samchain/econo-pairs-v1 huggingface dataset:
This problem was even more acute in the case of those firms, mainly SMEs, that relied in only a limited number of lenders facing 1  Beck, T., and Levine, R. (2002) “Industry growth and capital allocation: Does having a market- or bank-based system matter?”, Journal of Financial Economics, 64, 147 – 180; Gambacorta, L., Yang, J., and Tsatsaronis, K. (2014) “Financial structure and growth”, BIS Quarterly Review, March 2014, 21 - 35. 2 López-Espinosa, G., Mayordomo, S., and Moreno, A. (2017) “When does relationship lending start to pay”, Journal of Financial Intermediation, 31, 16-29. 3 Tengulov, A. (2016) “The Impact of Borrowing Diversity on Firm Value, Financing and Real Decisions”, Working Paper SSRN 2361401. 4 De Fiore, F. and Uhlig, H. (2015) “Corporate Debt Structure and the Financial Crisis”, Journal of Money, Credit and Banking, 47, 1571‑1598. 3/6  financial problems since their ability to switch to a new lender was not always easy due to asymmetric information problems.5 Given the generally low level of diversification of liabilities of European firms, and the risk this poses for the corporate sector to face shocks affecting the bank lending channel, there seems to be some room for a higher role of capital market financing in Europe. Moreover, European financial markets not only are less developed than their US counterparts but they are also less integrated.

Apart from the aforementioned implications in terms of the low diversification of firms’ financing sources, this situation has also implications for the ability of households and firms to hedge against country-specific sources of risk to smooth income, consumption or investment growth. The evidence for United States shows that cross-ownership of assets all over the country, and especially equity securities, has played a key role in smoothing state-specific shocks6. By contrast, this mechanism is less powerful in Europe since the cross-border ownership of assets is still limited. The project of the Capital Markets Union (CMU) aims at the developing and integration of capital markets in Europe. In my view, the CMU project is an important step forward to reach the goal of correcting some structural deficiencies of the EU capital markets in terms of their relative underdevelopment and fragmentation. CMU Action Plan was launched in 2015 by the European Commission by setting out a list of over 30 actions and related measures to establish the building blocks of an integrated capital market in the European Union by 2019. So far the implementation of these measures has been slow. In any event, in recent years the role of European capital markets as a source of funding for firms has increased. For example, the ratio of financing through fixed-income securities to total debt financing has grown from 8% in 2007 to 12 % in 2017. A similar trend has also been observed in other advanced economies including the United States.
Therefore, it is important to find ways, to ensure more balanced development opportunities to all sectors of the economy and groups of population. Albanian economy, by large relies, on micro-businesses. Nearly all enterprises in Albania fall into the category of small and medium enterprises SME-s. More than 90 percent of Albanian enterprises can be classified as small or medium-size according to our INSTAT data. The majority of these companies are engaged in trade and services, reflecting their micro business nature, and less in industry. As for employment, SME-s account for more than 40 % of total employment in the enterprise sector. There is a high concentration in the region of Tirana-Durres of private enterprises than other regions, while industry is concentrated mainly in Elbasan. This new private sector especially SME-s needs the financial support to grow. Until now banking sector has not been able to meet these needs. The situation is more problematic because SME-s do not have very developed financial sectors. Usually, these countries also have difficulties to access international financial markets. I don’t want you to get me wrong about the role of financial sector. Financial sector has made considerable steps in Albania. Today, our financial sector includes many banks and non-bank financial institutions, savings and loans associations and unions, insurance and reinsurance companies, pension funds. One should say though that the development of the financial sector institutions is more noticeable in the banking sector and the insurance sector.

The banking system currently comprises 16 operating institutions, with total assets of around 53 per cent of the country’s GDP. The system is well capitalized and liquid. Its intermediation role is increasing. The lending activity although small (accounting for around 23 percent of total banking assets and around 12 percent of GDP), is strongly picking up. Other financial institutions are trying hard to increase and modernize their activity. However, many problems primarily legal and property rights related which are outside financial sector are making it difficult for them to increase their credit lines. Microfinance has proved to be a more effective way to deal with these problems. With its inventive formulas it makes financial resources become accessible to small and medium businesses that account for most of aggregate production during these development stages. These resources are often used to finance small projects in areas like agriculture, livestock or services like handicraft, small food stores etc. The first microfinance institutions in Albania, were set up in 1994 as development projects co-financed by the Albanian Government and the World Bank. 13 donors cooperate with the Albanian government in supporting the development of SME-s in Albania. From 1992 a large share of funds has been allocated in Albania as donation, but only a portion has been spent. Most of these funds has been  BIS Review 88/2005  1  given as soft loans for Albanian government. Aid represents around 30 % and only 5 % are direct commercial loans to co-finance the private investment.
This trip includes meetings with the people at the SUNY Nanotech Center, Global Foundries (an advanced microprocessor plant), the Capital Region Economic Development Council, and the Rensselaer Polytechnic Institute. At the New York Fed, we continually track conditions in our District, and we have created a number of tools for that purpose. For example, my staff produces monthly indexes of economic activity for New York City, New Jersey and New York State. These indexes are essentially local measures of output – similar to gross domestic product, or GDP at the national level. These measures provide a more complete gauge of activity than the employment report, which is the only other available metric at the state level. We have also started a consumer panel to track local household credit conditions, including the amount and type of debt owed by an average person and whether payments are being made in a timely way. In addition, we have a new poll about credit and financing for small businesses, the latter are an important source of new jobs. The survey asks firms about credit applications and reasons for not seeking credit. Almost 900 regional businesses responded to our May 2011 poll, of which nearly 15 percent were from the upstate region. The next poll will be in January. If you, as part of a small business, would like to participate in our January poll, please pass your card to my colleagues in the audience.

Conclusion To sum up, growth has picked up modestly in the second half of 2011, but not enough to bring unemployment down. While there are some bright spots in the U.S. economy and the financial system, strong headwinds are preventing a more vigorous recovery. Inflation, which has risen in recent months, is poised to moderate soon. The Fed is doing – and will continue to do – everything within its power to promote jobs and price stability. Looking ahead, the key challenge for the Albany area will be to continue to prepare its residents for the best jobs being created here. Expanding education and skills will go a long way to broaden participation in the economy to all residents. Thank you for your kind attention. 4  See Jaison Abel and Richard Deitz, The Role of Colleges and Universities in Building Local Human Capital. Current Issues in Economics and Finance, vol. 17, No 6, 2011. 6  BIS central bankers’ speeches
Such a mechanism would enable resources to be swiftly deployed when such shocks occur, contributing to ensure that the joint fiscal impulse of the euro area is appropriate for the cyclical situation (for example, by implementing a permanent macroeconomic stabilisation fund in the common budget, a cyclical stabilisation function or a pan-European unemployment insurance scheme). In parallel, the European fiscal framework is also in need of a thorough overhaul. We must not forget that in a monetary union, fiscal policy is the main instrument available to countries for tackling asymmetric shocks. It is therefore crucial that each economy maintains a countercyclical fiscal policy that generates sufficient room for manoeuvre in the expansionary phases to respond to adverse situations. The Stability and Growth Pact (SGP) was designed for this purpose. It provides a framework of rules that is essential to the macroeconomic stability of the euro area. However, we have to acknowledge that the Pact has not been able to contribute to the design of countercyclical fiscal policies. Its excessive complexity results in its being somewhat opaque and difficult to communicate to the general public, which does not facilitate its implementation. This complexity also makes uneven application across countries and over time more likely, undermining its legitimacy and credibility. Hence the pressing need to overhaul the current fiscal framework.

However, a common European response should be considered a necessary but not sufficient condition for ensuring a swifter and stronger recovery of our economy and minimising the structural damage caused by this crisis. To attain these goals, not only must fiscal policy continue to provide adequate support for households and firms in the short term, but the European funds must be allocated to high added-value investment projects, accompanied by a structural reform programme designed to strengthen the economy’s long-term growth. Indeed, the European funds should also be used to finance the structural improvements required by the Spanish economy. Thank you very much for your attention. 11
Both these problems restrain the attraction of foreign investments and impede the country’s development. Third, efficiency in using the economy funds should be improved even at micro level. This implies the need for improving private businesses’ management and control systems, enhancing analytic and forecasting capabilities, as well as transparency. Allow me to further deal with some of the above-mentioned issues. Stable economic development of the country As we have continuously underlined in our periodical reports, the economic growth over the recent years has been strongly supported by the banking system lending. The growth of banking lending has provided an impulse of about 7 percentage points of GDP in the last five years, making a pronounced and evident contribution to the growth of consumption and investments in economy. Their growth has provided room for expanding the production basis and improving the welfare. However, it has also generated macro and microeconomic imbalances. At macroeconomic level, the high consumption and investments were followed by increasing inflationary pressures and higher trade and current account deficit. These signs of overheating were clear signals that that level of consumption could not be kept for a long time, hence calling for controlling measures by the monetary authority. This is also the key to understand our prudent monetary policy during the period 2006–2008. The institutional investment we have made during these years in terms of consolidating macroeconomic and financial stability was rewarded with a much more moderate and milder impact of the global crisis than in the regional countries.

Structural vulnerabilities and the need for reform A useful lesson that the Bank of Albania has learnt from the crisis is the need to continue and deepen the structural reforms in the economy. These reforms, not only will create a more appropriate environment for promoting the private entrepreneurship, but will also increase the economy’s resilience to shocks. They also help to absorb foreign direct investments, which are the best support to the country’s development in the medium and long run. However, as stipulated even in the EBRD’s report, Albania is among the few countries that have continued structural reforms even during 2009. In this regard, Albania has lagged behind the regional countries, attracting in total only about USD 1100 per capita of FDI during the 20 years of transitions. In the entire broad framework of reform-related problems, I would like to dwell today upon the need for investments in education and infrastructure. A well-known business maxim is that: Employees are a company’s most precious asset. To the Bank of Albania it signifies that the higher the professionalism, the higher our institutional independence. To a broader sense, this is also relevant for the national economy. Our country’s progress, the convergence with the developed countries of East Europe and even beyond, with the European Union countries, will depend on our level of education. Competition in national and international markets is above all based on the generation of ideas and their use in the final products.
At this point, it is difficult to say whether the recent pause in job growth is short-lived or not. As such, we will continue to closely monitor our region’s job situation. Meanwhile, unemployment rates have ticked down across the region. Given the disappointing job numbers, it is not surprising that this change is largely due to a decline in labor force participation. In the fourth quarter of 2010, the labor force of both New York and New Jersey declined by about 0.3 percentage points, meaning that fewer people were actively seeking work. December’s unemployment rate in New York and New Jersey, at 8.2 percent and 9.1 percent, respectively, were below the national jobless rate of 9.4 percent for that month, though these rates remain painfully high. Puerto Rico’s 15.7 percent unemployment rate, although down from its high of over 17 percent, still shows little evidence of a sustained improvement. Overview of household debt during the crisis Now, let me turn to this session’s special topic: household debt. This topic provides an important lens into economic conditions in our country and our region. How families are adjusting their saving, borrowing and spending in the aftermath the mortgage crisis and the Great Recession will help shape the path of the recovery. Here at the Federal Reserve, we try to answer questions such as: what is happening to households’ credit, debt and delinquencies and what economic consequences will that have?

Without further reforms, and depending on the nature of the next crisis, we may well be forced to test the limits of our mandate – a concern that has been voiced by Germany in particular. I offered three “lines of defence” that any well-functioning monetary union depends on: flexible markets, adequate national fiscal buffers and a common fiscal instrument to cope with large shocks. The logic is simple and compelling. Flexible markets for goods, services, labour and capital reduce the need for costly macroeconomic stabilisation and curb contentious debates about 1/3  BIS central bankers' speeches  crisis management. They reduce both the likelihood and impact of shocks and allow economies to bounce back more quickly. And they save much of the precious political capital governments had to spend on acrimonious crisis discussions. But flexible markets come at a price. In a downturn, they often impose economic hardship on workers through job losses or wage cuts. Governments can mitigate these effects. Unlike the United States, however, the European Union is not a federation. This means that – as a rule – stabilisation needs first to take place at Member State level. Building and maintaining adequate room for action at national level is therefore essential. This is what our fiscal rules are about.
Gradually, the economic policy met distrust and high premiums for uncertainty. The effects of changes in monetary policy instruments became increasingly uncertain. Nevertheless, a desire for predictability must not precede the demand for an interest rate setting that the central bank deems to be correct. The expectations of other economic agents must not control the setting of interest rates. There are a number of examples from countries with "transparent" monetary policies where interest rate changes have come as a surprise. This may be partly due to the fact that the central bank had a 6  Wadhwani, S.B: "Some Reflections on the MPC". Speech to the National Association for Business Economics.Washington 21 May 2001  7  Blinder, A., C. Goodhart, P. Hildebrand, D. Lipton, C. Wyplosz: "How Do Central Banks Talk?" Report to be presented at the Third Geneva Conference on the World Economy on May 4, 2001  6  BIS Review 51/2001  different view of the outlook for economic developments. The inflation outlook may also change rapidly and prompt rapid and possibly pronounced interest-rate adjustments. Transparency may be discussed in relation to ·  objective function  ·  reaction function  ·  analyses  ·  views on how interest rates affect price inflation  ·  assessment of the inflation outlook and the balance of risks  Norges Bank has sought to contribute to transparency by presenting its interpretation of the mandate and by explaining the implementation of monetary policy.

The operational target of monetary policy shall be annual consumer price inflation of approximately 2½ per cent over time. In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances shall not be taken into account. Storting Report no. 29 of 2001, "Guidelines for economic policy" states: "Consumer price inflation is expected to remain within an interval of +/-1 percentage point around the target." The inflation target of 2½ per cent over time is slightly higher than the targets in Sweden, Canada and the euro area, but corresponds to targets in the United Kingdom and Australia. In the US, consumer price inflation has been somewhat higher the last ten years. The target is approximately in line with the average inflation rate in Norway in the 1990s. In our view, with its change in monetary policy, the Government has recognised low inflation as a benefit in itself. History has shown that high inflation does not result in either sustained economic growth or lower unemployment rates. A track record of low inflation since 1990 has provided Norges Bank with a good basis for implementing monetary policy even though, as I mentioned, the inflation target was introduced during an upturn. Higher interest rates curb demand for goods and services and reduce inflation. Lower interest rates have the opposite effect. If evidence suggests that inflation will be higher than 2½ per cent with unchanged interest rates, the interest rate will be increased.
European Central Bank: Press Conference - introductory statement  Introductory statement by Mr Willem F Duisenberg, President of the European Central Bank and Mr Christian Noyer, Vice-President of the European Central Bank, at the Press Conference, held in Frankfurt, on 2 November 2000. *  *  *  Ladies and gentlemen, the Vice-President and I are here to report on the outcome of today’s meeting of the Governing Council of the ECB. The Governing Council conducted its regular examination of monetary and economic developments and their implications for the maintenance of price stability in the euro area. It decided to leave the minimum bid rate on the main refinancing operations of the Eurosystem unchanged at 4.75%. The interest rates on the marginal lending facility and the deposit facility were also kept unchanged at 5.75% and 3.75% respectively. Starting with the first pillar of the monetary policy strategy of the ECB, the three-month average of annual M3 growth stood at 5.4% in the period from June to September 2000, unchanged from the three-month period ending in August 2000. While remaining above the reference value of 4½%, M3 growth, reflecting the increases in ECB interest rates since November 1999, has shown signs of moderation over recent months. A further factor to be taken into account is the fact that the growth rate of credit to the private sector increased to 10.8% in September. However, this was influenced by the financing of payments for UMTS licences.

  Broaden the oversight of the financial system in order to identify sources of systemic risk that may emanate from nonbank financial firms or from other areas of activity. Turning first to the Basel III capital and liquidity standards agreed upon by the Governors and Heads of Supervision Committee (GHOS) in Basel last month, I believe these standards address some of the major shortcomings revealed by the crisis. In particular, the new standards will require banking organizations to significantly increase the amount of highquality, loss-absorbing capital that they hold; significantly improve risk capture in trading, counterparty credit, securitization and other activities that the prior regulatory capital requirements did not adequately capture; make it more expensive for banks to provide liquidity guarantees to shadow banks; constrain the leverage that banking companies can take by introducing a credible, non-risk-based backstop; and increase the capacity of banks to absorb shocks that might temporarily impede their ability to access short-term funding markets. While these changes apply directly only to large internationally active banks, they will have wider ramifications for the financial system as a whole, including nonbanks and the capital markets. Furthermore, I believe that the agreement achieves an appropriate balance between significantly increasing the minimum capital and liquidity requirements for the major banks, while doing so in a way that recognizes the current state of the global economy and that seeks to minimize adjustment costs.