samchain/econo-pairs-v1 huggingface dataset:
The euro area has also shown some improvement recently, with positive growth rates in some countries as early as in the second quarter. The latest figures suggest that economic activity may be expected to show positive growth rates across the area in the third quarter. That said, the upcoming recovery will be slow, meaning that quite some time will elapse before pre-crisis output levels are restored. BIS Review 151/2009  1  Public finances have worsened considerably in the euro area owing both to the operation of the automatic stabilisers, which have responded to the cyclical downturn, and to the discretionary measures adopted to boost demand and the action taken to support the financial system. The financial crisis and the decline in activity have severely affected some European credit institutions, which have come to depend largely on public-sector support and which are immersed in a process of adjustment that may have repercussions for their ability to effectively channel funds in the future. On the inflation front, we have continued to witness year-on-year declines in consumer prices in the euro area, due above all to notably lower oil prices than a year ago. Most forecasts suggest positive inflation rates will resume in the area in the coming months, as the comparison effects with the levels reached by commodity prices twelve months back cease to apply.

Yet although the decline in residential demand has been very abrupt, lower interest rates and the fall in house prices have placed affordability indicators at more moderate levels, which is helping to stabilise real estate purchases in recent months. In the case of lending to the private sector, we have witnessed increasingly negligible and even negative growth rates, and this pattern will probably prevail over the coming quarters. These developments in lending have a most significant cyclical component, accentuated by  2  BIS Review 151/2009  the tension on international financial markets. After the strong increase in household and corporate debt ratios in the previous upturn, it was inevitable these ratios would fall to improve the financial position of households and firms, and to assist in the resumption of a sustainable path of spending. The strong adjustment in spending is also bringing about a sharp reduction in the external deficit which, after posting a figure close to 10% of GDP in 2007, may be below 5% of GDP in 2009. The adjustment is based, above all, on the decline in imports and on lower commodities prices; accordingly, for this correction to firm when demand picks up, a more substantial contribution by exports will be needed and, in this connection, our export base and the productivity of our companies must continue to be strengthened. In terms of inflation, we are also seeing a significant correction, as there has been a negative inflation differential with the euro area for almost a year.
Hall has pointed out that a tighter household borrowing constraint can help explain the depth and persistence of the most recent recession in the U.S.2 Mian and Sufi observe that unemployment is much higher in counties across the U.S. where households were more debt constrained by the fall in the price of housing.3 Their finding provides further support for the hypothesis that it is the especially debt-constrained households that are under the greatest pressure to reduce current consumption. Given the effect that sudden reductions in borrowing capacity are expected to have on broader economic activity, it is then encouraging to see that, at least at the aggregate level, households are increasing their borrowing. This suggests that the forced cuts in spending caused by declines in borrowing capacity are becoming less of a major concern for households. I’d now like to turn to some of the empirical analysis that can help explain both the decline in aggregate U.S. borrowing after 2008 and the subsequent turnaround of this trend in 2013. First, as we now know all too well – and as seen in Chart 2 (House Prices Peaked and Fell Precipitously), house prices in the U.S. rose at steadily increasing rates from 2000 through 2006, followed by an approximately 31 percent reversal that persisted through 2011. That  1  See Gauti B. Eggertsson and Paul Krugman (2012), “Debt, Deleveraging, and the Liquidity Trap: A FisherMinsky-Koo Approach,” Quarterly Journal of Economics, 1469–1513. 2  See Robert E. Hall (2011), ‘‘The Long Slump,’’ American Economic Review 102, 431–69.

Clearly, these losses generally produce second-round effects, mainly through reputational damage that tends to affect the financial sector as a whole, rather than individual institutions. As is currently the case, these losses tend to rise, precisely, in the aftermath of crises, where some of the questionable commercial practices are exposed. Banks are hit by these losses at a time when customers, shareholders and public stakeholders are questioning their business model, precisely because of this risk. Consequently, the upshot could be a clear procyclical effect. In a nutshell, we must acknowledge that non-financial risk presents certain features that can exacerbate or compound the effect of a crisis. It is also very hard to estimate and, unlike traditional risks, cannot be eliminated; at best, it may be mitigated. This would be the key question for today: what can we do to mitigate non-financial risk to the maximum extent? In my view, the mitigation of non-financial risk is linked to the quality of internal procedures, IT systems, governance structure or compliance function of a bank. In other words, it is not so much about what banks should do, but how they should do it. Naturally, enhancing governance, compliance or IT systems is not easy. It generally involves additional spending that adds pressure to the already beleaguered profitability of the sector. Understandably, some firms see spending in these areas as an additional cost. I believe it is more appropriate to see improvements in IT or governance as long-term investments.
Eddie Yue: Investment in infrastructure is crucial to Asia’s growth Statement by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority and Head of the Delegation of Hong Kong, for the 46th Asian Development Bank Annual Meeting, Delhi, 4 May 2013. *  *  *  I would like to thank the Government of India for hosting the 46th Annual Meeting of the Asian Development Bank (ADB). I wish to take this opportunity to pay tribute to Mr Haruhiko Kuroda for his excellent work in leading ADB for more than eight years. We welcome the appointment of Mr Takehiko Nakao as the new President of ADB, and look forward to continue working closely with the Bank under his leadership in furthering the development of the region. Global economic sentiment has improved since the beginning of this year. The announcement of further accommodative monetary easing by major advanced economies has reduced tail risks and stabilised financial markets. But while the accommodative monetary policy will help authorities buy time to solve the problem, it is by no means a substitute for medium-term fiscal consolidation and structural reforms that are required for the economy to regain competitiveness and return to a sustainable path. Looking ahead, economic adjustments and deleveraging in both the public and private sectors are set to continue in the advanced economies, and regional economies will increasingly have to look to themselves for new sources of growth.

Factors like certainty in government’s sector development plan, clarity in publicprivate partnership (PPP) framework, conducive legal, regulatory and institutional environment, and capacity to develop and implement projects are key to attracting private sector investors. ADB has an important role to play in capacity building, and through its interventions, catalyse reforms and assist governments to develop an environment conducive for private sector investment. Given the high degree of perceived risk of long-term infrastructure projects, public sector support is often needed to catalyse private sector investment. Provision of credit enhancements and guarantees as well as PPP are common modalities of public sector support, and more work should be done to find new and effective ways to catalyse private sector investments. We are glad to see ADB’s expanded efforts in mobilising private sector  BIS central bankers’ speeches  1  investment under Strategy 2020. With the support of ADB, the ASEAN Infrastructure Fund (AIF) established by ASEAN is expected to help mobilise private capital as well as the region’s foreign exchange reserves for financing infrastructure projects in the ASEAN economies. While the AIF is newly set up and more time is needed to observe the effectiveness of this model, the AIF represents a meaningful attempt by regional governments to cooperate and find new ways to mobilise public and private savings of the region to finance Asia’s own infrastructure needs. We encourage further efforts in this regard, and ADB, with its expertise and resources, is best placed to support such efforts.
Lars Heikensten: Challenges for the Swedish fixed income market Speech by Mr Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, at the RäntEvent, Modern Museum, Stockholm, 8 May 2001. *  *  *  The Swedish fixed income market has undergone a fantastic development over the past 20 years. This refers to both the volumes traded and the level of sophistication. However, the journey here has by no means been a simple one. At times, both profitability and activity have been quite low. Today the market is facing new challenges. Profitability appears to have fallen and with it both the number of players and the volumes traded. The risks are now also covered to a greater extent by Swedish players trading in, for instance, the German market. The Swedish fixed income market has thus lost ground, relative to other countries. It also appears to have lagged behind in the sense of technology. A year or so ago there was an attempt to introduce a new instrument, a Swedish fixed income future, with the aim of increasing the market's powers of attraction. This attempt did not live up to expectations, however. Today we are gathered here partly because of a new initiative, a platform for electronic fixed income trading. Let me start by saying a few words about the way I see the role of the Riksbank in this context. Our fundamental objectives are to safeguard price stability and promote a safe and efficient payment system.

This reasonably entails the costs of doing business of the same size being higher and the relationships between players being closer. This carries a risk, particularly in times of uncertainty, of affecting the functioning of the market. The inclination to take on risks then declines and with few players and problems with trading situations, the market has occasionally almost come to a standstill. As you know, there are differing opinions as to whether this type of problem can be solved or alleviated with the aid of electronic trading. I do not intend to become involved in that discussion. Part of the positive effects of electronic trading that I mentioned earlier on a more general level will probably be smaller in a market like the Swedish one than on a larger market. Of course, even in terms of direct operating costs, the savings will be less when calculated in kronor. At the same time, it is clear that electronic trading will involve new opportunities. Above all, we hope that it will bring about an increased interest from both Swedish and foreign players in being active and doing business on the Swedish market. How this turns out will undoubtedly depend on the actions of those in the system from the start. If they choose to limit entry or make it more difficult for new players, there is a risk that the socioeconomic gains with the new platform will not be very great. Settlement is important Allow me to conclude with a few words on business settlement.
If we want our children to have peace, I am calling on all of you to act too.

When shocks to money demand are large, expressing the stance of monetary policy in terms of an interest rate – in other words, as a price rather than as a quantity – can help to insulate the wider economy and price developments from the volatility that those demand shocks induce in monetary quantities. This insight had long been embedded in central bank practice, with short-term interest rates being the operational instrument of monetary policy. And it is now central to the canonical model of monetary policy outlined in Woodford’s magnum opus Interest and Prices, which both captures and has catalysed the large and still growing literature on interest rate rules for monetary policy. Three questions: Past, present and future While I will revisit some of these arguments in what follows, you should not expect much innovation from me on those dimensions. But, two decades on, a number of new questions have emerged, which I do hope to address. Page 4  Past: What are the lessons of the past twenty years? A natural focus is to explore how we should think about the expansion of central bank balance sheets via quantitative easing (QE) and other mechanisms. In Lord King’s article, discussion of QE is limited to the case of Japan and treated as something of an anachronism.
Warwick Economics Summit – 4 February 2022 Twenty years later… and twenty years ahead  Speech by François Villeroy de Galhau, Governor of the Banque de France  Press contact: Mark Deen (mark.deen@banque-france.fr)  Page 1 sur 9 Ladies and Gentlemen, I am delighted to be with you today, though I would have preferred to actually come to Warwick and your world-renowned University. And I am deeply honoured to offer today, with this speech, the very first of the Persaud Lectures, launched this year by Professor Avinash Persaud – none other than the son of Professor the Honourable Bishdonat Persaud. I borrowed my title from the famous French writer Alexandre Dumas: Twenty Years Later was his sequel to the Three Musketeers. January 1st marked 20 years since the introduction of the euro as cash. And if central banking isn’t quite as much fun as the tales of d’Artagnan and his friends, our young currency has had a few adventures and it is worth drawing some lessons from them. I will then turn to the next twenty years and the two main transformations facing Europe. Before I plunge into this longer view, allow me to say a few words about the European Central Bank’s latest monetary policy decision as set out by ECB President Christine Lagarde. Yesterday, in the face of increasing uncertainty on inflation, our key word was « more than ever » optionality.

We nevertheless have reasons to cheer: in 2021 around EUR 100 billion were invested in the European technology ecosystem, almost three times the previous record of 2020, with around 100 new unicornsi. Furthermore, although technologies have not yet shown their full potential in terms of productivity, we may be at a turning point with the latest advances in artificial intelligence, biotechnologies or telework-related reorganisations - after a lag which corresponds to the process of appropriating these technologies by the economic fabric (investment, training, etc.). Page 7 sur 9 These disruptions are also reflected in the monetary, financial and payments spheres – which we scrutinise as central banks and supervisors –, where digitalisation is bringing about a triple revolution – and it is far from over: (i)  First, the arrival of new players: new actors born from the tech world – Fintechs and Bigtechs – are challenging historical players with radically new approaches to financial services and at present much less regulation;  (ii)  Second, the emergence of new assets: crypto-assets from the blockchain universe in the form of tokens: they will never according to me be credible as “crypto-currencies”, but could be used as settlement means – think of stablecoins for instance;  (iii) Lastly, the emergence of decentralised market infrastructures: new technologies tend to reduce the use of proven centralised settlement systems. These revolutions offer the potential for increased market efficiency while reducing costs and time.
Svante Öberg: The financial crisis and wage formation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at the National Mediation Office, Stockholm, 29 January 2010. * * * Why is the Riksbank interested in wage formation? Wage formation and monetary policy are interrelated. The development of wages affects inflation and inflation affects the development of wages. The target for monetary policy is to maintain a low and stable level of inflation. This job is made easier if wage formation works well. Consequently, it is important for the Riksbank to follow this year’s comprehensive wage bargaining rounds. I will not make any recommendations to the social partners regarding the outcome of this year’s collective bargaining. Instead, I will describe the economic setting for this collective bargaining. This may seem to be an extremely subtle distinction, but it is an important one, nevertheless. We make no normative pronouncements regarding which rate of wage increase may be most appropriate. However, considering the drawn-out recovery and the weak labour market, the scope for wage increases seems to be highly restricted. I would also like to make two points during this introduction. Firstly: I will not be reporting any new view of economic developments beyond that presented in the monetary policy update of 16 December, although a few figures will be updated with the latest statistics. Secondly: The assessments and valuations I make here are not necessarily shared by all of my colleagues on the Executive Board of the Riksbank.

4/7  In any event, the improvement in the Spanish banking system has allowed it to support the economic recovery and job creation seen in recent years through a more efficient allocation of credit to businesses and industries. The paradigm shift in bank resolution This transformation of the Spanish financial sector has occurred in parallel with a farreaching review at international level of the regulatory and supervisory frameworks for financial institutions. The aim has been to increase the resilience of the banking system and to reduce the impact of financial crises on the economy, with a wave of reforms, the last phase of which was completed in December 2017 by the Basel Committee on Banking Supervision and will be implemented progressively over the coming years. In Europe, these reforms have been accompanied by very significant institutional changes, in particular, creation of the banking union. And one of the pillars of the banking union is the Single Resolution Mechanism. As regards bank resolution, these reforms have in fact generated a paradigm shift, as a result of the high cost of the global financial crisis for the public sector in numerous advanced countries. The paradigm shift consists in moving from a bail-out to a bail-in system of bank resolution, that is to say, from rescue or recapitalisation using public funds to rescue using private funds, belonging to the bank itself, through the use of capital, hybrid instruments and, where applicable, the most subordinated debt.
I think it is helpful to recall why so many central banks, regulatory agencies, and commercial banks have devoted their best resources to ensuring the success of the New Accord. The existing Accord, as you know, was already considered a milestone in banking regulation. It offered the first internationally accepted “yardstick” for capital adequacy and a simple measure of risk. It had received praise for reversing a downward trend in bank capital levels and for serving as a benchmark measure of a bank’s financial health around the world. But the 1988 Accord was a blunt instrument that quickly fell behind the times. Advances in technology, in banking products, and in risk management changed the way that leading banks measure and manage their risks. By the mid-1990’s, bankers and supervisors agreed that the original Accord no longer offered the largest and most sophisticated organisations a meaningful measure of risk. Under the leadership of William McDonough, former President of the Federal Reserve Bank of New York and my predecessor as chairman of the Basel Committee, the Committee seized the opportunity to achieve more than a simple update of the capital requirements. Bill brought tireless energy to the project and convinced industry leaders, bank supervisors, and central bankers that we should pursue a far greater objective that would incorporate market discipline and also encourage advances in risk management across the industry.

Some have argued that output gaps and prices retain their historical association if the right measure of “output gap” is compared to prices that are responsive to it. But then, what is a “correct measure” of the output gap, given that this is a not directly observable variable? In recent months, the Fed has been underscoring that some key structural variables for monetary policy, like the output gap itself, the neutral interest rate and natural unemployment are estimated with considerable uncertainty and may have shifted in recent years. We will hear about measurement challenges and structural parameters across this conference. Inflation dynamics in emerging countries As we hold these discussions in an emerging country, it is also important to note some differences with the advanced world concerning price dynamics and monetary policy. For one, average inflation in emerging economies has been traditionally higher and more volatile than in advanced countries. This keeps our countries generally far from the risk of deflation, but has also contributed to the buildup of indexation mechanisms and more volatile inflation expectations, which may make inflation targeting more difficult. Also, in many emerging countries, the domestic economy is relatively small compared to foreign trade, and pass-through from the exchange rate to prices is a much more relevant determinant of short term inflation. The larger size of the informal sector also tends to weaken the relationship between wages and prices.