samchain/econo-pairs-v1 huggingface dataset:
One important reason is considered to be that various types of structural adjustments, in business as well as in society in general, were needed before the benefits of electricity could be reaped efficiently. At factory level, for example, more flexible production processes enhanced productivity when, instead of running much of the workshop in a cumbersome manner from a single large electric motor, smaller power units were developed for single machines. Thus, since it takes time to work out and implement various types of organisational changes that are most appropriate for the new techniques, there is liable to be a considerable time lag before general purpose innovations have an impact. This time lag unfortunately also makes it difficult to single out the factors that underlie technical advances and growth. What has happened in the United States in recent years also illustrates another consequence of the new economy. Besides the strong trends for productivity, capital formation and employment, which have BIS Review 18/2000  2  resulted in a more positive appraisal of potential growth, share prices have risen dramatically and saving has fallen to low levels. A major question at present is how stable this situation will be. Summing up, then, there are a good many signs that IT may have contributed to a more favourable productivity trend in the United States, particularly in recent years. But there have also been many other changes, such as increased competition and the emergence of deep and efficient markets for venture capital.

By the end of August, outstanding resident loans subject to moratoria had peaked at € billion, equivalent to almost 17% of resident lending, with households accounting for the lion’s share, though these represented 10.1% of lending to households. By September, the amount of loans subject to moratoria started to decline, falling to 15.6% of resident lending, as some of these borrowers were in a position to resume their loan repayments, signalling a recovery in economic activity. At the same time, around € million loans were disbursed under the Malta Development Bank’s COVID-19 Guarantee Scheme, accounting for almost 4% of the resident corporate loan book to support working capital Page | 3 Document Classification: Public  requirements of businesses. A further € million have been sanctioned but not yet disbursed. Such loans were mainly granted to the wholesale and retail trade, accommodation and food service activities, and the transport and storage facilities, which were the sectors that were worst hit by the pandemic. Banks worked hard to activate such schemes within a relatively short period of time. The support provided by domestic banks was made possible because of their prudent business models coupled with the implementation of a stronger post-global financial crisis regulatory framework, which over the past years strengthened the overall resilience of the financial system. Although, as with other banks around the globe, domestic banks posted significantly lower profits – with a few registering losses in the first half of 2020 – their financial standing remains sound.
We have to act in a determined way to deliver our 2% target Inflation has reached levels that we have not seen in decades in the United States and in the euro area. HICP inflation in the euro area was 10.0% in September 2022 and excluding energy and food reached 4.8%. We decided to frontload our monetary policy normalization in September with a 75bp increase in all our policy rates, taking them into positive territory for the first time since July 2012. When anyone acts fast, there are always people to ask whether they are overreacting or could wait and move more slowly. For some in Europe, there would be two arguments in favour of inaction or at least caution: namely the supply-side origin of the shock and the risk of a recession. Let me tell why I don’t think such fears should derail us from our normalisation course. On the nature of the inflation shock, there is obviously a significant energy and supply component in the current euro area inflation, reflecting pandemic-related supply 2  Page 3 sur 14  disruptions in 2021, and on top of the sharp increase in energy prices this year after Russia’s invasion of Ukraine. When central banks are faced with temporary supply shocks, they are often supposed to “look through” the immediate effect and extend the horizon over which inflation returns to target if necessary. But due to pressures along the pricing chain, inflation has not only heightened, it has broadened into industrial goods and services.

Something similar happened with copper, other minerals, grain, etc. The response of inflation did not take long to arrive on the scene. Since the inflation peak of last year, Chile is one of the countries where inflation has dropped most sharply.6 Inflation  4  For more discussion on this issue see De Gregorio (2008a). 5  For more information on the inflation rise of 2007 and its external origin see De Gregorio (2008b). 6  This is also applicable if we leave aside the possible effect of changes in the CPI measurement methods. BIS Review 41/2009  3  expectations have also shown major adjustments in the face of this new global scenario (Figure 4). However, the main issue in the most likely scenario, is the effect on inflationary pressures of the increase in output gaps and the decrease in international commodities’ prices resulting from the global recession. Its effects on the inflation forecasts for the next two years are highly relevant and have enabled the application of countercyclical policies. The antiinflationary commitment ensuing from monetary policy conduct based on a flexible inflation targeting regime has paved the way for an important and unprecedented adjustment of monetary policy. Likewise, for monetary policy to be effective, rate changes must be transmitted to the entire yield curve, and this is achieved by implementing a monetary policy based on a credible anchor. In fact, since the Central Bank announced a downward bias of the MPR, the market has started to include this monetary easing at all horizons.
The supervisory activity, along with prevention of extreme cases of insured institutions’ bankruptcy, carries out also the administration of such institutions, in cases when they fail irrecoverably. In this stage, the role and contribution of the Deposit Insurance Agency, until that moment “invisible”, appears with the whole magnitude and importance. It is indispensable not only in terms of treating depositors that have had savings at the bankrupt institution, but also in the “calming down” effect for all the depositors of the banking system. In fact, the world experience has indicated that the deposit insurance function of the customers of the banking system is an important instrument in the framework of maintaining the banking system sustainability and keeping public confidence in it. The timely payment of the deposit value at the insured amount, in the case of a bank’s bankruptcy, allows responsible authorities to be focused on the procedures intending the isolation of the case and the recovery of the values of the bankrupt institution. The activity of responsible deposit insurance institutions has different characteristics in different countries. Their legal framework provides responsibilities that are limited only in the role of the payer of the available fund and other cases, when responsibilities are extended further, up to the recovery of the insured institutions’ values that have gone bankrupt.

Such a convergence and harmonisation can only happen with greater engagement among the regulators, practitioners and scholars in Islamic finance in the international community. Finally this integration process also requires greater cooperation among the regulators to ensure that the Islamic financial system is not subject to vulnerabilities and abuses and thus ensuring its soundness and stability. In this respect, the sharing of information among the regulators including across borders is important especially in a more globalised and liberalised environment where financial transactions and activities have become more complex and globalised. In this regard, there is a greater need for regulators to be continuously connected to share information on key issues and developments faced in their own financial jurisdictions. In this respect, the Islamic Financial Services Board has an important role to facilitate this process. Closer financial linkages among Islamic financial institutions from different jurisdictions is essential to contribute towards accelerating the process and towards serving as a bridge to strengthen the relationship of the international Islamic financial markets as well as the investment and trade ties between regions. Such linkages within the industry could also lead to new product offerings and to co-arranging financing. There could also be mutual development of IT systems and other technologies including other research and development endeavours. Finally, let me touch on the development of the socio-economic aspects of Islamic finance.
In doing so, it would steer clear of the pitfalls that other countries have fallen into and maintain its growth path. In this respect, I will focus on a number of important considerations. On the fiscal side, government spending can be increased on a sustainable basis if government revenue increases on the back of a growing economy. Furthermore, increased expenditure on pensions and health services must be financed in a sustainable way. As the population ages we have to pay sufficient attention to the dynamics that this implies, and of the options available, such that the chosen path would not impinge on economic growth. Government policies must, above all, enhance the efficiency of the productive system, promote investment and incentivise entrepreneurial initiative. Labour market The local higher level of labour force skills and qualifications, as well as its adaptability, have been instrumental in attracting investment in new areas of activity and have therefore reduced the vulnerability of the domestic economy to shocks in foreign demand. Chart 9 shows how Malta’s wages compare with those abroad. On the basis of the purchasing power standard which measures wages by taking into account the cost of living, the average Maltese wage ranks towards the middle of a broad range of selected countries that are shown in the chart. The issue arises as to how to increase living standards in a sustainable way, without losing competitiveness. One should be mindful of the relationship between all costs (including wages) and productivity.

The European Systemic Risk Board (ESRB), which is an EU-level body established with a mandate to oversee the macro-prudential oversight of the financial system, recommended the setting up of an authority or body to make recommendations on macro-prudential aspects of the financial system. The Central Bank in its capacity as the macro-prudential authority has agreed with the MFSA, to set up a Joint Financial Stability Board which will be formally constituted in a few weeks. The objective is to enhance the cooperation between the two bodies for the assurance of the stability of the financial system. The intention is to strengthen the resilience of the financial system and to mitigate the build-up of systemic risks. To these ends, the Board’s mandate includes the development of mechanisms that would identify risks to financial stability, and the establishment of the necessary macro-prudential policy tools. The Joint Financial Stability Board will also be able to make recommendations to the CBM or MFSA boards on macro or micro prudential issues, as the case may be. The board is also responsible to follow-up on recommendations made by the ESRB. Second, in the current situation, it must be ensured that fiscal consolidation is not compromised and the commitments under the Fiscal Pact are achieved. The room for fiscal manoeuvre is very limited at this present juncture of contraction in the euro area economy and the current debt-to GDP levels in the Maltese economy. Third, higher productivity allows sustainably higher wages and living standards.
This is a world in which it is harder for policy to boost productivity and growth. the second half of the 20th century, the median level of GDP per capita was 15% below the level predicted from the trend of the ten years prior to the crisis, which is roughly where the UK is currently. See Reinhart, C. M., and V. R. Reinhart (2015) “Financial crises, development, and growth: a long-term perspective”, The World Bank Economic Review. 3  2  Refers to forecasts made for the first year after the April IMF WEO in question; for example the April 2010 WEO forecast for 2011 relative to the final outturn data. BIS central bankers’ speeches  In these secular stagnation views of the world, the water around us was getting colder before the crisis and has become colder since. But we have not noticed it. And it is this, rather than the slowness of the healing process and the aftershocks of the crisis, that explains the serial disappointments in economic growth. I have set this out as two very different stories about what is happening – “slow healing” and “secular stagnation”. Of course, given enough unfortunate events and enough repeated disappointment on the pace of recovery, they could look and feel the same for a long time. There is much that is common to them. In both stories for a period of time, productivity is lower, interest rates stay low for long and pay and income growth is weak.

But we could be sinning by omission, by passiveness. Contrary to a longstanding approach whereby central backs only dialogued with financial specialists, we must now direct our communication at all economic agents,  Page 7 sur 10 including the general public. A better-informed society across categories allows for a better understanding of monetary objectives, and hence a greater efficiency of monetary policy. Tailored and active communication is now a centrepiece of central banks’ actions. In 2021, the “Banque de France listens” initiative included 17 events, with an audience of 300,000. This year, the Banque de France organised its annual National Monetary Policy Forum, reaching an on-line audience of 500,000. It adds up to sustained efforts on financial education: in 2021, almost 40,000 young people benefitted from our actions, and we are stepping up again in 2022. III. Does the international dimension of monetary trust still exist? Whether or not the international dimension of monetary trust can still inspire us is a key question for the IMF, which has sought to embody it since 1944. It has become a painful question, with the ongoing destructive Russian war in Ukraine adding to the other illnesses of multilateralism in the last six years, from Brexit to populism and (poorly-disguised) protectionism. Let us acknowledge it frankly: the G20 is today not in good shape, whereas it had been key to great progress over the last twenty years. And sanctions against Russia divide it.
Estimating the impact of such a shock on CPI inflation, and the time it takes for that impact to come through, is very difficult, not least because the precise scale depends in large part on the reasons for the shock. It is fair to say that the MPC originally underestimated the degree and timing of  1  Since the change was only announced in July 2010, this was a surprise addition to our inflation projections made before that date. 2  These prices impact directly on the retail prices of petrol, gas and electricity, which together account for just under 10% of the CPI basket. 2  BIS central bankers’ speeches  exchange rate pass through into consumer prices. One possible reason for that is that it would appear that the sensitivity of CPI to the exchange rate has been rising over the past decade or so. Chart 4 Sterling exchange rates  A one-off, autonomous shock to the exchange rate would ultimately change the price level not the inflation rate. But this particular shock probably reflected a reappraisal of real UK economic performance in the light of the financial crisis rather than, for example, interest rate differentials between the UK and its major trading partners.3 During the decade prior to the crisis – the NICE or non-inflationary, consistently expansionary decade – the UK experienced an unparalleled run of sustained growth, falling unemployment and low, stable inflation.

Information about future demand and supply levels ought to be reflected in the current price and in the prices of commodity futures. But the increases from Autumn 2010 onwards were largely unexpected, and have been a genuine surprise for our forecasts. For example, spot oil and gas prices have risen very substantially since their low points in 2009.2 Spot oil prices are well above the levels implied by futures prices at the time of the February Inflation Report (Chart 2). Gas futures prices have also moved markedly higher since then (Chart 3). Chart 2  Chart 3  Sterling oil prices(a)  Sterling gas prices(a)  Sources: Bloomberg, Thomson Reuters Datastream and Bank calculations. Sources: Bloomberg, Thomson Reuters Datastream and Bank calculations. (a) Futures prices for February and May are averages during the fifteen working days to 9 February and 4 May respectively. Each futures curve assumes that the sterling-dollar exchange rate remains constant at its average during those periods. (a) Futures prices for February and May are averages during the fifteen working days to 9 February and 4 May respectively. (b) One-day forward price of UK natural gas. (b) Brent forward prices for delivery in 10–21 days’ time converted into sterling. Third, we have been experiencing the ongoing effects of sterling’s fall during 2007 and 2008, when the nominal effective exchange rate fell by around 25% (Chart 4).
355, November 2011. Borio, Claudio and Haibin Zhu. 2008. Capital regulation, risk-taking and monetary policy: a missing link in the transmission mechanism? Bank for International Settlements. BIS Working Papers. No. 268, December 2008. Brunnermeier, Markus and Lasse Pedersen. 2009. Market liquidity and funding liquidity. The Review of Financial Studies, 22, pp. 2201–2238. Buch, Claudia M., Sandra Eickmeier and Esteban Prieto. 2011. In search for yield? Survey based evidence on bank risk taking. Paper provided by the Deutsche Bundesbank Research Centre. Discussion Paper Series I, Economic Studies, number 2011, 10. Danielsson, Jon, Hyun Song Shin and Jean-Pierre Zigrand. 2011. Endogenous and systemic risk. First version, July 2010. This version, August 2011. Dell’Ariccia, Giovanni, Luc Laeven and Robert Marquez. 2010. Monetary policy, leverage and bank risk-taking. IMF Working Papers 10/276, International Monetary Fund. 1 December 2010. Hott, Christian and Pierre Monnin. 2008. Fundamental real estate prices: an empirical estimation with international data. The Journal of Real Estate Finance and Economics. Springer, vol. 36(4), pp. 427–450, May. Goodfriend, Marvin and Robert G. King. 1997. The new neoclassical synthesis and the role of monetary policy in Ben S. Bernanke and Julio J. Rotemberg, eds., NBER Macroeconomics Annual 1997, Cambridge, Massachussetts, MIT Press, pp. 231–83. Kohn, Donald L. 2007. Financial stability: preventing and managing crises. Speech by the Vice Chairman of the Board of Governors of the Federal Reserve System at the Exchequer Club Luncheon. Washington DC, 21 February, 2007. Morris, Stephen and Hyun Song Shin. 2004. Coordination risk and the price of debt. European Economic Review. Elsevier, vol. 48(1), pp.

In addition, we have undertaken a broad based program of initiatives to build a more robust over-the-counter derivatives infrastructure through, among other measures, a central clearing house for credit default swaps; to strengthen the financial cushions held by central counterparties against the risk of default by a participant; and to reduce vulnerabilities in secured funding markets. These initiatives will take time, but we expect to see substantial progress over the next two quarters. I look forward to your questions today and working with you as we move ahead in building a more effective financial regulatory framework for the United States. Thank you. BIS Review 95/2008  5
Finally, we want markets to provide economic incentives for institutions to improve bank management and disclose information that is relevant to end-users’ needs. What I am saying is that the “efficient frontier” can best be achieved through a combination of the three pillars, given the reinforcing/diversification effects of each. Each pillar provides something that the other cannot and is essential to achieving our overall objective of financial stability. I realise that this presentation of the three pillars as items of a portfolio of policy options is an oversimplification, but I think it helps us visualise why we think that the most “efficient frontier” involves a mixture of minimum rules, tempered by supervisory discretion, and supplemented by market-based incentives. Current industry practices and issues that arose in consultations Let me now move to current industry practices and how transparency is incorporated into the Basel framework. In deciding to revise the 1988 Accord, the Basel Committee thought carefully about what improvements to banks’ public reporting would mirror the New Accord’s incentives-based approach to foster improvements in risk management. In recent years, the Committee has noted some improvements in the quality of bank reporting worldwide. Annual surveys conducted by the Committee suggest that the extent of banks’ public disclosures has increased markedly in some areas. Still, important deficiencies remain.

Pablo Hernández de Cos: Remittance flows and their effects on Latin American macroeconomic and financial stability during the COVID-19 crisis Introductory remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, to the virtual seminar on “Remittance flows and their effects on Latin American macroeconomic and financial stability during the COVID-19 crisis”, organized by the Fondo Latinoamericano de Reservas (FLAR) and the Bank of Spain, webinar, 27 July 2021. * * * Good afternoon, ladies and gentlemen. Let me first thank FLAR (the Latin American Reserve Fund) and its president, José Darío Uribe, for the opportunity of jointly organising this webinar with the Banco de España. It will be the first of many and marks the start of close collaboration between both institutions, formalised in a memorandum of understanding in December 2020. The close economic and financial ties between Latin America and Spain are widely known. The interest of the Banco de España in the region has grown, as you know, owing to the internationalisation of Spanish banks since the early 1990s, largely directed towards Latin America. In this process, the region has taken on great significance for the Spanish banking system. Indeed, Spanish banks’ exposures to Latin America account, on pre-pandemic data, for almost one-fifth of the system’s total exposures, and for almost 30% of exposures outside Spain.