other hand, the ability of central banks to react to such large shocks may be impaired. Rising temperatures and an increased frequency of natural disasters may further suppress potential output growth and hence the real equilibrium interest rate around which central banks have to calibrate their policies.

Jean-Pierre Danthine: Financial stability developments and the delayed new Swiss banknotes Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 13 December 2012. *  *  *  In my introductory remarks today, I would like to look at the main developments in the area of financial stability since the publication of our Financial Stability Report in June of this year. Afterwards, I will talk about the postponement of the new banknote series. In the area of financial stability, the improvement in the big banks’ capital situation is particularly noteworthy. The prevailing uncertainties and the risks for the banking sector as a whole remain considerable, however. Prevailing risks remain considerable General economic and financial conditions for the Swiss banking sector remain difficult. On the one hand, the situation in the financial markets has eased since June 2012. This is largely due to various decisions and measures taken by governments and central banks worldwide. On the other hand, the easing of tensions in the financial markets should be interpreted with caution. Should the measures already taken not be effective or should the progress made in restructuring government budgets be slow, we cannot rule out renewed turbulence in the financial markets. The European banking industry is also in a fragile state.
William C Dudley: The challenges ahead Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Center for the New Economy 2010 Economic Conference, San Juan, Puerto Rico, 19 February 2010. *  *  *  Thank you very much and good morning. Although this is my first visit to Puerto Rico in my current role, I have been here a number of times, going way back to a childhood visit with my parents. It’s a beautiful and special place, but I must admit that coming in February has some special advantages. I welcome this opportunity to talk with business leaders, workers and educators. My goals are to hear what issues are on the minds of people here and to let you know what the Federal Reserve has been doing to help improve the economy. So I’m very grateful to the Center for the New Economy (CNE) for giving me the opportunity to speak to – and learn from – you. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. I want to start by talking about the implications of the close economic ties between the mainland and Puerto Rico. Since the economies of the mainland and the Commonwealth are very tightly linked, what happens on the mainland has important consequences for Puerto Rico, as well.

With such heavy trade flows, when the mainland economy does poorly – as during the past year – Puerto Rico’s economy and job growth suffer. Financial regulation also represents an important linkage. Of course, my presence here representing the New York Fed is one example of that particular connection – Puerto Rico is part of the Second District of the Federal Reserve System, along with New York, the U.S. Virgin Islands and parts of New Jersey and Connecticut. I’ll return to the theme of financial regulation shortly. For now, let me just say that we share, along with the rest of the world, a commitment to taking the necessary steps to prevent the type of financial crisis that we just experienced from recurring in the future. The Fed’s role in coping with the crisis and the outlook for the United States The close ties with the mainland means that the broader outlook for the United States is very important for Puerto Rico. The U.S. economy has been through a terrible period, having suffered the worst financial crisis in 70 years. Extensive study of banking crises shows that they tend to be “protracted affairs” with surprisingly similar, if unpleasant, contours. Downturns average four years, during which the unemployment rate rises an average of 7 percentage points. The peak-to-trough decline in output averages 9 percent. Those statistics point out the risks that we faced. Well aware of the threat of a second Great Depression, U.S. policymakers took very aggressive actions to support economic growth in 2008 and 2009.
According to this equation, consumption falls by around 80 per cent of the decline in disposable income, that is, around 1.6*0.80 = 1.3 per cent. Consumption comprises around 50 per cent of GDP. However, consumption also contains an imported content of around 25 per cent, which means that if consumption falls by 1 per cent, GDP falls by roughly 0.5*(1–0.25) = 0.38 per cent. In the example, thus, GDP falls by 1.3*0.38, or around 0.5 per cent. A more thorough calculation should also take into account indirect effects that arise over time. BIS central bankers’ speeches  11  If, on the other hand, one waits to take measures, the adjustment costs for households when the measures are actually taken will be greater. If interest rates have risen to twice what they are now, which is not at all inconceivable, the effects of abolishing the tax relief will be correspondingly greater. In my opinion, it is thus much better to try to do something about household debt now, when interest rates are low and the conditions in general are relatively favourable, than to be forced to take measures further ahead, when conditions may be less benevolent and the adjustment costs for both individual households and society as a whole will be unnecessarily high. A step in the right direction: more amortisation So how should we deal with the debt problems? I have discussed and compared a number of different possible measures to counteract excessively high debt in the household sector.

Our current assessment is that the forecasts described in the Inflation Report indicate low inflationary pressure and that the repo rate could perhaps be raised at a slightly slower rate in future than the interest rate path on which the forecasts are based. Market expectations of future interest rate increases have also been adjusted downwards in recent days, which thus appears reasonable – given the information we have at present. Prior to the next interest rate decision in April, we will of course need to make a new assessment and take into account the information available then. The future stance of monetary policy will thus depend as usual on new information received and on the Riksbank’s assessment of the inflation outlook. The principles for the Riksbank’s monetary policy The economic debate has recently focussed on monetary policy objectives. Some people have suggested that we should supplement our inflation target with other targets. Others have interpreted our most recent interest rate decision as meaning that we already have targets for other quantities and that we are trying to achieve too many targets. It is unfortunate that there appears to be a certain amount of confusion in this matter, so let me repeat my earlier comment: there is one objective for monetary policy and that is to maintain price stability. This is the objective set by law for the Riksbank’s monetary policy. In addition, we have been given the task of promoting a safe and efficient payment system.
We have been working on that in recent years following a careful, gradual approach, to make sure that we put in place the necessary prerequisites to introduce additional flexibility with minimum costs. An example of this approach is the way in which we moved first from limited exchange rate flexibility to a wider band and then to a full, clean float, at a time of our own choosing, September 1999. This was done only after the Central Bank had put in place hedging instruments in the market, had stimulated banks to do likewise, and had established currency mismatch regulations in the financial sector. Also incentives were provided to the financial sector to take into consideration currency mismatches of their client when evaluating their risks. The Central Bank has not intervened at all in the forex market since 5  2  Rogoff, K “On Why not a global currency”, paper presented to the American Economic Association, January 5, 2001. BIS Review 53/2001  floating, and interest rate policy has not been based on an exchange rate target consideration but rather on the achievement of the inflation target. The volatility of the peso-dollar exchange rate 6 increased after floating, but it is the second most stable among floaters, after Canada . A clean float, once settled, makes removing exchange restrictions easier and less risky, and the remaining restrictions in Chile were eliminated last April. We are convinced that flexibility is the key policy approach to face a rapidly changing world.

And shorter cycles make for a more effective monetary policy. 1  Krugman, P. “Crisis: the price of globalization?” Paper presented at Jackson Hole, Wyoming, 2000. 2  World Economic Outlook, May 2001, Chapter III: “Three Current Policy Issues: Impact of the Global Technology Correction on the Real Economy”, page. 57-66. 3  Brookings Institution (2001): “The Economic Payoff from the Internet”. www.brook.edu/es/research/areas/it/ipibisummary.htm. Blinder, Alan (2000): “The Internet and the New Economy”, Brookings Institution Policy Brief N°60, June. Altig D. y Peter Rupert (1999): “Growth and the Internet: Surfing to Prosperity?”, Federal Reserve Bank of Cleveland Economic Commentary, September. 4  For instance, Robert Gordon (Does the “New Economy” Measure Up to the Great Inventions of the Past? Journal of Economic Perspectives, Fall 2000) mentioned “the new economy has meant little to the 88 percent of the economy outside of durable manufacturing; in part of the economy, trend growth in multifactor productivity has actually decelerated, despite a massive investment boom in computers and related equipment”. Page 72. BIS Review 53/2001  1  Optimal inventory management in an increasingly open international economy will not only imply shorter, but also, most probably, more synchronic cycles. A by-product of this development is an expansion of the geographical limits of optimum currency areas à la Mundell. 3. Terms of trade shocks and emerging economies  The synchronization of the cycle increases volatility in commodity markets, an important source of international transmission of the cycle to a good number of emerging economies.
As can be seen in Chart 2, the uneven pace of economic recovery is evident: countries, such as Greece, Italy and Portugal, are registering a contraction in their economies, while Germany, Austria and Malta are among the countries that have recorded modestly positive growth rates. Chart 3 shows that unemployment rates vary between less than 5% in the Netherlands, Austria and Luxembourg to over 25% in Greece and Spain. …and in terms of monetary policy transmission Even on the monetary side, the transmission of accommodative monetary policy measures across the euro area remains weak and uneven. Loans to the private sector have been declining and the pace of contraction has actually accelerated in recent quarters, particularly in the stressed countries. Although, on the demand side, subdued loan dynamics in the weaker economies can largely be explained by the slow pace of economic activity, the supply of credit is also constrained by banks’ efforts to repair their balance sheets and strengthen their capital position. For all these reasons, it will perhaps take a while for the ECB’s monetary policy to be reflected in credit creation in the weaker economies. Though Malta is positioned with the stronger economies… Various indicators place Malta with the stronger performers. Chart 2 shows a growth rate for Malta that generally exceeds the corresponding rates for both categories of countries. A similar conclusion can be drawn from Chart 3, which deals with the unemployment rate.

Looking more closely at the external dimension, an important characteristic that distinguishes us from other models, such as the one in Cyprus, is the fact that the international banking sector in Malta is only lightly linked to the domestic economy and to the remainder of the Maltese banking system. Meanwhile, unlike the situation in other countries, the core domestic banks have very low reliance on non-resident deposits. They operate along traditional lines, applying a prudent business model and, like the rest of the banking sector, carrying minimal exposure to securities issued in the distressed economies. The core domestic banks are highly capitalised, profitable and liquid, and the other categories of the banking sector are similarly robust. …in terms of interest rates, Malta needs to further align with its peers. Although various indicators place Malta with the stronger performing group, there is room for further improvement. Interest rates on loans to businesses are currently around 2% to 3% higher in Malta as compared with Germany, the Netherlands, Finland, Austria, and Luxembourg. In contrast, deposit rates offered by Maltese banks are broadly in line with those across the euro area, as shown in Chart 6. As a result, bank interest margins are higher in Malta, as shown in Chart 7. A closer alignment of margins with those of our peers appears to be warranted. The recently proposed Budget measure to conduct a review of bank charges to businesses makes sense.