samchain/econo-pairs-v1 huggingface dataset:
National demand is showing a brisker pace of recovery than initially envisaged, based on the increase in household consumption and investment in equipment over the past two quarters, and on some slowing in the fiscal adjustment following the revision of the adjustment path last summer. In fact, household spending, in a setting of improved confidence resulting largely from the gradual improvement in the labour market and from some recovery in disposable income, is showing moderate growth, despite the fact that the necessary reduction of household debt is still exerting something of a contractionary effect on expenditure. Further, investment in capital goods is looking buoyant, in light of the improved business climate and increased investment activity by exporting firms. The contractionary course of residential investment has slowed, although it remains in negative territory, while the stock of unsold housing remains high. The outlook of progressively improving activity is closely linked to labour market developments, where the benefits of wage moderation and the improved incentives for job creation driven by the recent labour reform are becoming patent. The latest employment figures show a continuation of the positive trend discernible since the second half of 2013. Thus, in recent months, Social Security registrations have continued to increase and the pace of decline of registered unemployment has stepped up. However, on the first-quarter figures for 2014, the unemployment rate remains very high, still close to 26% of the labour force.

It is such action, called for at the level of the international community three days ago in Washington by the G7, the IMFC and the G20, that the Europeans considered indispensable, particularly in the euro area last Sunday, with the adoption of a concerted European action plan. This plan has six dimensions: ensuring appropriate liquidity; facilitating the funding of banks through various means (guarantee, insurance or similar arrangements for new medium-term – up to five years – bank senior debt issuance); providing additional capital resources to financial institutions; recapitalisation of distressed banks; ensuring appropriate implementation of accounting rules; and enhancing cooperation among European countries. The very day after the meeting, namely yesterday, a large number of euro area countries displayed their implementation of the Eurogroup commitments at the level of the Heads of State and Government. I will not hide the fact that I am impressed by the degree of responsibility and decisiveness that was demonstrated last Sunday and this week in the euro area. I am impressed by the will of the countries that share the single currency not only to work together, but also very closely with the United Kingdom and all EU Member States. And I see that the new decisions taken in the United States are further reinforcing this very impressive implementation of the plan that has been approved by the international community. This is no time for complacency. Central banks will remain solid anchors of stability and confidence.
It shows that the policy stance is also underpinned by the information stemming from our monetary pillar: - From 2001 to 2003, the annual growth of M3 was well above its reference value. However, an indepth analysis of M3’s components and of its main counterparts showed that the dynamics of M3 was mainly due to extraordinary portfolio shifts into M3, in a context of heightened economic, financial and geopolitical uncertainty. This implied low medium-term risks for price stability, as captured by the monetary indicators presented in figures 4 and 5, and allowed the Eurosystem to enter an easing cycle. 6  BIS Review 4/2006  - The situation has changed since the second half of 2004 as reflected by the monetary indicators: first, broad money aggregates accelerated in parallel with increasing demand for loans to the private sector; second, this acceleration was mainly driven by the most liquid components of M3, pointing to a significant impact of low interest rates on monetary dynamics. Furthermore, the growth of borrowing, especially mortgage loans, remained very robust, fuelling a sharp increase of housing prices across the euro area. In such a situation, the risks revealed by the monetary analysis to price stability over the medium-term were strongly revised upward. 4. Predictability and frequency of policy actions Contrary to some preconceptions, most monetary policy decisions have been perfectly anticipated by the markets.

Deposit rates dropped significantly at maturities of one year or more, while the rates on our instruments at terms of two or more years, also fell after the announcements. One issue that has been on the table, not only in Chile but in the developed world and a number of emerging economies as well, is precisely the behavior of longer-term interest rates. Unlike those at very short term, which are largely arbitraged by the monetary policy stance, interest rates on long term government bonds are more influenced by, among other factors, the appetite for risk, the evolution of interest rates around the world and the widespread uncertainty prevailing in the economy. This last point is connected with expectations for long-term inflation and growth and fiscal solvency prospects, with particular strength in those economies that have had to embark in costly financial packages and bank bail-out programs, thereby multiplying their levels of public debt. In some emerging economies, and even in some developed ones, this increased debt has spurred doubts about the sustainability of their fiscal accounts and monetary arrangements, questioning their capacity to grow in the coming years. Although luckily, and thanks to the efforts made, the Chilean economy is not in such a situation, the determination of the long-term interest rates does depend indisputably not only on the prospects for growth and inflation – and thus on monetary policy – but also on portfolio decisions of domestic agents and the appetite for risk. Developments early this year are very illustrative.
Trade activity has been strongly driven by the withdrawal of pension savings, with sales hitting all-time highs in lines such as home equipment, clothing and footwear, in addition to construction materials. Actually, household consumption data for the third quarter shows a very significant rebound in the purchase of durable goods. The consumption of services, on the other hand, remains well below its year-ago levels, combining the Page 2 of 19  restrictions that affect supply with fears of contagion that affect demand (Figure 5). The transitory nature of the increase in purchasing power, its orientation towards imported goods and the consolidation of online shopping has meant that salaried employment in trade has recovered only modestly. The strong push to the consumption of durable goods led to a significant reduction in inventories of some product lines, putting pressure on their prices. In fact, between August and October, inflation accumulated close to 1.5 percentage points, which was partially reversed by the negative figure for November. Most of the ups and downs of this period are explained by the change in these prices, which is reflected in the recent increase and partial reversal of goods inflation (Figure 6). Thus, headline and core inflation stand at 2.7% and 3.2% annually, respectively. These sharp inventory depletions and price increases have occurred in a context where imports have fallen considerably throughout 2020 (Figure 7).

Incoming data show that about one third of the jobs lost during the pandemic have been recovered. Employment growth has been slower in services, which is relevant because they are more labor-intensive Page 3 of 19  (Figure 9). It is noteworthy that the increase in employment has been concentrated in non-salaried or informal occupations and has benefited women less. In fact, in the last year, the rate of female participation has fallen by nearly 9 percentage points, citing family responsibilities as the reason why (Figure 10). Given the social division of household work that predominates in Chile, it is likely that the recovery of female labor participation is conditional on the reopening of schools. On investment, there has been a slight improvement in the most recent period, as works that had been shelved because of the pandemic have been gradually resuming. However, performance continues to lag behind more than we had anticipated, in part because restrictions have had a greater effect on constructions on site. Thus, after falling 13% this year, gross fixed capital formation is projected to increase by 7.3% in 2021. This projection, however, is subject to higher than usual degrees of uncertainty. On the one hand, although the surveys show increases in the number of new projects, these concentrate on mining and energy, with no major transmission to other economic sectors. In turn, engineering services posted significant drops in the third quarter, showing little activity in the initial stages of investment projects.
Unfortunately, the final negotiations in the Doha round have once again been postponed, and a final agreement will probably not be signed until 2006 or 2007 at the earliest. Although the 147 member countries of the WTO took an important decision in principle regarding goals and rules for negotiations in the field of agriculture last summer, the contents are still incomplete. In other important areas, such as trade in services, the results were even less substantial. Europe and the United States can contribute in a very concrete way in the trade negotiations by reducing their own tariffs and subsidies, particularly in the industries where developing countries have their largest competitive advantages, such as agriculture, textiles and the steel industry. An example of the potential significance of the reforms is that a European cow receives an average of USD 2.50 a day in subsidies, while 75 per cent of Africa’s population are living on less than USD 2 a day.2 More free trade within these areas would lead to more poor people being integrated into the world economy, and would thus enable one of the major problems with the current system to be remedied. In addition, it would contribute to making the global distribution of labour more efficient, which would also benefit the industrialised world. However, when wealth reaches our levels, mobility in the labour market has tended to decline, at least in Western Europe.

Thus, increased growth and globalisation have not solved all of the problems, far from it; there are still far too many poor people who are on the outside of the world economy and far too many countries with large environmental problems. However, existing shortcomings and defects do not mean that the present model needs to be changed; on the contrary, it needs to be defended, extended and spread further, and its weaknesses need to be managed. I believe that the positive effects of sustainable long-term growth, combined with the opportunities offered by continued internationalisation of the world economy, indicate that there are good grounds for optimism about the future. BIS Review 60/2004  7
BIS Review 16/2009  7  The enlargement of the currency area for which we bear responsibility is a challenge specific to the ECB. No other central bank operates in an economic and monetary area whose expansion forms part of a structured integration process. No other central bank regularly integrates new institutions, as the Eurosystem does. With each addition to the euro area, the Eurosystem incorporates a national central bank in the “monetary team”, which consists of the ECB – the “captain” – and all the national central banks of the euro area countries. The euro was introduced ten years ago into 11 EU Member States as a single currency. At that time, the euro area had 292 million inhabitants. Today it comprises 16 countries with a total of 329 million inhabitants. Over the past ten years, five new members have joined: Greece, Slovenia, Malta, Cyprus and, on 1 January of this year, Slovakia. Slovenia and Slovakia were the first former communist countries from central Europe to join. Their entry bears witness to their transformation over the past two decades. The accession of five countries in ten years also reflects the openness of the euro area. We are not a “closed shop”. The euro area is open to all Member States of the European Union. To join, a Member State has to fulfil the Maastricht convergence criteria. These relate to inflation, long-term interest rates, exchange rates and state finances.

Ten years ago – on 1 January 1999 – it was introduced in the then 11 countries of the euro area. Ten years is a short time in history. But it represents a good opportunity to talk about successes and challenges – the subject of my address tonight. I wish to consider this theme by asking three questions: 1. How successful is the euro? 2. What is the euro’s role in the current financial market turbulence? 3. What challenges lie ahead for the single currency? I intend to refer to a series of current issues relating to the global financial market turbulence and economic developments in the euro area. The first question: How successful is the euro? The euro is a stable currency and is an important contribution to the completion of the Europe’s single market. That’s why it is a success. After all, it helps to secure prosperity in the participating states. Stability of the euro Let me first of all consider the theme of stability. Before the euro was set up there were reservations about the stability of the future single currency, including in Germany. The first ten years have shown that these fears were unfounded. The euro is just as stable as its most stable predecessors, which were merged into it. That applies of course also to the Deutsche Mark. “The euro will be as strong as the Mark”, it was said. That promise has been kept.
Developments in the banking sector  Having discussed the relationship between banks and securities markets, I would now like to turn to developments within the banking sector. Competition in the banking markets is increasing. Banks face competition from other banks and financial institutions. As mentioned, there is also increasing competition from securities markets on both sides of the balance sheet. In addition, new operators are entering the market, either on their own  7  BIS Review 78/2000  or in cooperation with existing market operators. Distribution of financial services on the Internet is one example. Joint ventures between supermarkets and banks is another. Unless the banks adapt to this new environment, their long-term profitability might suffer. The restructuring of the banking industry can be viewed as an attempt to respond to these competitive pressures. 5.1  Cross-border integration  In the last few years we have experienced a wave of mergers and acquisitions in the financial industry. Internationally, consolidation within countries has been predominant. This indicates that reducing costs and strengthening market position are often the preferred strategies. However, the development of “national champions” might be a run-up to increased cross-border activity. The Nordic and Benelux countries are important exceptions to this international trend. The five largest Nordic banking groups - MeritaNordbanken and Unibank - which are now part of Nordic Baltic Holding - Handelsbanken, FöreningsSparbanken, Den Danske Bank and SEB - all define the Nordic region as their home market.

In my opinion there is support for this in the law and its prefatory documents. However, if a situation were to arise that might justify a departure from the current rule of action, it is important to be particularly explicit about what monetary policy is guided by. Besides enabling the general public and market investors to know how and why the Riksbank acts as it does in such a situation, this makes it possible to exercise democratic control even when the target of 2 per cent inflation has to take second place. 3  6  An influential paper that summarises the traditional view of how monetary policy ought to address asset prices is Bernanke, B. & Gertler, M. (1999), "Monetary Policy and Asset Price Volatility", in New Challanges for Monetary Policy, Proceedings of the Symposium Sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, pp. 77-128. An alternative opinion is presented in Cecchetti, S.G. et al. (2000), "Asset Prices and Central Bank Policy", Geneva Reports on the World Economy No. 2, CEPR, Switzerland. See also Kent, C. & Lowe, P. (1997), "Asset-Price Bubbles and Monetary Policy", Research Discussion Paper 9709, Economic Research Department, Reserve Bank of Australia. BIS Review 30/2001
[31] The crypto industry is seeking to grow by parasitising the financial system: it touts itself as an alternative to the financial sector, yet it seeks shelter within that very sector to address its inherent risks, all in the absence of adequate regulatory safeguards. The public response: backing, regulating or innovating? The public sector response can be encapsulated in three main suggestions. Not giving in to the temptation to offer public backing to cryptos First, the temptation to offer public backing to cryptos must be resisted. The idea of permitting stablecoin issuers as non-bank financial institutions to hold their reserves at central banks might seem appealing, but could lead to serious adverse consequences. By granting stablecoins access to the central bank’s balance sheet, we would effectively outsource the provision of central bank money. If the stablecoin issuer were able to invest its reserve assets[32] in the form of risk-free deposits at the central bank, this would eliminate the investment risks that ultimately fall on the shoulders of stablecoin holders. And the stablecoin issuer could offer the stablecoin holders a means of payment that would be a close substitute for central bank money. [33] This would compromise monetary sovereignty, financial stability and the smooth operation of the payment system. For example, a stablecoin could displace sovereign money by using the large customer network of a big tech, with far-reaching implications. [34] Therefore, central banks should exercise prudence and retain control over their balance sheet and the money supply.

Eighty years of the Central Bank of Chile and how inflation was conquered in Chile The Central Bank of Chile was created in 1925 as an entity apart from the Executive Power. That year, also two laws related with the Bank’s startup were enacted: the Monetary Law and the General Banking Act. The former established a gold standard, while the latter created the Superintendency of Banks to supervise commercial banks. The Central Bank was granted the monopoly for printing bills, which under said Monetary Law would be gold convertible. But the foreign exchange regime and the Bank’s institutionality as set forth in 1925 weren’t strong enough to cope with the Great Depression with some success (it had enormous impact on the Chilean economy) and the growing demands for fiscal funding. These forced the abandonment of the gold standard, the imposition of foreign exchange controls, the creation of multiple exchange rates and the beginning of trade. Since the Great Depression – except for very short spans of relative macroeconomic stability –, the country suffered decades of high, volatile inflation. The ultimate cause of this was the systematic expansion of credit on the part of the Central Bank, both to state-owned organizations and to the private sector. Inflation followed inevitably and caused the failure of stabilization attempts in the years 1950 and 1960. The deterioration of the fiscal and monetary situation culminated in the early 1970s in a short hyperinflation.
BIS central bankers’ speeches  1  regulatory capital and higher risk weights for many classes of assets. And the Federal Reserve mandated a new minimum supplementary leverage ratio that includes off-balance sheet exposures for the largest, most internationally active banking organizations and a leverage surcharge for large U.S. banking organizations. In support of these new regulations, capital assessment has become a focus of supervision since the financial crisis. Examiners monitor capital reserves and put banks through periodic stress tests that are evaluated on a cross-firm basis. This has been one of the great advancements of bank oversight following the crisis. These evaluations enable supervisors to assemble a composite assessment of the nation’s banking sector, which materially assists the Federal Reserve in its statutory mandate to promote financial stability.3 The Dodd-Frank Act mandates supervisory stress tests that assess whether large bank holding companies have a sufficient level of capital to absorb losses during adverse economic conditions.4 The Federal Reserve also conducts a capital planning exercise, called the Comprehensive Capital Analysis and Review or “CCAR.” This evaluation combines the quantitative results from the Dodd-Frank Act stress tests with a qualitative assessment of whether the largest bank holding companies have vigorous, “forward-looking capital planning processes that account for their unique risks.”5 The criteria for both sets of stress tests are dynamic and change in response to evolving risks. For example, past tests have assumed a sharp, sudden, and widespread drop in markets triggered by, say, a large Eurozone shock.

11  See William Dudley, “Ending Too Big to Fail,” Remarks at the Global Economic Policy Forum, New York City, November 7, 2013; William Dudley, “Enhancing Financial Stability by Improving Culture in the Financial Services Industry,” Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry, Federal Reserve Bank of New York, New York City, October 20, 2014. BIS central bankers’ speeches  3  As part of this effort, I have proposed four specific reforms to curb incentives for illegal and unduly risky conduct at banks. First, banks should extend the deferral period for compensation to match the timeframe for legal liabilities to materialize – perhaps as long as a decade. Second, banks should create de facto performance bonds wherein deferred compensation for senior managers and material risk takers could be used to satisfy fines against the firm for banker misbehavior. Third, I have urged Congress to enact new federal legislation creating a database that tracks employees dismissed for illegal or unethical behavior. Fourth, I have requested that Congress amend the Federal Deposit Insurance Act to impose a mandatory ban from the financial system – that is, both the regulated and shadow banking sectors – for any person convicted of a crime of dishonesty while employed at a financial institution. III. Supervisory process  In tandem with our attention to capital, liquidity, and risk management, we have made important changes to the process of supervision.